Live-Wire Posted October 20, 2003 Report Posted October 20, 2003 Globalization, in recent years, has significantly hampered the sovereign ability of nation-states to implement policy to best serve their own economic interests. The interests of the world economic community, or of more economically powerful nation-states, have largely replaced any international interests in the rights of nation-states to control their economic outcomes. This theory is supported through several events in recent history that demonstrate such injury to sovereign powers; the spread of reliance on the U.S. dollar, the rise of the European Union and resulting economic ins!@#$%^&*utions, International Monetary Fund (IMF) plans and pressures towards a policy of independent central banking, and the infection of Brazil’s economy as a result of crisis in Russia (a microcosm of moral hazard). The evidence presented suggests an injury to sovereignty in economically subordinate nation-states and world economy leading nation-states alike. Sovereignty, defined in real terms, could be seen as a nation-state’s fundamental ability to tailor fiscal and monetary policy to be responsive to the needs of the nation-state’s domestic economy. In “The Geography of Moneyâ€, Benjamin Cohen suggests the catch phrase of “One Nation/One Moneyâ€. Although the conclusions he draws differ from mine, the evidence he presents is exemplary for my case. Why is currency control (or the right to print and regulate your own currency) a fundamental component to economic sovereignty? Control over printing money equates control over the quan!@#$%^&*y of money in circulation, and therefore control of interest rates, arguably one of the best tools to bolster the business cycles of a capitalist economy. Without the ability to choose between unemployment and inflation centered policies, a nation-state loses a key sovereign ability to satisfy her people. Seniorage also presents an irrefutable tool of exercising sovereignty. Where it is impossible to collect taxes, due perhaps to civil conflict or disorganization, a seniorage tax can raise funds for a nation-state. Indeed, this ability is hampered by a currency peg or floating system, but completely removed by using another nation-state’s currency. The prominence of the U.S. dollar has granted the United States a power over their domestic and foreign policies that a nation-state without its own currency does not have, as is the situation in several South American states. This was irrefutably proven when the United States began helping funding of their war in Vietnam by what I’d like to call the “World Tax.†What could be a more powerful tool than funding a war with the money of people from other countries; money that is not borrowed, but simply taken? If said war were against a country entirely reliant on the U.S. dollar, they could simply be cut off from the currency, and the war would be all but won. Why do countries dollarize then? In recent history it has been after a financial crisis, as well as in emerging democracies, who oft struggle with the implementation of their own currency. But, this is not to say there isn’t a potential advantage to sovereignty. When China pegged to the dollar in the mid-1990s, they made it incredibly hard for the U.S. to export to their markets, yet incredibly easy for China to export to the U.S. Indeed, there is short-term growth to be gained through moves such as those made by China (which should soon be stifled with the re-peg), but does this short-term growth outweigh the utter loss of sovereignty over currency, not to mention the injury to nationalism over the reliance on another country, or “monetary insulationâ€? Cohen does not disagree with me – he concludes that public policy can not cope, and “monetary invasion†or the creation of currency-blocs, is imminent. In realistic terms, as long as the scope of currency is larger than the scope of political control over domestic affairs, through globalization, there will be a skew of sovereignty towards those controlling the regulation of currency. Questionable, however, is the absolute gain of sovereignty of the currency regulating nation-states. That is to say, has the United States infringed on their own ability to respond to domestic needs by taking on a responsibility to the international marketplace? If unemployment is low in the U.S., but is through the roof in a developing nation that has dollarized, what stance on monetary policy should the Federal Reserve take, and will that stance be detrimental to domestic stability and/or growth? When Japan bought U.S. dollars to stimulate their own economy by keeping exports up, intervening to keep the dollar strong, the U.S.’s intention as the sovereign regulator of dollars, to allow the dollar to naturally devalue, was undermined. The potential for infringements on sovereignty due to globalization of currency across One Nation/One Money lines can be felt in both the country-of-origin of the prominent currency and all nation-states who rely on that currency, and tragedy can ensue. A prime example of this would be the failure of Bretton Woods, as Barry Eichengreen discusses in “Globalizing Capitalâ€. In the 1960s, the weakening of the U.S. dollar, with external oil