The most imperative features of the up to date world’s development is the globalization of the world economy. It tends to result in the high level of the national economies’ interdependence. The whole world becomes an arena for the activities of the foremost transnational corporations (which are generally referred to as TNCs). Along with that, the international division of labor becomes more prominent and the foreign trade and international economic relations’ volumes, dynamics and significance are known to be multiplied. Deepening of the economic integration is supposed to be based on a completely new level of advance of productive forces, which represents the real meaning of economic globalization. The process of globalization has had a strong impact on the nature of the world economy functioning and resulting in the greater openness of economic systems in the individual states as well as the intensification of regional integration processes. The US economy has also experienced both negative and positive collisions caused by globalization. Nevertheless, the advantages of the process are seen, as a rule, as more obvious.
The best manifestation of the globalization’s positive and negative features both for the US and the whole planet is known to be the global financial and economic crisis. It had started in 2008, before the cruelest economic events took place in the world arena. The beginning of the crisis had taken place in the US banking sector. This happened due to the globalization of various aspects of the country’s life including the economic ones. Within a short period of time, the crisis covered the entire economy of the USA. As a consequence, its spread was noticed in the whole world. The process of the globalization of both the US and the world economy can be represented as complex, multi-vector and contradictory one. Neither politicians nor scholars have fully comprehended or evaluated globalization’s role in the human civilization’s development. Therefore, having both positive and negative sides, globalization has mostly positively impacted the economy of the US as the country obtained new ways to distribute their products and financial assets all over the world.
Globalization: The Ways of the Consequences’ Assessment
There is a significant number of the ways to assess the possible consequences and effects of the globalization on both the USA and the world economies. The scholars connect the possibility of solving global social and economic harms with the process of ensuring the harmonization of the developed and developing countries’ interests, having them based on the development of the historical process of globalization (Antonelli & Fassio, 2016). They claim that all the consequences of globalization for economy are linked to the sustainable development of the entire global system, and the achievement of a balance between society and the natural environment (Antonelli & Fassio, 2016). Owen and Quinn (2016), on the contrary, adhere to the opposite assessments of the consequences of globalization: they have a conviction that the very idea of globalization is nothing else but a craftily veiled mechanism, which has been invented by and functions in the Western world. In addition, they state that globalization is, in fact, headed by the oligarchs, who have created the subordination on the whole planet and have used to the fullest extent the ability to exploit the greater part of humanity in their personal interests (Antonelli & Fassio, 2016). This part of scholars follows the idea that to realize their goals, the oligarchs establish unequivocal and secret alliances (Antonelli & Fassio, 2016). Figuratively speaking, they form to a certain extent, the so-called ‘brotherhoods,’ which claim to be the leaders of the countries and peoples’ destinies on the planet (Antonelli & Fassio, 2016). In this case, a significant number of scientists make a note of the extremely negative consequences of the directness of the national economy of the USA. Finally, they state that it is one of the main signs of the strengthening of the globalization process (Antonelli & Fassio, 2016).
Not having the positive results of globalization idealized, it is also difficult to agree with the assertions that this is not a logical historical process for the expansion of the world economy, but the top financial oligarchy’s actions’ consequences (Antonelli & Fassio, 2016). At the same time, globalization can not be said to be a remedy for all economic troubles which the whole world and the US have faced (Antonelli & Fassio, 2016). The processes of including the economies of individual countries in the world economy are extremely complex in content and contradictory in their consequences. Consequently, they need a balanced and impartial analysis and, along with that, they require relevant scientific recommendations and conclusions’ preparation (Antonelli & Fassio, 2016). The majority of scholars in this field of expertise rightly note the aggravation, which is known to appear due to the influence of the processes of globalization and the problems in the social and labor spheres (Antonelli & Fassio, 2016). Their manifestation is seen in the growth of unemployment, the stratification deepening between the rich and the poor layers of the population in the USA, the growth of society’s desolidarization, and, finally, the traditional moral ties’ weakening.
The expansion of the limits of the openness of national commodity and financial markets is due to the impact of the liberalization of foreign trade. In turn, it results in the growth of competition between manufacturers, and, as a consequence, numerous significant changes occur in the structure and the scale of the way and manner of the employment. Thus, as a consequence, the possibilities of transferring production and jobs to countries with cheaper labor are gradually expanding. In this case, the scholars point to the fact that the developed countries В– such as the USA В– tend to have numerous financial benefits (Owen & Quinn, 2016).
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Advantages and Disadvantages of Globalization for the US Economy
Having regarded the ways of assessment of globalization’s consequences, it is possible to point to the advantages and disadvantages of the process to the US economy. The absolute advantages, herein, are mostly evident in the US companies that manufacture competitive products, which have the ability to influence the political decisions of the governments dictating their conditions. Herein, in contrast to the advantages of globalization for the US economy, the negative effects of globalization on the employment are still felt by the US (Temin, 2016). The situation in certain segments of the labor market is still in tension and requires more elaborations from the side of the US government. This approach includes, first of all, branches or individual spheres of the economy that do not have competitive advantages or in cases when their development within the US economy does not meet the interests of transnational companies.
