Term Paper on "Globalized World in the Modern"

Term Paper 10 pages (3488 words) Sources: 1+

[EXCERPT] . . . .

Globalized World

In the modern world, advances in shipping, travel and information have all brought about a certain type of global community. However, the development of globalization has not necessarily created a world that is safer, more equal, or more stable than the world it replaced. Globalization has, in fact, increased the divide between the richest and poorest portions of the world. Developing nations - sometimes referred to as third world nations - are at a severe disadvantage when it comes to global trade, diplomacy, and power. Yet as the planet begins to reach its carrying capacity of human beings, and precious world resources become scarce, the significance of third world nations in foreign policy will exponentially grow. The globalized world of the immediate future may not be particularly stable - it may actually be filled with new conflicts - but recognizing the importance of viewing the social picture from a worldwide perspective may be the key toward developing international approaches to handling the numerous problems ahead.

The capitalists won the cold war. This war was seeded in the ashes of the Second World War, and was much more so a war of production than a war of death and killing. In many ways such a battle is preferable to conventional warfare; however, other consequences of the cold war have been just as devastating to certain portions of the world as an open struggle between the United States and the Soviet Union could ever have been.

Despite the obvious advantages of capitalism -- increased production and availability of products -- it tends to increase the gap, actual and proportional, between the upper and lower classes. This fact is true not only within countries with capitalist economies, but between nations with capitalist economies and developing nations. "As the twentieth century ended, these gaps kept growing wider. Almost a quarter of the world's people (most of them living in the world's poorest countries) had an income less than $370.00 a year. Clearly, capitalism was not working very well for these people," (Downing 36). The global and social division of wealth, despite the new world economy, has continued to draw a sharper and deeper contrast between the rich and the poor of the world.

The first step to understanding this contrast is to understand the current world economy. The western world, in many respects, is overrunning the rest of the planet economically. Obviously, this is not a new trend -- dominating the poorer nations of the world -- since the Europeans and Americans have attempted to colonize the far corners of the globe for centuries. Largely, these actions always had an economic basis. Whether it was to gain a tighter hold on slave labor in Africa or on trade through the Panama Canal, there have been economic motives behind colonialism. The current methodology accomplishes many of the same goals, but with a modern twist: globalization.

Globalization is a modern business phenomenon. For companies to survive in today's marketplace it is almost essential that they spread their resources overseas. Outside of the United States opportunities exist for cheaper means of production, labor, and even customer service. Currently, "Globalization has altered the economic frameworks of both advanced and developing nations in ways that are difficult to fully comprehend," (Greenspan 2004). Despite a huge budget deficit and record high household debt in the United States we have yet to experience any significant economic backlash.

Our current globalized economy was born in the wake of the Second World War. The architects of the new world economy were Harry Dexter White, and John Maynard Keynes. "Their aim was to recreate the international economy that had brought prosperity before the First World War while safeguarding against the 1930's that had lead to the second," (Legrain 104). Essentially, these men proposed that "international trade be gradually freed, but that speculative capital be tightly controlled," (Legrain 104). Today, multinational companies are more important than at any time in the past. Your typical product, whether it is automobiles or army men, is manufactured in different locations all across the planet.

When the Berlin Wall fell in 1989 it marked the collapse of the Soviet Union, and as a result, global business opportunities suddenly appeared. So, with such a young form of economy it should not be surprising that many of the intricate checks and balances that stabilize economies are not fully in place (Friedman xiii). The strange fact that the United States can have a functioning economy despite heaping debts illustrates that many of the indicators of how healthy an economy is can no longer be clearly applied to the world today. So also, the growing gap between the wealthy nations of the world and the poorer nations is not an accurate indicator of the strength of the global economy either.

The appearance of multinational corporations has presented a number of problems for developing countries. Critics of capitalism have argued, "People and businesses in the richer countries held on to most of the economic power. They decided where to invest their capital in new businesses and jobs. The poorer countries had to accept what little they were offered. They had little bargaining power of their own," (Downing 38). From a business standpoint, it is essential to expand influence overseas -- survival depends upon it. Such a move can greatly increase profits; and if you, as a company, do not do it, assuredly your competitors will.

Not surprisingly, capitalism's supporters had a more positive view of its record in the developing world. They pointed to the success of what were called the 'Asian Tigers' -- countries like South Korea, Taiwan, Singapore, and Malaysia -- that had managed to lift themselves out of poverty by stressing education and hard work and by keeping wages low," (Downing 38). Yet, these nations still suffer from relatively high levels of poverty and the job opportunities offered by these multinational corporations are few and barely enough for subsistence.

This introduces an important point regarding the emergence of multinational corporations and their cooperation with foreign governments. Although from a purely capitalistic point-of-view, a company spreading their resources in search of cheaper means of production is perfectly understandable and should lead to eventual global equality of wages; many of the locations where the cheapest labor is found have governmental factors that inhibit class mobility. "According to economist and Nobel laureate Amartya Sen, poverty needs to be understood in broader terms than only the lack of monetary income. Sen argues that poverty should be characterized fundamentally in terms of the deprivation of basic freedoms, rather than merely low incomes," (Hollander 25).

Among the additional factors that inhibit freedoms and contribute to poverty in developing countries include lack of health care, "lack of sanitation, exclusion from education, exclusion from market activities, and above all, tyrannical regimes associated with systematic deprivation of political liberty and basic civil rights," (Hollander 25). By the very nature of capitalism, corporations are not concerned with these problems -- they make a profit regardless. These tyrannical regimes can also make a profit, but at the expense of the lower classes. Therefore, the supposed advantages to workers in developing countries cannot come about in many because of oppressive governments.

Sadly, a cheaper labor force is not the only advantage to corporations who extend their production to developing nations. Weaker labor and environmental laws also contribute to corporate profits while degrading the lives of the citizens of these nations. With an abundant labor force and a lack of unions corporations can set wages extremely low and make the working day unbelievably long with the assurance that enough people in these nations will be willing to take the jobs. Additionally, the corporations do not have to live-up to the stricter safety or environmental regulations that have been established in developed nations. It has been argued that "countries and people in the earliest stage of development tend to have little interest in environmental issues as typically understood in the industrial countries, such as acid rain and global warming," (Hollander 26). Particularly in the first stage of economic development, nations are more interested in catching-up with the rest of the industrial world than ensuring the safety of the labor force or the preservation of their environment.

Largely, the global distribution of wealth has been determined in the past fifty years by those nations who have opened their doors to the western economy and those who have not. Obviously, the first stage of economic development is industrialization. The industrial revolution began in the United States almost a century ago, and has yet to reach many nations of the world. Unfortunately, many of the problems that faced the American workforce a hundred years ago face the workforce of these third and forth world nations today. Lack of unions and labor laws make these workforces weak, and therefore, attractive to multinational corporations. The difference in today's market, however, is that the means by which American workers improved wages and conditions will simply not work in the… READ MORE

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