shocks and the explosion in the price of gold, led to extensive ripple effects around the global economy. Foreign central banks absorbed dollars to avoid further devalue of the U.S. dollar, causing spiked inflation – yet Germany, of all countries the most worried of hyper-inflation, hesitated to revalue. Their history in the preceding part of the century was a strong component of their policy to avoid inflation at nearly all costs. Their economy, as a result of reliance on the Bretton Woods system, had the potential to turn in the completely opposite direction of their stated sovereign intention to avoid inflation. The European Union could pose similar problems in present day. The European Union is a startling example of a move towards globalization, or at least towards a European bloc. With the Euro as a currency shared among these nations, even with the central regulation belonging to a board of the nation-states involved, the sovereign abilities of each state to manage their domestic stability and growth simultaneously appears challenging to say the least. With Germany’s strong support for fighting inflation, will the other European Monetary System members suc-*BAD WORD*-b to that desire, or will there be a lack of policy cohesion as there was under the European Snake? The EM addresses oil-shocks from OPEC, which certainly contributed to the failure of Snake, where the members were affected to different degrees, and the appropriate response was not a unified policy, in a strange manner. Fiscal federalism, as Eichengreen calls it, is a policy that incredibly infringes on sovereign power. Cir-*BAD WORD*-stances in domestic affairs certainly arise often which could not be predicted in fiscal policy – will members of the EM be able to address these concerns without fear of repercussions for deficit spending? There is, of course, the Very-Short-Term-Financing Facility, but this still allows an international ins!@#$%^&*ution to determine when a nation-state can spend its own money. History shows us the difficulty in enforcing fiscal federalism – several EM members have already violated specific regulations, and the United States, were it a member of the EM, would not even come close to meeting their requirements. Yet, the actions of the EU appear to be at least some sort of attempt at mimicking U.S. success as an economic superpower. One might liken political federalism in the United States at the turn of the 19th century, to the fiscal federalism of the European Union at the turn of the 21st century. Yet, one argument for how this apparently overwhelming restriction on sovereignty is justified, is one political in nature; that Europe sees themselves falling so far off the throne of world domination the U.S. has usurped they are willing to give sovereignty up to a higher, European, purpose. Such is the result of the globalization of political power, in which a country an ocean away can dominate political affairs. This political globalization goes hand in hand with economic globalization, so one might argue that EU members are only giving up a sovereignty that is becoming more and more useless compared to the authority of the United States. The hazard to sovereignty the Europeans face is similar, in ways, to those worries developing nations face by accepting International Monetary Fund packages as a last resort, with control over monetary policy being moved from politicians to an independent central bank, or in essence from the independent central bank to IMF (non-governmental) officials. Even without IMF intervention, it should be noted that independent central banking is at least partially a result of globalization, and removes a level of sovereignty. If a central bank removes a politician’s (of a nation-state which is a republic) ability to manipulate monetary policy, they remove a tool subject to abuse, but also the politicians ability to voice the preferences of the people. If the central bank recognizes long term inflationary problems leading to a major recession, they may cause a short term rise in unemployment, removing the ability of the people to dictate policy. Even more prominent as a sovereignty restriction would be a monetary policy that, as in the United states, takes into account the world economy in addition to the domestic economy; an absolute result of the globalization of the dollar. When the IMF structures a package that controls fiscal and monetary policy in a nation-state, even if tailored specifically to bring said nation-state out of crisis, it is an infringement of the sovereignty of that nation-state. This argument could easily tangent into a new definition of sovereignty, and whether it is within the sovereign right of a nation-state run by a dictator to create policy detrimental both to domestic and world markets. As we have defined sovereignty already to mean that it is, indeed, the sovereign authority of a nation-state to be wrong, it is an interesting dilemma. International markets (that is to say, globalization) can force a move to independent central banking as a means of signaling a strong market for foreign investment. The prominence of independent central banking in the 1990’s certainly has led to a subtle “market forcing†of many nation-states