How Globalization Affects Developed Countries
The phenomenon of globalization began in a primitive form when humans first settled into different areas of the world; however, it has shown a rather steady and rapid progress in recent times and has become an international dynamic which, due to technological advancements, has increased in speed and scale, so that countries in all five continents have been affected and engaged.
What Is Globalization?
Globalization is defined as a process that, based on international strategies, aims to expand business operations on a worldwide level, and was precipitated by the facilitation of global communications due to technological advancements, and socioeconomic, political and environmental developments.
The goal of globalization is to provide organizations a superior competitive position with lower operating costs, to gain greater numbers of products, services and consumers. This approach to competition is gained via diversification of resources, the creation and development of new investment opportunities by opening up additional markets, and accessing new raw materials and resources. Diversification of resources is a business strategy that increases the variety of business products and services within various organizations. Diversification strengthens institutions by lowering organizational risk factors, spreading interests in different areas, taking advantage of market opportunities, and acquiring companies both horizontal and vertical in nature.
Industrialized or developed nations are specific countries with a high level of economic development and meet certain socioeconomic criteria based on economic theory, such as gross domestic product (GDP), industrialization and human development index (HDI) as defined by the International Monetary Fund (IMF), the United Nations (UN) and the World Trade Organization (WTO). Using these definitions, some industrialized countries in 2016 are: United Kingdom, Belgium, Denmark, Finland, France, Germany, Japan, Luxembourg, Norway, Sweden, Switzerland and the United States.
Components of Globalization
The components of globalization include GDP, industrialization and the Human Development Index (HDI). The GDP is the market value of all finished goods and services produced within a country’s borders in a year, and serves as a measure of a country’s overall economic output. Industrialization is a process which, driven by technological innovation, effectuates social change and economic development by transforming a country into a modernized industrial, or developed nation. The Human Development Index comprises three components: a country’s population’s life expectancy, knowledge and education measured by the adult literacy, and income.
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The degree to which an organization is globalized and diversified has bearing on the strategies that it uses to pursue greater development and investment opportunities.
The Economic Impact on Developed Nations
Globalization compels businesses to adapt to different strategies based on new ideological trends that try to balance rights and interests of both the individual and the community as a whole. This change enables businesses to compete worldwide and also signifies a dramatic change for business leaders, labor and management by legitimately accepting the participation of workers and government in developing and implementing company policies and strategies. Risk reduction via diversification can be accomplished through company involvement with international financial institutions and partnering with both local and multinational businesses.
Globalization brings reorganization at the international, national and sub-national levels. Specifically, it brings the reorganization of production, international trade and the integration of financial markets. This affects capitalist economic and social relations, via multilateralism and microeconomic phenomena, such as business competitiveness, at the global level. The transformation of production systems affects the class structure, the labor process, the application of technology and the structure and organization of capital. Globalization is now seen as marginalizing the less educated and low-skilled workers. Business expansion will no longer automatically imply increased employment. Additionally, it can cause high remuneration of capital, due to its higher mobility compared to labor.
The phenomenon seems to be driven by three major forces: globalization of all product and financial markets, technology and deregulation. Globalization of product and financial markets refers to an increased economic integration in specialization and economies of scale, which will result in greater trade in financial services through both capital flows and cross-border entry activity. The technology factor, specifically telecommunication and information availability, has facilitated remote delivery and provided new access and distribution channels, while revamping industrial structures for financial services by allowing entry of non-bank entities, such as telecoms and utilities.
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Deregulation pertains to the liberalization of capital account and financial services in products, markets and geographic locations. It integrates banks by offering a broad array of services, allows entry of new providers, and increases multinational presence in many markets and more cross-border activities.
In a global economy, power is the ability of a company to command both tangible and intangible assets that create customer loyalty, regardless of location. Independent of size or geographic location, a company can meet global standards and tap into global networks, thrive and act as a world class thinker, maker and trader, by using its greatest assets: its concepts, competence and connections.
