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  • Print publication year: 2009
  • Online publication date: January 2010

2 - For Richer, for Poorer: Economic Globalization

Summary

The most visible manifestation of economic globalization is the flow of manufactured goods across national borders. Shoes conceived of at Nike's headquarters in Oregon are produced in far-flung factories in China, Vietnam, Indonesia, and Thailand, to avoid high labor costs in the United States, and then sold to consumers the world over who possess sufficient disposable income to afford sneakers priced at up to $300 a pair. Even services have become globalized, and for similar reasons. Dial a toll-free number in the United States to purchase airline tickets and you may find yourself talking with an airline reservations agent located in India. And, to avoid U.S. regulations, phone sex calls by U.S. residents are routed through poor countries like Guyana, a practice that generates up to 40 percent of Guyana's gross domestic product (GDP).

Our global economy is not a new phenomenon. Trade between countries and between continents is a centuries-old process that grew considerably during the latter half of the nineteenth century. Yet the intensity of that exchange has grown in the past several decades at quite high speed. Today's global market bears little resemblance to the world's economic system in the mid-twentieth century, at which point it was “an aggregation of reasonably distinct domestic economies.” For the most part, at that time, manufacturing took place in the industrialized countries (the “First World”) – the United States, Europe, and Japan – where manufactured goods were sold as well as being widely exported abroad.

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