to implement hands-off policies. A whisper of capital controls can scare off international investment so quickly that it becomes in the best interest of a nation-state to tie their own hands. To scare off investment, there can also be uncertainty about the reliability of an independent central bank to be truly independent, meaning to be protected from the ceasing of monetary policy away from the bank. As Sylvia Maxfield discusses in “The International Political Economy of Central Banking in Developing Countriesâ€, Brazil’s debate over a central bank took nineteen years, because of the political uncertainty of the country. Globalization has led to the suggestion that for nation-states to be successful, they must be players in the international market, or face poverty. And to be players in the international market, meaning to invest capital, nation-states frequently need to tie their hands from affecting monetary policy for political agendas. Such a train of thought leads to the inference that globalization can remove the political power of a nation-states major players, or their sovereign ability to dictate policy and create growth in their own country without subscribing to international ideals (for instance, the current ideal of democracy and capitalism). IMF packages do not always specifically tailor themselves to recovery from crisis – sometimes the packages are meant to provide only enough relief to quarantine the crisis. To do otherwise can result in moral hazard, crash, and further crisis. These considerations the IMF must make in designing a package for a nation-state in crisis can lead to a package that detrimentally affects the recipient – certainly an infringement on their sovereignty to manage their growth, stability, inflation, and unemployment. An idea, to prevent moral hazard and the propagation of crisis, suggested by Charles Kindleberger in “Manias, Panics, and Crashesâ€, is letting the crisis burn-out. That is to say, take absolutely no steps in rectifying the temporary dilemma, in favor of long term benefits. The dangers of a poverty trap are possible, but there is also a potential infringement on sovereignty, to those completely separated from the crisis. Investors, paying off poor investments in Russia, start selling out in Brazil, since Brazil seems the least stable place to invest. The prophecy is self-fulfilling, and Brazil – entirely across the world – is infected with the Russian financial crisis. This involvement in world affairs, simply being an actor, leaves a nation-state’s economy open to complete destruction with no particular domestic economic problems. If sovereignty is defined as a nation-state’s ability to manage (read: create policy for) its’ growth, stability, inflation, and unemployment, this is the ultimate infringement on sovereignty. It would be naïve to say that there is no effect on sovereignty by globalization – but whether that effect is positive or negative depends fundamentally on whether sovereignty is a nation-state’s measure of control in the world economy, or the domestic economy. One might argue, in refuting my claims stated here, that for all the losses of control over domestic monetary and fiscal policy, there is a proportional gain in control over world policies. When an IMF package removes a nation-state’s control over some policies, it is a demonstration that the nation-state has enough sway in international, global markets to have warranted receiving attention in the first place. Cohen, in particular, agreed with my !@#$%^&*essment of globalization’s affect on sovereignty, but he suggests that it is a moot argument, because the Westphalian model of nation-states is a recent anomaly, and will soon be outdated. Given the information I’ve explored here, I’m tempted to agree with Cohen. That a European bloc, Asian bloc, and American bloc have already emerged is evident. Whether nation-states will continue managing their monetary and fiscal policies to control their domestic economies, or larger bloc-states will emerge as the EU appears to be, is an interesting question that the immediate future may begin to answer.
SVS Posted October 20, 2003 Report Posted October 20, 2003 I am heading to bed but I will respond to this tommorrow, good post LW.
Bacchus Posted October 20, 2003 Report Posted October 20, 2003 Nice post there LW! I already knew that globalization was a threat to a nation-state integrity but it was a partial diagnostic...I still need to process your post a little but it has enlightened me on the different forces at work (economic one) and where they were having influences in domestic policies/economics. I'll write more comments later, I need to write it down before posting it gj.
Aileron Posted October 20, 2003 Report Posted October 20, 2003 I don't think that post had a single opinion in it. What was your point? However, as to that last question, the former result is more likely. The European Union should be regarded as an exception to the norm because it is not only economics but politics that is gradually removing sovreignty to European countries. Thus, it is more likely that the rest of the nation-states will be able to control their policies, while the European bloc will control their policies as a group.
