Brief Notes on Globalisation and Liberalism

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1. The strongest case for globalisation is liberalism: the main pillar of international capitalism.

2. The invisible hands of Liberal market: economy will turn profits into an engine of social progress through enhanced corporate responsibility when technology advancing supports trade across borders and integration of production.

3. Liberalism is consistent with necessary government interventions as corrective measures in the market-economy.

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4. Under Liberalism capitalism: globalisation makes many workers better off against worsening of some workers.

5. Under free trade, consumers tend to be better off as their standard of living improves.

6. Under liberal trade, a country shifts its pattern of production in the direction of specialisation and competitive/comparative advantage.

7. Technological progress and transfer of technology in the globalisation process would create more winners against losers.

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8. Most outward FDI from rich countries goes to other rich countries rather than poor countries.

1. It follows that capital movement through FDI is hardly flowing to the LDCs. ‘

2. During 1990s, almost 80% of the American FDI outflows was in Canada, Japan, Western Europe. Rest was in middle income countries, such as Brazil, Indonesia, “Mexico and Thailand.

3. Since the affiliates of the MNCs irade with other FDI and exports tend to be not complements.

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4. Before FOI, the firms tend to export finished products.

5. After FDI, e sports constitute a mixture of intermediate-cum-finished goods.

6. Despite crisis and difficulties, prosperity of East Asian countries is better than the economic position of India, Pakistan and such other countries that have remained aloof from the international economy.

7. Critics argue that capital inflows make economy less stable as these inflows lack stability. Besides, MNCs are least interested in development with their eyes on profits only.

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8. Trade promotes growth. Growth helps poor. Evidence in East Asia proves that economic progress has lowered their poverty index.

9. Africa has high poverty index because its growth has remained very slow.

10. China has wedded into global economy and is progressing fast.

1. Globalisation does not imply exploitation of labour. Labour is exploited when wages are below their marginal productivity.

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2. MNCs pay labour wages when their entry shifts up demand for labour, average wage rate in the market would also rise. Thus, globalisation tends to make labour better off.

3. Critics argue that, due to globalisation the welfare state has been under attack for last two decades.

4. It is argued that nations, which do not upgrade production simultaneously by downloading blue-collar jobs, cannot sustain their competitive edge in global markets. For instance, U.K., when attempted to preserve its employment without a sharp improvement in productivity in the manufacturing sector it had industrial down fall in the global economy over the years. Deposit such as labour policy, the country’s average unemployment rate remained very high (13%) for the past three decades.

4. UK’s experience suggests that there is a vicious circle for a country trying to preserve low productivity workers at all costs.

5. A developing country’s strategic industries/sectors need to be protected in global economy.

6. Overstaffing, i.e., lower productivity is greatly responsible for corporate sickness.

7. In K-economy, knowledge products are not-valued in terms of the physical inputs such as labour hours and labour costs.

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