NationStates Jolt Archive

well, which is it?

well i'm from a first world country, so i vote good.

So its bad if your from a 3rd world country?

Good. Free trade > protectionist nonsense.

So its bad if your from a 3rd world country?

yes since things like hotels in Kenya have large amounts of there profits sent to the owners countries meaning almost no money going to Kenya

edit: well I say its bad for the 3rd world but its 50/50 really and more of a win/win for the first world

Free Trade is always good baby.

So its bad if your from a 3rd world country?

I don't think so.
People opposed to globalisation often look at China, where it has been claimed that companies like Nike have 'exploited' cheap labour.
But China has grown at a rate of at least 9% per year for more than 25 years, most likely because of foreign investment in the country, as well as the growth of international trade.

Free Trade is always good baby.

Why?

Why?

Free Trade Creates competition. Competition usually brings out the best product while driving the price down, everyone wins!

Free Trade Creates competition. Competition usually brings out the best product while driving the price down, everyone wins!

horray for capitalism!

Does Globalization cause Outsourcing?

Free Trade Creates competition. Competition usually brings out the best product while driving the price down, everyone wins!Foolish presumption. Yes, free trade will drive the price down as long as there is competition, doing whatever you can get away with. If slavery, child labor, exploitation, or murder drive the price down and can be gotten away with, they will happen. Not everyone wins.

Globalization is neutral. It is merely a tool that can be used by individuals and societies for positive or negative ends.

Free Trade Creates competition. Competition usually brings out the best product while driving the price down, everyone wins!

Everyone except the workers who were put out of a job by foreign imports. I'm generally in favour of globalisation, but there will be people who lose. All of us consumers get to enjoy lower prices though.

Globalization is neutral. It is merely a tool that can be used by individuals and societies for positive or negative ends.

Does the USA in general use it for positive or does it use it for negative ends?

Depends on your strategy and how you deregulate your markets.

Everyone except the workers who were put out of a job by foreign imports. I'm generally in favour of globalisation, but there will be people who lose. All of us consumers get to enjoy lower prices though.
If foreign imports are cheaper, consumers will have more money to spend on other goods - consequently, other industries within the nation will expand, thereby creating new jobs. In addition, with their newly acquired, say, dollars, citizens of the other country will now be prompted to by more goods from say, the US.

Does the USA in general use it for positive or does it use it for negative ends?The USA doesn't use it at all, if that's how you look at it. Private businesses do.

Does Globalization cause Outsourcing?

simple answer: yes but only in unskilled work (which is already under attack from teh machines!!!)

Everyone except the workers who were put out of a job by foreign imports. I'm generally in favour of globalisation, but there will be people who lose. All of us consumers get to enjoy lower prices though.

It's not a zero-sum game. Workers usually find new jobs in areas where there are more efficiencies and can end up being better paid. Otherwise half the population of the US would be unemployed instead of having one of the highest levels of employment in the developed world.

Does the USA in general use it for positive or does it use it for negative ends?
Again, it varies depending on the group in question. Many companies use globalization to cooperate with others around the world and to create new and exciting things, while others choose to exploit and take advantage of poorer, weaker nations.

As for the government, I don't think it has a comprehensive globalization policy.

Foolish presumption. Yes, free trade will drive the price down as long as there is competition, doing whatever you can get away with. If slavery, child labor, exploitation, or murder drive the price down and can be gotten away with, they will happen. Not everyone wins.
Yes, until said nation concentrates enough capital to industrialize. Machines are cheap and tend to be efficient to run - hence child labour will by consequence become the lesser good. The alternative (ie not trading) would be for the nation to stagnate, yet still go on practising its more reprehensible actions. So now not only would it be poor, but people would still suffer.

simple answer: yes but only in unskilled work (which is already under attack from teh machines!!!)

So it forces most US workers to become skilled, which requires education then right? So those Globalization indirectly cause college to become a requirement for citizens to find work? and if so how would people from poorer families or people who don't get good enough grades find good work in America? Would the poor become poorer then?

*these are objective questions i'm not trying to be biased, i simply don't know.

