is globalization an obstacle to economic development?

Question

specially with reference to devloping economies

Answer 1

Globalization is merely a market economy executed on the largest scale possible.

Think about how market economies work on a smaller scale. In your house, you do not grow your own food, or manufacture your own goods, and your household culture constantly imports the culture of your neighbors, wether it is you watching Entertainment television on your television, your kids buying the latest hip-hop CD, or your wife going out to a mall and buying clothing from the latest fashion trend.

It probably doesn't bother you that much that you are running up a trade deficit when you buy more goods for your house than you sell out of it. Nor does it probably bother you that you are importing cheap labor to do your gardening/lawnwork rather than do it yourself. Does it bother you that you are completely dependent on your grocery store for food?

It works on all levels, too. Does the state of Pennsylvania complain about the trade deficit it is running with the state of Virginia? Is the state of Utah ready to declare war on California for "cultural invasion"?

Now consider how globalization affects nations. The United States trades with China. Trade, by definition is the mutually beneficial exchange of goods between two parties. For every dollar that goes to China, we recieve a good that is perceptively greater in value. We bemoan that factories are being built in developing nations, while forgetting that for most of these countries, going to work in a factory is the greatest opportunity these people have ever had. Factories in developing countries has done more to lift their people out of poverty than all the aid dollars in the world. Aid dollars differ from trade in that rather than the capital flowing into the hands of the workers, it flows into the hands of the government, and very seldomly does it get any farther than that. And unlike trade, Aid is a zero-sum game. Our conscious is the only thing keeping that money flowing. But trade is mutually beneficial, we trade with these companies because we benefit, and as corollary, so do they.

There is a school of thought that says that trade is zero sum so we need to export more than we import. It is called Mercantilism, and it is an antiquitated way of thinking. Mercantilism stresses nationalism, exceptionalism, and is frequently the cause of wars. Trade transcends nationalism (we start to see ourselves as a global people, united in peace, not members of individual tribes), forces us to prove exceptionalism (Are we the best? lets see how hard we work in relation to the rest of the world) and makes war an economic impossibility (Neither the United States nor China would ever dare declare war on the other, as we are too trade dependent on each other.)

Answer 2

I have noticed that globalization is not only in the marketplace. It is not only for goods or services.

You can say, well, globalization allows more competitiveness and more productivity. But what those terms mean?

Competitiveness is the capacity to obtain comparative advantages to get a better position in the socioeconomic environment.

Productivity is the perfomance. The relation between the investment and the output.

Then competitiveness looks for more quality services, for savings and for productivity. It looks ok, but, how do the world corporations and governments are traslating it to their politics and plans?

Let see. USA got trade agreements with other nations to sell and buy goods and services. But to open the laboral market too. Then. After a while, the companies were looking for how to achieve a better productivity by moving to other countries, after all, a mexican worker is cheaper than a USA worker.

The companies look at this process as normal, doing the right thing to survive. But they leave the USA and left people unemployed.

After a while, companies moved from México to China, because it is cheaper to employ a chinese worker than a mexican worker. They then left mexican workers unemployed.

Governments then thought, we need structural reforms to be more attractives to the big capital. Laboral reforms with less benefits, more affordable pension systems (what means fewer amounts of pensions), or in a world, we need to be more like China. We need workers able to compite with chinesse workers.

If a USA worker gets 60 dollars daily, and a mexican worker gets 20 dollars daily, now to compite with China, they need to accept fewer benefits and earning less every day , 5 dollars daily?.

They will be competitive with chinesse workers, when they be at the same standard of life.

So I think globalization includes a risk, the risk of lowering the standard of life of the countries until they get the bottom of the line,

Naturaly, at the lower level, they are growing. It is just as if the world would say: Hey, let's wait for China, let get down to be as they are and to reinitiate at their standard of life.

Lets get unemployed in USA, in México, In Canada, to fulfill the agreement.

Is just like osmosis, the water goes to the side of the membrane where there is a lower osmolarity.

To protect the laboral market is important. Not only to protect the gains of the company. Not only to get macroeconomic indicators of national wealth.

I live in México. I am mexican. I think that the USA main problem is not the immigration issue. The main problem is the overwhelming trend of the industry and business to get out of the USA to be more competitive.

When finally China has been satisfied, they will see with surprise, that companies now are moving to Niger.

At the end of the day, globalization will finish the job of the communist systems, all the people will be equal, all poors. With just the lords of the Money as feudal sirs.

Answer 3

globalization is a driving force in economic development.
Especially for devloping economies

Look at India and China
(not to mention Korea, Singapore, HongKong and others)

Answer 4

On the other hand, globalisation may help developing economies! The market is opened up, and the right follow up measures will do a world of good to the domestic economy! World of good, literally!