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A primary driving force behind this inability to
prioritize the needs and overall welfare of workers, as was
the common practice in the "Golden Age", is the essential
element of time inherent in this type of global competition.
All of the developing countries are attempting
to establish their capital market infrastructure at the same
time. The essence of this issue is that the international circulation
of capital has wrestled control from governments who are therefore
unable to control their budgets. They are increasingly dependent
on directors of companies, multinational financiers, and managers
of private funds who can influence the direction that their
client's funds are invested.
Previously, because governments
feared a loss of their natural capital and control over domestic
economy policy, they attempted to regulate the international
monetary system until the early 1980's but failed. As a result,
governments today have been compelled to reduce the amount of
tax deducted on foreign investments and reduce the barriers
to capital movements because financial markets will always favor
the most welcoming political centers. Foreign capital reserves
the right, or the privilege, under globalization of withdrawing
from any economy that presents unfavorable fiscal policy.
Therefore,
governments are perpetually engaged in finding an appropriate
balance between the taxation of capital flow and the maintenance
of favorable economic conditions. Outsourcing, therefore, remains
a controversial issue because of its role in the increasing
gap between rich and poor.
Because the essential nature of business
is to take whatever necessary means of maximizing profit, corporations
in today's globalized economy are somewhat expected to outsource
jobs to developing nations that offer more flexible wages as
opposed to continuing the practice of employing full-time workers
at a social wage, which went out of fashion at the end of the
"Golden Age".
While some critics accuse companies
of turning profits by exploiting the labor of workers in poor,
developing countries in an ethical argument, the fact is that
in the economic environment today, capitalizing on cheap labor
is an essential means of a company maintaining a competitive
profit margin. If an enterprise is operating in a competitive
environment and elects to maintain the "Golden Age"
status quo in terms of sharing economic gains with its suppliers,
workers, and customers in a gesture of social responsibility,
it will lose profits.
On the other hand, if they choose not
to, their suppliers, workers and customers will go else where
and the enterprise will fail. The argument here is that exploitation
is a two-way street, although companies may benefit from the
cheap labor of workers in poor, developing countries, these
workers are in turn benefiting from exploiting, or perhaps it
is better said that they are capitalizing on, the opportunity
to earn money that international companies are offering.
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