The collision of the processes of globalization with the state of the US labor market is clearly demonstrated by the level of unemployment in the USA. Therein, the reality is the leaching of jobs with higher and secondary education from the US national labor market. Also, this aspect comprises of the worsening of employment prospects in those sectors that can become and should have already become a priority. Also, the growth of unclaimedness of accumulated human resources and the deterioration of employment prospects in high-tech industries are important to be concerned and dealt with to stimulate the creation of jobs that worsen vocational skills within the employment structure of the country. Thus, it means that the US has to review the impact of the openness of their national economy on unemployment and employment, as well as on the entire system of social and labor relations in the context of the globalization processes’ strengthening .
Investing in the economy of foreign countries from the part of the USA is motivated by the possibility of winning new markets and raw materials’ sources. Also, within the framework of globalization it presupposes the process of weakening the position of competitors, the acquisition of high technology for low prices, the use of cheap labor, and low environmental requirements for manufacture and the ability to rebase.
Currently, when discussing the advantages and disadvantages of globalization, it is necessary to address the issue of environmentally friendly approach as it impacts the economic development of any country. The US is known to be environmentally dirty. It means that the country is expected to have numerous expenses to fight the negative consequences of globalization for environment. This aspect impacts also the labor costs and the way the companies within the country tend to develop (Temin, 2016). The labor cost in the USA is not much higher or lower than in the other developed countries. In the case of the transfer of the environmentally unfriendly productions from the territory of the USA, transnational companies would be able to save up to 30% of the capital investments (Temin, 2016). These assets would normally have to be spent on the purification of facilities production and preservation measures financing for the environment protection. It is not uncommon for the US companies and firms to remove producers from the national market by acquiring a controlling stake in their shares and then stopping the process of manufacture.
The potential or even factual threat of loss of jobs under the pressure of globalization processes affects the maintenance of a balance of power between employees and employers and creates an atmosphere of vagueness over the society (Temin, 2016). The component of globalization processes is an intensification of migration processes and the labor mobility growth. These consequences are believed to be exceedingly contradictory. For the USA В– a country which does not pursue a balanced migration policy В– a serious challenge for the national labor market is the growing competition from low-wage states. Also, there appears a reduction in the number of jobs in which the indigenous population functions and the decline in the average wage, especially of the unskilled and low-skilled labor representatives.
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Within the impacts of globalization on the US economy, a serious problem is the outflow of highly skilled labor. This problem is similar to both the developing countries and the countries with economies in the state of transition. Globalization and technological progress make a significant contribution to increasing the demand for highly skilled labor from multinational companies (Temin, 2016). According to estimates by the American scholars, the highly qualified specialists’ emigration is equivalent to investing numerous million dollars in the economy of the USA (Temin, 2016). It is estimated that as a result of the emigration of highly skilled specialists from other (developing) countries, they have already invested more than a trillion dollars in the US economy alone which is a positive advantage of globalization for the US economy.
Within the framework of the globalized US/world economies, the US national state economic institutions and the institutional environment itself represent the most important fundamental elements. Herein, by their means all economic life in the global space is structured. Hence, it is possible to formulate a number of directions for improving the institutional environment of the involvement of the USA in the world economic process to a great extent and creating prerequisites for the new economic institutions’ formation for interaction between the national and global levels (Owen & Quinn, 2016). This interaction is necessary as it helps to produce separation of the political and business elites and results in the rejection of state favoritism in its clean form. Secondly, it stimulates the process of overcoming the inconsistency of the lawmaking base with the society’s existing needs (Owen & Quinn, 2016). Thirdly, there appears improving the process of the investment climate. Moreover, there should be a refusal from state support of inefficient manufacture facilities to solve problems in the short term to the detriment of the interests of efficient producers (Owen & Quinn, 2016). Finally, the private property institution should be strengthened and the ‘distributing’ economy should be abandoned (Owen & Quinn, 2016). In recent years the analysis of the US economic institutions, according to Owen and Quinn, (2016) has already given a reason to believe that the country will have sufficient resources in the future to act on the national interests of the globalized world economy. This is to be done in order to strengthen the USA’s competitiveness and increase even more the attractiveness of the country for foreign capital and economic growth.
Within the economy of the US, the process of economic relations’ globalization objectively calls for a need to unify the norms, methods, and rules of accounting, which are to manifest in its standardization. The complexity and novelty of the problems, which are currently faced by a variety of countries including the USA and individual market participants in the process of globalization tend to raise the requirements for the regulatory framework governing the activities of the US based companies and banks (Ding & Qian, 2016). Herein, the incompatibility of financial information about companies that raise funds in the capital markets is among the serious problems, which arise from the globalization of financial markets. It means that the development and adequate application of accounting and reporting in individual countries becomes an urgent task, and should correspond to the international standards (Ding & Qian, 2016). This approach would give an opportunity to provide investors, who operate in the capital markets, with accurate financial information.
