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Impact of globalization
Comprehensive effects of globalization
Globalization and its impact
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In 2000 the giant pool of money contained $36 trillion and has since doubled in size as of 2008 (Blumberg 2008). Its most recent profit increase is a result of developing countries and cities such as India, Abu Dhabi, and China making money from manufacturing garments and textiles. This financial gain was due to the Multi-fibre Arrangement (MFA) deal that limited the amount of allowance a developing country could export to a developed country expiring on January 1, 2005 (Dicken, 2011). The purpose of this accord was to protect exploited workers in developing nations while maintaining the capitalistic economy of developed countries. Capitalism is thought as a commodity- exchange system. A commodity is simply something useful that enters the market and is available for purchase at price. Three factors that drive capitalism are natural resources, labor and finances (Coe, Kelly, and Yeung, 43-7, 225). The content and themes shown in Planet Money T-Shirt Project, the world behind a simple shirt in five chapters, explores theories and concepts related to capitalism and global manufacturi...
Capitalism, as a system is bound to increase economic disparity. Bill Gates argues that this system would make huge progress in terms of reducing the divide between the rich and the poor (1). However, capitalism would cause disparity not only within a country but also between different countries. A free market would ensure an increase in inequality because the wages of the working class never increase proportionate to the economic growth. This happens because of “inflation, rapid economic growth, the decline in the power of unions and their influence as well as the exchange rate of the dollar” (Thompson). The owners of companies always get the benefits whereas the labor receives very little for the work it has put into the products (Hanks). In terms of disparity between countries, capitalism, while proposing free trade, emphasizes the need for specialization. This specialization increases the divide between the first world and third world. The third world consists of countries which specialize in the primary industry whereas the first world concentrates on the secondary industry. The seco...
One of the most common major types of economic systems in the world today is capitalism. In its simplest terms, capitalism can be defined as an economic system in which a country’s trade and industry are run by private organizations for profit. So within capitalism major industries such as manufacturing, energy, banks, transportation, medicine and more are not run by the government. The earliest forms of capitalism can be traced to the 17th century English Puritans who possessed a strong work ethic that focused an importance on productive labor. Modern capitalism is said to have started in the mid-18th century with the birth of factories. Factory owners were able to maximize wealth by making goods that were in-demand and also by streamlining labor. For capitalism to work. supply and demand is typically unregulated by government. It is based on the f...
Capitalism as an economic system has not been around for a very long time. Stanford indicates that this economic system began in the mid-1700s in Europe . For a considerably young system, it almost seems impossible to imagine a different way of living. Capitalism has become deeply embedded in our social structures; it is naturalized as a way of doing day to day things. If this is the case, then we as humans have a long way to go if we are to achieve social and economic justice. The question I aim to explore is whether capitalism is capable of achieving socio-economic justice. I am arguing that it cannot achieve justice because there is too much focus on profit rather than people and it dislocates the consumers from the modes of production which indirectly promotes social inequality. Our current economic system which I will be interchangeably using as capitalism throughout the paper will examine why the focus on profit is detrimental to the social well-being of people and explain how capitalism is divisive and why this can pose negative outcomes for individuals and communities. It is with these arguments that outline the need for a fundamental change to how our economy is structured and managed.
In Karl Marx’s Capital he analyses the intricacies of capitalism and its effects on the social relations between people and products. Marx’s chapters “Commodity of Fetishism” and “Working Days” in particular parse through and deconstruct the complex model of a commodity and its crucial role in capitalism. In order to do this, Marx introduces the notion of a use-value as the base foundation of a commodity. Marx then further relates this idea to exchange-value of a commodity. The exchange-value is incredibly important, as it is the driving force behind capitalism. In the first chapter Marx examines how commodities, once in the marketplace seemingly adopt innate value wherein the consumer does not equate the objects value with the human labour expended, but rather that the item
...ontinues to drive global capitalism, as capitalist continue to expand and accumulate more capital. However, the cost cuts to the clothes we wear come at a high price for garment workers of Bangladesh. The exploitation the vulnerable workers from a country plagued with structural problems and the unsatisfied global expansion of capitalists’, results in the catastrophes like Rana Plaza. The globalization of the capitalist system was written about by Marx and Engels. The flaws in the capitalist systems that would bring its eventual downfall seem to be true at post Rana Plaza. The resentment of those who profit from their suffering; the government, the factory owners and the western retail chains, have brought on riots and demands of compensation. However, until the system is overturned as a whole, the dire work conditions of the Bangladesh garment worker will remain.
It has pitilessly torn asunder the motley feudal ties that bound man to his ‘natural superiors’, and has left remaining no other nexus between man and man than naked self-interest, than callous ‘cash payment’. It has drowned the most heavenly ecstasies of religious fervor, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom-Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation. The bourgeoisie has stripped of its halo every occupation hitherto honored and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage-laborers.
