Assignment4 / economic globalization / Choisieon

What is the relation between economy and globalization? 

1) Summary

Each country has been constantly striving for each other's economic benefits. Economic globalization tried to cooperate with each other, but conflicts were inevitable in the process. Nevertheless, objects that were not disturbed across national boundaries began to appear, such as the emergence of transnational corporations.

It began in World War I. Manufacturing companies began to be called placeless giants, taking on a large share of the world's total exports.

As the world was connected, geographic inequality had a great influence on it. Traditionally, geographical localization of natural resources was the first start. This is because natural resources were not always produced only by powerful countries. It can be seen as a phenomenon that occurred because the area of use and production were different.

It was also shown in the difference in labor costs. Companies in developed western countries have begun to move companies to take advantage of the inexpensive labor of developing countries. Korea also, in the past, was able to benefit a lot from it. Since then, it has been followed by China and Southeast Asia.

Since then, it can be seen that it has led to cooperation between multinational companies. Originally, fiercely competitive companies started alliances. In particular, it can be seen that companies competing in the automobile industry are dividing and developing various parts through alliances.

It is true that these multinational corporations are contributing greatly to the development of the modern world economy. Like the European Union, this occurs within an organization or connects with the whole continent.

In the clash between states and Transnational Corporations, there exists a complex negotiation dynamic, contrary to the belief that TNCs always wield absolute power. States still hold significant authority, regulating access to their territories and shaping operational rules, sometimes collaborating to strengthen this influence (as seen in the EU). The idea that states are universally powerless against global corporations is baseless; it's more of an empirical inquiry.

Instances from the automobile industry showcase this. Ford, in the 1970s, secured preferential access to the Spanish market for its Fiesta by leveraging its bargaining power, highlighting the state's competition for investment. In contrast, recent efforts by US and European auto firms to enter China faced constraints due to China's strong control over market access, driven by the firms' keen interest in China's rapidly growing market.

Stopford and Strange emphasize that while governments have lost some bargaining power to TNCs, they can still influence general policies and specific deals. Similarly, labor faces challenges due to its localized nature against the spatial flexibility of TNCs. However, international civil society organizations might transcend these constraints by representing labor and consumer interests globally, often through the internet. Despite acknowledging TNCs' undeniable influence, the notion that they always prevail is oversimplified. Recent events show that TNCs encounter constraints and lack absolute power, highlighting the complexity of their interactions in the global economy.

 

2)Interesting point

It is true that economic globalization has drawn cooperation from around the world, and each country has benefited greatly in the process. However, first, in a disaster situation such as Covid-19, the connection between countries is broken, leading to great damage. It is questionable whether a response to globalization is also necessary.

Secondly, as the mediation power of the United States, which played the role of international police, has diminished, many wars are occurring, which also leads to damage to multinational corporations. If so, I think the question of whether we should prepare for a situation where economic globalization is difficult is also necessary.

3)Discussion

In the process of economic globalization, rich countries become richer, and poor countries become poorer. Literally, it can be seen that the problem of the gap between the rich and the poor becomes larger. Then, can economic globalization be seen as a phenomenon in which everyone can cooperate and live well?