Goods From Producer To Consumer example essay topic

Global Managerial Economic sECO 305-08 Phase 1 Task 1 Prof. Ray Bell Bernard Meister Globalize is defined by the dictionary on Yahoo. com as "To make global or worldwide in scope or application". Manfred B. Steger (2003) goes quite a lot further when he says, .".. globalization is best thought of as a multidimensional set of social processes that resists being confined to any single thematic framework. Indeed, the trans formative powers of globalization reach deeply into the economic, political, cultural, technological, and ecological dimensions of contemporary social life". (1) It would be simple enough to continue on, as it seems everyone, from the Canadian government to the International bank of Italy to the WTO, has their own definition of globalization.

Let us look at this in an economic sense and put a few of the definitions together to say that globalization concerns itself with the world as being both producer and consumer. Crossing state and national boundaries, goods are produced by the people who are most able to specialize in their production for use by those who are in need or want of that particular good. This does not limit the production and transfer of goods to the corporations or countries, but it also does not consider the policies and agreements needed to move these goods from producer to consumer from differing states or countries. This is where we start to look at the sovereignty of the states and nations that are involved with the international trade agreements, specifically NAFTA, the United States, and Mexico. The World Bank Group and the United States is pouring billions of dollars into the economy of Mexico and Mexico itself has decentralized it's government. (2) Mexico has made great strides in the world economy, but the dollars that could be going to the improvement of the people and the country are being paid to the creditors holding up the Mexican economy.

(3) The Mexican government has put restrictions on the states for borrowing money to bring themselves out of an immediate problem and further worsening the debt burden of Mexico itself to foreign investors. With the NAFTA agreement in place in 1994, an opening to these investors placed Mexico in a bad position when they decided to withdraw funds caused a collapse in the economy in 1995. While this forced Mexico to make hard decisions, it has given them a strong base of self-reliance and more a stringent fiscal plan to assure this does not happen as easily again. The United States, on the other hand, has lost jobs and revenue from the workers of those jobs. As of July 2001, over 350,000 workers have qualified for retraining into another profession due to job loss because of NAFTA. The promises of the higher wage have also fell flat, with wages actually depressed before making a weak comeback.

The corporations have recorded record earnings, in the mean time. (3) With capital moving out of the United States and labor declines, the owners of the capital (the corporations) making record profits, the taxed income from those profits increase the fiscal input to the United States. The movement of unskilled labor out of the United States has further a negative effect on labor. The unskilled workers in the United States need to become skilled. As they do, the jobs that require skill become scarcer and the wage goes down due to a larger labor pool.

Bibliography

1) Steger, Manfred B., Globalization: A Very Short Introduction. Manfred B. Steger Oxford University Press. Oxford, England. 2003.
Page Number: . web (2) World Bank Group web (3) Seven Years under NAFTA Sarah Anderson, Institute for Policy Studies, 733 15th St. NW, #1020, Washington, DC 20005 web (4) web (5) International Economics, W.