Beneficial Effects
Some economists have a positive outlook regarding the net effects of globalization on economic growth. These effects have been analyzed over the years by several studies attempting to measure the impact of globalization on various nations’ economies using variables such as trade, capital flows and their openness, GDP per capita, foreign direct investment (FDI) and more. These studies examined the effects of several components of globalization on growth using time series cross sectional data on trade, FDI and portfolio investment. Although they provide an analysis of individual components of globalization on economic growth, some of the results are inconclusive or even contradictory. However, overall, the findings of those studies seem to be supportive of the economists’ positive position, instead of the one held by the public and non-economist view.
Trade among nations via the use of comparative advantage promotes growth, which is attributed to a strong correlation between the openness to trade flows and the affect on economic growth and economic performance. Additionally there is a strong positive relation between capital flows and their impact on economic growth.
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Foreign Direct Investment’s impact on economic growth has had a positive growth effect in wealthy countries and an increase in trade and FDI, resulting in higher growth rates. Empirical research examining the effects of several components of globalization on growth, using time series and cross sectional data on trade, FDI and portfolio investment, found that a country tends to have a lower degree of globalization if it generates higher revenues from trade taxes. Further evidence indicates that there is a positive growth-effect in countries that are sufficiently rich, as are most of the developed nations.
The World Bank reports that integration with global capital markets can lead to disastrous effects, without sound domestic financial systems in place. Furthermore, globalized countries have lower increases in government outlays and taxes, and lower levels of corruption in their governments.
One of the potential benefits of globalization is to provide opportunities for reducing macroeconomic volatility on output and consumption via diversification of risk.
Harmful Effects
Non-economists and the wide public expect the costs associated with globalization to outweigh the benefits, especially in the short-run. Less wealthy countries from those among the industrialized nations may not have the same highly-accentuated beneficial effect from globalization as more wealthy countries, measured by GDP per capita etc. Although free trade increases opportunities for international trade, it also increases the risk of failure for smaller companies that cannot compete globally. Additionally, free trade may drive up production and labor costs, including higher wages for more skilled workforce.
Domestic industries in some countries may be endangered due to comparative or absolute advantage of other countries in specific industries. Another possible danger and harmful effect is the overuse and abuse of natural resources to meet new higher demands in the production of goods.
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The Bottom Line
One of the major potential benefits of globalization is to provide opportunities for reducing macroeconomic volatility on output and consumption via diversification of risk. The overall evidence of the globalization effect on macroeconomic volatility of output indicates that although direct effects are ambiguous in theoretical models, financial integration helps in a nation’s production base diversification, and leads to an increase in specialization of production. However, the specialization of production, based on the concept of comparative advantage, can also lead to higher volatility in specific industries within an economy and society of a nation. As time passes, successful companies, independent of size, will be the ones that are part of the global economy.
Старик и море
«Старик и море» – это повесть, которая была последним большим художественным произведением, написанным Эрнестом Хемингуэем и опубликованным при его жизни. Она считается одной из его наиболее известных работ, была награждена Пулитцеровской премией в области художественной литературы в 1953 году, и была упомянута Комитетом по присуждению Нобелевской премии, как вклад в присуждение Нобелевской премии по литературе Хемингуэю в 1954 году.
