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Posted on September 4th, 2012, by

Martin Wolf defines three main things going on in the globalized world: technology, policy change and the entry of billions of people into the world economy. It is due to these three things the competition increases, but, paradoxically, collaboration increases respectively. Wolf explains such a paradox by the enlargement of economic opportunities since billions of people get an opportunity to enter the world economy. As a result, they can take their niche in the world market but they still need to crave for their own workplace, while companies and countries have to struggle for their market share, but without the world market they cannot keep growing economically. However, such a growth does not seem to be eternal and the recent economic recession has revealed how easy states can introduce protectionist policies and resume isolationism when their national economy is under a threat. In addition, such globalization is not a unique phenomenon since in 1870-1914 similar trends occurred and ended with World War I. Therefore, the ongoing globalization does not bring stability but rather disparity between countries that increases the risk of conflicts.

Dorgan and Friedman have contradictory views, on the one hand, they recognize actual and potential benefits of globalization, but Dorgan insists that globalization leads to the decline of the US economic power since capital flees the US and outsourcing deprives Americans of their jobs, while Friedman argues that it is a normal process typical for open market economies and the US should come prepared to the competition in global terms. Basically, Dorgan and Friedman agree with Wolf that globalization allowed billions of people get integrated into the world economy, but Dorgan justly criticizes this effect of globalization because it leads to job losses in the US, while capital moves to countries with a cheaper labor force and costs of production. However, even though he agrees with Friedman and Wolf that technologies have a positive impact on the world economy, he still fails to recognize that technologies is a part of globalization and they encourage globalization. At this point, it is possible to agree with Friedman who views technologies as important part of globalization, along with capital and labor force movement.

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