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Globalization leading businesses to outsource.

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Globalization leading businesses to outsource.

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Globalization has lead to many businesses to outsource jobs. Businesses in more developed countries outsource their work to those in developing countries to where the cost of labor is much cheaper than in a country such as the United States. By outsourcing jobs to a developing countries they increase their own profits. Although this is generally good for the well being of the company but this is one of the main causes for the loss of service-sector jobs in developed countries. Ultimately globalization leads to developed countries losing work that is being lent out for less pay to those in other countries.
source: http://www.greenworldinvestor.com/2012/05/14/pros-cons-of-globalization/

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Globalization is not a new phenomena, the seeds were sown long back when the Dutch East India Company and the British East India Company started trading with India. In history, there were trade relations between different countries like Arab and Egypt, and now in modern times, that has translated into Globalization or Free Trade. It's true that ultimately all the free trade resulted in the white man taking the burden proactively, but then globalization leads to more employment and higher standard of living, especially among developing countries. Theories suggest that globalization leads to efficient use of resources and benefits all who are involved.

According to libertarians, globalization will help the world to deal with crises like unemployment and poverty. It will help us to raise the global economy only when the involved power blocks have mutual trust and respect for each other's opinion. Globalization and democracy should go hand in hand. It should be pure business with no colonialist designs. The way we have developed in the last 10 years, globalization seems to have given us good returns. Globalization has made the life of the third world citizen a completely different story. There are so many foreign companies that have made way to Orient and have made India a brand name all over the world.

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Evaluating the Major Pros and Cons of Globalization

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Globalization has made the world a smaller place. As with everything else, it has its advantages and disadvantages. Globalization refers to the absence of the walls that every country had, based on suspicion, mutual distrust and ambition. Different countries were in fact different worlds, and therefore, could never manage to deal with natural disasters, deadly epidemics, etc., which challenged us.

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Globalization is creating a labor drain in many developing countries. Labor drain is when poorer countries lose skilled workers to better paying jobs. Globalization had helped workers travel to other countries for work, making it easier for workers from poorer countries to receive better pay. Better pay is good for the workers, but the poorer countries then lose their workers and are left to fend for themselves. This problem adds on to how globalization creating and or helping to widen the gap between the poor and rich and between developed and developing countries.
source: http://futureofworking.com/9-huge-globalization-pros-and-cons/

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Talk: Globalization - Opportunity or Risk? | Global Talk

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Globalization offers both - risks and opportunities. Countries can achieve significant benefits from future globalization as much as companies and people. But what kind of environment is favorable to business and people? How does one ensure that everyone benefits from globalization and that the gaps between rich and poor people and within countries don't grow further?

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Globalization has increased the gap between the rich and the poor.

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Globalization has increased the gap between the rich and the poor.

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Globalization is creating a wider gap between the poor and the rich people all over the world. More developed countries such as the United States are well ahead of smaller or developing countries financially. More developed countries have better wealth and higher income. Although globalization has helped the poor out of poverty, developed countries still have the upper hand in technology, business and more, developing countries are still new to certain products, machinery etc, so they have not had the time to adjust to globalization. Globalization is not the main factor in the widening of the gap between the poor and the rich but it does play a big role.
source: http://www.canada.com/story.html?id=1b6f21bc-25aa-40ba-bd8a-ac71a4185db6
source 2: http://www.voanews.com/content/a-13-globalrichandpoor2006-12-22-voa6-66512112/553270.html

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Closer integration of national economies, also known as economic globalization, had increased prosperity primarily in the world's most advanced nations, a survey released by Bertelsmann Foundation on Monday showed.

Measuring wealth gains among 42 nations since 1990, the study by the Germany-based foundation found that per-capita gross domestic product (GDP) within the top 20 industrialized nations rose by about 1,000 euros ($1380) on average per year. However, in the so-called newly-industrialized countries (NICs) - including China, India and Mexico - average wealth gains amounted to less than 100 euros per person between 1990 and 2011, the survey said.

Germany, alongside Finland, Denmark and Japan, benefitted the most from rising economic interdependencies, adding an average of 100 billion euros to its GDP per year. This translated into about 1,240 euros more annually per German, the study, which was conducted by Prognos Institute, showed.

The per-capita gross domestic product gap between Germany and fast-growing China, for example, had widened over the period, rising from 20,879 euros in 1990 to 25,630 euros in 2011.

"This makes clear that globalization tends to widen the gap between rich and poor," Bertelsmann Chief Executive Aart de Geus said in a statement.

Geus also noted that protectionism on the part of the newly-industrialized countries would be the wrong response to the development because isolationism would reduce the growth effects of globalization in those countries.

