Economic globalization

Economic globalization is the creation of a global market in which all tariff barriers are removed to allow free movement of capital: financial, commercial and productive.

Financial capital is money, loans and international loans and foreign investment. Its characteristic is that it has a role and thanks to technology can move from one place to another quickly.

The productive capital, constitute the money invested in raw materials, capital goods (machinery, tools, buildings, land, vehicles, etc.) and labor.


The commercial capital, goods and services are finally being bought and sold on the international market. In the international market, leading vendors are multinational companies such as: Shell, Coca Cola, Sony, IBM, Unilever, Phelps Dodge, etc. Buyers are the populations of each country and there are many sellers of their labor, these are what make up the workforce, and they sell their labor in exchange for wages.

Globalization then, would be like the stage of completion of the historical process of capitalist expansion, with two objectives: the free movement of capital and the creation of a single world market.



Advantages and Disadvantages

Some advantages of globalization are:
Ø production costs are decreased and therefore products are offered at lower prices.

Ø Increase employment in places where Multinationals, especially in underdeveloped countries.

Ø Increased competition among entrepreneurs and product quality rises.

Ø discover and implement technological improvements that help the production and rapid economic transactions.

Ø Increased accessibility to goods previously were unobtainable in underdeveloped countries.


Some disadvantages of globalization are:
Ø Increased economic inequality between developed and developing countries due to concentration of capital in developed countries (external accumulation of capital).

Ø Economic inequality within nations as globalization benefits big and powerful companies.

Ø In developed countries increase unemployment and poverty because large companies migrate to other places in search of cheap labor and raw materials.

Ø Increased economic interference by developed countries to underdeveloped countries or developing.

Ø Environmental degradation by exploitation of resources.

• Decreased chance of competing with those big monsters that are multinational companies.