Yes, until said nation concentrates enough capital to industrialize. Machines are cheap and tend to be efficient to run - hence child labour will by consequence become the lesser good. The alternative (ie not trading) would be for the nation to stagnate, yet still go on practising its more reprehensible actions. So now not only would it be poor, but people would still suffer.An optimistic, yet unrealistic view. And it ignores the social background of most of child labor cases: The kids will often be sent to work because the parents have no jobs, because the jobs are being done by kids.

An optimistic, yet unrealistic view.
Prove it.

And it ignores the social background of most of child labor cases: The kids will often be sent to work because the parents have no jobs, because the jobs are being done by kids.
Machines cost less to operate than children, and are more efficient. In turn, the children will lose employment. Eventually, due to the increasing costs, the machines will become less efficient. Hence more manpower will be needed once more. Guess who can fill it.

An optimistic, yet unrealistic view. And it ignores the social background of most of child labor cases: The kids will often be sent to work because the parents have no jobs, because the jobs are being done by kids.

Child labour is prevalant in third world countries only because it has to be has to be. Very poor countries often don't have a level of productivity high enough to support children without putting them to work. Child labour was commonplace in the West until after the industrial revolution. If anything, globalisation will reduce child labour because multinationals will not risk losing their reputation.

I see global capitalism as negative. Unregulated free market capitalism will always - worth debating I suppose - benefit the slightly richer whilst hurting the poorer and means that we can never have a global equality. It's not realistic but ideologically I love the idea of snydicalism: no more money, trading with each other on a personal non-big business level. Oh! A guy can dream...bring back communes I say; the sooner the better....and leave Africa alone for forty years. Now I feel better.

Child labour is prevalant in third world countries only because it has to be has to be. Very poor countries often don't have a level of productivity high enough to support children without putting them to work. Child labour was commonplace in the West until after the industrial revolution. If anything, globalisation will reduce child labour because multinationals will not risk losing their reputation.
Amongst other things, yes. That will also be one reason for them to reduce child labour.

Prove it.


Machines cost less to operate than children, and are more efficient. In turn, the children will lose employment. Eventually, due to the increasing costs, the machines will become less efficient. Hence more manpower will be needed once more. Guess who can fill it.The whole thing sounds much like a homo economicus construct. You're assuming too much foresight on behalf of those that benefit from child labor.

well, which is it?

Yes; would you like to be ruled by George W. Bush? It's bad enough that he rules 1 country, but the world?

The whole thing sounds much like a homo economicus construct. You're assuming too much foresight on behalf of those that benefit from child labor.
They will have to compete with western corporations if they desire to remain afloat. If Western corporations are more capital-intensive (and they are), they will outstrip their more "primitive" competitors. They will either conform or sink, to put it simply. The ex post situation will be better than the ex ante situation.

What if we reverted to the old days where we had protectionist tarriffs to protect our industry, wouldn't there be jobs for in America in all fields? Not just skilled labor?

I don't think so.
People opposed to globalisation often look at China, where it has been claimed that companies like Nike have 'exploited' cheap labour.
But China has grown at a rate of at least 9% per year for more than 25 years, most likely because of foreign investment in the country, as well as the growth of international trade.

China also has policies on banning imports into the country, and pinning the currency against the dollar to prevent inflation. In other words, it proves free trade is awesome if you're the only one not doing it. Which certainly it is :p

What if we reverted to the old days where we had protectionist tarriffs to protect our industry, wouldn't there be jobs for in America in all fields? Not just skilled labor?
In which case you would force consumers to pay a higher price for goods. The extra $5 they could, say, have spent on any other good will now be focused on this more expensive good. Consumption will fall as an overall. Employment that could have been created will now not be created.

So how could the US protect its unskilled labor while keeping goods cheap? Get rid of unions?

They will have to compete with western corporations if they desire to remain afloat. If Western corporations are more capital-intensive (and they are), they will outstrip their more "primitive" competitors. They will either conform or sink, to put it simply. The ex post situation will be better than the ex ante situation.That is assuming that the Western corporations will place morals over money, and that their consumers will too. This isn't always the case. I hear people decrying fair trade often enough simply because they don't want their coffee to cost more.

So how could the US protect its unskilled labor while keeping goods cheap? Get rid of unions?
Focus on what goods it is best at trading.

