Understanding The Global Economy

Lately you may have been hearing the terms “global economy” and “global competitiveness”. Just as the name states the global economy is an economy that is dependent on production and consumption on a global scale. This means that production at one place can equate to products being consumed at another location thousands of miles away. This would seem like a great situation but the advantages of a global economy can sometimes seem minimal compared to its disadvantages. What disadvantages can come from a globally connected marketplace you may ask. Let’s take a look at the global economy and how it shapes the economy and job market we all operate within.

The global economy can be described as hyper intense consumption and rapidly flowing interaction without barriers and boundaries. With a global economy comes the ease of access from one distance to another that allows for instantaneous communication and quick processing time. These things seem all good and well but if you dig beyond the surface of the positivity you will find that globalization brings with it negative consequences. For instance all countries are not equal which means the advantages and disadvantages from one place to another can be wide and varying. For example the United States compared to China is a great depiction of the effects globalization creates. China is a cash rich country but the standard of living for most of the country’s citizens is entirely below that of the U.S. Workers in China are paid substantially below the minimum wage in the U.S. and are not accustomed to worker’s rights so they accept the substandard conditions, although that is slowly beginning to change. Now with borders being open due to globalization, developed countries like to seize opportunities for potential development within underdeveloped or undeveloped countries. We have determined China is a country with plentiful cash means but everyone does not have a hand in the pot . The U.S. being a country that promotes equal opportunity and the “American Dream” somewhat has a duty to ensure its people have the opportunity to prosper and that in itself can be an expensive task. When you see the chance to reduce your expenses and increase your profits you most certainly will make the initiative to exploit the benefits of such an opportunity. In turn you see U.S. companies locating their jobs within countries such as China due to minimal expenses and that means fewer jobs in the U.S. When jobs are scarce, consumer spending slows and government spending begins to increase. So in reality currency is not circulating; rather just staying in a few hands constricting the ability to trade and consume efficiently. Also I mentioned the attitude of Chinese workers is beginning to change, well that is due to globalization. Chinese workers are realizing that places such as the U.S. offer a better living and a potential to prosper; significantly greater than what is being given in their current setting. So what better way to voice your issue with this situation than with protest, revolts and rebellion. When China was cut off from the rest of the world this probably would not be happening but the access produced from globalization allows for information and communication to be spread rapidly, influencing people’s thoughts and actions in the process.

Globalization is such a complex and huge system that I could write pages about its cause and effects. With this post though I just wanted to give a brief example that illustrates the process of the system and how it ripples continuously once it takes hold. I think it is important to be educated about globalization because local and regional boundaries are quickly becoming non-existent. Everyone is competing on a world-wide level, which means you must be aware of world events and how they can affect your own life. Stay attentive as I continue to analyze globalization and the effects it causes throughout the world and in people’s lives.

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