Bacchus Posted October 20, 2003 Report Posted October 20, 2003 Ail, i'm not sure it's intended as an "opinion"text but as an informative one. It's critically and theoretically sound. It's critical tool, you can fathom whatever opinion you want after reading it. The point was to present how globalization was affecting nation-state sovereignty over their domestic policies (via their economical power), thus ensuring that this nation-state gov. can still represent it's people voice (in a democracy). And off course individual nation-states will control their internal affairs but they will do so according to the EU "cons!@#$%^&*ution" which presents a very large number of pre-requisite ensuring the EU members an economical standard, thus the necessary stability for the EU (and EURO) to survive the onslaught of world economy. As such, nation-states are effectively forfeiting some if not all their sovereignty to a bigger body.
madhaha Posted October 20, 2003 Report Posted October 20, 2003 I thought the EU was more of an example of how things didn't work. EU laws are routinely flaunted and the Euro is under strong criticism...
Live-Wire Posted October 20, 2003 Author Report Posted October 20, 2003 As Bacchus said, its an explorative essay ... there is no "point".
madhaha Posted October 20, 2003 Report Posted October 20, 2003 Just pointing out that the EU isn't perhaps the best case study to use.
Bacchus Posted October 20, 2003 Report Posted October 20, 2003 it's not the EU per see which is discussed, but the effects of an "economical federalism" on the participating nation-state... mmh, juicy, isn't it
MonteZuma Posted October 20, 2003 Report Posted October 20, 2003 Tl, dr. Would someone like to post a summary?
Live-Wire Posted October 21, 2003 Author Report Posted October 21, 2003 Read the first and last paragraphs for a summary
MonteZuma Posted October 21, 2003 Report Posted October 21, 2003 OK...Based on the 1st and last paragraphs..... The thing about gobalisation/etc is that there are winners and losers. More often than not the losers are in poorer countries. These loony protesters that we see on the streets (remember S11, etc?) whenever the World bank, etc meet have a valid point, but it is ignored, largely because people in wealthy countries generally benefit from globablisation. It means that we can get access to cheap labour and resources more easily. Basically it allows the west to economically rape and pillage poorer countries more easily. There needs to be checks and balances. The way I see it, what globalisaton advocates are calling for is a removal of many checks and balances for more open access. Poor countries unfortunately don't have much bargaining power. They may as well just bend over, grab their ankles and take it like a errrm man. Or else we in the west can accept a lower standard of living and aim for a more equitable distribution of wealth and resources.....Well that might happen - IN OUR DREAMS. Westerners make up all sorts of excuses for why this can't happen - bad government in poor countries, religion, war, lazy people...whatever...well maybe sometimes these factors come to play - but the basic problem is that 'you gotta have money to make money' and 'the rich get richer and the poor get poorer'. Monte.
Live-Wire Posted October 21, 2003 Author Report Posted October 21, 2003 No one is economically raped. Globalization makes it so that instead of everyone being poor, there are some people who get rich. Yes, the rest stay poor, but if the others weren't rich, the poor would still be poor. People work in sweat shops because if they didn't, they'd have NO jobs and would die of starvation. Thats not raping - thats helping. Nike does a them a serice. If Nike were to literally up and leave china this instant, it would cause thousands to die within weeks, no doubt. Redistribution of wealth is a moral hazard as well. If we're both going to get $10, but only one of us has to do any work, I'm sure as -*BAD WORD*- not going to be the one who does the work. This is the way the world works, and "blood sucking" capitalism is making the world better. In history, people have always been poor, but never have as many been rich, or even just "okay". The West isn't doing ANYTHING wrong to anybody else - they're just bitter that they don't have it as good. Sure, Nike COULD pay more money to their employees... but I could also transfer you $200 through paypal right now. How about - No.