The Bertelsmann Foundation CEO, therefore, called on the world's advanced economies to further open up their markets to products from less developed countries, reduce agricultural subsidies and do more for education in newly-industrialized nations. Moreover, spending on infrastructure and production facilities there should be enhanced to ensure the transfer of modern technologies, he added.

Although per-capita gross domestic product is a gauge for measuring the health of a country's economy, it says little about people's individual incomes. In Germany, for example, real wages have fallen over the past decade.

uhe/se (dpa, AFP)

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Globalization widens wealth gap as advanced economies outpace developing world | DW | 24.03.2014

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Closer integration of national economies, also known as economic globalization, had increased prosperity primarily in the world's most advanced nations, a survey released by Bertelsmann Foundation on Monday showed. Measuring wealth gains among 42 nations since 1990, the study by the Germany-based foundation found that per-capita gross domestic product (GDP) within the top 20 industrialized nations rose by about 1,000 euros ($1380) on average per year.

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Globalization has helped popular culture.

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Globalization has helped popular culture.

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Globalization has helped popular culture spread all over the world and allowed people to enjoy different aspects of different cultures. A great example of popular culture and  globalization is fast food restaurants. McDonald's started in the United States and now the restaurants are all over the world, not only do they have the restaurants but they incorporate their own cultural foods into the menu. Globalization has allowed people all over the world to enjoy different foods, clothes and entertainment. Globalization has created a place where you can go to another country such as Japan, and you can still enjoy most of the food, music clothing as in the U.S

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Globalization is the connection of different parts of the world. Globalization results in the expansion of international cultural, economic, and political activities. As people, ideas, knowledge, and goods move more easily around the globe, the experiences of people around the world become more similar.

Globalization in History

Globalization has a long history. Ancient Greek culture, for instance, spread across much of southwestern Asia, northern Africa, and southern Europe. The globalization of Greek culture came with the conqueror Alexander the Great. In fact, there are cities named for Alexander in Iraq (Iskandariya), Egypt (Alexandria), and Turkey (Alexandria Troas).

The Silk Road, a trade route between China and the Mediterranean Sea, promoted the exchange of ideas and knowledge, along with trade goods and foods such as silk, spices, porcelain, and other treasures from the East.

When Europeans began establishing colonies overseas, globalization grew. Many early European explorers were eager to bring the Christian religion to the regions they visited. The globalization of Christianity spread from Europe to Latin America through Christian missionaries working with the local populations.

Globalization was accelerated in the nineteenth century with the Industrial Revolution, as mechanical mills and factories became more common. Many companies used raw materials from distant lands. They also sold their goods in other countries.

Britain's colony in India, for instance, supplied cotton to British merchants and traders. Madras, a light cotton cloth, was made in the city of Madras (now called Chennai), a major port in India. Eventually, madras cloth was no longer manufactured in Madras at all-the Indian labor force supplied the raw material, cotton. Factories in the county of Lancashire, England, created madras cloth. British factories made fabric and other goods from the cotton. British manufacturers could then sell their finished goods, such as clothing and blankets, to buyers all over the world-the United States, Brazil, Australia, even India.

Globalization sped up dramatically in the twentieth century with the proliferation of air travel, the expansion of free trade, and the dawn of the Information Age. Miles of fiber-optic cable now connect the continents, allowing people around the world to communicate instantly through the borderless World Wide Web.

Communication

Modern communication has played a large role in cultural globalization. Today, news and information zips instantly around the world on the internet. People can read information about foreign countries as easily as they read about their local news. Through globalization, people may become aware of incidents very quickly. In seconds, people are able to respond to natural disasters that happen thousands of miles away.

About 60 percent of the people in the world now use cell phones. A farmer in Nigeria can easily talk to his cousin who moved to New York City, New York. The success of global news networks like CNN have also contributed to globalization. People all over the world can see the same news 24 hours a day.

Travel

Increased international travel has also helped globalization. Each year, millions of people move from one country to another in search of work. Sometimes, these migrant workers travel a short distance, such as between the Mexican state of Sonora and the U.S. state of California. Sometimes, migrant workers travel many thousands of miles. Migrant workers from the Philippines, for instance, may travel to Europe, Australia, or North America to find better-paying jobs.

People do not travel just for work, of course. Millions of people take vacations to foreign countries. Most of these international tourists are from developed countries. Many are most comfortable with goods and services that resemble what they have at home. In this way, globalization encourages countries around the world to provide typical Western services. The facilities of a Holiday Inn hotel, for instance, are very similar, whether the location is Bangor, Maine, or Bangkok, Thailand.

