GLOBALIZATION AND THE ECONOMY— What Every Citizen Should Know Download Handbook
The CQC Handbook on Globalization
I. The Economic Downturn
Although world trade quadrupled over the past 25 years, the economic downturn that began in 2008 has slowed the rate of globalization to the degree that trade is declining faster than production. Plummeting demand for goods and services has been accompanied by falling global water and air traffic, national bailouts of financial institutions, and measures designed to protect home country workers and business firms. Many observers see only a temporary slowdown of globalization, noting movements of government funds across borders to help prop up teetering economies.
The future rate of globalization is likely to be affected by the rate national economies recover and by the degree to which nations use protectionism (high tariffs, quotas, subsidies to domestic producers) to protect their domestic economies. In early 2009, the Inspector General of the World Trade Organization (WTO) warned its members against the perils of competitive protective policies. Many nations, however, were concerned about the outsourcing of jobs to places with cheaper labor and the spread of unsound financial products into global markets.
When the downturn has finally ended, the causes and effects of globalization as described in this Handbook will require increasing attention. A focus on ways to forge closer collaboration between nations on global problems will also emerge.
II. Globalization Summarized
A. DEFINITION: Globalization, broadly understood, is the worldwide integration of markets, finance, commerce, communications, technology and law, which transcend traditional national boundaries. It also includes the outsourcing of work in manufacturing and service industries, the increasing movement of peoples across national borders, and worldwide trends affecting the environment and natural resources.
B. THE IMPORTANCE OF GLOBALIZATION: Globalization increasingly affects the livelihoods of people everywhere, the use of the earth’s resources, and the viability and cohesion both of nations and of international organizations. It is therefore not surprising that globalization generates controversies. The 2007 Pew Global Attitudes Survey of 47 nations reported the United States as the country in which opposition to globalization has risen the most. Opposition in the U.S. grew from 24% in 2002 to 41% in 2007. Problems associated with globalization have been simplified into sound bites, but also are discussed in hundreds of articles and scholarly books. We seek to explore the subject factually in order to provide a balanced picture.
C. OVERVIEW: CAUSES, EFFECTS, AND OPTIONS: Since globalization is chiefly driven by economics, technology, and trade policy, we first discuss trade, investment, transnational corporations, and international organizations. We then take a worldwide look at the effects of globalization on labor, on distribution of incomes, and on national security, sovereignty, democracy, the environment, and culture. Finally we discuss how globalization will help or harm you and your descendants, and what might be done about it.
IV. Conclusions
General Conclusion: Globalization, like international trade which drives it, produces winners and losers, benefits and detriments, and some serious problems that require adjustments. The speed and extent of globalized trade, however, make adjustments more difficult for the losers who must turn to their national governments or to non-governmental organizations to seek redress.
A. SIGNIFICANT TRENDS:
1. Globalized trade has spurred economic growth in both rich and poor countries.
2. Globalized trade is often accompanied by an increase of inequality of incomes and wealth within nations, although direct causation has not been proved.
3. Outsourcing may resume its acceleration after the global downturn is reversed.
4. There is growing recognition of the need to develop stronger safety nets for globally displaced workers. European nations with strong labor unions and protective legislation provide greater worker security than most other nations.
5. Labor has begun to establish internationalized unions.
6. Non-governmental organizations and scholars have had some success in bringing globalization issues to public attention.
7. Long-term environmental and demographic issues have been disregarded both nationally and internationally by manufacturers and by the business community. Populations continue to increase in most countries, while resources to support good standards of living are rapidly depleted.
8. Some prosperous emerging nations are becoming less dependent on the need for aid from rich industrial nations.
9. Globalization has increased the number of economically powerful nations. Several nations may in time share economic dominance, instead of the U.S. being viewed as the single dominant power.
C. POLICY SUGGESTIONS: (These suggestions are for consideration and are not necessarily recommendations.)