In economic theory increased trade between countries leads each country to

In economic theory increased trade between countries

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In economic theory, increased trade between countries leads each country to concentrate its productive resources in areas of greatest comparative advantage, and this lead to higher national incomes. The basic idea is that access to larger markets and increased competition will lead to economies of scale, specialization, and higher productivity, and thus rising living standards. However, in real world, a country might be a net exporter of capital, and workers who lose their jobs due to increased imports might not find comparable or better jobs quickly due to a shortage of expanding sectors. In addition, the criticism of the book “Work and Labour in Canada: Critical Issues”, pointed out that the rising in North-South trade had impacted negatively on Canadian jobs and wages; moreover, the shift of manufacturing to developing countries and elsewhere in Americas has been an important cause of plant closures and layoffs in the manufacturing sector, and there is also a sign of growing impact on service sectors (Jackson 2010: 251). Some argue that globalization is a positive development, as it will give rise to new industries and more jobs in developing countries. Others say globalization is negative in that it will force 3
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poorer countries of the world to do whatever the big developed countries tell them to do. Another viewpoint is that developed countries, including Canada, are the ones who may lose out because they are involved in outsourcing many of the manufacturing jobs that used to be done by their own citizens. Outsourcing refers to obtaining goods by contract from outside sources. This is why people may find many of their clothes with labels from developing countries such as Cambodia, China, and Vietnam, where these products can be produced at lower cost. Critics of outsourcing feel that no one wins with this practice. Workers in Canada and other developed countries may lose their jobs while those doing the work in poorer countries get paid much less while working in poor conditions. What can be done about these realities? To answer this question, the paper will discover the history of globalization in order to find out the origin of the change in Canadian labor market. 1. The revolution of globalization According to Frank J. Lechner and John Boli (2012), many scholars point to sixteenth- century Europe as the original source of globalization. After the European established worldwide trade connection on their own terms, brought their culture to different regions by settling vast areas (Lechner, and Boli 2012). Thus, the modern world system already existed nearly five centuries ago. It is true that globalization is the race to the bottom on the free trade market. Therefore, any producers can afford a low cost of production will be a winner in this race. But how can they do that? The solution is that they have to increase the productivity of workers by apply scientific management or Fordism methods, because these are two special tools of the industrial manufacture since 1920s.
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  • Fall '14
  • JohnWalker
  • Economics, Labour economics, Developed country

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