How the Current Recession Will Be Affected by Globalization

Commentary
European gas prices are skyrocketing by at least 30 percent as one of the main Russian pipelines, Nord Stream 1, will be shut down indefinitely. Global inflation has been its highest in decades as tightening monetary policy threatens to cause a global recession. As hedge fund manager Ray Dalio stated in his book, The Changing World Order: “The times ahead will be radically different from those that we’ve experienced in our lifetimes, though similar to many times before.”
Globalization allows for buying cost-effective materials, manufacturing abroad, and expansion to overseas markets for increased profitability. About half of Facebook’s revenue, for example, is overseas. More than half of Apple’s business revenue is often generated outside of the United States, and Tesla on average collects 25 percent of its revenue in China alone. Outsourcing has allowed for innovative ideas, new jobs, and overall higher standards of living across the world. Without the benefits of globalization, iPhones on average would cost $600 more to make, and fabrics would be substantially more than their current retail price….

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