Is globalization behind the recession?

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Recently, there has been talk about how a person out of high school no more has hope of getting a decent job. On CNN, an person on a panel said that globalization is the cause.


Do you agree?

That and deregulation. A world created where the currency speculator and the derivatives trader is king. If there was a powerful Soviet Union this nonsense probably could have been avoided.

Right now, things are definitely tight.

Part of the reason is the economic contraction - we have had recessions and depressions going back in history for hundreds of years. So in that sense, this is part of the normal business cycle.

Is the US losing its privileged status from globalization? Maybe. Competition from workers in China and Vietnam are affecting wages in the US. But much of the post WWII prosperity was due to the fact that developed countries in Europe and Asia bombed the smithereens out of each other, and the US was able to sell them what they needed to rebuild, plus lots of consumer products. That advantage was always going to be temporary - America benefited greatly from globalization when they could sell to the rest of the war ravaged world ... now, not as much.

hrmph, yeah, republicans and their annoying envy to deregulate ._. There might be leaks in what i'm about to say, but i reckon i've seen a doc where it said the ministry of health or something was gradually infiltrated by a private company, which allowed them to do whatever they wanted in that domain. Like i said, i'd still need to review that, i might've made mistakes here and there...

Yes.

Recession? There was one in the 30's, and we have not seen any ever since.

In short, the answer is "YES."

Globalists are the ones who created the failed economic model we now have....all of it designed to fail (with them knowing when to pull their assets out of the market) so that it would force the necessity of forging a single global economic model.

A global economy will be a disaster because it creates equality in poverty...except that those in power will somehow be allowed to retain their personal wealth and power while the common man is denied that same right. No sane person would want such a model in place, so they had to set events in motion that would force it to happen against the will of the people.

There were warning signs of this subterfuge since the day they started pushing towards it, but sadly, most people chose to ignore the warnings. After all, as long as the sun was shining and the winds were fair, why suspect there is a coming storm?

Those who know how to survive storms know that you don't wait until it gets here to prepare for it.

I agree, this recession was planned, and was needed so that globalization could take place worlwide.....

It did not just come out of the blue...

Globalization is partially the cause of the reduction in good jobs for relatively unskilled workers. The other reason is the use of technology in a manner that makes unskilled labor less useful.

That being said, I don't see much evidence that globalization is really much behind the recession. I mean, how would a bigger market make the market significantly more unstable? If anything, more actors would mean greater diversity in actions I would think.

I don't think globalization is the main cause of the recession. I think the main cause is the failure of the so-called "ownership society" model for western capitalist societies.

I was aware of the prognostications of doom before I caught an article last year that stated that the real crisis was that the world economy was doing too well, that this drove up commodity prices that empowered the Third World and the Russians... and that the U.S. was losing power in the world as a result of that. The answer, he suggested, was to do something like what happened in 1980 thereabouts - cause a deep global recession that would cause commodity prices to crash and this was skillfully exploited to force IMF Structural Adjustment on much of the Third World... (That is, they were unable to pay debts because the goods they sold crashed in value... and interest rates were hiked as part of the plan causing the debt to skyrocket. They were thus blackmailed into Structural Adjustment)...

structural adjustements, the polictly correct way to say "privatisation" -.- IMF really oughta work on searching for new damn solutions instead of trying to apply this to every problem, it's sickening and in some cases, it doesn't even work... -.-

Now, the radicals who run the Republicans want to impose Structural Adjustment on their own people - Frankenstein's monster now turns on its creator. The goings on in California and what happened in New Orleans suggest that this ongoing plan will be very bad...

Forced privatisation, using blackmail as always, is always profitable for the well-connected who are usually close to those carrying out the blackmail. This is an ideology that is very profitable for those who advocate it.

I agree that globalization per se is not the fundamental cause, but your belief that the largeness of a system should be a predictor of stability seems naive (albeit common dogma in many economic circles). According to systems theory/cybernetics, it is equally or more likely to make a system more chaotic.

Even if one looks at the simplest classic assumptions of how a market works (fully informed, rational actors) one can see that expansion from national to international markets creates a situation where the actors are less connected by geography, language, and culture ... which often means that information is harder to obtain. While the biggest problem is that people bought instruments they didn't understand, you have to admit is somewhat harder for a person to evaluate stocks or bonds issued in a far away place, where the language and regulatory standards are quite different.

Do you believe that the atmospheres on a series of planets become more stable as the size of the planet, or thickness of the atmosphere increases? Nope! Just the opposite. Larger atmospheres tend to breed more extremes, larger storms.

Do you believe that a larger scale agricultural economy is more resistant to the spread of E. coli or other food-borne pathogens? Nope, just the opposite. Infected cows go into the grinder with healthy cows, and the blend is distributed further and faster than in a smaller system.

The simple classic assumptions of how a market works are invalid, and the homogeneity found in these assumptions actually decreases stability and you know that, so why would we take unfavorable assumptions to test an idea? (for example equal information is certainly a source of homogeneity, and somewhat ridiculous if we take the role of a market as an information organizer seriously, although I will admit that I have some very Austrian intuitions on the matter) I would have instead assumed that actors would instead be involving more cultures.

Uncertain investments also can lead to diversification, as it is true in investment theory that a diverse set of investments that do not always move in the same direction can be more stable than the stablest single investment in the set.

There isn't much of an atmosphere on a planet with less air. In any case, I will admit that chaotic patterns can exist with atmospheres, however, in these atmospheres there is also homogeneity.

Well, actually yes, I would assume that the larger scale agricultural economy is more protected from pathogens. The reason being that once a bad source of food is identified, other sources can be pursued. If one grinder of beef is found to be producing bad beef, others can be chosen, or even other food sources can be picked. A small agricultural economy however is at the whims of the seasons though and more likely to die for that reason.

Your basic assumption isn't largeness, it is homogeneity, and I put largeness as standing against homogeneity, at least to some extent.

Last edited by Awesomelyglorious on 11 Jul 2009, 2:30 pm, edited 2 times in total.

One thing about globalisation - if you have a car factory, and you pay your workers well, your car sales may suffer if you cut their wages in half, if you are limited to selling your cars to your home market. If other markets are opened, you can argue that you cut your workers' wages in half, sure they don't buy anymore, but you can make it up by selling abroad.