Taking Local Steps toward Globalization
Brumer, Wilson N., Global Finance
Globalization gives the sense of a completed issue. However, we are still far from nearing any conclusion.
Any attempt to globalize production must consider the market as part of the equation. In our opinion, this is not happening, and we fully agree with Greider's warning: If corporations continue to pursue self-interested globalization strategies, they could ultimately destroy consumption, savings, and family income.
Today's market-driven economy spurs competitiveness on a global level, applying steady pressure to improve quality and reduce costs. Hanging over all of us is the possibility of production overcapacity and depressed wages. The sustainability of a consuming society is dependent upon a well-paid and employed population. Henry Ford was absolutely correct: Every employee should be able to buy the goods his or her company produces.
Unfortunately, the migration of manufacturing sites to lower-cost countries is not significantly helping to globalize economies. In the short and/or medium term, companies can benefit from higher margins; however, in the long run, lowwage employers destroy the purchasing power for their own products worldwide.
The real globalization of the world economy will come first with the sustainable development of local economies. This process may be accelerated by groups of countries in a certain region banding together in order to develop their own industries and service centers. Such cooperation may ultimately create wealth through real increases in average family income. Secondly, governments must reduce their interference and associated costs related to employment and taxes. In many cases governments are inefficient administrators of public funds. A huge portion of corporate and personal income is designated to pay government taxes, which are usually poorly managed. …