“Individual economies grow and prosper as their inhabitants learn to specialize and engage in the division of labour. So it is on a global scale. Globalization – the deepening of specialization and the extension of the division of labour beyond national borders – is patently a key to understanding much of our recent economic history. A growing capacity to conduct transactions and take risks throughout the world is creating a truly global economy. Production has become more and more international. Much of what is assembled in final salable form in one country increasingly consists of components from many continents. Being able to seek out the most competitive sources of labor and material inputs worldwide rather than just nationwide not only reduces costs and price inflation but also raises the ratio of the value of outputs to inputs – the broadest measure of productivity and a useful proxy for standards of living. On average, standards of living have risen markedly. Hundreds of millions of people in developing countries have been elevated from subistence poverty. Other hundreds of millions are now experiencing a level of affluence that people born in developed countries have experienced all their lives”. (Alan Greenspan, The Age of Turbulence)
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