The Good and the Bad of Globalization?

Call centres have been exported to various parts of the far east, to the point where it is rarely worth calling one any more. Since the call centre was first conceived firms no longer respond when one writes to them with a query or complaint. Fax remains an effective tool for this type of message, as does closing an account.

My lawn is consistently the nicest on the block - since I do it myself and my neighbors have it done by service companies that hire cheap Mexican workers and make them mow 50 yards a day.

I've noticed a marked decline in the quality of house construction. I recently did some faux work at a 8000 sqft mansion - the bricks were extremely poorly laid.

This is not a comment on the capabilities of Mexican workers - I've seen many who do a great job. But the race to the bottom in wages by some of these companies means that they hire only the least skilled, lowest paid workers.

In my professional life, there hasn't been any impact that I can see. That's because I've always worked in either defense of space electronics - and we don't outsource anything. My friend at TI tells me that they don't build anything much here anymore. They use their plants in India.

In general, though -I'd say that dollar for dollar, we get better work out of our many immigrants here than we do from our citizens.

We speak of "globalisation" as if something new. Globalisation has been going on for thousands of years, and only being refined a little over the last 50 years. Trading where commodities and goods are less expensive than at home has normaly been the source of good business for all involved, the buyer and seller.

What we are experiencing now is a little different. The victors of the second world war since the mid 1940's have poured back endless amounts of money into the defeated nations making some of them now as powerful or more powerful than the victors.This is not bad but, can be deemed as slightly unfair by some of the older citizens of the victorious nations. This however has been accepted for some 35 years. I am purposely leaving individual country names out of my comment so as to not provoke a lot of people.

The question I feel is mainly aimed at what we now call "Globalisation" The last 10-15 years. I am very proud to have played a fairly large role in this era by assisting many emerging nations and companies. Mainly in the skills of Engineering, Financial Control, Planning, Management etc. To such a degree that now many of the companies on my list are now listed companies on the stock exchanges of their particular regions of the world.

The rapid growth of 2 of the major regions has really only been publicised for a relatively short while compared with the actual event. Only now is the reality behind this extrordinary growth pattern being realised. With the environmental effect and the abuse of labour involved in this growth. Plus the now larger gaps in wealth spread. I like to think of this phase as the teething phase and it will all level out and fairness prevail, but that I feel is naive.

What should have happened in my opinion is the greed of the major OEM's and their shareholders should have been curtailed by the governments of the now buying nations. Whilst Quality cost and timing was always the mandate for the buyer in the West, to achieve a more timely launch of their products than their competitors. I have noticed that timing is being allowed to slip and quality is still nowhere near what was expected of the suppliers in the West, but all is forgiven when the invoice hits the accounting department.

To get to my point. As this train of logic can go on for pages. I feel that a more levelled and controlled growth taking into consideration some of my comments above could have been planned a lot better. This would have given the smaller and more vulnerable companies in the West the ability to compete by supplying the same initially lower quality and extended lead times for an also lower cost as their competitors in the emerging nations. I agree that we could never have competed with the actual hourly labour rates, or the working conditions, but with our skills and at the time the higher expertise, we in the West (although I live in semi retirement in Sth East Asia) could have become more competitive than it appeared we were. It is now in my opinion far too late for this to mean anything and we will for sure reap the unpleasant side of globalistion yet to come with the loss of many more jobs and the inherent inability to purchase new items due to more insolvent family's in the West.

This is one mans view after some 35 years of being involved in what we now call globalisation. I hope it does not offend in any way as that is not the intention. I really only want to say that if we are 'all' globally (East-West, North-South) not careful. Greed and so called 'bargains' will catch us 'all' out. Living on this world should not be viewed as a short term thing.

KennyT

What you say is scaring; it means that the USA and other developed countries are right at the beginning of an exponential declination, a fast and accelerated march towards total economic, and social and human devastation. Indians and Chinese will produce million tons of tech-thrash and will have no markets where to sell it, so they will have to sell the tech-thrash themselves, but theirs salaries are too low absorb all that "production".

What we must regret more is the lose of the American tinker spirit and the incentives to creativity in the "garage lab". ¿Is the USA about to give up?

Here in Chile we are just observers, 20 years ago we were too underdeveloped to create an environment prone to incentive an electronics industry, and now we are too expensive. I wonder in what year we were right at the threshold. However I have been for years sending ideas, projects and designs to companies in the USA to attract investors here without any results, so it may be that the USA is no longer the promise land and we have to surrender to this evidence.