Travel and tourism have made people more familiar with other cultures. Travelers are exposed to new ideas about food, which may change what they buy at the store at home. They are exposed to ideas about goods and services, which may increase demand for a specific product that may not be available at home. They are exposed to new ideas, which may influence how they vote. In this way, globalization influences trade, taste, and culture.

Popular Culture

Popular culture has also become more globalized. People in the United States enjoy listening to South African music and reading Japanese comic books. American soap operas are popular in Israel.

India, for instance, has a thriving film industry, nicknamed " Bollywood." Bollywood movies are popular both in India and with the huge population of Indians living abroad. In fact, some Bollywood movies do much better in the United States or the United Kingdom than they do in India.

Clothing styles have also become more uniform as a result of globalization. National and regional costumes have become rarer as globalization has increased. In most parts of the world, professionals such as bankers wear suits, and jeans and T-shirts are common for young people.

There has also been an increasing exchange of foods across the globe. People in England eat Indian curry, while people in Peru enjoy Japanese sushi. Meanwhile, American fast food chains have become common throughout the world. McDonald's has more than 31,000 restaurants in 118 countries. And people all across the world are eating more meat and sugary foods, like those sold in fast food restaurants.

The worldwide expansion of McDonald's has become a symbol of globalization. Some menu items, such as the Big Mac, are the same all over the world. Other menu items are specific to that region. McDonalds in Japan features a green-tea flavored milkshake. At McDonald's in Uruguay, a "McHuevo" is a burger topped with a fried egg. Globalization has brought McDonald's to billions of consumers worldwide.

Economy

The international economy has also become more globalized in recent decades. International trade is vital to the economies of most countries around the world. American software companies, such as Microsoft, rely on international trade to make large profits. The economy of the country of Saudi Arabia is almost entirely dependent on oil exports.

To increase trade, many countries have created free trade agreements with other countries. Under free trade agreements, countries agree to remove trade barriers. For example, they may stop charging tariffs, or taxes, on imports. In 1994, the United States, Mexico, and Canada signed the North American Free Trade Agreement (NAFTA), which eventually ended all tariffs on trade goods between the three nations. This allowed globalization of goods and services, as well as people and ideas, between these three countries.

Most large corporations operate in many countries around the world. HSBC, the world's largest bank, has offices in 88 different countries. Originally, HSBC stood for Hongkong Shanghai Banking Corporation, which was founded in 1865 to promote trade between China and the United Kingdom. Today, HSBC has its headquarters in London, England.

Economic globalization has allowed many corporations based in the West to move factories and jobs to less economically developed countries, a process called outsourcing. The corporation can pay lower wages, because the standard of living in less developed countries is much lower. Laws protecting the environment and workers' safety are less widespread in developing countries, which also lowers costs for the corporation. Often, this results in lower costs for consumers, too.

Economic markets are global. People and organizations invest in companies all over the globe. Because of this, economic downturns in one country are repeated in other countries. The financial crisis that began in the United States in 2006 quickly spread around the world. The way globalization allowed this situation to spread led to the nation of Iceland nearly going bankrupt, for example.

Politics

Cultural and economic globalization have caused countries to become more connected politically. Countries frequently cooperate to enact trade agreements. They work together to open their borders to allow the movement of money and people needed to keep economic globalization working.

Because people, money, and computerized information move so easily around the globe, countries are increasingly working together to fight crime. The idea of maintaining international law has also grown. In 2002, the International Criminal Court was established. This court, which handles cases such as war crimes, has a global reach, although not all countries have accepted it.

Many problems facing the world today cross national borders, so countries must work together to solve them. Efforts to confront problems such as global climate change must involve many different countries. In 2009, representatives from 170 countries gathered at a conference in Copenhagen, Denmark, to discuss climate change. Other international issues include terrorism, drug trafficking, and immigration.

The process of globalization is very controversial. Many people say globalization will help people communicate. Aid agencies can respond more quickly to a natural disaster. Advanced medicines are more easily and widely available to people who may not have been able to afford them. Jobs available through globalization have lifted many people out of poverty. Globalization has increased the number of students studying abroad.

Not everyone says that globalization is good, however. Some people worry that Western culture will destroy local cultures around the world. They fear that everyone will end up eating hamburgers and watching Hollywood movies. Others point out that people tend to adopt some aspects of other cultures without giving up their own. Ironically, modern technology is often used to preserve and spread traditional beliefs and customs.

Opponents to globalization blame free trade for unfair working conditions. They also say that outsourcing has caused wealthy countries to lose too many jobs. Supporters of globalization say that factory workers in poor countries are making much better wages than they would at other jobs available to them. They also argue that free trade has lowered prices in wealthier countries and improved the economy of poorer countries.

