Globalization the Effects of Globalization Term Paper

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Bhagwati says, "But today's most dramatic change is in the degree to which governments have intervened to reduce obstacles to the flow of trade and investments worldwide (p. 11)." He emphasizes to make this next point, which is:

But this fact forces upon our attention a disturbing observation: governments that can accelerate globalization can also reverse it. Herein lies a vulnerability that cannot be dismissed complacently. The earlier globalization, in the end, was interrupted for almost a half century with rising trade barriers epitomized (p. 11)."

The warning is, of course, as a result of recent "discoveries" by those colonizing countries that unskilled labor is being "outsourced" to third world countries; and the citizens of countries like America, where the unskilled labor jobs have been the bread and butter of America's middle class almost since the birth of America, are becoming very nationalistic and loud about work being outsourced to third world countries (Krishnan, 2007, p. 2189).. It is a subject that has been addressed to win the middle class vote by current candidates in America's 2008 election campaigns.

Jayanth K. Krishnan (2007) says:

The issue of outsourcing jobs abroad stirs great emotion among Americans. Economic free-traders fiercely defend outsourcing as a positive for the U.S. economy, while critics contend that corporate desire for low wages, alone, drives this practice. In this study Professor Krishnan focuses on a specific type of outsourcing, one which has received scant scholarly attention to date -- legal outsourcing. Indeed, because the work is often paralegal in nature, many see the outsourcing of legal jobs overseas as no different from other types of outsourcing. But by using case studies of both the United States and India, the latter of which is receiving an ever-increasing amount of outsourced American legal work, Professor Krishnan describes how there are many forms to the legal outsourcing model and how this practice can entail a range of legal services (p. 2189)."

To this extent, globalization is bringing India into the modern world, reducing its levels of poverty, because, even in India, work is outsourced from urban to rural areas (Shurmer-Smith, 2000, p. 60). Talking about globalization and outsourcing within India, Pamela Shurmer-Smith says:

Urban poverty is intimately connected with rural poverty. As a consequence, so long as there is greater economic growth in the towns than in the villages, economic growth will not lead to increased wages for urban workers. Urban poverty declines only when there is a growth in regulated labour intensive industries, but, as Mitra (1992) shows, the tendency has been towards investment in high productivity, capital intensive industry with ancillary outsourcing of labour intensive production in the informal sector, where wages are driven down by the excess of available unskilled and semi-skilled labour (p. 60)."

At least in the modern sense, we see that globalization is working towards the creation of a balance of earning ability amongst the third world nations' poor.

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However, it is important, too, to heed Bhagwati's warning, that governments that can direct the forces of globalization, can change that direction too. Currently, there is legislation pending in America that is intended to address the concerns of the middle class about their jobs being outsourced, and that legislation could bring about a halt to work represented by labor unions, and work stemming from federal and state governments that have been outsourced to other countries, especially to India (IRS, healthcare, legal). Bhagwati's concerns about governments redirecting globalization is a valid concern, just as are American's concerns with loss of jobs. However, most Americans are not looking at the long-term picture: they are going into taxpayer debt by way of America's taxpayer philanthropy in third world nations. To bring those countries into the global market and free trade will serve the American taxpayer well in the future.

Clearly the topic of globalization will remain a hot subject around the world, but it is very probable that there is no way to stop globalization. Timothy Taylor (2005) says that Americans' concerns that outsourcing is at the source of their current economic woes is not a valid argument against outsourcing (p. 367). He says:

The best news for the U.S. economy in recent years has been its extremely strong productivity growth. Measured by output per hour in the business sector, productivity growth was 4.4% in 2002, 4.3% in 2003, and 3.9% in 2004 according to the Bureau of Labor Statistics, giving this period three of the best four years for productivity growth since 1971 (the other year in the top four was 1992). Producing more per hour is how an economy raises the average standard of living over time. U.S. firms have generated this remarkable productivity growth in large part by taking advantage of the gains in information and communications technology -- and outsourcing is one mechanism by which this has happened. The practice of outsourcing both to domestic and foreign firms allows businesses to harness dramatic innovations in communications and information technology more effectively than they could if they just gave each of their own payroll-department employees a fancy new computer. Instead of every firm individually needing to learn how to run an expensive computerized system for collecting job applications, mailing paychecks, and offering choices of employee benefits, these services can now be provided by firms with core competencies in these areas (p. 367)."

Outsourcing is synonymous with the goals of globalization, and it is not likely that, even given Bhagwati's warning, that globalization will reverse itself by trend or that it will be reversed by governments......

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