Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
February 12, 2025
From Backwaters to Powerhouses At the start of the 1970s a widely held belief in the United States and in Europe was about how there were no markets outside of their regions. The implication was that the Third World countries were not worthy of foreign investment as they were steeped in backwardness, immersed in poverty, […]
The Vexatious Issue of Reservations in the Indian Private Sector Every now and then, the vexatious issue of Reservations in the Private Sector crops up in India and more so, in the run up to the elections that are held every five years or less. This issue that polarizes Indian society and policymakers apart from […]
Drugs have been a moral menace to many societies for many years. Right from the time, the British East India Company corrupted an entire Chinese generation to the modern world where this epidemic is destroying South American nations, the curse of drugs is causing mayhem. This has led many governments in the past as well […]
The crash in the value of the Turkish lira is not really a surprise. President Erdogan has been following loose monetary policies despite receiving warnings from several monetary experts. In a way, this economic turmoil has been self-inflicted. Turkey has increased its money supply to about 300% in the past seven years! The rationale behind […]
ERP packages contain several modules, such as finance, sales and distribution, materials management, manufacturing and production control, human resources, plant maintenance and quality management. Main characteristics of ERP system is that all its modules function in an integrated manner. Due to integrated nature of functioning, a few master tables are referenced frequently all across the […]
Globalization is a phenomenon that can mean many things to many people. For the workers and the executives in the manufacturing units of China, it can mean new opportunities and the chance to earn a decent living. For the software engineers in India, it can mean an upward mobility towards greater economic and social status. However, globalization can also mean loss of livelihoods for the people who have lost their jobs in the United States because of outsourcing.
More importantly, globalization can mean millions of people being denied the access to basic services because they cannot afford them. This happens when those without the skills or the education find it hard to compete in the global economy and hence are left out of the economic growth story.
The noted economist, Joseph Stiglitz, authored a book called Globalization and its Discontents where he makes a clear case for considering those who have been left out of the spoils and rewards of the globalization juggernaut.
The book is also noteworthy for the various descriptions of how not everyone in the Third World benefits because of globalization and how the number of people who have lost out is more than the number of people who have gained.
Of course, this is not to say that globalization produces more losers than winners. Just that the benefits of globalization are skewed and despite the claims of Thomas Friedman that the world is flat, the world is flat only for those who can leverage their expertise that has been developed as a result of being endowed with favorable circumstances.
The point here is that for globalization to work for everybody, the playing field has to be leveled even for those who cannot climb aboard the bandwagon.
For instance, it is often the case that rural peasants and farmers in China and India cannot compete with global agri businesses because they do not have the capital or the scale to take them on.
Similarly, small traders and small businesses often find that their livelihoods are at stake because of the entry of giant retailers like Wal Mart. This explains why there are frequent protests against these companies in many countries in Asia.
The solution to this problem can be found in the governments of the country protecting their small businesses and farmers to the extent possible by giving them incentives and loans. However, it should be clear that this is not a policy recommendation for protectionism or a return of the welfare state that is unproductive and inefficient. Rather, the point here is that by incentivizing small businesses and extending credit to small farmers, the government can ensure that they can stand a chance against big business.
Further, alternative employment and tie-ups with the big businesses including enlisting the services of these groups is a viable solution. The best example is the cooperative movement in India that is a federation of small scale farmers and businesses who come together to band as a unit and with governmental assistance reap the benefits of economies of scale and efficiency that they otherwise would not have done individually.
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