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Dunn, Margery G. (Editor). (1989, 1993). "Exploring Your World: The Adventure of Geography." Washington, D.C.: National Geographic Society.

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Globalization is the connection of different parts of the world. Globalization results in the expansion of international cultural, economic, and political activities. As people, ideas, knowledge, and goods move more easily around the globe, the experiences of people around the world become more similar. Globalization in History Globalization has a long history.

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Globalization has increased life expectancy 

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Globalization has increased life expectancy 

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Globalization has increased the life expectancy of many especially those who live in developing countries. Globalization has allowed developing countries to afford and use products from foreign countries that are better quality than what the countries already have. The advanced technology has helped in many aspects such as the businesses who can now produce food and other goods at a much faster rate or hospitals being able to use the advanced machinery that are programmed to help different illnesses, disabilities and more that will help cure many people and allow a greater life expectancy.

source: http://reason.com/archives/2015/04/30/globalization-is-good-for-you/

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Globalization leads to cultural deterioration 

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Globalization leads to cultural deterioration 

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Globalization has created a deterioration in culture all over the world. Although globalization has helped spread culture all over the word but it has also caused many cultures to slowly lose touch of its roots. Traditional foods have been replaced by fast food restaurants such as McDonalds and even Starbucks. Not only has the food been changing so has the customs of holidays, clothing and family. Traditional clothing is becoming a rarity and being replaced by blue jeans and white shirts. Cities themselves have changed as well, places in other countries made to look like famous cities such as Paris, London and so on. Globalization has allowed many businesses to spread across the world but unfortunately has lead to cultures being cloned, replaced or forgotten.
source: http://www.buzzle.com/articles/negative-effects-of-globalization.html
source 2: http://www.subzeroblue.com/archives/2007/01/globalization_vs_cul.html

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Globalization has helped bring many families out of poverty through world trade across international frontiers. Globalization creates more trade between countries, this creates more opportunities for an increase in jobs and wages for workers. Globalization does not only benefit the poor by allowing them sell their cheaper labor into the world market but also those of higher status. The poorer countries bring in the investment that create jobs while the richer countries bring in lower cost products and more money to spend on other investments and more. As globalization continues the trade market increases helping more and more families to a better life.

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There is talk of food miles, of buying locally, and of self-sufficiency, as if these were virtues. The good thing (my number nine) is globalization which gives us all access to each other's special skills and products.
9. Globalization
Over the course of decades globalization is turning the world into an integrated economy instead of what it has been for most of its history, a series of relatively isolated economies. The more trading that takes place, the more wealth is created, and global trade across international frontiers has created more wealth than ever before in human history, and had helped lift more people out of mere subsistence than ever before.

To poorer countries globalization brings the chance to sell their relatively low cost labour onto world markets. It brings the investment that creates jobs, and although those jobs pay less than their counterparts in rich economies, they represent a step up for people in recipient countries because they usually pay more than do the more traditional jobs available there.

To people in richer countries globalization brings lower cost goods from abroad, which leaves them with spending power to spare and a higher standard of living. It also brings opportunities for productive investment in high growth industries in developing countries.

Those adversely affected by the global exchanges are the people in rich countries whose output is now undercut by the cheaper alternatives from abroad. They often need to find new jobs or to be retrained to do work that adds higher value. The extra wealth generated by globalization has brought an increase in service sector employment, which provides many of the new jobs needed.

Competition from abroad forces firms to become more efficient and to use resources more efficiently. Often they choose to go upmarket, seeking higher added value products that face less competition from relatively unskilled labour. Thus firms which once sold cheap textiles move into fashion and design, and find customers among the rising middle classes in developing countries.

The integration of the world economy has brought with it an interdependence. As countries co-operate in trade with each other, they get to know each other and grow into the habit of resolving disputes by negotiation and agreement instead of by armed conflict. The 19th Century French economist Frederic Bastiat expressed this pithily: "Where goods do not cross frontiers, armies will."

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There is talk of food miles, of buying locally, and of self-sufficiency, as if these were virtues. The good thing (my number nine) is globalization which gives us all access to each other's special skills and products. 9. Globalization Over the course of decades globalization is turning the

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Globalization increases world oil prices , use of limited oil supply from developed to developing countries.

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Globalization increases world oil prices , use of limited oil supply from developed to developing countries.