MonteZuma Posted October 21, 2003 Report Posted October 21, 2003 No one is economically raped.How can you say that when some sweathshop worker works long ours, lives in a shack without basic utilities and has a life expectancy 40 years shorter than yours? That sweatshop worker is being economically raped. Globalization makes it so that instead of everyone being poor, there are some people who get rich. Yes, the rest stay poor, but if the others weren't rich, the poor would still be poor.Globalisation is supported by rich people who want to get richer by pillaging the poor. We should support economic initiatives that make the system fairer. That won't happen because it would mean that you and I would have to give up a lot of what we have. Any politician that advocates that is doomed. Regardless....It is not fair that the luminesant dials on my wris!@#$%^&*ch were painted by some sweatshop worker who got paid $2 a day and is now dying of tongue cancer. In my country workers are not allowed to be subjected to that kind of treatment. If the system made me pay a few bucks more for my wris!@#$%^&*ch then that kind of stuff wouldnt happen. Capitalism and free market systems are flawed. People work in sweat shops because if they didn't, they'd have NO jobs and would die of starvation. Thats not raping - thats helping. Nike does a them a serice. If Nike were to literally up and leave china this instant, it would cause thousands to die within weeks, no doubt.No way. Helping would mean giving workers in poor countries the same pay and conditions as workers in my country. They work these jobs because the system is geared such that they cannot expect a better life. Your nikes would be 10 times the price if the workers were paid a fair wage. But you and I would rather keep the worker in poverty and have cheap shoes. Redistribution of wealth is a moral hazard as well. If we're both going to get $10, but only one of us has to do any work, I'm sure as -*BAD WORD*- not going to be the one who does the work.The simple fact is that sweatshop workers work harder than you and I and get paid virtually nothing. That is where the moral hazard lies. This is the way the world works, and "blood sucking" capitalism is making the world better.That is the way the world works and it sucks. capitalism makes the world better for some - you and I included, but it hasn't made a better world for everyone. There are winners and losers and the poor are usually the losers. In history, people have always been poor, but never have as many been rich, or even just "okay". The West isn't doing ANYTHING wrong to anybody else - they're just bitter that they don't have it as good.Of course they are bitter. I would be too if I were them. Just because of where I'm born I have access to excellent food, water, health care, education, jobs, etc, etc, etc. How the -*BAD WORD*- can that be fair. The system is letting down the world's poor. The blame for that can't be attributed only at the west...but our economic system makes it -*BAD WORD*-a hard for people to break out of poverty traps. Sure, Nike COULD pay more money to their employees... but I could also transfer you $200 through paypal right now. How about - No.Point proven. You'd rather have cheap shoes than pay a worker a fair price for making your shoes. Your comfortable with the idea that that worker will never have access to the standard of living that you are accustomed. This is why many people hate the west and especially the US. Globalisation represents a 'race to the bottom'. A race to find out where can we pay the cheapest price for labour and resources? That race leads to degradation. Degradation of quality of life and social and cultural fabric, environmental degradation and in extreme cases degradation of national economies and the the rise of banana republics. Monte.
