Is Globalization a Zero Sum Game or a Win-Win Situation?

When we discuss globalization, we often take into account the fact that both countries that are partners in trade benefit from the exchange. What this means is that a country A that specializes in a particular good or service can trade with country B that specializes in another good or service.

In this way, both countries stand to gain as they import the goods that are cheaper to make in the other country and export the goods that are cheaper to make in their countries. This is the classic version of the win-win situation that globalization and free trade bring to the table.

However, this is a simplified explanation of the globalization phenomenon and as the experiences of many countries show, international trade is not linear but a complex activity that is beset with protectionist rhetoric, subsidies to one’s farmers and traders as well as skewed rules and regulations.

The famous cheerleader for globalization and author, Thomas Friedman, in his book The World is Flat argues that globalization is proceeding briskly because of the “flattening of the world”. What he means is that with the advent of information technology and seamless communications, any country in the world that has a pool of educated workers can aspire to jump on to the globalization bandwagon and benefit from the erasing of entry barriers.

The point here is that countries like India have successfully leveraged the power of IT and communications to leapfrog the intermediate stage of manufacturing power that is required for economies to become fully fledged powerhouses.

However, an aspect that has been missing in Friedman’s analysis is the fact that unless a particular person has the minimum required education and access to IT; he or she would not be able to harness the power of globalization.

Even with the flattening of the world, globalization works only for the privileged and denies the benefits to the majority. This is the counter argument to Friedman’s hypothesis about how globalization is a win-win situation.

Of course, this is not to say that globalization has not benefited the world at large. For instance, studies have shown that globalization has succeeded in lifting Millions (if not a Billion) of people out of poverty and has ensured that they live a decent life.

It goes without saying that the benefits of globalization though a bit skewed, have nonetheless reached a large proportion of humanity. Hence, in this context it is fair to say that globalization has indeed been a win-win game instead of being a zero sum game.

Finally, the point needs to be made that like any other economic phenomenon, globalization needs a push and shove from the governments to ensure that there is a level playing field and hence, the process can benefit more if the governments of the world decide to extend a helping hand to the less privileged and thereby ensuring that they are able to climb the ladder through which they can participate in the process.