As for unions, they exist as a worker's right to representation within the free-market; insofar as they are not pressure groups and do not make excessive claims, they are a legitimate entity.

That is assuming that the Western corporations will place morals over money, and that their consumers will too. This isn't always the case. I hear people decrying fair trade often enough simply because they don't want their coffee to cost more.
No, it assumes nothing of the sort. It merely assumes that Western corporations are capital-intensive. They will compete with foreign companies as a matter of expanding their market. The foreign companies, if they lack the foresight to shift to being more capital-intensive, will lose out. So capital-intensiveness will now become a matter of survival rather than just an option.

Are we talking globalisation or free trade?

As far as the latter is concerned, there is no argument.

Read this: http://www.stanford.edu/~wacziarg/downloads/integration.pdf

All the evidence you ever needed.

No, it assumes nothing of the sort. It merely assumes that Western corporations are capital-intensive. They will compete with foreign companies as a matter of expanding their market. The foreign companies, if they lack the foresight to shift to being more capital-intensive, will lose out. So capital-intensiveness will now become a matter of survival rather than just an option.

what if every country (or almost every country) became more capital-intensive, this as we stated before would add more competition and cause lower prices, but would it also create a need for cheaper labor, so now wages would go down as well as prices? And if countries shifted to just making the stuff their best at making would that cause each country to produce only a few goods each?

what if every country (or almost every country) became more capital-intensive, this as we stated before would add more competition and cause lower prices, but would it also create a need for cheaper labor, so now wages would go down as well as prices? And if countries shifted to just making the stuff their best at making would that cause each country to produce only a few goods each?
Why would more machines create a need for cheaper labour? They eliminate the need for unskilled labour!

China for example is actually experiencing a net loss in manufacturing jobs every year because of the use of machines.

Meaning that there are less people working in sweat shops, and more people who therefore look for alternatives in education and service sectors.

Are we talking globalisation or free trade?

As far as the latter is concerned, there is no argument.

Read this: http://www.stanford.edu/~wacziarg/downloads/integration.pdf

All the evidence you ever needed.

summarize it for me real quick

what if every country (or almost every country) became more capital-intensive, this as we stated before would add more competition and cause lower prices, but would it also create a need for cheaper labor, so now wages would go down as well as prices?
Here comes in the concept of increasing costs. Machines gradually become less efficient and more expensive to operate. Furthermore, due to cost-reduction profit margins will increase for corporations; more will enter the market. Profits margins will fall. Incentives to hire labour will increase. Labour will shift to skilled work. Increased demand for it and this shift, will lead to higher wages.

And if countries shifted to just making the stuff their best at making would that cause each country to produce only a few goods each?
No, not really. This is realistically impossible. They will simply be intensive in their abundant factor.

summarize it for me real quick
Trade Liberalisation => Consistently stronger economic growth

Globalization can help or hurt a country, it just depends upon their situation.
For a rich nation, the labor is exported to a poor nation. The poor nation benefits because they finally have jobs, and the rich nation benefits from the cheaper products. However, the poor nation suffers because giant corporations limit competition within their nation, while rich nations loose labor.

It can come down to a simple question. Do you want to pay $50 for a TV, and loose your job? Or do you want to pay $500 for a TV and keep your job? This can apply to upper level jobs because there's always some country out there that can do the job you can do only more cheaply.

Of course, there's other issues with globalization, but in the end everyone is supposed to benefit from competition and cheaper products.

(Bah...so slow in saying something...I'm so late in the game now.)

It’s the single greatest event in human history.

I think the argument for free-trade has been made. Globalization, however, is a very broad concept. What specifically did the OP have in mind? They should have offered a definition first, and it is my silliness for not demanding this of them.

Ok, one more question. If the auto industry is cutting back and there are few manufacturing jobs for the laid off workers to find, how do they get themselves a job that makes nearly as much money as their old? Like whats happening in Michigan...

Ok, one more question. If the auto industry is cutting back and there are few manufacturing jobs for the laid off workers to find, how do they get themselves a job that makes nearly as much money as their old? Like whats happening in Michigan...
There is absolutely no guarantee that they will. They might get a better job, they might get a worse-paying one. However, as I have explained cheaper goods and increased real income on part of consumers will lead to higher overall spending within the domestic economy, plus a surplus of dollars abroad will lead to higher US exports. This will cause growth within the economy. This growth will usually seek labour; labour that has been made redundant and is flexible will usually be absorbed in this manner. This is typically what protectionists forget to see.