Guest Starlight Twinkle Dancer Posted October 21, 2003 Report Posted October 21, 2003 How can you say that when some sweathshop worker works long ours, lives in a shack without basic utilities and has a life expectancy 40 years shorter than yours? That sweatshop worker is being economically raped. Sweatshops do not equate to economic rape. You are using normative statements to judge a situation which is illegal and immoral from your perspective. To define morality on a subjective scale, especially in the international arena, is to lose all sense of perspective. Sweatshop workers live in countries without abundant capital resources; their comparative advantage lies therefore in the labor force. If Nike sets a wage which workers are willing to work for, would you deny those workers the ability to work? No. I assume you would advocate for a higher, "more fair" wage. This sort of benevolent social planner activity decreases total welfare in the world; one must assume that the value-added by each sweatshop worker exceeds the wages he is paid, creating a marginal gain which is maximized under the market price. Are sweatshops an ugly thing? Yes. Would you advocate welfare packages? Foreign aid? Do you think that taking away these worker's jobs will increase their welfare? No, the opposite is true. Increased capital investment in these countries leads to a higher demand for labor, raising the wage rate and raising per capita income. Globalisation is supported by rich people who want to get richer by pillaging the poor. Globalization is not a zero-sum game. Liberal economic trade between nations creates economic growth via comparative advantage and expands the production possibilties frontier of all members engaged in inter-state trade. No way. Helping would mean giving workers in poor countries the same pay and conditions as workers in my country.If workers in poor countries demanded the same wages as American workers, they wouldn't have jobs. Leisure is a luxury created by the perception of stability over-time; you demand a higher wage than workers in poor countries because you know that you will have another job opportunity as soon as you want one. That is the way the world works and it sucks. capitalism makes the world better for some - you and I included, but it hasn't made a better world for everyone. There are winners and losers and the poor are usually the losers. Captalism is the only capable way of handling the mul!@#$%^&*ude of transactions which occur every second. Decentralized coordination of aggregate wants creates, by defintion, the most efficient distribution of resources. Yes, it makes the world a better place. Yes, some people get rich, some people get poor. Can you justify the morality of capable compe!@#$%^&*ion? Yes. Some people are born with more resources at their disposal. Does this mean that resources should be taken from them and given to the less fortunate? Can you quantify the exact utility you steal from one person and give to the next? Who are you to say that $100 makes person A happier than $100 makes person B? I do not propose that people living in poverty are wrong, or evil, or deserving, but you can't beat something with nothing. The artificial redistribution of wealth annihilates any concept of property rights and increases the cost of transactions between parties, destroying benefits to trade and undermining the international currency market. Globalisation represents a 'race to the bottom'. A race to find out where can we pay the cheapest price for labour and resources? That race leads to degradation. Degradation of quality of life and social and cultural fabric, environmental degradation and in extreme cases degradation of national economies and the the rise of banana republics. Globalization is anything EXCEPT a race to the bottom. Finding out the cheapest price for labor and resources creates a surplus in society which increases per capita income and in turn increases the standard of living. How does increasing social, political and economic welfare equate to a 'race to the bottom?' Effective anti-globilazation arguments are social arguments; globalization encourages economic growth and the political systems which support free markets. Why do you think Germany's economic growth has stagnated since the early 90's? How did Britain manage to overcome France as the pre-eminent nation in Europe? Why did the West rise to global supremacy after the reign of Frederik the Great? Why did the great depression in America trigger a horrible economic recession in Japan? How did Japan manage a 15% GDP growth rate after the SCAP occupation? The answer to all of these questions is the success of free market economies and increased globalization. Live-Wire = <3
Live-Wire Posted October 21, 2003 Author Report Posted October 21, 2003 That, gentleman, was one of my roomates. Bask in his glory. Starlight Twinkle Dancer = <3
Aileron Posted October 21, 2003 Report Posted October 21, 2003 Actually, Globalization is caused by increase in technology. In order to stop it we would need to uninvent the internet, the telephone, the airplane, the train, the truck, and the ship. Basically, understand right now that no matter what we do, it cannot be stopped. What we CAN do is negotiate trade agreements so that everybody gets the best deal. That is what the WTO meetings are for. As for the "exploiting" of third world labor, Live-Wire and Starlight Twinkle Dancer are right. The cost of labor in these countries is the only thing they have going for them. If you were to deny them that, and force companies to give the wage of a first world country, the company would simply move out. The thing about this is that they are getting a poor paying job in comparison with no job. Simply put, even a fraction of a dollor per hour is still better than nothing. Besides, the cost of living in third world countries is also a lot less. That pay wouldn't buy food in a first world country. However, the worker is surrounded by people even more poor than he is. Thus, that insignificant rate is enough to buy all of the worker's and his families' needs.
