Socio-economic inequality in South Africa is due to the institutionalised ideological mismatch regarding labour and economic policy Economic growth is shaped by policy context and promoted most effectively when it is consistent with either liberal market or co-ordinated market ideal type varieties of Capitalism. Policy inconsistency dampers economic growth post-apartheid South Africa attempted to adopt a social-democratic and co-ordinated variety of Capitalism. This failed due to the adoption of macro-economic neo-liberal policies. Organised labour protected labour market policies which lead to policy inconsistencies with regard to trade liberalisation. Trade liberalisation combined with labour market protection leads to unemployment.
Fair trade assumes consumers rights are an injustice to the producer. Through protectionist policies, a government forces consumers to support a company that cannot stand on its own. Protectionism is based on the idea that a government will become richer if its citizens are forced to pay higher prices for fewer goods. Every government restriction forces resources to be allocated away from efficient industries. Protectionist policies are harmful to consumers and the economy.
One thing that the article mentions is how moving goods from countries is one of the problems that is creating the poverty another is the huge migration that has been going on. “It is the gap between rich and poor within developed countries that has helped foster a deep suspicion, not just of unlimited migration, but of free movement of capital and goods as well.” (Elliot). This shows that the author expects the audience to know and understand the basic knowledge of globalization and capitalism. The audiences are knowledge about these systems because the systems are either harming them or giving them profit. Making them understand the effects of capitalism and migration in certain countries.
The diagram below compares monopolistic competition and perfect competition: As the diagram above illustrates, the monopolistic profit maximization lies at the average market cost, representing a large deadweight loss in the triangle formed by ATC, AR and Monopoly Output. To combat this, reducing welfare loss by increasing output and lowering prices, government intervention may prove an efficient method of solving the problem of monopoly. By legislating anti-monopolistic policies, for example lowering barriers of entry to encourage competition that was previously unsuccessful due to the monopoly-induced high barriers of entry. This would profit companie... ... middle of paper ... ... directly allocates funds to purposes of increase economic development, then they unconsciously limit the growth, which the nation will experience, because the financial resources have been used for secondary purposes. This can be exemplified in several socialists economic measures, such as taxation, transfer payments, indirect taxes, excessive government expenditure, with which the government aims to improve equity and income equality, but at the cost of economic and financial growth.
It results in both positive and negative aspects. It is often claimed that working conditions of unskilled workers deteriorate in the course of economic globalization and that jobs of unskilled workers even disappear(e.g, Heine and Thakur 2011, Stigliz 2002, Wood 1995, 1998) because of two reasons. Firstly, internationalization is supposed to increase competitive pressure. As a consequence, firms decrease wages, rationalize production processes and demand more from workers. Secondly, globalization is also believed to induce governments to deregulate labor markets to provide advantages to national and foreign investors.
This is defined as product classification in paper "How Rich Countries Became Rich and Why Poor Countries Remain Poor: It’s the Economic Structure" by Jesus Felipe, Utsav Kumar and Arnelyn Abdon. This three authors had given an scenario regarding comparative advantage with respect to technology used for designing and making better products can have greater advantage over international market which in general held by developed countries leading them to be more rich and countries having this products leading them to poor. Also developing countries labor more unskilled then developed countries this takes them time to understand technology. which makes them to use that technology but not understand and innovate new technology. 2).
Instead of globalization could reduce poverty, from people round the world gaining wealth, the modern process of globalization is exacerbating inequality. Globalization could be seen as a new form of colonialism. The companies may be going in and stepping on the cultures and peoples of the area they are trying to extend their global reach to. Globalization brings wealth, but where there is great wealth, there is also great poverty. Globalization can lead to poverty because the rich are exploiting the poor around the world.
Corrupt activities hold back economic development, prevent the conditions free market and equal opportunities for businesses and consumers as well as exploits already marginalised groups of people. In some cases, s... ... middle of paper ... ... American Economic Review. 89 (4), 1. Bonaglia, F., de Macedo, J. and Bussolo, M. (2001). How Globalization Improves Governance.
The film explores a maze of illegal activities and provides evidence supporting the idea that the sale of counterfeited goods results in government instability, money laundering, corruption and a host of other problems around the world that globalization has brought upon today’s society. The wealthier countries exploit innocent people for economic growth and create unequal distribution of wealth, which leads to a decrease in over economic productivity and slows economic growth. Low-skilled workers in developed countries who will see a decrease in wages due to the competition that they face from low-skilled workers in developing countries who will see an increase in wages. Economists have come up with an idea that trade liberalism is the force behind the rise of inequality in the United States and Western Europe, because of the boost in trade with poor countries and fragmentation of means of production, that has caused low-skilled jobs to be outsourced. Where treatment of the workers are inhumane and the unequal distribution of wealth will lead to an increase in poverty because the inequality leads to harmful for development that is generated because too he pressure that is created by inequality, this is directed the states having to adopt to redistributive polici... ... middle of paper ... ... of individuals competing for low-skilled jobs.
The argument being economic is that labor standards and low wages in countries that are developing threaten worker’s living standards in developed countries. The argume... ... middle of paper ... ...l on the people who are getting this unfair treatment and nations as a whole. Works Cited Golub, Stephen. "Are International Labor Standards Needed to Prevent Social Dumping?." Finance & Development.