Jaime Soto Figueroa

http://www.matharts.cl/

The sad reality is that those of us in manufacturing are forced to look to other countries to get certain jobs done. Ergo we are using cheap labor. But we could not find a single company in the United States or Australia to build these certain products for us. We found a company in Canada--they manufacturer in China. So we are building this particular product in China but it is not our preference. Cheap labor is a misnomer --This project has turned into a nightmare working with language difficulties, corruption in customs, and the demand for scheduling which the Chinese don't seem to understand or care about. We are concerned for quality and safety --this is just not an issue with the Chinese work crew.

What happened to all of the companies doing this work in the US? Even though I am a little disappointed in President Bush, I almost have to agree with him about his view on global warming. The US imposes stricter environmental laws and our companies go to other countries with no such laws to get their job done. I would not recommend to any small company to build in China; we are going to lose money.

The effect is enhanced throwaway of consumer goods rather than repair, so I miss out on repair work, because the consumer would rather buy new? technology in some cases on delayed payment plans, rather than pay someone to repair their goods. The new equipment is lucky to last a year(warranty period).

Just remember, you always get what you pay for...

Lower barriers ==> more trade ==> globalisation.

Lower barriers ==> smaller differences in prices, lower prices, wages, quality, because new, less qualified workers and firms are entering market. Number of firms will be smaller, but they will be bigger.

Money from work (average and span) will be lower, money from capital (money) will be bigger.

More automatisation, more unemployed.

But nowadays most important is partial acceptation of western way of management of production in some areas of China.

Summary: better global world economy; plus:lower prices, minus: lower quality.

The lower quality is a transitional step, as the new producers get up to speed, and the top level of demand insists on only the best. If these companies do not improve their quality, then they will not survive.

As for the biggest companies, they tend to take longer and longer to react to market demands and fall out of favour, leaving space for the minor players and newcomers to make giant leaps: Dyson and MacLaren are houshold names in the UK which have come from nowhere to revitalise industry sectors, leaving the biggest companies trailing far behind.

I am surprised by how little comment this thread has received. "Globalization" is cluttered with so many conditions which are added on to the concept.

1. There is fairly widespread criticism of the USA's agricultural commodity programs, with government assistance to producers for key or named crops, such as corn (maize). The widely-accepted view is that this lowers the cost so it is "unfairly" cheaper than the cost of locally-grown corn in other countries such as those in Central America. The result frequently is that local farmers, with very small areas under cultivation compared to the agri-business growers in the USA, cannot market their crop. A second result is the reduction in the varieties of corn grown--a decrease in biodiversity--coupled with an increase in the monoculture type of farming which often weakens fields and natural pest predators. A third result is an increase in the use of fossil fuels for transportation. When the local farmers cannot market a crop, the local economies are weakened.

2. Although there is a push for lower production costs, the trade-off for this is sometimes a decrease in quality (either of materials used or workmanship). This poorer quality may not be seen when the consumer buys the product. When it is, the higher-priced manufacturer could very well have already shipped the factory overseas or closed its doors. I am a contractor. There are many brands of tools that I will not buy because of quality problems. There are many products that I try to avoid for the same reasons.

3. Usually the "free-trade" agreements are written from the perspective of the producer of goods, so environmental and safety concerns are omitted. The producers are often multi-national corporations with allegiance to no one and accountability to few. In many countries, these corporations are bigger and more powerful than the national governments. When faced with regulations for environmental or safety or pay rules, they have moved to another country where they can continue unfettered. I have seen many "maquiladoras" in Central America, which have barracks-type housing, fences topped with concertina wire, and guard towers. Granted, in some places there is a real fear for safety, but where these factories are, the surrounding local businesses--even the banks--do not have such "protections". The stories told by the local people, regarding working conditions and exploitation, are harsh. True, these are examples and are not typical for all. Yet the tendency is for people in power to abuse those not in power, and for money in the form of profits to be corrupting.

In general, although globalization of the economy yields lower costs and more wide-spread availability of products, I believe that it hurts more because of the increase in fossil fuel consumption, the decrease in diversity in the biosphere as well as in the economic sphere, and the increase in structured social inequality.

Direct effects to me: poorer tools, a lower wage for my contracting skills, and a decrease in the surrounding financial and environmental health.

--JMM