Profiteering?
Globalizarea: evoluie sau
abuz?
By Lisa Smith
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goods in locations where wages are high. (For related reading, see What Is
International Trade?)
Profits soar due to the greatly reduced wages for workers, and Wall Street
rewards the big profit gains with higher stock prices. The CEOs of global
companies also get credit for the profits. Their rewards are usually generous
compensation packages, in which company stock and stock options figure
prominently. Institutional investors and wealthy individuals also take home the
big gains when stock prices increase.
The View from the Street
But globalization doesn't only affect CEOs and high-net-worth individuals.
Competition for jobs stretches far beyond the immediate area in a global
marketplace. From technology call centers in India, to automobile
manufacturing plants in China, globalization means that workers must
compete with job applicants from around the world.
Some of these changes arose because of the North American Free Trade
Agreement (NAFTA). NAFTA sent the jobs of U.S. autoworkers to Mexico, a
developing country, where wages are significantly lower than those in the U.S.
A few years later, some of those same jobs were relocated to third-world
countries in East Asia, where wages are even lower.
In both cases, the auto manufacturers expected U.S. consumers to continue
buying those products at U.S. prices. While critics of globalization decry the
loss of jobs that globalization can entail for developed countries, those who
support globalization argue that the employment and technology that is
brought to developing countries helps those populations toward
industrialization and the possibility of increased standards of living.
The View from the Middle Ground
In the globalization battleground, outsourcing is a double-edged sword.
On the one hand, low wages in foreign countries enable retailers to sell
clothing, cars and other goods at reduced rates in western nations where
shopping has become an ingrained part of the culture. This allows companies
to increase their profit margins.
At the same time, shoppers save money when they buy these goods, causing
some supporters of globalization to argue that while sending jobs overseas
tends to lower wages, it may also lower prices at the same time.
Lower-income workers also enjoy some of the benefits of stock price
appreciation. Many workers have mutual funds holdings, particularly in
their 401(k) plans. When companies outsource jobs and get rewarded with
rising share prices, mutual funds with those shares also increase in value.
The Effects of Globalization
The ever-increasing flow of cross-border traffic in terms of money, information,
people and technology isn't going to stop.
Some argue that it is a classic situation of the rich get richer while the poor get
poorer. While global standards of living have risen overall as industrialization
takes root in third-world countries, they have fallen in developed countries.
Today, the gap between rich and poor countries is expanding, as is the gap
between the rich and poor within these countries.
Homogenization of the world is another result, with the same coffee shop on
every corner and the same big-box retailers in seemingly every city in every
country. So, while globalization does promote contact and exchange between
cultures, it also tends to make them more similar to one another. At the market
level, linked global financial markets propel local issues into international
problems, such as meltdowns in Southeast Asia and the 1998 Russian debt
default.
What Lies Ahead?
Deviation from the status quo on this issue is likely to be minimal. The massive
outsourcing of U.S. manufacturing jobs that began decades ago continues
today. White collar jobs, such as call center workers, medical technicians and
accountants have also joined the outsource parade, leaving many to argue
that those profiting from the arrangement have little incentive to change it,
while those most impacted by it are virtually powerless.
Politicians have latched onto the idea of the disappearing middle class as a
political issue, but none of their income redistribution schemes are likely to
have any immediate substantial impact. (For related reading, see Losing The
Middle Class.)
The Bottom Line
Public scrutiny of CEO compensation has encouraged business leaders to
begin to see that a rising tide doesn't necessarily lift all boats. In many cases,
low-wage workers get hurt the most because they don't have transferable
skills. The concept of retraining workers is on the radar, but it's easier said
than done and decades too late for the American manufacturing industry. (To
learn more, see Evaluating Executive Compensation.)
Until a better solution is found, education, flexibility and adaptability are the
keys to survival. So far, the only answer that politicians and business leaders
agree on is the value of an educated, flexible, adaptable workforce. (At the
individual level, you can take action on this issue if you Invest In Yourself With
A College Education.)
in an ideal world, we'd all be equal. but we're not. chinese people take jobs in
factories because it's a better life than working on a farm and struggling not to
starve to death. so without chinese companies making products for us, the chinese
people would be worse off.
the real question is, how do we get to a point where we are all equal, where it
doesn't matter where you're born, and everyone has the same opportunity? free
trade and capitalism are probably the best ways to get there. just look at the
progress the average chinese person has made under quasi-capitalism and compare
that to decades in a communist economy.
