GLOBALIZATION

Are We Better or Worse Off In This Globalised World

Are We Better or Worse Off In This Globalised World

Introduction

Who could have imagined that a person in Lebanon would be able to watch a soccer game played in Europe, live, with perfect image and sound? Our world, as we know it today, has become like a small village where physical, cultural, and economical barriers have become more or less inexistent. This is due to a phenomenon called Globalization. This phenomenon is not a new one; however, since its existence Globalization has had influence on many major aspects of our life, especially the business world. This impact that globalization has on our business world is displayed through the increase of world trade, ease of new communication methods, and setting high standards on goods and services all around the world.

This paper will analyze that are we better or worse off in this globalised world?

Discussion

Is it wrong or right? There are different points of view:

To begin with, one must mention the fact that Globalization has lead to an obvious increase of world trade.

The first positive result of the globalization is the growth of the GDP in almost every country. The world is 6 times richer than it was in 1960's.What is the link between growth and globalization? Economists think that there are two main explanations for the fast economic growth from international exchange, the increase of productivity and the expansion of markets (Temple, 2001, 91).

The increase of productivity: International exchanges are based on comparative advantages and specialization. The theory of comparative advantages suggests that it makes sense for a country to specialize in producing those goods that it can produce most effective while buying goods from another countries that it can produce more efficiently itself. This type of trade is a positive-sum-game: a situation in which all countries can benefit from others. International trade theory suggests the theory has an advantage because it frees the home countries resources to concentrate on activities where the home country has a comparative advantage. By specializing in production, countries augment the total productivity of the economy; this favours fast economic growth (Giddens, 2003, 72).

The expansion of markets: an increase in market size augments production quantities and when the size of production augments, firms accomplish economies of scale, which diminishes the unit expense of production (Rena, 2005, 101). On the other hand, the fact that the market expands is followed by the fact that competition increases: on the worldwide market, there are numerous producers and expansion of the market favours everyone.

Result: Companies are incited to make all that they can to improve their competitiveness, in particular by improving their conditions of production and their capacity to adapt itself to the variations of the demand. It is favourable to the growth, from the point of view of the prices as well as on the quality of products. Earnings, therefore, will be translated in the improvement of the standard of living and in growth (Cioffi, 2000, ...