Because of the global economy, many goods including what we use as daily basic produced by other counties have to be transported for a long distance. To what extent do the advantages outweigh the disadvantages?

Written by Surjit

The global economy refers to the increasing integration of a fragmented national market for goods and services into a single global market. Kenichi Ohmae (1989), a Japanese consultant, calls global economy as the borderless world. There are many advantages and disadvantages of transporting goods over a long distance. In my opinion, the advantages outweigh the disadvantages.

Adam Smith, the Scottish economist and philosopher, stated that countries traded, because they had an absolute advantage. One nation’s workers could produce a given product more efficiently than workers in other countries. Rather than produce those products that it could produce but poorly, a country could specialize and exchange those products it produce efficiently for those produced efficiently by another country and, therefore, increase its overall wealth. The braking down of global barriers allows companies to benefit from the largest and cheapest workforces, raw materials and technology.

Other advantages that companies benefit from include: the opportunity for smaller companies to expand globally quicker, having more choice when recruiting a workforce and lastly the opportunity to target a large customer base. A global economy would also help in promoting international co-operative and piece. If countries are dependent upon one another’s economic success then armed conflict would be less likely.

One disadvantage of transporting goods and services across nations is that it has lead to the emission of green house gases. It has also resulted in the loss of domestic jobs as certain labor-intensive industries tend to shift their production from developed countries to developing countries where wages are lower.

To put it in a nutshell, it can be said that the advantages outweigh the disadvantages as we get more variety, more options, and it improves relationships between countries.