«Старик и море» – это повесть о битве между старым, опытным кубинским рыбаком и большим марлином. Повесть начинается объяснением о том, что этот рыбак, которого зовут Сантьяго, выходит в море 84 дня и не может поймать ни одной рыбы. Действительно, он настолько невезучий, что родители его молодого ученика Манолина запретили ему (Манолину) выходить в море со стариком и приказали ловить рыбу с более успешными рыбаками. Однако мальчик, все ещё преданный старику, каждый вечер посещает его лачугу. На 85-й день Сантьяго выходит в море один, направив свой ялик далеко в Гольфстрим. Он устанавливает свои лески, и к полудню первого дня большая рыба – он уверен, что это марлин – хватает его наживку. После долгой борьбы с рыбой Сантьяго удаётся притянуть марлина к борту ялика и направиться домой, думая о высокой цене, которую рыба принесет ему на рынке, и как много людей он накормит. Пока Сантьяго плывёт назад к берегу, акул привлекает кровавый след, оставленный марлином в воде. Несмотря на его (старика) усилия отогнать акул, они почти сожрали всю тушу марлина, оставив скелет, состоящий, в основном, из его хребта, хвоста и головы. Оказавшись дома, он (старик) падает в свою кровать и проваливается в глубокий сон. На следующий день группа рыбаков собирается вокруг лодки, к которой всё ещё прикреплен скелет рыбы. Манолин, беспокоившийся во время стараний старика, кричит, найдя его невредимым и спящим. Мальчик приносит ему газеты и кофе. Когда старик просыпается, они обещают (друг другу) порыбачить вместе ещё раз. Заснув опять, Сантьяго видит сны о своей юности – о львах на берегу Африки. К концу повести старик чувствует себя очень плохо и несколько раз кашляет кровью. Он не говорит мальчику.
Эта повесть получила очень много призов и считается одной из лучших повестей в американской литературе. Сантьяго сражается с морскими созданиями, и некоторые читатели думают, что это история о битве человека против мира природы. Однако повесть можно рассматривать, как историю о месте человека в отношениях с природой. В повести, Сантьяго и марлин демонстрируют одинаковые качества гордости, чести и отваги, и оба подчиняются одному вечному закону природы – они должны убить или быть убитыми. Сам Сантьяго говорит:
«Человек не создан для поражения … человек может быть уничтожен, но не побежден».
The Old Man and the Sea
The Old Man and the Sea is a novel that was the last major work of fiction to be written by Ernest Hemingway and published in his lifetime. It is considered to be one of his most famous works and was awarded the Pulitzer Prize for Fiction in 1953 and was cited by the Nobel Committee as contributing to the awarding of the Nobel Prize in Literature to Hemingway in 1954.
The Old Man and the Sea is the story of a battle between an old, experienced Cuban fisherman and a large marlin. The novel opens with the explanation that the fisherman, who is named Santiago, has gone 84 days without catching a fish. In fact, he is so unlucky that his young apprentice, Manolin, has been forbidden by his parents to sail with the old man and been ordered to fish with more successful fishermen. Still dedicated to the old man, however, the boy visits Santiago’s shack each night. On the eighty-fifth day, Santiago sets out alone, taking his skiff far onto the Gulf Stream. He sets his lines and, by noon of the first day, a big fish that he is sure is a marlin takes his bait. After a long struggle with the fish Santiago manages to strap the marlin to the side of his skiff and heads home, thinking about the high price the fish will bring him at the market and how many people he will feed. While Santiago sails back to the shore, sharks are attracted to the trail of blood left by the marlin in the water. Despite his efforts to ward off the sharks, they have almost devoured the marlin’s entire carcass, leaving a skeleton consisting mostly of its backbone, its tail and its head. Once home, he slumps onto his bed and falls into a deep sleep. The next day, a group of fishermen gather around the boat where the fish’s skeleton is still attached. Manolin, worried during the old man’s endeavor, cries upon finding him safe asleep. The boy brings him newspapers and coffee. When the old man wakes, they promise to fish together once again. Upon his return to sleep, Santiago dreams of his youth – of lions on an African beach. The old man feels very unwell and also coughs up blood a few times towards the end of the story. He doesn’t tell the boy.
The novel has received so much praise and is considered to be one of the best novels in American literature. Santiago fights the creatures of the sea and some readers think that the story is about man’s battle against the natural world. However, the novel can be viewed as the story of man’s place in relation to nature. In the story, Santiago and the marlin show similar qualities of pride, honor, and bravery, and both are subject to the same eternal natural law – they must kill or be killed. Santiago himself says:
“man is not made for defeat . . . [a] man can be destroyed but not defeated.”
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