I recommend you read Economics in One Lesson by H. Hazlitt if you're a non-economist for further elaboration on these concepts.

Like whats happening in Michigan...
Or the poor people of the horse & carriage industry? Henry Ford sure destroyed their existence.

There is absolutely no guarantee that they will. They might get a better job, they might get a worse-paying one. However, as I have explained cheaper goods and increased real income on part of consumers will lead to higher overall spending within the domestic economy, plus a surplus of dollars abroad will lead to higher US exports. This will cause growth within the economy. This growth will usually seek labour; labour that has been made redundant and has not shifted its focus will usually be absorbed in this manner. This is typically what protectionists forget to see.

I recommend you read Economics in One Lesson by H. Hazlitt if you're a non-economist for further elaboration on these concepts.

Oh... I will be sure to get the book then... Obviously I don't know too much about the subject and didn't really realize that there was a difference between Globalization and free-trade... I just wanted to know what it exaclty consisted of, so I would know on which side I support...

Oh... I will be sure to get the book then... Obviously I don't know too much about the subject and didn't really realize that there was a difference between Globalization and free-trade... I just wanted to know what it exaclty consisted of, so I would know on which side I support...
That's why I asked you previously to define what you mean by globalization exactly. Free-trade is surely an aspect of it, but only one. I have given the arguments for free-trade specifically, so unless you further define globalization I have nothing more to say on it.

That's why I asked you previously to define what you mean by globalization exactly. Free-trade is surely an aspect of it, but only one. I have given the arguments for free-trade specifically, so unless you further define globalization I have nothing more to say on it.

Well what are the other aspects of Globalization then?

Or the poor people of the horse & carriage industry? Henry Ford sure destroyed their existence.

Touché

Well what are the other aspects of Globalization then?
Cultural (so-called "americanization") and political globalization (e.g. world-government). They may or may not be tied into free-trade, but they are also separate entities in their own right.

http://dictionary.cambridge.org/define.asp?key=33184&dict=CALD

globalization
noun [U]
1 (UK USUALLY -isation) the increase of trade around the world, especially by large companies producing and trading goods in many different countries:
We must take advantage of the increased globalization of the commodity trading business.

2 when available goods and services, or social and cultural influences, gradually become similar in all parts of the world:
the globalization of fashion/American youth culture

I say globalization, at least in the economic sense, is BAD, at least for nations that try to make sure employers pay their employees enough to live off of, such as the United States.

On the other hand, it's GOOD for those nations that allow employers to get away with something VERY close to slave labor, i.e. NOT paying employees anywhere NEAR enough to live off of, such as Vietnam.

Or the poor people of the horse & carriage industry? Henry Ford sure destroyed their existence.

Hey now! They're still going strong and hanging in there! Why, just look at the Amish. Ample opportunity to pimp carriages like we do our SUVs. :p

Oh... I will be sure to get the book then... Obviously I don't know too much about the subject and didn't really realize that there was a difference between Globalization and free-trade... I just wanted to know what it exaclty consisted of, so I would know on which side I support...
Economics in one lesson (http://www.mises.org/books/onelesson.pdf)

Here is that book off of the internet. You can download it as a pdf file.

Economics in one lesson (http://www.mises.org/books/onelesson.pdf)

Here is that book off of the internet. You can download it as a pdf file.
Why did I not know this? :( Meh, costs me more to print it out anyway, and I ain't bothered to read entire books off a screen.

Why did I not know this? :( Meh, costs me more to print it out anyway, and I ain't bothered to read entire books off a screen.
I don't know, I think that there are 2 sites have this particular book for free. Right, well for people who are too cheap/poor to buy the book and can tolerate reading an entire book off of a screen this is worth it.

I don't know, I think that there are 2 sites have this particular book for free. Right, well for people who are too cheap/poor to buy the book and can tolerate reading an entire book off of a screen this is worth it.
Indeed, thanks for putting it up. :)

I say globalization, at least in the economic sense, is BAD, at least for nations that try to make sure employers pay their employees enough to live off of, such as the United States.

