When "globalisation" first became mainstream a decade or so back, only a very few warned of its impact on the western world.

I remember getting into a argument with a collegue about 10 years ago who was championing globalisation as a way to raise the living standard of the worlds poor. No doubt it will do that, but the price is a drop in standard of the worlds "rich".  There is only so much money to go around.

Now that a number of "poor" countries have got their act together (china, india, etc), globalisation is ramping up very quickly with 1000's more jobs off-shored day by day.

Seems to me we (and many western countries) are at the tipping point, where the other sectors of the economy which cant be off-shored are unable to take up the slack of job loses in manfacturing and professional services.

Yes another valid reason Australia needed reform in industrial relations in order to compete globally which the Howard Govt delivered and the present Labor Govt rolled back.

Now Australia finds itself uncompetitive and lots of businesses are winding down or closing up shop and moving overseas....

Labor's fault entirely.....and have they learned from this?

NO.......instead they continue to make Australia uncompetitive with the great big new carbon tax, and the great big new mining tax and they champion unions and uncompetitive behaviours such as collective bargaining which is stuffing Australian business and the jobs are disappearing every day that this rabble Govt is in power. 

Globalisation and free trade are some of the reasons a very small trading nation like Australia is doing so well.

corporate_whitey wrote on Mar 1^st, 2012 at 9:43am:


There are much worse places to be if your unemployed

bobbythefap1 wrote on Mar 1^st, 2012 at 9:28am:


Exactly. Globalization is not new. It reached its peak in the late 19th century, declined in WWI, and crashed in the Great Depression.

The global economy then atomised into national economies with competing war plans. After the war, an international gold standard was created which put a check on the excesses of the financial system.

It was the international financial system that was seen to be the cause - and the cure - of the problems of the 20th century; namely, two world wars.

In 1971, Nixon pulled out of the gold standard. This created a floating currency system again. Then, in the debt crisis of 1981, the IMF changed tack. It needed to plug holes in the debts of developing economies - debts that would bring down the US banks - and to do this it instituted the Washington Consensus.

This "consensus" marked globalization as we understand it today: free trade, privatisation of state industries, floating currencies and monetary policy.

Without it, we wouldn't have cheap Chinese consumer goods and foreign food products, so it has its advantages.

Equally, we wouldn't have an increasingly polarised world with "failed", or client, states - once attached to the two Cold War powers. The War On Terror is a response to globalization.

The first battle in the War On Terror was between Russia and Chechnya, and was a direct response to the breakup of the Soviet Union and its market liberalisation policies.

The US followed - first into Afghanistan, a former Soviet colony, and then the Middle East, a former Cold War battleground. This was a response to the dawning of the US's slow decline and the 2000 recession.

When the money pulls out of shares and goes into US bonds, it's tempting to start a war. Add the investment pulled out of soft tech stocks and into "hard" technology, and you've got a very itchy trigger finger indeed. Up the ante with a new administration looking for a cause, add September 11, and you've got a new world order.

It's not a new world order, just a mad clutch for order in a period of decline.

You can't hold off globalization, but states will always have a lover's tiff with it. On again, off again, it's just the way things are.

People trade, it's what we do as a species. Nationalism, racialism, protectionism and tribalism are nothing more than blind isms that seek to hold off the inevitable.

But how to deal with the stateless global financial system that creates the disorder in the first place?

Ah.

adelcrow wrote on Mar 1^st, 2012 at 9:39am:


Australia did well because we had a relatively free trade system between similarly westernised countries in europe, north america, NZ, etc.   Nobody off-shored jobs to the UK, yet they were happy to buy our products  exported from the other side of the world.

Globalisation, has allowed free trade to extend into all sorts of disparative economies, causing the whole world to slope toward a average rate of wealth, which is lower than we previously had.

The only way out is a move back to protectionism, but that has many costs and disadvantages as well.

Karnal wrote on Mar 1^st, 2012 at 11:37am:



Off-shoring is an excellent idea and I am a big fan of what it brings.
The most successful project I have been a part of involved off-shoring not value add intensive labour processes to India from South Australia which improved any number of company corporate goals.

Think in these terms -

1) Our aim as a company is to maximise shareholder wealth whilst behaving in a socially responsible manner - thats the whole ethos of being for a company.

2) By offshoring to the developing world we are doing two things.
We are increasing capital into that country - we are helping them raise their standard of living and we end up building first world plants for them to have.
We are also paying them a decent wage relative to their living standards in that country.

We are also doing a duty to our shareholders in saving considerable Operating expense.
In our project we replaced workers in Adelaide on $40,000 per annum with Indian workers on $500 per annum. Multiply by that by several thousand across the globe and you a significant savings.

Think this way -

Developing country gets investment, employment and higher living standard.

Developed country keeps the retained profit disbursement and the higher value processes and competitive priced product.

I am a huge fan of globalisation and market force capitalism.

Andre is right on the money when it comes to labour, but he misses the foreign ownership of resources in developing countries.

Water, land, electricity, transport, intellectual property and patents, the list goes on.

Foreign investment does not just create jobs - it buys up resources.

This means the decision-making about things like irrigation, crops, land use, resource distribution, etc, etc, etc - not to mention currency - are made overseas, and in the interest of profit alone.

A US-based company like Monsanto, which owns several nations' water supplies, seed patents and much of the land, can effectively starve a country to death.

Not exactly a higher living standard when your country's crops consist entirely of feed stock for cattle in the US - all exported to produce the developed world's hamburgers.