The most obvious thing I have done since coming to University is to look at world trade. The most recent study of world trade by the World Trade Organization (WTO) found that there is little trade between the advanced economies of the world. Instead, many of the economies of the developing world rely on imported goods to become the primary source of their growth. As we all know, increased import duties on some goods, such as that from Japan, cause import cost deflation.
Is this the new normal? Is the globalization that Thomas Piketty described in his book, Capital in the Twenty-First Century about rising inequality a real trend in the modern world? The answer is that it probably is. If you want to read about globalization and its possible implications for you and your family, visit the site Globalization and Inequality.
Another possibility that I have examined is immigration. As we know, a growing number of people are leaving their native lands in search of better opportunities. This process can lead to an increase in population size and consequently, political instability in some parts of the world. We know that migration has become much easier due to the internet and that international capital has become increasingly important to the running of many economies.
If we talk only about direct trade between developing countries and developed countries, we are already seeing some barriers to trade. For example, India may be reluctant to open its markets to European goods due to fears that the European companies operating in the country will take over the manufacturing industry. Is all of this just paranoia or a preview of future conflict? The answer is no and yes.
Is all of this going to affect us in the future? As a matter of fact, we should be very concerned. Globalization and emerging economies are creating new wealth generators in the developing world, but some countries are not benefiting from this process. The poor in these countries have seen their living standards decline, which means they are now relying on credit from banks to purchase food and basic necessities. Is the global expansion of the globe’s market place a positive or negative force for the world economy?
Globalization and emerging economies provide a unique opportunity to citizens of the United States. As the world becomes a larger collective pool of economy, it becomes more important for each individual to take responsibility for his/her own economic security. It is unfortunate that the American people are being forced to take a leadership role on this issue. Too many elected officials and special interest groups are making a loud and clear plea to do nothing about the issues of joblessness and lack of upward mobility in the U.S. As citizens, we need to take my emerging economies and globalization seriously.
The time is now to address the issues of joblessness and poverty in the developing nations. There is a lot of debate over what the correct response should be. However, there is one wise thing that we can do as citizens of the United States and that is “spread the wealth.” We must allow those in underdeveloped countries to have access to the capital necessary for them to provide for their families and themselves. In addition, we must ensure that these individuals can take advantage of higher education and other forms of technology so that they can join the global workforce and benefit from globalization.