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The world oil supply has been very flat over the past years, that is our first problem. Globalization adds on to the problem. With globalization , oil demand is increasing while the supply is not leading to the price of oil to rise. The low supply leads to the oil consumption to decrease in developed countries and for it to increase in less developed countries. With the increase of consumption leads to more jobs and an increase in the number of workers who can afford a vehicle. Increase in jobs in other countries , lead to job losses in countries such as the U.S which contributes to the decrease in oil consumption

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Globalization seems to be looked on as an unmitigated "good" by economists. Unfortunately, economists seem to be guided by their badly flawed models; they miss real-world problems. In particular, they miss the point that the world is finite. We don't have infinite resources, or unlimited ability to handle excess pollution. So we are setting up a "solution" that is at best temporary.

Economists also tend to look at results too narrowly-from the point of view of a business that can expand, or a worker who has plenty of money, even though these users are not typical. In real life, the business are facing increased competition, and the worker may be laid off because of greater competition.

The following is a list of reasons why globalization is not living up to what was promised, and is, in fact, a very major problem.

1. Globalization uses up finite resources more quickly. As an example, China joined the world trade organization in December 2001. In 2002, its coal use began rising rapidly (Figure 1, below).

In fact, there is also a huge increase in world coal consumption (Figure 2, below). India's consumption is increasing as well, but from a smaller base.

2. Globalization increases world carbon dioxide emissions. If the world burns its coal more quickly, and does not cut back on other fossil fuel use, carbon dioxide emissions increase. Figure 3 shows how carbon dioxide emissions have increased, relative to what might have been expected, based on the trend line for the years prior to when the Kyoto protocol was adopted in 1997.

3. Globalization makes it virtually impossible for regulators in one country to foresee the worldwide implications of their actions. Actions which would seem to reduce emissions for an individual country may indirectly encourage world trade, ramp up manufacturing in coal-producing areas, and increase emissions over all. See my post Climate Change: Why Standard Fixes Don't Work.
4. Globalization acts to increase world oil prices.
The world has undergone two sets of oil price spikes. The first one, in the 1973 to 1983 period, occurred after US oil supply began to decline in 1970 (Figure 4, above and Figure 5 below).

After 1983, it was possible to bring oil prices back to the $30 to $40 barrel range (in 2012$), compared to the $20 barrel price (in 2012$) available prior to 1970. This was done partly by ramping up oil production in the North Sea, Alaska and Mexico (sources which were already known), and partly by reducing consumption. The reduction in consumption was accomplished by cutting back oil use for electricity, and by encouraging the use of more fuel-efficient cars.

Now, since 2005, we have high oil prices back, but we have a much worse problem. The reason the problem is worse now is partly because oil supply is not growing very much, due to limits we are reaching, and partly because demand is exploding due to globalization.

If we look at world oil supply, it is virtually flat. The United States and Canada together provide the slight increase in world oil supply that has occurred since 2005. Otherwise, supply has been flat since 2005 (Figure 6, below). What looks like a huge increase in US oil production in 2012 in Figure 5 looks much less impressive, when viewed in the context of world oil production in Figure 6.

Part of our problem now is that with globalization, world oil demand is rising very rapidly. Chinese buyers purchased more cars in 2012 than did European buyers. Rapidly rising world demand, together with oil supply which is barely rising, pushes world prices upward. This time, there also is no possibility of a dip in world oil demand of the type that occurred in the early 1980s. Even if the West drops its oil consumption greatly, the East has sufficient pent-up demand that it will make use of any oil that is made available to the market.

Adding to our problem is the fact that we have already extracted most of the inexpensive to extract oil because the "easy" (and cheap) to extract oil was extracted first. Because of this, oil prices cannot decrease very much, without world supply dropping off. Instead, because of diminishing returns, needed price keeps ratcheting upward. The new "tight" oil that is acting to increase US supply is an example of expensive to produce oil-it can't bring needed price relief.

5. Globalization transfers consumption of limited oil supply from developed countries to developing countries. If world oil supply isn't growing by very much, and demand is growing rapidly in developing countries, oil to meet this rising demand must come from somewhere. The way this transfer takes place is through the mechanism of high oil prices. High oil prices are particularly a problem for major oil importing countries, such as the United States, many European countries, and Japan. Because oil is used in growing food and for commuting, a rise in oil price tends to lead to a cutback in discretionary spending, recession, and lower oil use in these countries. See my academic article, "Oil Supply Limits and the Continuing Financial Crisis," available here or here.

Developing countries are better able to use higher-priced oil than developed countries. In some cases (particularly in oil-producing countries) subsidies play a role. In addition, the shift of manufacturing to less developed countries increases the number of workers who can afford a motorcycle or car. Job loss plays a role in the loss of oil consumption from developed countries-see my post, Why is US Oil Consumption Lower? Better Gasoline Mileage? The real issue isn't better mileage; one major issue is loss of jobs.