With means of production becoming more efficient due to the introduction of modernization and technology, workers jobs begin being replaced by machines. No longer is the laborer’s skill of any value to the capitalist, especially, when the worker can be replaced by a more affordable machine, or when they can be replaced by the exploitation of another countries’ cheaper laborers or resources. With capitalism main objective being profit at whatever means possible; we see that one nation isn’t enough to contain this destructive force, so it stretching across the globe. When the differences of age, sex, race, nationality, gender and any other distinctive social validity, the sobering consequence develops the very demise of the capitalists and creates an untamable globalized chaos caused by the force of productions and the greed of the
Capitalism in its purest form is all about maximizing profit at whatever the cost to the workers, economy or environment. In this light capitalism can be viewed as a double-edged sword, in which a company in a capitalistic economy will avoid extra cost at any chance possible even if that means the illegal disposal of harmful secondhand electronics avoiding all the rules and regulations that would make disposal cost extra called E-Waste, to impoverished countries such as China and Ghana. But this in turn hurts the very people that make the system work, which is the second contradiction of capitalism; with the improper disposal of waste that in turns make the workers sick, they then work less or potentially die, but a workers death in underdeveloped countries will have less of an affect on the economy “Because wage structures are lowest in less developed countries, pollution would mean fewer losses in earnings due to morbidity and mortality” (Robbins et al. 2010, 97). And the prime example of the damage that E-waste is causing is in Guiyu, China where irreversible damage has been done to the entire community because of failure to properly dispose of electronics by countries such as the United States, Canada and Australia has led to a surplus of harmful obsolete electronics that have flooded underdeveloped countries all in the name of saving money and avoiding the regulations set about by the U.S. government.
The most influential cultural practice of our time is the culture of capitalism, as it is the dominant form of economic organization across the globe (Anderson 2010). Capitalism takes and makes places throughout the globe, leaving traces that affect the commodities we buy, the livings earned, the methods and motives for travelling, and the meanings associated with them (Anderson 2010). The culture of capitalism is based upon trading products, experiences, and services, at all different scales - locally, nationally, or globally. Those who successfully trade products and services, and those who are limited to selling their labour to help other manufacture and provide the desired product often define capitalism. The process of making more money is a key defining element of the culture of capitalism (Anderson 2010).
In The Travels of a T-Shirt in the Global Economy, business professor Pietra Rivoli takes the reader on a fascinating around-the-world adventure to reveal the life story of her six-dollar T-shirt. Traveling from a West Texas cotton field to a Chinese factory, and from trade negotiations in Washington to a used clothing market in Africa, Rivoli examines international trade through the life story of this simple product. Her compelling story shows that both globalization's critics and its supporters have oversimplified the world of international trade.
Globalization and industrialization contribute to the existence of sweatshops, which are where garments are made cheaply, because they are moving production and consumption of those cheap goods. Industrialization has enabled for global distribution, to exchange those goods around the world. They can also set apart the circumstances of consumption and production, which Western countries as mass consumers, are protected from of producers in less developed countries. These factories are usually located in less developed countries and face worker exploitation and changes in social structures. Technological innovation allows for machines to take the place of workers and do all the dirty work instead of workers doing hours of hard work by hand.
The practice of trading and bartering of commodities has been around since the beginning of time. The concept of commodity chains was developed by Terence Hopkins and Immanuel Wallerstein in an attempt to understand the spread of capitalism and economic change. (Bair & Werner, 2011) The emergence of capitalism has brought about an anthropogenic phenomenon know as globalization as a means to create profit and in doing so altered competitive dynamics (Gereffi 1999). Globalisation of economies has lead to the construction of chains of production, distribution and consumption transcending borders across the world. Gereffi (1994) identified these chains as Global Commodity Chains, using them as a method to analyze the global economy.
The external environment has been analysed in previous sections, Appendix E lists internal capability and resources of Burberry by using porter’s value chain model, the VRIO framework will also be used to test whether the brand adds value by such activities or not.
Capitalism dominates the world today. Known as a system to create wealth, capitalism’s main purpose is to increase profits through land, labor and free market. It is a replacement of feudalism and slavery. It promises to provide equality and increases living standards through equal exchanges, technological innovations and mass productions. However, taking a look at the global economy today, one can clearly see the disparity between developed and developing countries, and the persistence of poverty throughout the world despite the existence of abundant wealth. This modern issue was predicted and explained a hundred and fifty years ago in Karl Marx’s Capital.
“Inequality, conflict, and regulatory corruption are all part and parcel of capitalism, history has borne this out numerous times unless someone steps in to break them up, monopolies are the natural result of unbridled capitalism.” Author John Perkins, also known as the ‘economic hitman’ describes his role as a highly paid professional who helped the U.S. cheat poor countries around the world out of trillions of dollars by providing them more money in which they could not pay back and later, taking over their economies in exchange of natural resources such as oil. In the epilogue of his book “Confessions of an Economic Hitman” he expresses his thoughts on taking ownership and changing the system by avoiding products that were manufactured by overworked laborers by developing boycotts to end labor standards and the promotion of it. Even though their is obvious economic growth in the U.S., Grassroots boycott can affect the policies of multinational corporations by avoiding products that are made by mistreated workers and help reduce self-destruction of the overall global empire because people who live in poverty do not benefit from a “voluntary trade,” the ecosystem is dying out, and greed is built in the system of the third world.