ECON401 assign1 Essay

Submitted By smeneguzzi
Words: 870
Pages: 4

1. The shift towards a more integrated and independent global economy is believed to be a positive development and has many supporters. These promoters of globalization believe that increased trade and cross-border investments will lower prices for goods and services and create stronger economic growth, higher consumer income, and higher employment numbers. The critics of globalization worry that it will actually cause job losses, environmental degradation and cultural imperialism of global media and multinational enterprises. A shift to greater globalization can cause an increase in job opportunities in less-developed nations as more companies seek to outsource certain areas of their corporation. While this may sound troubling for workers in America, globalization can increase jobs at home for the more skilled tradesmen. The shift can also allow companies to reduce its production costs of goods by manufacturing its various components in different parts of the world where parts and labour are more economical. These reduced production costs can then be passed on to the consumer. The environmentalists are concerned that free trade policies brought about through globalization encourages firms from advanced nations to move their manufacturing facilities to less-developed nations that don’t have adequate regulations to protect the environment. But supporters of globalization argue that stricter environmental laws go hand in hand with economic growth.

2. The original expectation was that globalization would positively affect global disparities, inequality, and poverty and narrow the gap between the richer and poorer countries. However, according to Joseph Stiglitz, this gap has not narrowed; but, in fact, it has increased. This increase is evident in all the areas in which improvement was expected. To support his theory he points out that the global financial system is not working the way it should. Money is supposed to flow from rich to poor countries and risk should transfer from the poor. But the fact is, things are moving in the opposite direction. Stiglitz uses the example of the disparity between Mexico and the U.S., which is at its largest. NAFTA was supposed to alleviate the six-fold income difference across the borders. This gives rise to the enormous immigration issue. A decade after NAFTA was implemented the disparity actually increased. Globalization has been managed well in India and China where the growth rate has been 6 percent and 10 percent, respectively. Several hundred million people are moving out of poverty. However, elsewhere in the world, globalization has not been managed well. Stilglitz also considers how a nation provides access to, and education in, technology. He states that if a country doesn’t have access to it or is unable to technologically educate its workers, it will fall further and further behind. He stated that the international community, which makes rules of trade, is made mostly by advanced industrial countries. The rules, however, are usually made with the best interest of the advanced industrial countries and not the interest of developing nations. He also states, that the last trade agreement, the Uruguay round, actually made poor countries poorer.

3. Intellectual property refers to creations of the mind, inventions, literary and artistic works, and computer software. Intellectual property can be protected by patents, copyrights and trademarks. For a company doing business internationally, protecting intellectual property can differ greatly from country to country. This is evident even in countries that are members of the World Intellectual Property Organization, which signed treaties to protect…