Globalisation Flashcards
Causes of globalisation
Trade liberalisation ( WTO + reduced trade barriers )
MNC growth in new countries
Tech advances improve moving of G / S
Govt policy promoting movement of labour
Pros of globalisation
Lower prices caused by increased competition as it causes pressure to reduce £ , increases efficiency / more choice for consumers improves quality of living
Greater employment as markets grow , demand for labour also grows which is great for LND’s , due to increased amount of people to sell to they increase their size to maximise profits
Large economies of scale , as markets grow , companies exploit this and increase output and lower costs = more investment from buying in cheaper countries
Cons of globalisation
Chance of structural unemployment as it increases struggle for national business to compete with large MNC’s which is bad for LDN’s with no welfare safety net
Environmental costs as firms take advantage of resources and deplete them more , future generations may potentially lose out on resources
Trade imbalances are bad if they depend on each other , greater risk of trade wars and current deficits . For imports it could actually impact national economies from being independent
Risk of being affected by other nations economic shocks , making other places susceptible to recessions caused by overreliance
Consequences for LDN’s
Ideas of cultural imperialism by Big MNC’s and countries ruin that places culture
Farmers potentially forced to make one type of crop ( no diversity of income )
Big brands short change workers as they sell more for what they are made in the west
What may MNC’s say about the potential idea of exploitation ?
May say that the wages that they pay to their workers far exceed the average wage in that country . This encourages local businesses to raise their wages too . MNC’s claim to improve the working conditions of factories in LDN’s where they operate
Impacts of lost power caused by globalisation
Less freedom to introduce tariffs as MNC’s operate all over the world
Fluctuating currencies affects ability to carry out monetary policy
Many GOVT’s face debt traps caused by mass borrowing
Slowballisation
Changes in the global economy , slowing down the process of internationalisation of economic activity
E.g of slowballisation
Nationalisation seeing countries policies protect domestic business
Factory jobs moving out of nations where it is cheaper = a political minefield
Microchip issues have seen promotion of domestic business / products
Factors encouraging overseas call centres
Lower wages in LDN’s
Cheap and reliable telecoms
24 hour shifts to overcome time zone issues
Globalisation and the labour force
Has seen movement of labour from LDN’s to developed nations
Immigration controls over free movement has slowed this down
Richer countries encourage migration to fill low paid work
Growth of EU increases labour and capital mobility
