The globalization struggle

Comparative disadvantage

The battle between the proponents of unfettered globalization and the proponents of globalization with standards to protect labor and the environment has replaced the struggle between communism and capitalism over the best way to deliver the benefits of modern production to people around the globe. On the side of expanded globalization, many economists, international organizations, and developing country governments believe that free trade of goods and services and foreign investment promote the growth of less developed countries, and they fear that labor and environmental standards will undermine their competitiveness in global markets. The critics see global standards as a scheme to lower the comparative advantage of poor countries, and they believe that trade sanctions to enforce standards are protectionism in disguise.

Embracing an alternative vision of globalization, many nongovernmental and human rights activists, as well as most trade unions, believe that unencumbered free trade increases income inequality and creates a race to the bottom for workers worldwide. Many of these groups, particularly from developed countries, want trade agreements that include global labor standards and trade sanctions to enforce them. Nongovernmental organizations and unions from developing countries are often in the middle of this debate, favoring higher standards in their own countries but opposing the linking of those standards to trade for fear that their exports, and therefore jobs, will suffer.