6. Globalization transfers jobs from developed countries to less developed countries. Globalization levels the playing field, in a way that makes it hard for developed countries to compete. A country with a lower cost structure (lower wages and benefits for workers, more inexpensive coal in its energy mix, and more lenient rules on pollution) is able to out-compete a typical OECD country. In the United States, the percentage of US citizens with jobs started dropping about the time China joined the World Trade Organization in 2001.

7. Globalization transfers investment spending from developed countries to less developed countries. If an investor has a chance to choose between a country with a competitive advantage and a country with a competitive disadvantage, which will the investor choose? A shift in investment shouldn't be too surprising.

In the US, domestic investment was fairly steady as a percentage of National Income until the mid-1980s (Figure 9). In recent years, it has dropped off and is now close to consumption of assets (similar to depreciation, but includes other removals from service, such as removals because manufacturing has moved overseas). The assets in question include all types of capital assets, including government-owned assets (schools, roads), business owned assets (factories, stores), and individual homes. A similar pattern applies to business investment viewed separately.

Part of the shift in the balance between investment and consumption of assets is rising consumption of assets. This would include early retirement of factories, among other things.

Even very low interest rates in recent years have not brought US investment back to earlier levels.
8. With the dollar as the world's reserve currency, globalization leads to huge US balance of trade deficits and other imbalances.
With increased globalization and the rising price of oil since 2002, the US trade deficit has soared (Figure 10). Adding together amounts from Figure 10, the cumulative US deficit for the period 1980 through 2011 is $8.6 trillion. By the end of 2012, the cumulative deficit since 1980 is probably a little over 9 trillion.

A major reason for the large US trade deficit is the fact that the US dollar is the world's " reserve currency." While the mechanism is too complicated to explain here, the result is that the US can run deficits year after year, and the rest of the world will take their surpluses, and use it to buy US debt. With this arrangement, the rest of the world funds the United States' continued overspending. It is fairly clear the system was not put together with the thought that it would work in a fully globalized world-it simply leads to too great an advantage for the United States relative to other countries. Erik Townsend recently wrote an article called Why Peak Oil Threatens the International Monetary System, in which he talks about the possibility of high oil prices bringing an end to the current arrangement.

At this point, high oil prices together with globalization have led to huge US deficit spending since 2008. This has occurred partly because a smaller portion of the population is working (and thus paying taxes), and partly because US spending for unemployment benefits and stimulus has risen. The result is a mismatch between government income and spending (Figure 11, below).

Thanks to the mismatch described in the last paragraph, the federal deficit in recent years has been far greater than the balance of payment deficit. As a result, some other source of funding for the additional US debt has been needed, in addition to what is provided by the reserve currency arrangement. The Federal Reserve has been using Quantitative Easing to buy up federal debt since late 2008. This has provided a buyer for additional debt and also keeps US interest rates low (hoping to attract some investment back to the US, and keeping US debt payments affordable). The current situation is unsustainable, however. Continued overspending and printing money to pay debt is not a long-term solution to huge imbalances among countries and lack of cheap oil-situations that do not "go away" by themselves.

9. Globalization tends to move taxation away from corporations, and onto individual citizens. Corporations have the ability to move to locations where the tax rate is lowest. Individual citizens have much less ability to make such a change. Also, with today's lack of jobs, each community competes with other communities with respect to how many tax breaks it can give to prospective employers. When we look at the breakdown of US tax receipts (federal, state, and local combined) this is what we find:

The only portion that is entirely from corporations is corporate income taxes, shown in red. This has clearly shrunk by more than half. Part of the green layer (excise, sales, and property tax) is also from corporations, since truckers also pay excise tax on fuel they purchase, and businesses usually pay property taxes. It is clear, though, that the portion of revenue coming from personal income taxes and Social Security and Medicare funding (blue) has been rising.

I showed that high oil prices seem to lead to depressed US wages in my post, The Connection of Depressed Wages to High Oil Prices and Limits to Growth. If wages are low at the same time that wage-earners are being asked to shoulder an increasing share of rising government costs, this creates a mismatch that wage-earners are not really able to handle.
10. Globalization sets up a currency "race to the bottom," with each country trying to get an export advantage by dropping the value of its currency.
Because of the competitive nature of the world economy, each country needs to sell its goods and services at as low a price as possible. This can be done in various ways-pay its workers lower wages; allow more pollution; use cheaper more polluting fuels; or debase the currency by Quantitative Easing (also known as "printing money,") in the hope that this will produce inflation and lower the value of the currency relative to other currencies.

