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Economic Globalization

Maria R

 

In November of 1999, the World Trade Organization (WTO) held a conference that brought to light issues that most American's had never entertained before. In scenes that reminded some of Kent State in the sixty's, protesters were arrested, shot with rubber bullets, and sprayed with tear gas. The actions of that week in Seattle reflect the sentiment of a small, passionate sect of society that is against the globalization of anything. A global stock market and the International Monetary Fund (IMF), to the large majority, are not only a good thing, but are already functioning or will be soon.

Those who are feverishly against globalization propose that opening up all barriers will put Americans out of work, sanction the inhumane working conditions of other countries, and open up the doors to mass environmental sabotage as countries that do not have environmental regulations on business are encouraged to grow and further pollute to increase profits. Those who feel this way are missing a very important point. As the economy in the US has changed and grown, we have experienced all of these horrible conditions internally. During the Industrial Revolution, skilled tradesmen lost their jobs to machines and continue in this day as robotics and technologies continue to improve. Sweatshops were prevalent in New York City's garment district where women and young children were forced to work in conditions that today are considered despicable. In March of 1911, 146 women and children at the Triangle Shirtwaist Company in New York City died because the doors were locked to keep the workers from leaving the building on breaks from their 14 hour day. The list of environmental catastrophes and unabated pollution that occurred before federal regulations were enacted is far too long to list. The only reason that Americans are so aware of these issues is because we have lived through them ahead of the rest. Other countries that have advanced behind our young country, have yet to reach our level of social consciousness (such that it is) and economic streamlining.

According to basic laws of economics, resources flow to where they will be best utilized. This includes labor, dollars, and raw materials. All the makings of the products and services that we demand on a daily basis are controlled by this demand. If it is cheaper to use robotics to put a bolt on a car, then the mechanic must retrain to perform a function that cannot be done by machines. Fifty years ago, housewives found that many of the tasks they did by hand could be performed better and faster by machines. Instead of spending all day cleaning and washing cloths, housewives educated their children, performed charity work, and eventually many found themselves out in the workforce. The same holds true for money. At one time, businesses were most likely to have large amounts of money tied up in cash and inventory. As technology has improved, companies have found that by strategic cash flow, they can compete with increasing profit pressures by using efficient cash management.

All of these factors represent the progress of a country's economy. This progress cannot be stopped if a country is to grow economically and in population. If the economic methods of a country are stagnant, it will not be able to provide food nor other basic needs for its growing population with the shrinking natural resources of our Earth. A global economy is the only way to stabilize the needs of the Earth's populations. Third world countries that are abundant with labor and raw materials must be utilized for their resources. Utilization does not mean exploitation. This is one of the major hurdles of the WTO. The WTO must strive to regulate businesses, on a global level, for humane treatment in all countries or we, as a nation, face reliving the guilt and responsibility for lives as in the Triangle deaths.

In addition to cash management on an individual company's basis, money is and will be invested on global level. Many mutual fund companies provide a fund channel for investment in global and international companies and have for many years now. For instance, Janus WorldWide has an inception date of 1991 and Dreyfus Global Growth Fund has been around since 1987. This trend cannot be stopped, especially with the formation of the European Central Bank and the stability that it intends to bring. Excess cash in the US must find its way over the pond if the returns of the last few years are to be maintained. Global growth will exceed growth in the US until the next great technical revolution pulls it back to US companies. Many countries, including the US, do take measures that inhibit the flow of goods and services but the Federal Government must realize that the US alone cannot provide all of the goods the consumer demands. Our GNP alone is not enough to satisfy the hunger of the American consumer and this fact alone demands the flow of funds overseas. A Global Stock Market is just a natural progression of the globalization of the economy.