On the other hand, it's GOOD for those nations that allow employers to get away with something VERY close to slave labor, i.e. NOT paying employees anywhere NEAR enough to live off of, such as Vietnam.

The wages needed to live off very low in Vietnam, and even though the Vietnamese aren't paid much by our standards, they are far better off working in foreign-owned businesses.
According to this source, workers in foreign owned businesses in Vietnam are paid wages of US $0.42 compared with the average of just US $0.23.
http://www.extension.umn.edu/newsletters/ageconomist/components/ag237-701a.html (these statistics are fairly old (1998))
It might seem like a pitance, but it has to be put in perspective, a Vietnamese worker is far better off for globalisation.

It might seem like a pitance, but it has to be put in perspective, a Vietnamese worker is far better off for globalisation.
To add something else; as poorer areas become richer, the comparative advantage their labour has against that in richer countries will fall. Hence it will become increasingly less attractive for Western companies to outsource. As poorer countries become richer, they may expand their business into Western countries and absorb unutilised Western labour.

Globalization killed my grandma...

If one does not mind getting one's information from Mises.org they actually did put up an article recently about globalization. It can be found here (http://www.mises.org/story/2361).

Globalization killed my grandma...
Did it take a knife and stab her in her sleep?

...

Globalization is most excellent, and its continuation is our best hope for developing an international system that is defined not by the wars that have been so damn dominant for the past six thousand years, but by peace and wealth.

To add something else; as poorer areas become richer, the comparative advantage their labour has against that in richer countries will fall. Hence it will become increasingly less attractive for Western companies to outsource. As poorer countries become richer, they may expand their business into Western countries and absorb unutilised Western labour.

It's not espescially fast, but it's amazingly efficient. We're seeing it right now in the United States, with firms like Toyota and Honda investing in massive production facilities.

It's not espescially fast, but it's amazingly efficient. We're seeing it right now in the United States, with firms like Toyota and Honda investing in massive production facilities.
Exactly. And as technology progresses it may become even faster.

Cultural (so-called "americanization") and political globalization (e.g. world-government). They may or may not be tied into free-trade, but they are also separate entities in their own right.

http://dictionary.cambridge.org/define.asp?key=33184&dict=CALD

Don't forget integration of financial and banking systems, as well as removing the barriers to the flow of capital, as well as increased transparency of government actions.

Or the poor people of the horse & carriage industry? Henry Ford sure destroyed their existence.
I have to say, that was beautiful.

Or the poor people of the horse & carriage industry? Henry Ford sure destroyed their existence.

Yes, yes, absolutely terrible what happened to those chaps, absolutely terrible.

On a sidenote, did you know that the Hoover Vacuum Cleaner Company was born because equestrian leather goods were no longer needed, due to the development of the Automobile?

Trade Liberalisation => Consistently stronger economic growth

That is a bad summary.

While these within-country estimates based on a wide sample represent the average effect of liberalization on growth, investment and openness, they mask interesting differences in the individual response of countries to trade liberalization. ... On the one hand, countries that experienced positive effects tended to deepen trade reforms. Yet active industrial policies such as those implemented in South East Asia did not preclude growth gains from trade liberalization, and broad-based reforms appear to be neither a necessary nor a sufficient condition for reaping these gains. On the other hand, countries that experienced negative or no effects on growth tended to experience political instability, contractionary macroeconomic policies in the aftermath of reforms or to actively counteract trade reform by shielding domestic sectors from necessary adjustments. Future research should seek to further identify factors accounting for heterogeneity in the growth effects of trade reform.

That is a bad summary.
Well, he asked for the quick version.

The evidence ultimately says that on average countries have experienced higher economic growth after trade liberalisation than before it.

But there obviously is variance, and although it only seldomly resulted in slower economic growth (usually in a series of freaky coincidences), the results are not the same for everyone.

It vitally depends on the government policies in place during and after trade liberalisation, which is what they're saying.

I got across the basic message: Trade Liberalisation is, on the whole, good for the economy. How good depends on your quality of government.

Well, he asked for the quick version.

Yes. My only objection was to the use of "consistently."

Trade liberalization does seem to be a generally wise policy, especially where domestic competition is nonexistent.