This topic was triggered by my reading of "The World is Flat" by Thomas L. Friedman. I believe this may be one of the very best books I have read in the last three years. Friedman spends a lot of time describing the extent to which globalization has spread throughout the business community. He then explores the causes of this phenomenon. This is followed by a description of the implications for the future for individuals, businesses, governments and social institutions. His ability to relate anecdotal illustrations to the observable trends makes this a very enjoyable read.

Personally, I have always struggled a bit with the balance between benefits and problems brought on by globalization. For instance, buying a foreign car may put US workers out of jobs but if the foreign car is a better value at a cheaper price where is my responsibility. Taken to the limit, if they give me the foreign car, shouldn't I take it?
The problem becomes even more abstract when one considers the supply chain for various manufacturers. US manufacturers buy parts from suppliers in other countries and frequently complete assembly in some other country. At the same time, both Toyota and Honda buy some parts from American suppliers and do final assembly of some models in The US. And so it goes.
It is even difficult to make an arguement for "Buy American" when we really cannot be sure at any given time just what companies are US companies. For instance, ADT, the alarm company, seems very American until a little research finds it owned by Tyco, an off shore organization.
Friedman has other examples that bring this cost benefit arguement home especially where governments choose to outsource for the benefit of taxpayers but at the cost to displaced workers.

The fact of the matter is, globalization is a fact of life and will continue. In Friedmans words, the world will continue to get flatter. But, what are the drivers and why is it happening so fast? Over the past few years there is evidence of a seachange brought about by continued lowered costs and improved bandwidth of communication, meteoric development of computer capacity, and the willingness and capability of people to collaborate.
Downsizing is happening because it can be effective to outsource. Downsizing just for the attempt to dump the savings down to the bottom line is not a good reason. Down sizing so that effective and efficient effective outsourcing can be achieved is a good reason. In fact, there are many examples where outsourcing has been followed by increasing payrolls, employees working in higher skilled, more challanging rolls, and significant business growth.

But wherefore the evils? Do they exist anymore?
Well, from my standpoint, there are some problems, most having to do with wasted resources. I think artificially low transportation costs promote the shipment of goods that need not be shipped. Why, for instance, should we make watermelons available in Minnesota during January? To me, it is a waste of oil just as it is wasteful to trans ship many of the products in our various supply chains. If the true cost of a barrel of oil--including the environmental effects--were included maybe the cost/benefit balance would shift.
Some one noted recently that the whole economy of the US is shifting from manufacturing goods to just hauling them around. Indeed, I just met a man who was downsized from being a bank officer and is now attending truck driver school.

Another issue that bothers me is the maniacal drive to the bottom line practices by some companies. Why, for instance, does Wal-Mart continue to drive down labor even after they have driven all of the competition out of local markets.
This may not be directly a part of the globalization trend but it is part of a universal assault on worker benefits; if it only costs this much in area A why should we pay more in area B. Thus, globalization helps in the rationale used by some managers to cut worker benefits when the only benefactor is the capital interests.

Then there is the issue of responsible citizenship. When a company goes global, what happens to loyalties. All too often it seems like companies are skating out from under responsibilities to the home country.

Dave Brickner

this piece was written in May of 2005. In perspective, this was before the great increase in Gas prices and before Hurricane Katrina's devastation of New Orleans and the Gulf Coast.