The Negative Impact Of Reciprocity And Globalization

From a young age, children are taught an essential aspect of business relationships. They are taught that if a favor is returned it will help build friendships, much like, reciprocity. Reciprocity is the act of trading with others to gain mutual benefit as well as to permit privileges from one organization to another. In addition, reciprocity is a key principle in understanding the process of globalization. Globalization is the development of international influence in an organization. Reciprocity and globalization are important factors for purpose of trade. Nonetheless, if concepts much like these two are misunderstood or misused in our economy, it could lead to a negative impact. For example, In “Mr. Trump’s Trade War” written by Douglas

The first fallacy is regarding the misinterpretation that manufacturing jobs are the foundation of American success. Bringing back manufacturing jobs has always had a strong demand in elections since 1980. According to the authors, as U.S. manufacturing output rises, manufacturing jobs decreases mainly because massive productivity gains such as frequent innovations in technology and management practices occur. For example, farming jobs between 1790 and 1950 have decreased due to a major shift to manufacturing much like, the use of heavy machinery. Nations that are more economically developed have encountered job losses in the manufacturing sector yet they manage to be successful. This is because economies that are most advanced have grown to become service economies and each economy whether it is just an emerging or already a rich economy, are each dedicated to their comparative advantage. Manufacturing jobs should not be looked as the stability of an economy. Instead each state, country , etc. must focus on their strengths and work with what they are most efficiently best at than any

The final fallacy is based off the traditional concept that in order to export, firms are obligated to sell to foreign countries. In contrast to what is traditionally considered, modern economies dominate global value chains. Each organization adds value to different components of the chain even though a firm is not frankly engaged in the selling process to a foreign buyer as it may be part of the chain that exports. According to the authors the global value chain contains three sets of firms. Tier 1 consists of specialized suppliers for specific parts that rely on tier 2 for components. The ones that emerge the overall design are "orchestrators." Orchestrators much like tier 1 and 2 are necessary to make the whole compute possible. For example, the aerospace industry does not deal with foreign buyers directly as it benefits by avoiding risks that direct exports must deal with but allow them to gain experience the firm may use if it decided to expand