Globalization and its affect on the american economy Research Paper

Globalization and its affect on the american economy - Research Paper Example ld economies results in removal of barriers between nations for free movement of goods, services, investments, and also manpower across national boundaries. Practiced as a strategy, globalization results in enhanced economic activities and hence prosperity of all nations and its impact on the US economy is not different, critics notwithstanding. The second half of the previous century witnessed the rapid growth of the US economy in all spheres. It gained position as by far the most powerful nation on earth in economic and military terms, and had a deciding voice in multilateral organizations like the WTO, IMF and the World Bank. High investments in education, research and development, manufacturing and infrastructure coupled with vast natural resources, low population density and a democratic polity resulted in high prosperity of its population. The prosperity put high wages in the hands of its consumers, and consumer spending on food, personal accessories, leisure and entertainment have become important prime movers of economic growth in a self-sustaining way. Being a free market economy, competitive forces ensured that goods and services are offered at attractive prices and/or features, till the market reached a point of saturation. At this point businesses had to look to ever new products, new markets or newer ways of reducing costs, to sustain in business and grow with profits. Globalization, for which the US and other prosperous Western European countries are the strongest advocates through their dominant position in international bodies, can be seen in this background of saturated local markets and declining competitiveness. A few words about ‘post industrial society’ are not out of place at this juncture. The US society is often called the ‘post industrial society’ where the emphasis is on knowledge as opposed to manufacturing (Daniel Bell as quoted by Marshall G, 1998). In other words, knowledge-based services offered by professionals are at a