There is no way this race to the bottom can end well. Prices of imports become very high in a debased currency-this becomes a problem. In addition, the supply of money is increasingly out of balance with real goods and services. This produces asset bubbles, such as artificially high stock market prices, and artificially high bond prices (because the interest rates on bonds are so low). These assets bubbles lead to investment crashes. Also, if the printing ever stops (and perhaps even if it doesn't), interest rates will rise, greatly raising cost to governments, corporations, and individual citizens.

11. Globalization encourages dependence on other countries for essential goods and services. With globalization, goods can often be obtained cheaply from elsewhere. A country may come to believe that there is no point in producing its own food or clothing. It becomes easy to depend on imports and specialize in something like financial services or high-priced medical care-services that are not as oil-dependent.

As long as the system stays together, this arrangement works, more or less. However, if the built-in instabilities in the system become too great, and the system stops working, there is suddenly a very large problem. Even if the dependence is not on food, but is instead on computers and replacement parts for machinery, there can still be a big problem if imports are interrupted.
12. Globalization ties countries together, so that if one country collapses, the collapse is likely to ripple through the system, pulling many other countries with it.
History includes many examples of civilizations that started from a small base, gradually grew to over-utilize their resource base, and then collapsed. We are now dealing with a world situation which is not too different. The big difference this time is that a large number of countries is involved, and these countries are increasingly interdependent. In my post 2013: Beginning of Long-Term Recession, I showed that there are significant parallels between financial dislocations now happening in the United States and the types of changes which happened in other societies, prior to collapse. My analysis was based on the model of collapse developed in the book Secular Cycles by Peter Turchin and Sergey Nefedov.

It is not just the United States that is in perilous financial condition. Many European countries and Japan are in similarly poor condition. The failure of one country has the potential to pull many others down, and with it much of the system. The only countries that remain safe are the ones that have not grown to depend on globalization, of which there are probably not many today-perhaps landlocked countries of Africa.

In the past, when one area collapsed, there was less interdependence, so it was possible to let cropland "rest" and deforested areas regrow. With regeneration, and perhaps new technology, it was possible for a new civilization to grow in the same area later. If we are dealing with a world-wide collapse, it will be much more difficult to follow this model.

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Twelve Reasons Why Globalization is a Huge Problem

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Globalization seems to be looked on as an unmitigated "good" by economists. Unfortunately, economists seem to be guided by their badly flawed models; they miss real-world problems. In particular, they miss the point that the world is finite. We don't have infinite resources, or unlimited ability to handle excess pollution.

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Having multiple producer or multiple options is good because the different companies want customers to buy their products instead of the other companies. The quality of services and of goods go up benefitting the people. Globalization increases the competition because now business have to compete against companies in other countries, this competition leads to the prices of products to reduce. Making the products is one of the ways that producers do to try to make their product much more appealing than the competition’s product. Each company will try to improve their services and more so that the customer chooses them. This competition allows the customers to have a choice of product, price, style and quality.

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It's a small world, after all. This saying has never been more true, and if trends continue to develop the way they are, the world may continue to shrink.

In light of advanced technology, higher demands from markets and faster turnaround times, globalization has become a staple for world commerce.

In the U.S., the term globalization often has negative connotations. For many, it represents a threat to their jobs, livelihood and way of life.

Though many Americans think of it as a dirty word, "globalization," actually has been a catalyst for positive change as well.

Related:
K-State promotes globalization by offering Swahili courses

Here are four ways that globalization has had a positive impact on the world economy:
1. More efficient markets
Efficient markets should be what every economy strives for. Essentially, the sign of an efficient market is where there is an equilibrium between what buyers are willing to pay for a good or service and what sellers are willing to sell for a good or service.

If you can improve the way you produce a good or service by doing things such as outsourcing certain processes or buying from an overseas supplier that offers discounts, you can then afford to lower your selling price which results in increased demand and affordability.

Even if businesses don't lower prices, they can make additional profits and then reallocate that excess profit into doing things like increasing wages, taking on more investments or even creating more expansion projects.

Related:
3 negative impacts of globalization on the United States
2. Increased competition
Anytime that you have multiple producers competing for a hold of the economy, that's a good sign for consumers, as the quality of goods and services often goes up as a result.

When businesses started to venture across international borders, what they often did was introduce a new standard into the global marketplace. Consumers then had more options to choose from.

With more competitors to fight over market share, each company has to constantly look to improve their goods or services or create more value for their customers.

This means better products and sometimes lower prices, which is always a good thing for buyers.

