It guards their domestic industry from the negative effects of the financial crisis by accepting new trade restrictions intended at imports and other policies designed to limit the flow of wealth outside their country (Faiola, 2009). Thus to conclude, the impact of globalization may have been extremely economical, but it has brought the dependency theory into the forefront, as poor is becoming poorer and the rich are getting richer. The divide between the north and south states is defining the new international developments and relation. Consequences of economic globalization are immense, whether these consequences prove the dependency theory “right”, it is yet to be discovered.
This paper will not analyze the responses of the welfare states to the challenges of the 1970 and 1980s but instead will look at the response of the welfare systems in the face of the increasing global integration of product and capital markets and thereafter determine how the conflict begins and ways in which it can be minimized. I will argue that globalization has happened to the expense of the welfare state and that states will have to correct its negative effects by re-establishing social justice. This question suggests that there may be an incompatibility of goals between globalization and the welfare states. The conflict comes from the government need and interest in protecting and promoting the economic and social well-being of its citizens, and its need to integrate and expand into a process of expansionary international flows of goods and services, capital, information and people. There are many components of economic growth, one of them being competition of wages and prices, research and development or human capital of nation states to name a few.
The economic liberalization of trade globalization can reduce resource wars and civil wars influenced by natural resources. Integration would generate state interdependence preventing the risk of conflict between trading states. Independent states in the past have shown to be unstable and have been the political and economic causes of war on a global scale. Economic globalization and economic integration produces a neoliberal market, interdependent states, and stable governments reducing the probability of conflict and war. Neoliberalism opens the global market for freedom of exchange limiting government intervention preventing the government from gaining capital from corrupt means, such high taxation rates on foreign goods so that the demand for domestic goods increase leading to economic growth.
Governments institute protectionist policies in order to promote fair trade. These policies are designed to discourage imports through tariffs, quotas, and other trade barriers, to prevent foreign takeover of domestic industries and markets. The intention is to protect domestic businesses, thereby aiding the domestic economy. Which sounds like a good thing. However, the United States uses its formidable economic power to implement these policies directly hurting foreign economies and indirectly hurting its citizens.
Similarly, neoliberalism argues that the state is in some cases the problem, because it has not allowed the correct policies to be implement. However, the state is also the solution as it will implement the right policies which will be carried out to improve an economies development (Kiely, 2005). Therefore, hyperglobalist state, that globalisation is the beginning and the end of the nation state and the denationalisation of economies, which will lead to economic boundaries becoming irrelevant and national governments will not control their own economies, but instead facilitate connections between parts of the world through supranational organisations such as the EU (Larner, 2000). There are a number of reasons why one would not expect this approach hyperglobalism to promote rapid growth. Firstly it gives rise to a problem of insufficient demand, lowering of both real wages and public spending.
When companies exercise monopoly power they act as if they were monopolies. Government regulation of big business/monopoly power arose because of the following accusations: monopolies raise prices, monopolies reduce output and living standards, monopolies are inefficient and wasteful, monopolies are intensive to consumer demand, monopolies engage in unfair competition, monopolies help bring on recessions and they threaten our political system. The current antitrust laws were written without respect to the foreign market. When these laws were created the foreign market was not as b... ... middle of paper ... ...ade, I would allow to remain illegal, but I would not describe monopoly power, or attempting to limit competition as a restraint of trade. I would allow the FTC to remain in action, but only to prevent unfair trade practices, which does not include limiting competition, and false or misleading advertising.
The outcomes of international trade are explained throughout this essay. Also, this essay identified how monopolies in a domestic market respond to foreign competition and how they must adapt to such situations. The measures taken by government to prevent and control foreign competition are briefly explained and as to how these can work to hinder domestic markets from competition. The positive, short-term effects of trade protectionism are increased government revenue, prevention of ‘dumping’ and an increase in domestic production. Although, the long-term effects of such actions are often the opposite to the original idea of protectionism and could lead a country to economic stagnation.
States must have the freedom run its political and economical work according to its own values without being interrupted by any external power . Welfare state has been bought up to ensure social security for its citizens but over the years this concept has been getting a lot of heat from developed countries .This could be due economic globalization which can lead to devaluing of currencies , regulation of capital markets, excessive public funds leading public deficit and also increasing cost of labor on goods and services . Globalization of economies has made the chances of states to know there outcome of their polices less. Due, to the completion of international trading markets and increase of mobility in capital and MNC 's , states are forced to reduce to cost on labor , reduction of good and service prices , and reduction of taxes to make their local markets more competitive which effects the welfare of the state a lot . After the 2008 financial meltdown everyone turn to the austerity measures which leads to the cutting of employment in public sector and also reduction of pensions .
Globalization, a great number of people regard it as a chiefly economic phenomenon, necessitating the additional integration, or interaction, of nationally based economic entities through the development of international trade, investment and monetary flows. Also included in this view is the rapid advances in sharing social and cultural values as well as new technologies as the world grows together. Globalization can be defined as a procedure in which geographic distance is a diminishing factor in the formation and sustentation of international economic, political and cultural relations. Proponents of this process believe that free trade and integration of world markets will facilitate growth in economies both old and new. Proponents also believe that globalization will stimulate the spread of democracy and in turn improve the condition of human rights so intrinsic to the values of democracy.
Globalization can in general be described as the growing interaction amongst integration of activities. This mostly affects economic activities of human societies around the world. Nevertheless more realistically, globalization refers to the increasing economic interdependence of countries or states internationally through the escalating amount and variety of cross-border relations and transactions in goods and services and of global capital stream. It is also through the extra speedy and widespread diffusion of technology. In this case therefore, globalization includes both a description and a prescription.