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inSUBordination - Wag the Dog

Politics - Uncover the truth behind the news. "When the emperor has no clothes, you have to have the presence of mind and the courage to stand up and say, 'The emperor has no clothes'.”

Tuesday, December 06, 2005

The pitfalls of globalization

Globalization is not a formula to increase global economic growth since economic growth eventually depends on available recources. With the term recources I do not only refer to the treasures of the soil but also knowledge, know how or interlectual property as well as money or capital.

To make my point clear I'll give you an example. Let's say we have an unlimited amount of money and wont to make profit by producing cars at cheap prices and sell them at high prices. We won't be able to produce cheap cars as long as we don't have the know how to build cars if we lack steal or human recources. We won't be able to sell these cars if theres no market, e.g. nobody has money to afford (lack of monetary recources, capital) the cars we produce.

As you can see an unlimited amound of money will not lead to economic growth if the system fall short in any other limiting recource. The same happens if you have unlimited human recources. It will make labour and thereby production cheaper but to spent less money for labour means also that people will earn less. Less earnings will lead to a drop in demand wich causes prices to decrease and will therby limit the proit you could earn with selling your cars.

Globalization rather leads to a redistribution of recources in the first place. Weather globlaization will increase economic growth or not will depend on the goverments of contries involved in globlaization. Wether they can negotiate a fair rules for regulation of international cash flow and investment. This would eventually lead to the highest possible global economic growth and the heighest possible benefit for the most people in the world. Ignorant and egositic insisting on nationalistic interests on the other hand might eventually lead to a collapse of the disbalanced system and to a decrease of economic growth.

1 Comments:

Blogger souvik said...

not at all sufficient. horrible

Monday, January 25, 2010 9:10:00 AM

 

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