HELP???Globalization rich and poor?

Question

globalization how doesnt the rch get richer and the poor get poorer. I need this for a debate class and this is the only question that's giving me a hard time to answer.My group is FOR globalization.I need to prove this statment can be true

Answer 1

Its a shame that there is such an inherent bias against free trade and open and free international interaction... but anyway...

Globalization allows specialization of production. Poorer countries with cheaper labor are able to produce labopr intensive goods more efficently and wealthy nations can create capital intensive gods more efficiently. They both then trade and both are made better off.

In fact, if done well, even though both countries are better off via trade, the poorer countries benift more because of the deminishing marginal return to capital. A deminishing marginal return means thata ll else equal, the addition of an aditional unit of capital will be less productive then the previous. So poorer nations which have less capital, will benift more from having say an addition factory then a rich nation does.

Before the 1980s or so, most 3rd world countries practiced what is called import substitution. The theory is that will high trade tariffs and other restrictions, the nation will foster its own industry. But this largely ended up failing because the industries were not efficient ad did niot have access to adaquate capital. This is why most countries have now engaged globalization.

China began to open itself up in 1979, and since then their standard of livign has been expanding rapidly. based on whether you use $1 or $2 per day as the international poverty line, it is estimated that between 200 and 400 million chinese have now moved above that line since China started opening up. Theire economy has been growing at over 10% per year lately. This is compared to the developed worlds average of around 3%. As you can see, the poorer nation benifts more, butboth still benifit. India is in a similar situation.

Furthermore, technology gets spread around. Fr example, farmers in rural african nations now have cell phones so that they can call to markets to check the farm goods prices,a llowing them to sell at a better price. This increases their standard of living.

With that said though, there is a trasnision cost. Some jobs are destoyed while otheres are created, but the new ones pay more. Also, if the government has bad policy or is corrupt or restricts trade, it can be diasterous, and this is what happened all to often, for instance in Zimbawe, where the leeader is insain and driven his country into an inflation rate over 1000%. Many nations still have too high tarriffs, and a lot of developed nations have heavy tarriffs and substidies on agricultural products in particular. This really harms poorer nations comparative advantage.

Here is one link with an article for more detail:

http://www.radford.edu/~mthong/benefits_of_globalization.htm

Just google "globalization benifits poor nations" or variations of that. There is a ton of literature on the topic.

Answer 2

Think of it this way. Globalization is asking for a level playing field which is good. However, the players you want to play in it are not level. Think of developed nations as the NBA players and the developing nations as your high school team.

Is this the fault of developing nations? No. They're young and not yet capable. So will globalization be good for them. Maybe yes in some cases but no in most. Imagine Zimbabwe. You're asking a rookie hockey team to play with no armor against big, big, guys with lots of padding.

Its really a problem how developed nations are demanding developing nations to open up their markets when these developed nations themselves are not opening theirs. They're not removing farm subsidies, which is the only sure shot advantage of smaller nations. We've all also heard about Chinese clothes and shoes being refused entry in Europe, but here they still go and say "We're for free trade."

Its in how globalization that's done that's not working. Until that I stick to my opinions, and I'm not some street radical, I'm a business grad working in IBM.

Answer 3

Just take a look at the data:

ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/ind2000.txt

Between 1975 and 2002, manufacturing wages in Taiwan went from 6% to 25% of U.S. wages, in Korea, from 5% to 43%, in Singapore, from 13% to 34%...

Answer 4

A wealthy guy and a unfavorable guy are sitting in a bar one night. The unfavorable guy asks the wealthy guy what he have been given his spouse for her birthday. "I have been given her a clean convertible and a 24-karat diamond ring," reported the wealthy guy. The unfavorable guy, slightly puzzled by way of this, says "Why interior the hell did you get her the two?" the wealthy guy replies, "I have been given her the two using fact if she would not like the hoop, she will take it lower back in her new automobile and substitute it." After this, the wealthy guy asks the unfavorable guy what he have been given his spouse for her birthday. The unfavorable guy responds," I have been given her a headscarf and a couple of shoes." needless to say perplexed, the wealthy guy asks why he chosen those products. The unfavorable guy replied, " using fact if she would not like the headscarf, she will take a hike."