When your economy depends largely on another country's economy, it is hard to imagine either one of the countries attacking the other. In a weird sort of way, globalization helped heighten world security.

Although this may seem kind of twisted since there is so much violence that still goes on in the world, the fact remains that globalization has halted many conflicts that could have turned ugly if their country's financial health didn't depend on the other.

4. More wealth equality throughout the world

Although many Americans contend that their standard of living has gone down because of globalization, the flip side to this is that hundreds of thousands of people around the world now have jobs, have started their own businesses and can provide comfort for their families.

Living in the U.S., we take things like clean water, shelter and plentiful food for granted. Our standard of living is so high compared to many nations that when we can no longer buy frivolous luxuries, we claim that we are poor.

Globalization may have stopped you from buying another flat screen TV, but it also helped countless people in developing countries put food on their table for their families.

See? There is a silver lining to it all.

Andy Rao is a junior in finance and accounting. Please send comments to news@kstatecollegian.com.

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4 positive impacts of globalization on world economy

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It's a small world, after all. This saying has never been more true, and if trends continue to develop the way they are, the world may continue to shrink.In light of advanced technology, higher demands from markets and faster turnaround times, globalization has become a staple for world commerce.In

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Globalization has made businesses more efficient and have more opportunities. 

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Globalization has made businesses more efficient and have more opportunities. 

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The open markets create opportunities and more efficient businesses. Businesses can contact better with customers, partners and suppliers. Globalization helps producers sell their products in different locations at the same rate as in their own country. It can lead an increase in the standard of living in many developing countries , because of globalization these countries have access to foreign lending, better and higher quality products, goods and services. Globalization has allowed for other countries to become more developed in the business and cultural aspects. Both developed and developing countries have advantages and disadvantages such as developed countries have more supply selling and developing countries have access to them.
source:http://smallbusiness.chron.com/effects-economic-globalization-developing-countries-3906.html

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Globalization, the increasing integration and interdependence of domestic and overseas markets, has three sides: the good side, the bad side, and the ugly side.

The good side of globalization is all about the efficiencies and opportunities open markets create. Business can communicate efficiently and effectively with their partners, suppliers, and customers and manage better their supplies, inventories, and distribution network. Local producers can sell their products in distant markets with the same ease and speed as in their home country. Sony Corporation (NYSE:SNE), for instance, can sell its TV and game consoles with the same ease in New York as in Tokyo. Likewise, Intel (NASDAQ:INTC), Apple (NASDAQ:AAPL), and Cisco (NASDAQ:CSCO) can sell their high tech gear with the same ease in Tokyo as in New York.

The good side of globalization is also about easy credit and rising leverage, as money flows easily across local and national boundaries, and creditors fail to distinguish between good and bad borrowers, boosting aggregate demand; setting the world economy into a virtuous cycle of income and employment growth; and easy credit and leverage fuel financial bubbles that feed into a euphoria that perpetuates the virtuous cycle.

The bad side of globalization is all about the new risks and uncertainties brought about by the high degree of integration of domestic and local markets, intensification of competition, high degree of imitation, price and profit swings, and business and product destruction. Corporations that previously have been enjoying the benefits of globalization, now face unstable and unpredictable demand and business opportunities and their products quickly become commodities, leaving them little or no pricing power and under constant pressure by new competitors that undermine profitability.

The bad side of globalization is also about tight credit, deleverage, and declining money flows across local and national boundaries, as creditors tighten credit to both good and bad borrowers, depressing aggregate demand; setting the world economy into a vicious cycle of income and employment declines; and euphoria is succeeded by pessimism and a burst of asset bubbles, perpetuating the downward spiral of the world economy.

The ugly side of globalization is when nations and local communities try to escape the vicious cycle of income and employment declines through simultaneous currency devaluations; and by raising trade barriers that in essence put an end to globalization and a beginning to trade wars, as was the case in the 1930s.

In the last quarter of the century and for the most part of the first decade of this century, the world has seen the good side of globalization. In the last four years, the world has seen the bad side of globalization. We do hope and pray that the world won't see the ugly side of it.

Also read:
Why A Labor Shortage Is Good News For The Chinese Economy An Open Letter To The Capitalist Enterprise Why the Next Financial Crisis Will Be Nastier

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The Good, The Bad, And The Ugly Side Of Globalization

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Image via Wikipedia Globalization, the increasing integration and interdependence of domestic and overseas markets, has three sides: the good side, the bad side, and the ugly side. The good side of globalization is all about the efficiencies and opportunities open markets create. Business can communicate efficiently and effectively with their partners, suppliers, [...]

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These sources argue that globalization has made the world worse

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These sources argue that globalization has made the world better.