Bacchus Posted October 21, 2003 Report Posted October 21, 2003 wow, ain't it very unilateral thinking! ok, i'm not an economist...whereas some looks to be or are studying it. but: I know that a by-product of right-sided liberalism is poverty and exploitation of the masses. Maquilladoras aren't exactly a job and yea people go there to work because they're thrown out of their arable land by promotors with "lawful" papers saying they own the land. Peasants are exploiting ancestral lands, they do not have papers. End of story, promotors ask for law enforcement, bribe gvnmt officials and boom the farmer end up working in some backward Nike factory. Sure, they go there to work. but let's have a reality check here: We (industrialized, capitalised nation) are pushing this way of life on 2/3 of the world. Back when Adam Smith was writing An Inquiry into the Nature and Causes of the Wealth of Nations (which was in what...? 1776?) there was no such thing as a factory (ok, there was or was beginning to have factorial (spelling) chains), no m!@#$%^&* production technologies, and no m!@#$%^&* data managing system. There was a slight will to "reingeneer" (spell.) the workspaces and technics used by employees to produce whatever they were producing.When industrialization begun, new ways to augment production were found; steam engine, electricity, etc. The effect of that was a bigger production, surplus were made, money was travelling (which is good), etc. then unemployement hit an all-time high. For every machine, 10 employees were losing their jobs, which !@#$%^&*ociated salary became cheaper and cheaper.The agriculture, which represented if i'm not mistaken 85% of USA work force, developped (a while later) new ways of collecting vegetables, wheat, etc. In less than 10 years 60% employees lost their jobs. Most of them were afro-americans or latino-americans. Since segregationism was still an issue, most of them hadn't received an adequate education which would have allowed them to work as technician, mecanician, etc. So they ended up in the cities slums looking for slave-wage jobs...or they were looking for rich caucasian americans...who knows.The american economy dwindled (see crash) and Workers began !@#$%^&*ociating in union (yea, yea). As workers were winning more advantages (better salary, condition, less work hour per week...see fordism), the work force began a slow migration toward the service industry. A whole new setts of jobs were created (which is very good). Surplus were allowing export and affordable prices, jobs were good...everything was going as planned.Then someone invented the computer. A whole set of jobs were lost again as the computing machines were doing better then say...a human mind. As always, the real question is this:Why would a company pay 40k a year to have 5 Joe Blow with a degrees in finance when all they need is 100k accountant verifying the books integrity? Simple calcutions can be given to a 15k tech with knowledge in the appropriate accounting software. The company just saved 85k, which it will reinject either as profit or in investment. now 3 people need a new job. Multiply that by a whole world, and boom! in 50years...we're -*BAD WORD*-ed! Or...we find a way to adapt capitalism to somekind of a social ingeneering; which Sun System ceo, *enter his name here*, calls *picture grin here*; !@#$%^&*tytainment (spelling). Which basically is a way of saying that big company (representing 5% of the world riches and owning 51% of the world savings) must find ways to "manipulate" the unworking masses in organizing themselves in cooperative kinda...living from crumbs at the fringes of the rich and glamorous society...which by then will be more or less 1/4 (on a family of 4, only one will make a living) of the world population. Occident included. So, I think rampant capitalism and free markets are errors which should be avoided. Mind you, not destroyed...checked, quite thoroughly. There are ways, long term ways, to avoid social degenerescence, political enthropy and such...if only folks could stop thinking that there's only one this is gonna work...Finance and accounting, reingeneering, stock market, etc...those are part of a language, this only work because of consensus but there are ways to adapt the system; Tobin tax is an exemple, so is a salary limit (usually fixed at 40 x minimum wage i think), etc. my 2..errm...4 cents
Aileron Posted October 21, 2003 Report Posted October 21, 2003 Well, you are confusing your upper-class people. The Mexican upper class is the one (generally) kicking people off of their farms. The United States upper class is building the Maquilladoras. The Mexican upper class is the ones bribing the governement. The United States upper class would, but they generally don't know they can do that yet. Overall, this won't matter to the Mexican worker. However, supposing we could remove the US from the picture here, the Mexicans would be in a worse situation, because the Mexican upper class would still be taking their lands, but there would be no Maquiladora job to replace it. Overall, you must remember that the victims of globalization in the Mexican US case are the Mexican businesses and the US workers. That is because they now have to compete with tougher compe!@#$%^&*ion. Your overall point holds true though. Globalization and Capitalism should be a controlled process. However, nobody here doubted that to begin with.