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[]LowReady 2 puncte 1 an n urm
The second part of that turned out to be true, but of course it wasn't
enough to stop war.
But global conflict and violence have both declined quite a bit in
general. It hasn't stopped warfare but there's still also a whole lot
of protectionism going on, even in advanced economies.
Workers in American factories do not benefit, and pretty much
everybody else does benefit.
True, but at the same time those American workers now have more
purchasing power with their dollar even if they aren't paid as much
to work in a factory. You pointed this out later but its important to
keep in mind that gross salary is only relevant in context. If factory
workers get paid more and have job security but can buy less with
their dollars then what has really been accomplished other
than really harming anyone who isn't a protected factory worker?
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[]noelsusman 2 puncte 1 an n urm
But global conflict and violence have both declined quite a bit in
general.
That's true, but WWI and WWII clearly showed that nations will act
against their own economic interests when it comes to war.
Personally, I think mutually assured destruction is what keeps the
major world powers from committing to an all-out war.
Anyway, that's not very relevant to OP's question, just an
interesting aside.
Your second point is true and is part of what I was alluding to when
I said it's not that simple. I didn't want to get into a fully fleshed out
discussion on the effects of globalization because OP's assertion that
open borders for consumer products only benefit the wealthy is too
absurd to use as a starting point.
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[]LowReady 2 puncte 1 an n urm
That's true, but WWI and WWII clearly showed that nations will act
against their own economic interests when it comes to war.
Personally, I think mutually assured destruction is what keeps the
major world powers from committing to an all-out war.
I partially agree. There is definitely a known correlation between
arms proliferation and a general decrease in violence but I disagree
that nations were acting against their own economic interest,
particularly in WWII. The soviets and the fascists were clearly at
odds with each other but were also establishing hegemony (which
the soviets continued to do) which was then against everyone else's
economic interests. Do you disagree?
OP's assertion that open borders for consumer products only benefit
the wealthy is too absurd to use as a starting point.
I have no clue how after having been proven wrong, Ludditism is
more ubiquitous than ever. Protectionism helps oneclass: those in
power. It doesn't help the workers or the people they associate with.
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[]noelsusman 1 punct 1 an n urm
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[]LowReady 6 puncte 1 an n urm*
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[]Tlibri 2 puncte 1 an n urm
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[]meem09 2 puncte 1 an n urm
the periphery consists of all the stuff core states want, but don't wnt
to produce themselves (f.e. because the process involves health
risks). The semi-periphery works as a kind of political buffer for the
core states. There are some economic reasons for this, but at the
base of the idea is IMHO that the semi-periphery is the carrot
dangling in front of the periphery states. If there was only core and
periphery, the periphery would realize that they are exploited and
would try to rise up, because it seems impossible to make the jump
from say Liberia to the US. But if you do this for us, you will get this
and this and you will move up to the semi-periphery... It is possible
for states to do that, but of course there always has to be a
periphery.
There is a lot more to the theory. The way these analyses are build
is very interesting. They take a very long term view and I think that
way of seeing the world is unique, at least in International
Relations...
Edit: "rise up" may be the wrong term. The periphery states will try
to change the system...
The word "globalization" is a very recent term, only establishing its current meaning in the 1970s,
which "emerged from the intersection of four interrelated sets of 'communities of practice':
academics, journalists, publishers/editors, and librarians".[8] In 2000, the International Monetary
Fund (IMF) identified four basic aspects of
globalization: trade and transactions, capital and investment movements, migration and
movement of people, and the dissemination of knowledge.[9] Further, environmental challenges
such as global warming, cross-boundarywater and air pollution, and over-fishing of the ocean are
linked with globalization.[10] Globalizing processes affect and are affected
bybusiness and work organization, economics, socio-cultural resources, and the natural
environment. Academic literature commonly subdivides globalization into three major
ares: economic globalization, cultural globalization and political globalization