Globalization in the 21st century has transformed the American economy. Markets and people, that were a century ago inaccessible, are now able to buy American products and export their own. The intermingling of cultures has created new and exciting products and technology and has made the world a “smaller” place. There are downsides to the globalization of the American economy, however, but what are they, and do they outweigh the positive effects?
The Advantages of a Globalized Economy for the U.S.
If the average American were to take a look at everything in their house to see where it was made, they would probably be very surprised. They would see children’s toys made in China, shoes made in Vietnam, and food from every corner of the Earth. American companies are using foreign labor and materials to produce cheaper goods. Also, these same companies are exporting their products to other countries.
Take a trip around the world, and you will see the Chinese drinking coke, the Japanese watching MTV, and Egyptians wearing jeans. Globalization has revolutionized the way American companies do business by making them multi-national corporations. Companies, such as, Coca-Cola, McDonalds, and Wal-Mart are internationally known and drive the American economy.
Globalization not only allows companies to expand into new markets, but it also eliminates trade barriers. Trade agreements such as NAFTA (North American Free Trade Agreement) eliminate tariffs, which makes exporting and importing global products more profitable for companies, and affordable for the consumer.
The interlinked nature of a globalized economic system allows all nations to benefit from the innovations of another. In the U.S. , for instance, a breakthrough in computer technology in Japan can lead to the next generation American gaming console. However, globalization also has its downsides for the U.S. economy.
The Downsides of the Global Economic System on the U.S.
The most recent and stunning example of the drawbacks of globalization is the current worldwide “financial crisis”. But even before the crisis began, American consumers were experiencing the drawbacks of America’s globalized economy.
The U.S., which imports 70% of its oil supply, became very dependent on Middle Eastern oil. Foreign organizations, such as OPEC (Organization of Petroleum Exporting Countries) were perceived to have control over oil prices since they controlled production. Increased demand and stagnant production sent gas prices soaring, forcing Americans to tighten their wallets. Today, as the “financial crisis” spreads, the dependence of nations on the globalized economy is even more apparent.
Globalization for the American economy means that Americans share in the ups, as well as the downs of the global markets. Although globalization opens up cultures and products to new areas, it also diminishes the uniqueness of the world’s differing peoples. For better or worse, however, the globalized economy is here to stay, and America will continue to play a very large part in it.
