December 12, 2013
Cause of Globalization
Globalization is a concept with many differing definitions. Globalization is a process which entails the free movement of capital, goods, services and labor around the world. Globalization is the massive control of the world’s economy by big business; this control transcends the boundaries of state and country. This transcendence across countries makes the subunits of the economy decompose and depend on the larger companies with a controlling interest in most of the capital within a given economy. These companies then form global constituents; they then have a control of a large volume of capital within many countries. This global control of capital comes through the deindustrialization of larger economic superpowers to third world countries for economic gains of these companies. The true causes of globalization are companies seeking lower wages and a large unskilled labor force, most companies find it in third world countries. These are concrete examples of global companies seeking wage reductions on an international scale. This migration causes a deindustrialization for the larger countries and industrialization in these developing third world countries.
In a curious fashion they tend to confirm the Marxist view of, “Long thought out of fashion, that the working classes would be kept at subsistence level (Marxist).” Reebok Shoes, and other footwear giants, are forever shifting their manufacturing base to lands of lower wage scales. (This is more easily done in that industry than would be possible in steel or automobile manufacturing.) From New England to the American South and on to the American colony of Puerto Rico, thence the Philippines, Taiwan, Korea and Thailand -- until the annual wages of the factory are less than the remuneration paid to the basketball star paid to advertise the final product. No, globalization does not mean “workers of the world unite”. Joan E. Spero, Under Secretary of State for Economic, Business and Agricultural Affairs stated the issue at hand was one of a formidable size, “Capital now moves with startling speed around the world. Each day over $1 trillion is traded in a global foreign exchange market that never closes. Technological advances in computers and telecommunications are paving the way for a new information-based economy.”
The capital within this globalized economy is not situated as one might have first assumed. The capital is concentrated within the upper management and within the boundaries of the company itself. The growth of the American economy in particular is in no way a direct reflection on the wages and standard of living for most American workers. Large companies set up manufacture of products in developing countries, exploiting the economic need that is present there. Then these companies take this product from this country and bring it back to places like the United States to be marketed. The economic benefits are then reaped by the company. The product was manufactured in this third world country where they were paid small wages and in horrible working conditions. Then the product is taken to the United States where is sold to the American public who played no role in the manufacture of the product thus their purchase in no way supports the circulation of capital within the United States economy and is given specifically to the company. The company then takes the capital and reinvests the money into the company and in foreign industry and the money is not recirculate within the economy that created it. This theory of capital flight is what produces the economic growth of the economy as a whole but the workers and middle class of that economy do not see that growth. The middle class is becoming less and less necessary within the globalized economy. The skilled worker is not necessary due to technological advancements and the movement of industry from the United States to