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  1. 1. GlobalizationTo trade or not to trade? That is the question!For richer of for poorer!For better or for worse? 1
  2. 2. under Globalization  the United States and economically developed nations will promote • open trade • open financial flows • democracy • economic development 2
  3. 3. under Globalization the integration of national economies into the international economy will be promoted through • facilitating expanded trade levels • facilitating direct foreign investment (by corporations and multinationals) • facilitating short-term capital flows • facilitating international flows of workers and humanity generally, and • facilitating flows of technology 3
  4. 4. Globalization can be caused in response to: • Military change • political change • economic change and • technological change. Geographic and political borders are becoming less effective as barriers to economic exchange and economic expansion and economic integration 4
  5. 5. Globalization increases employment but may raise other issues • women’s relative economic strength • child labor • working conditions four (4) questions to be posed • Does the wage reflect the relative scarcity of the worker? • Are the workers working voluntarily? • Is the job better than their best alternative? • What can be done to improve their situation? 5
  6. 6. causes of Outsourcing? U.S. is a net exporter of service jobs. most job losses are the result of the 80% drop in voice and data transmission from 2000 thru 2004. the service job losses make up only 2% of all U.S. job losses. Many of these jobs were held by low income workers. 6
  7. 7. Globalization creates wealth capable of leading to expanded and widespread economic growth true growth can reduce poverty but for whom? 7
  8. 8. the International Monetary Fund & the World Bank IMF was founded to stabilize international currencies and support world trade World Bank’s mission is to assist and support developing nations’ efforts There are ongoing accusations of counter productive policies doing more harm than good 8
  9. 9. The Environment The World Trade Organization and other international trade groups are not the way to protect the environment; their mission and goal is to promote free and open trade. 9
  10. 10. Property Rights & Capital Hernando de Soto Polar • squatters may hold “plenty” of land • they don’t hold property rights • the key to development is establishment of property rights so that the poor can use “their property” to get loans to access economic development 10
  11. 11. Hernando de Soto Polar Hernando de Soto Polar (or Hernando de Soto; born 1941) is a Peruvian economist known for his work on the informal economy and on the importance of business and property rights The main message of de Soto Polars work and writings is no nation can have a strong market economy without adequate participation in an information framework recording ownership of property and other economic information. Unreported, unrecorded economic activity results in many small entrepreneurs lacking legal ownership of their property, making it difficult for them to obtain credit, to sell the business or to expand 11
  12. 12. Main Points The U.S. and other western nations are trying to promote open trade and the financial flows and democracy. This effort has led to the increased globalization and the increased integration of world economies the current wave of globalization is occurring in response to and as a result of military, political, economic, and technological change While globalization has led to increased world wealth there is some question with respect to globalization’s distribution effects 12
  13. 13. other Main Points Globalization and open trade have led to increased employment but some question the nature of the employment and continue to remain concerned about sweat shops and child labor practices Outsourcing destroys jobs in some service sectors. The U.S. is a net exporter of service jobs and services As evidenced by the Tuna versus Dolphin and the Shrimp versus Turtle cases ~ international trade organizations are not likely to be major enforcers of environmental protection Hernando de Soto Polar claims property rights and the consequent creation of capital hold the answer to the eradication of poverty. 13