Friday, January 27, 2012

Global Economic Issues - Learn the Pros and Cons of Having a Global Economy

Globalization

In order to gain a deeper understanding of the global economic issues leading to the current global recession we have to look at the history, the things that work, and the things that have harmed the world's economy as a whole.

Because of the downfalls of a global economy based on capitalism, there are entire activist movements working hard to stem the tide of third world countries being consumed by this global economy. Keep reading and I'll explain some of the basics.

History

A global economy is not actually a new idea. People have been traveling by sea to trade goods for thousands of years. In the Middle Ages, traders would travel along the Silk Road connecting China and Europe.

During the Industrial Revolution of the late 18th century, steam engines led to faster production machinery as well as steam powered boats enabling people to produce, deliver and trade goods much faster than ever before.

After the 1980s, however, globalization really picked up speed. Events like the NAFTA (North American Free Trade Agreement) and the formation of the WTO (World Trade Organization) opened up the markets dramatically. These and other factors allowed the entire global economy to be held under one system for the first time in history.

Pros and Cons

Globalization allows nations to produce what they do best. If a country can purchase cheap coffee from another country, they can focus their agricultural efforts on a crop that is better suited to their climate. The increase of the overall market size can benefit consumers by providing cheaper and more readily available goods.

Now, for the down side(s). Industrialized countries experience significant unemployment when corporations outsource or relocate to areas of cheap labor. However the biggest and perhaps most upsetting downside is globalization, as we have approached it over the past thirty years, directly leads to the poorest countries growing poorer. These countries get gobbled up by corporations quickly often times having their most vital resources, including clean water, being taken from the citizens for privatized production and use.

Moving Forward

The protest groups continue to grow and organize, using current global economic issues as evidence that things have gone terribly wrong. But the problems lie not only with the ethical concerns of globalization. Indicators are beginning to show that our current global economic crisis is about to get much worse. The best thing you can is to educate yourself, form your own opinions and learn how to protect your financial future.

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