Globalization and the Oil Prices as an Important Aspect of Economy
The introduction of the achievements of the scientific and technological revolution is the most important factor, which stimulates the revolution in the world oil market in the course of its development. This aspect, which has also made the oil production much cheaper, involves more and more countries in oil production and exploration of new deposits on the planet. Such a situation affects the world prices of oil and the mechanism of pricing (Ding & Qian, 2016). Recently he latter has already turned into more complex, mixed, and cartel-competitive one, which tends to involve a large number of actors in the market and stimulates the reduction of the costs and the rapid development of exchange trade (Ding & Qian, 2016). The US economy as a consequence has already impacted and still impacts the economy of other oil exporting countries.
Having emerged in the 1970s, the exchange trade in oil pointed to a new stage in the development of the world market. There has appeared a change in the nature of struggle from the horizontal between the individual vertically integrated oil monopolies to an upright one and the personal links of the so-called oil chain (Ding & Qian, 2016). As a result, almost all the oil coming to the US market was purchased by the monopolies on a commercial basis. It means that the official selling prices of the OPEC member countries deprived the monopoly of the opportunity to influence the market conditions by changing production levels and prices, regardless of the fact that the OPEC countries have been legislators of the world oil prices. The OPEC influenced the market state of affairs’ demand for liquid fuel, manipulating by the accumulated profit-making inventories and world prices through the mechanism of inter-industry competition.
Globalization and the US Economically Related Spheres of Life
Thus, the increased globalization of the American economy has a favorable effect on the country’s economic development for the most part as well as for the standard of living conditions of the population. At the same time, the processes of globalization provide many ambiguous socio-economic consequences and problems and require apposite actions by society and the state to surmount those issues (Ding & Qian, 2016). In this connection, at least three spheres of socio-economic life of the country have emerged. In them, the consequences of globalization are not manifested in the most positive way. First and foremost, these are the consequences for employment. This issue is especially manifested in a number of sectors of the economy, wherein the international competition is predominantly well-built and/or wherein the export of goods abroad has become noteworthy (Ding & Qian, 2016). The issue of ensuring international standards in the sphere of labor both at American enterprises abroad and inside the country, where overseas illegitimate labor is utilized, is nearby to that. Secondly, the factual danger is to be represented by the sudden large-scale changes in the stream of capital. It is similar as in the case with the flight of capital from the countries of South-East Asia and European countries (Ding & Qian, 2016). This can significantly weaken world markets, including mostly the US economy. Thirdly, globalization manifested itself in the growing trade deficit which appeared in the US, which has not had many positive consequences in the shape of cheap imports. It also has contributed to an augmentation of the balance of payments shortage and has caused an enlargement of the US external debt.
The United States, for the most part, tries to encourage the liberalization of world trade in an effort to improve the benefits of globalization and diminish its unconstructive consequences. This is especially evident in those areas, wherein it fits their interests (Temin, 2016). These are the areas, where the United States’ competitive positions are predominantly well-built. This applies to trade in services, especially in the field of information technology, telecommunication, and finance.
An essential concern, which is related to the globalization of the US economy, is the workers’ release. As a rule, it takes place in conditions of the influence on the export of enterprises abroad and foreign trade (Khan & Bashar, 2016). Thus, millions of Americans happen to be unable to find their jobs due to the production transfer abroad and the boost of the imports’ scale. What is more, service companies are becoming more and more exposed to the threat of transferring their activities to countries with the cheaper labor (Khan & Bashar, 2016). It goes as a result of the information technology dissemination. Besides, the international competition escalation increasingly results in a diminution of the wage rates, as a substitute to exporting enterprises abroad (Khan & Bashar, 2016). Due to the fact that the enterprises, which have already opened abroad, they are equipped with the most up to date equipment, and, as a consequence, the numerous US companies can lose their high-quality standards, competitive advantages, and reliability of goods (Khan & Bashar, 2016). According to what the numerous economic studies show, the foreign economic factors are less considerable than the US domestic ones. It means that the US government is taking a number of measures aimed at minimizing these negative consequences of globalization in terms of their collision with employment.
To conclude, the social and economic impact of globalization has recently turned into an important public interest. In accordance with the different scholarly investigations, most Americans view globalization as a more positive process for their country’s economy than a negative one. Along with this, there are several concerns about this process’ individual negative consequences. The growth of countries’ economic interdependence requires special treatment of another area of international economic relations В– financial interaction of states, where the US plays a major part and dictates the essential economic trends. The task to defer and/or at least decrease the consequences of possible global and/or regional financial crises for national economies has become extremely pertinent in the USA. Being based on the US economic views, the world oil market tends to develop within the framework of the activities of the largest monopolies. Those are the transnational corporations which are mainly concentrated in the United States. Mergers and acquisitions provide additional monopolization and tend to predetermine the effectiveness of transnational business to some extent in global oil manufacture. Herein, the process of globalization is rather positive for the US as the country governs the oil market at the world level.