Bacchus Posted October 21, 2003 Report Posted October 21, 2003 don't take it as an US critic...i'm not blaming US or Mexico, nor anyone else...who's bribing who doing what to whom is of no particular concern to me, inthis case anyway...it's about capitalism effects. Then again, i'm no economist
Aileron Posted October 21, 2003 Report Posted October 21, 2003 Actually, I was trying to leave that out as much as possible. But your overall point is right. Companies make more than money. As companies get larger, they also get power over their industry, both domestically and internationally. Basically, the free market system ALWAYS works. However, as companies become larger, they begin to control their industry, and the market is no longer free. Thus, government intervention is required. Basically, the debate over globalization is a distraction. What is needed is that the same controll over domestic free markets be applied to international.
madhaha Posted October 21, 2003 Report Posted October 21, 2003 So you plan on forcing every country to trade with to follow your rules? Good luck.
MonteZuma Posted October 22, 2003 Report Posted October 22, 2003 That, gentleman, was one of my roomates. Bask in his glory. Starlight Twinkle Dancer = <3His he a superstar at the gay bar too? j/k
MonteZuma Posted October 22, 2003 Report Posted October 22, 2003 Sweatshops do not equate to economic rape. You are using normative statements to judge a situation which is illegal and immoral from your perspective. Hardly. It is immoral that someone in an asian sweatshop works harder than I do and yet he lives in squalor and I live in comfort. Immoral. Regardless of the algorithms and fancy jargon that appears in most conventional text books, most sweatshop workers are trapped in poverty and globalisation won't help unless it contains checks and balances. Wealthy nations have a head start and they almost always use it to stay ahead of poorer nations. We have better education, better infrastructure and better social support services. We also just plain and simply have more money. Any economist should know the basic accounting principle that it is easier to make money if you have a large amount of capital to start with. Based on that obvious fact alone it is extraordinarilly difficult for a poor nation to get ahead in a free market. What big business and wealthy governments are calling for is a better opportunity to use the capital that they have to exploit poorer nations. It isnt about self sufficiency and it is only party about interdependence. It is about the efficient exploitation of resources. Cheap labour is a resource. Exploitation of that resource - and others - is the goal. On paper that might look fine and dandy - but it is exploitation of people we are talking about here. There are better ways to generate and distribute wealth, but because they aren't in your text books developing these ways is too difficult for todays narrowminded economists.
Guest Starlight Twinkle Dancer Posted October 22, 2003 Report Posted October 22, 2003 It is immoral that someone in an asian sweatshop works harder than I do and yet he lives in squalor and I live in comfort. Immoral.No. That is your opinion. Regardless of the algorithms and fancy jargon that appears in most conventional text books What? You mean the most successful political and economic tools that have been developed in the history of the world? What tools do you have to replace them with? Any economist should know the basic accounting principle that it is easier to make money if you have a large amount of capital to start with.Is this a the "fancy jargon" you've been debunking? Based on that obvious fact alone it is extraordinarilly difficult for a poor nation to get ahead in a free market. All nations start poor. Japan at the end of World War II had, almost literally, no economy. After the creation of the 1947 Cons!@#$%^&*ution, written by the United States, it managed to undergo the greatest period of economic and social growth the world has ever seen. And Japan's recent economic failures are to be blamed on its differences from the American free market political system. What big business and wealthy governments are calling for is a better opportunity to use the capital that they have to exploit poorer nations. It isnt about self sufficiency and it is only party about interdependence. It is about the efficient exploitation of resources. Cheap labour is a resource. Exploitation of that resource - and others - is the goal. On paper that might look fine and dandy - but it is exploitation of people we are talking about here.You mean the creation of the World Trade Organization? Interdependence is a concern when talking about a country's sovereignty or maybe their cultural output, but it is, in general, one of the most necessary parts of an effecient and equitable international arena. What about industry in South Korea and Singapore? There are better ways to generate and distribute wealth, but because they aren't in your text books developing these ways is too difficult for todays narrowminded economists. Please, if you have better methods, share them. You can't beat something with nothing.
Recommended Posts