Blog 4:What is the relation between economy and globalization

 Economy and globalization are areas of interaction between countries beyond individuals and companies. Economy refers to a social phenomenon based on human behavior that produces, distributes, and consumes goods and services. The economy was created because surplus resources were created, creating various gaps between people. This is more pronounced at the global level.

 In the past, economies had limited impact. The reason is that the cost that humans could consume, such as time and capital, was limited by the technological level. However, events connecting the continent gradually occurred, such as Magellan's trip around the world and Columbus' development of the Americas, and as technologies such as Marconi's wireless communication began to develop, connections with more diverse countries began. In this process, a country with technology that no other country had was bound to become a relatively powerful country, and naturally, developing countries existed as a powerful country was created. It was a structure in which a powerful country would benefit no matter what circumstances if these two countries went into trade. According to the economic concept, one country has a comparative advantage over another. All countries can benefit from trade according to the comparative advantage. However, compared to developing countries, powerful countries will trade in areas such as agriculture and manufacturing, where higher technology advances to create higher added value, and developing countries will trade in areas that are relatively less profitable. Therefore, even if there is a comparative advantage, someone will increase their capital much and someone will not create much value.

 Companies react sensitively to these conditions because they value profits above all else. As a result, multinational corporations are increasing over time. Multinational corporations establish factories in developing countries where labor costs are relatively low, and establish structures that sell goods to powerful countries. This is economically reasonable, but it can be a source of conflict in terms of globalization. To resolve this, we need an institution with the power to enact internationally universal legislation or mediate conflicts. After all, in order to create a free trade situation, something that can be controlled with strong power must exist.

 In any sense, we must strive for development through solidarity and avoid the isolation caused by personalization. As a result, genuine globalization requires a lot of people's effort.

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