This preview shows page 1. Sign up to view the full content.
Unformatted text preview: ho was a prominent nineteenth century
politician. Click on “Cobden” and read about his life. Cobden
was a strong advocate of free trade. He believed that international trade was necessary between major powers if war was
to be avoided. If he were alive today, no doubt he would
strongly support economic globalization efforts. T These U.S. consumers are shopping for cameras
made by a Japanese
might this scene
represent the hidden benefits of
globalization? 50 the proponents of globalization often argue
that the critics overestimate the influence
and reach of large transnational companies.
For example, in 2000, the top 100 transnational companies produced only 4.3 percent of the entire world’s output, which is
about as much as one country, the United
Kingdom, produced in 2000. Chapter 2 Economic Systems and the Global Economy To a large degree, whether one supports
or criticizes globalization seems to depend
on where “one is sitting.” Globalization
doesn’t affect everyone in the same way, and
often how it affects you determines how you
feel about it.
Suppose Sanders, an
American worker residing in New York, loses
his job to an Indian worker in New Delhi,
India, who will do Sanders’s job for less pay.
In this case Sanders incurs real costs, but
what about Sanders’s company, and the
company’s customers? For the company, this
change means lower costs and higher profits.
For the company’s customers, prices for the
company’s products may go down. So, in
this case Sanders is probably a strong opponent of offshoring, while his company and
its customers are probably supporters. When it comes to globalization, it is
often much more difficult to see the benefits than it is to see the costs. For example,
the supporters of globalization argue that it
brings greater economic wealth, lower
prices, more innovation, and less poverty.
Yet, sometimes it is difficult for us to see all
these benefits. When you buy cheaper
goods or different goods because of globalization, you probably never say,“Wow, I
can’t believe all the benefits I get from globalization!” In fact, you might not even
connect the lower-priced goods with globalization at all. The benefits of globalization
tend to be difficult to see, partly because
they are so widely dispersed.
The costs of globalization, in contrast, are
more visible, often because they are so concentrated. A person who loses a job because
of freer international trade in the world
knows exactly what is to blame for the
predicament he or she is in. This person
surely could receive some benefits from
globalization (in the role of a consumer),
but this person also could, for a time, incur
some rather high costs from globalization
(as an unemployed worker). It is likely that
this person will know of the costs but be
unaware of the benefits. 02 (030-053) EMC Chap 02 11/17/05 4:14 PM Page 51 This new IKEA
store opened in
Russia in September
of 2005. How
does a Swedish
a store in Russia
reflect the recent
globalization? A Fad o...
View Full Document
This document was uploaded on 01/16/2014.
- Winter '14