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Pros and Cons of Globalization

In his book The World is Flat, Thomas Friedman writes about how globalization is evening out the playing field in terms of global economics.  His main point is that the world is more interconnected now than ever before.  One of the benefits of globalizatio0n is that more countries are part of a global supply chain, and by being part of that supply chain it is less likely that any one country will try to bring the supply chain down.  Globalization is a way to stop major wars from breaking out.  Another  benefit he mentions is that as a genius in India, you can now export your talents anywhere in the world (Pink 2005).

What of the non geniuses though? It seems the rest of us are along for the ride.  We are more interconnected, so when the supply chain does fail like it did in 2008 it isn’t just one country that takes the fall.  It is the whole world.  It seems like it is turning every recession into a depression and every depression into a great one.  As the world competes for investment capital they are engaging in a race to the bottom with their currency.  Whoever has the least valuable currency has the biggest draw for investors, why pay an American $30, 000 a year to do a job that could be done by an Indian for less than a quarter of that?  Human rights, living wage, retirement and employee health benefits be damned.  Rather than passing the savings along to customers companies reinvest and move their corporate headquarters to locations with the lowest tax rates, leaving individuals to bear the lions share of the tax burden (Tverberg 2013). This is how multinational corporations have amassed as much wealth as small countries.

Instead of doing what Freidman recommended, making benefits portable, investing in science, giving more access to college educations, and creating a system of wage insurance, this country is instead increasing the costs to attend college and decimating employer benefits like sick time and pensions (Pink 2005).  It looks like globalization benefits the super rich and the very poor (if they are geniuses) and the rest of us just have to wait until we are one or the other.

Sources:

Tverberg, Gail. 2013. “12 Negative Aspects of Globalization.”
Retrieved from http://oilprice.com/Finance/the-Economy/12-Negative-Aspects-of-Globalization.html

Pink, Daniel H. 2005. Wired. “Why the World is Flat.”
Retrieved from http://archive.wired.com/wired/archive/13.05/friedman.html

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