What is the point of Globalisation? 2

[chris9]

Is quality of life in the west better or worse as a result of globalisation? Without a doubt the cost of consumer products such as cars, washing machines and TV’s is continually being driven down.

On the other hand the cost of living is going up. When my parents left school there was an abundance of work and my father could support the family on his earnings alone.

These days both parents need to work to make ends meet and this probably contributes to the high divorce rates. Graduates need to jump through hoops to get a job that doesn’t pay enough to support themselves or pay off their student loans.

The rich are getting richer and the poor are getting poorer in both industrialised and developing countries. Globalisation is based almost entirely around exploiting cheap foreign labour.

I don’t think it benefits the majority so what is the point?

 

[jmw]

I don't think globalisation is "based on exploiting cheap foreign labor".

Globalisation is almost a natural consequence of modern manufacturing efficiencies. It doesn't necessarily work against the industrialised nations to the advantage of the third world countries.

For any industry the proliferation of duplicated functions is often counter productive. Take the example of the large diesel engines e.g. as used for ship propulsion. The size and cost of these engines is substantial compared to the production numbers.

Some countries, such as the Uk, had several manufacturers each with their own R&D and development teams. This meant that for a given market size too many manufacturers were trying to fund R&D from too small a share of the market.
Visiting some of these companies with low sales and no investment was the ultimate in depression. Some were actively waiting to be taken over and the post takeover atmospher was a marked contrast. Sure, there were disruptions and job losses but the industry that emerges is far more vital and dynamic.

The globalisation that has taken place has resulted in just a few companies dominating the market. In many cases this has seen the retention of many of the manufacturing facilities but a centralisation of the R&D. Global centres of excelence mean that the development of these engines has accelerated. Changes and improvements in design are far more significant in the last several years that at any time previously.

The result is a far more dynamic and advanced industry with an excelent future. For manufacturing engineers there are some losses but for the top design engineers it has meant that the cream of them are concentrated in an environment where they are mixed with their peers and adequately funded and,importantly, more empowered.

Globalisation has liberated some of these industries and been the means to save them.

If we look at the threads on US jobs going overseas etc. you will find my arguments that it is in the innovation area that skills will remain with the developed nations. Manufacturing jobs are transferable and will transfer. Globalisation is niether here nor there on these job losses but vital to retain the initiative in the development and design areas.

JMW

http://www.viscoanalyser.com

 

[2dye4]

Read this

http://www.businessweek.com/magazine/content/04_12/b3875614.htm

 

[jmw]

But let's not confuse Globalisation with outsourcing.
Globalisation is the amalgamation of lots of small companies with regional focus into a few big companies with a global focus.
Any company can outsource whether global or regional.

JMW

http://www.viscoanalyser.com

 

[mabn]

Globalization is creating an unfair playing field in the world market. It's like setting up a race between Micheal Schumacher in his Ferrari and yourself in your Toyota Camry, he has the skills and resources to just keep pulling further and further away from you. There's no way Euro/North American societies will let their standards of living slow down or drop, and the other 80% of the world's population cannot close that gap. It's going to make for a very disenchanted world in the next few decades.

Mabn

Don't take driving to work and having food to eat for granted. Life ain't that bad in 'the West'.

 

[2dye4]

jmw:
I think chris9 means the larger sense of globalization
or economic transparency of borders.

True Chris9 ??

In this sense outsourcing is a part of the issue.
I would like to make some predictions for the future.

1 A large segment of the population making $30k/yr or
more will see their income drop significantly.

2 Rural areas of the US that depend on manufacturing will
become areas of high poverty.

3 Fewer US kids will study technology courses.

4 The children with outstanding ability who are destined
for PHd level degrees will still go on learn what they
love and contribute to the US tech edge.

5 Goods and services will be lower in cost to all. This will
partially offset the lower wages.

6 Real estate will maintain its price, and fewer will
be able to afford their own home contributing to greater
inequality in property ownership.

7 There will be new opportunities for employment in areas
that do not yet exist. These new jobs will come about from
challenges society faces because of the population and
shortage of resources. New energy needs, Infrastructure
improvement, Emerging disease control, Food safety,
Counter terrorism.

8 The proposed retraining of the population to offset job
losses is a deception. No one knows what to retrain for
at this time. These statements must be made to quiet the
storm of protest.

9 Workers in India and China will be able to afford more
home appliances and health care but property will stay
just beyond their means.

10 Many defaults on home mortgages due to high US consumer
debt load. Possibly leading to banking crisis.

11 Social security. Ha

Keep smiling

 

[ietech]

Chris9,

You might have already read the following threads but I will post anyway

thread730-85176

thread730-75854

There are many interesting thoughts and comments related to your question for this thread.



ietech

 

[EddyC]

Globalization makes corporations into countries without borders. And into "countries" that are autocratic rather than democratic. Unless properly regulated, they will end up acting the way companies did in the 19th and early 20th centuries (i.e....exploiting the general population to achieve wealth & power for a few).

 

[xnuke]

It seems to me that globalization is similar to the concept of entropy, and may be likened to the motion of energy from areas of high concentration to areas of lesser concentration. This covers a lot of physical processes.

We have a case where overall wealth is concentrated in a relatively few areas of the world, and there seems to be flow of that wealth away from these areas toward underdeveloped areas (hence globalization). Many people want to stop or slow it; I'm not sure that can happen. It seems to me that the only thing that will slow it will be an approach to an equilibrium, similar to a first order physical process.

Let's see...

The time rate of outflow of wealth from a given source is proportional to the amount of that wealth at that instant of time.

I'm not sure how this idea applies to situations where people or companies amass huge amounts of wealth. To move energy against its natural flow in a physical process requires work; maybe these people/companies are able to accomplish accumulation of wealth through work. Imagine that! You have to work for your wealth. It seems like a reasonable assumption to me. It also requires work to maintain wealth, just like you have to keep heating a room to keep its temperature above its surroundings.

Any thoughts?

xnuke

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[mabn]

xnuke,

The situation you describe would occur (it's sometimes funny how the natural laws of science can apply to global economics, thanks for pointing that out) if there were no barriers to the flow of wealth or resources or energy; however you'd like to describe it.

Unfortunatley, or fortunately, depending on your take, there are barriers to the flow of people, to the flow of resources, to the flow of money, etc. The developed world produces and consumes faster, better, stronger, more efficiently and at an ever increasing rate; then places barriers on the development outside of their sphere (envied as the tigers and sharks of industry).

How can a developing country 'develop' as fast or faster than a developed country in these physical conditions? The logic would state that the engineered limits of the barriers are not infinite and eventually will burst. The barriers are constantly being reinforced against this, but often times unethically.

Mabn