Nowadays capitalism is blamed for many things: poverty, inequality, unemployment and even global warming. As Pope Francis put it in a speech he delivered recently in Bolivia: “This system is no longer tolerated, the peasants cannot stand it, the workers cannot stand it, and the peoples cannot stand it.

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But are the problems that concern the Pope a consequence of what he calls a “rampant” capitalism? Or, on the contrary, are they a consequence of capitalism’s failure to establish itself as expected? G Scott Paterson is a technology entrepreneur focused on fintech and media.

Effects of globalization:

  • Among the most important effects are the standardization of products and services, the seduction of tariff barriers and economies of scale.
  • The standardization of products means that they have little or no variation between the different countries or regions where it is distributed. If a product needs to be modified significantly to enter another region, it is no longer a standard product.
  • Scott Paterson Toronto currently involved with several start-up companies. The reduction of tariff barriers, has introduced the so-called consumption of mass products, allowing them to have access to these many countries.
  • The economy of scale can make the most competitive with inexpensive strategies, using the capacity of idle plants, increasing productivity and distributing fixed costs among a greater number of units.
  • Globalization has led to the creation of large corporations in certain industrial sectors, causing small and medium enterprises to be sold to these corporations.
  • Another phenomenon that has its origin in globalization, is the integration of companies, these are companies that develop successfully in important markets. Multilateral integration organizations.

Important aspects of globalization:

The share of developing countries as a whole in world trade increased from 19% in 1971 to 29% in 1999. For example, the newly industrialized Asian economies have achieved satisfactory results, while Africa as a whole has performed poorly. The composition of the countries’ exports is also an important factor. The largest increase has been, by a wide margin, in the export of manufactured goods , while the share of total world exports of primary products – including food and raw materials – has declined, which in generally come from the poorest countries.

Capital movements:

A sharp increase in private capital flows to developing countries during much of the 1990s. The graph also shows that a) the increase occurred after a period – in the 1980s – when financial flows were especially limited, the official net flows of “aid” or development assistance decreased considerably from the beginning of the eighties, and c) the composition of private flows has been modified in an extraordinary way. The foreign investment Direct has become the most important category. The investment portfolio and credit Banks have increased, but they have shown greater instability, and they were reduced abruptly in the wake of the financial crises of the late 1990s


Workers move from one country to another in part in search of better employment opportunities. The number of people in this situation is still quite small, but in the period 1965-1990, foreign labor rose around 50% worldwide. Most of the migrations occurred between developing countries. However, the migratory flow towards advanced economies probably leads to a convergence of wages worldwide. It is also possible for workers to return to developing countries and for wages to rise in these countries.


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