Mercantilism: Poaching Natural Resources of Underdeveloped Countries and Selling for Greater Profits

As globalization and the world economy continues to become more and more global the poorest countries in the world are being abused and left in the dust. The global inequality in today's world economy rivals that of the gap between the rich and the poor in the United States, every day the rich are getting richer and the poor are getting poorer.

There are many factors of globalization that make it disadvantageous for underdeveloped countries. These challenges almost always revolve around the fact that well developed countries poach the natural resources of underdeveloped countries and then use them to create products which are later sold again for a greater profit. This general principle would be known as mercantilism which has been practiced by most European nations and some would argue that the United States has done it and to some degree is doing it now in Iraq in the form of oil. Another challenge is that these third world nations rely upon the global nations for support and aid and without it their people would suffer which does not allow them to free themselves from this need for global aid and the must continue to be a part of the global economy. Finally, these underdeveloped nations can not combine to fight back against the global developed countries because they are not self sufficient and they do not have the infrastructure to compete in specialization of trade. Even with attempted coalitions of third world nations, free of the corruption of first world nations, the third world nations are still unable and unprepared to fight against the repression of the developed nations because they do not have the instruments to do so. There are many challenges that the underdeveloped countries face that they can't handle with the lack of economic instruments they need such as infrastructure, capital, healthy workforce, and sound undivided leadership.

The expansion of international trade and the unfolding of the global economy is not beneficial to underdeveloped nations. The expansion of international trade would be beneficial to both underdeveloped nations and developed nations if everyone was playing on an equal playing field. However, the playing field is slanted severely because underdeveloped nations do not have the ability to manufacture goods. There are very few things they can do with their natural resources that are enticing to developed nations. This leads to the developed nations taking these resources and developing them for the underdeveloped nation which comes at a great cost. Essentially the developed nation is taking the resources and making all the profits off them. This shows how the developed nations try to expand the economic globalization across the Earth as it is so beneficial to them to rake in these great profits but it comes at the cost of the prosperity of these little nations. Like those who have and those who do not have in the United States the gap continues to grow in between them and the middle ground continues to decrease that there are those who have and those who do not. I equate economic globalization to the idea of the underdeveloped nation having 25 pennies and the developed nation taking them and returning two dimes in return with the five cents being the cost of manufacturing. Given a scenario like this but only with a billion times more value it is clear how much theses developed nations are taking advantage of the third world nations.

Many people question whether or not it is the duty of well developed nations to aid the struggling economies of third world nations. I don't believe it is the duty of these developed nations to do so and they should not be forced to by organizations like the UN or the IMF or other nations but I feel that it is the duty of each individual nation to some degree to aid the nations that has used to benefit off of. I believe that the aid is in many cases given the wrong way, instead of just giving these people aid we need to give them the necessary tools to create what they need and to become more self sufficient instead of just giving hand outs. Aid should be given in the form of creating infrastructure and manufacturing abilities that will allow their economy to specialize and produce one good very well and at a lower price than any other country with the implied agreement of a price fix on that product for the developed nation who provided the infrastructure. I also think that it is the responsibility of developed nations to aid in passing on the knowledge that they have and learned in the developing of their own nations that should be given to leaders of these developing nations.

The global inequality of the world that has made it very difficult for developing nations to grow up from under the hardships that developed nations have created for them. Globalization can not be seen as mutually beneficial because it is just another reason for developed nations to raid the natural resources of underdeveloped nations in which there are no gains to be had by the underdeveloped nation.