Sunday, January 14, 2007

Globalization in Retreat

And remember that from Frank Luntz:
5. A Global Economy/Globalization/Capitalism - Free Market Economy
NEVER SAY: Global Economy/Globalization/Capitalism
INSTEAD SAY: Free Market Economy

More Americans are afraid of the principle of globalization than even privatization. The reason? Globalization represents something big, something distant and something foreiwi. it.s the same reason why Americans like their local government but dislike Washington -- the closer you are, the more control you have. So instead of talking about the principles of globalization, instead emphasize "the value and benefits of a free market economy." Similarly, capitalism reminds people of harsh economic competition that yields losers as well as winners. Conversely, the free market economy provides opportunity to all and allows everyone to succeed. From: Frank Luntz Republican Playbook -- Searchable Text-Version: PART X "APPENDIX: THE 14 WORDS NEVER TO USE"

Actually economic terms are never very explicit in the meaning. I wonder why economists can never come up with good descriptors. Maybe they need a better PR person!
Well globalization is a vague term that has more to do with non-economic factors, as in:
# industrial globalization (alias transnationalization) - rise and expansion of multinational enterprises
# financial globalization - emergence of worldwide financial markets and better access to external financing for corporate, national and subnational borrowers
# political globalization - spread of political sphere of interests to the regions and countries outside the neighbourhood of political (state and non-state) actors
# informational globalization - increase in information flows between geographically remote locations
# cultural globalization - growth of cross-cultural contacts
Globalization.

And capitalism was never a good word to describe an economic concept since don't communist or socialist countries also have to deal with accumulation of capital?

And even Free Market Economy seems to not describe various economic aspects of an economy. Free Markets to me can be with regard to microeconomics, where there are many firms competing with little restrictions for entry and exit into the market. There is also a macroeconomic vague theory that has little restrictions on businesses and then the question is to what degree is an economy a free market or not? And lastly there is a concept of free trade between countries.

Well anyway back to the issue at hand. The title link is by Walden Bello, who is professor of sociology at the University of the Philippines, that wants to describe economic Globalization.
Globalization, in fact, has reached its high water mark and is receding.

Good, another intellect that has a scheme to measure economic globalization, because he has to realize that the other forms of globalization will continue for a long time to come. Because I hope he realizes that blogs (if he knows what that is) will continue to grow. That this is a process of globalization of information and ideas. Someone in Lebanon, Israel, Palestine, Iran or even Iraq can be a journalist and post about his individual experiences and what information he is most familiar with. We are no longer confined by borders that limit who and when we can 'talk' to others.

Anyway:
Fifteen years ago, we were told to expect the emergence of a transnational capitalist elite that would manage the world economy. Indeed, globalization became the “grand strategy” of the Clinton administration, which envisioned the U.S. elite being the primus inter pares -- first among equals -- of a global coalition leading the way to the new, benign world order. Today, this project lies in shambles. During the reign of George W. Bush, the nationalist faction has overwhelmed the transnational faction of the economic elite. These nationalism-inflected states are now competing sharply with one another, seeking to beggar one another’s economies.

Well, I guess that is good that corporations did not rule the world. So if they were wrong about it before, could they be wrong about the globalization also? Shambles, I guess it was time for another spin word. But no proof that it is shambles. Only that its supposed vision did not work out by the critics. And lastly the only time that beggar thy neighbors became effective was just before The Great Depression and we can see how that turned out.
But now Sebastian Mallaby, the influential pro-globalization commentator of the Washington Post, complains that “trade liberalization has stalled, aid is less coherent than it should be, and the next financial conflagration will be managed by an injured fireman.” In fact, the situation is worse than he describes. The IMF is practically defunct. Knowing how the Fund precipitated and worsened the Asian financial crisis, more and more of the advanced developing countries are refusing to borrow from it or are paying ahead of schedule, with some declaring their intention never to borrow again. These include Thailand, Indonesia, Brazil, and Argentina. Since the Fund’s budget greatly depends on debt repayments from these big borrowers, this boycott is translating into what one expert describes as “a huge squeeze on the budget of the organization.”

So why should we not try to improve the performance of aid? Sounds like a good thing since much of aid did not help and in many cases hurt. Edit, I guess I did very poorly to describe what I was thinking. One of the main functions of the IMF is for Technical Assistance and this is used not only in its funds but also coordinating financial flows. It has been shown that even large inflows or inconsistent flows can actually hurt more than help a country in the end. One tragic example is when food aid arrives in mass. This depresses the local markets for food and as a result the market tells farmers that their work is no longer as much value and they then do not plant as much or invest in as much food crops. And this leads to further food shortages in the end. So the point of my question is to say that the IMF still has relevance in the technical assistance part of its mandate.

Ok so now it is practically defunct. Again no proof of worsening the Asian Crisis, and no addressing of the vast amount of technical resources to address some of his concerns. So this is good if no one wants to borrow from the Fund then that will mean that the economies are doing good and that the Fund will have money to lend when and if it is needed. There has been some discussion that the Fund may be delaying some lending because a shortage of fund availability. So then how can he say that debt repayment from those countries are creating a huge squeeze on the budget. Especially since the bank has the same amount of SDRs as before and the quotas are the same.
Second, rather than forge a common, cooperative response to the global crises of overproduction, stagnation, and environmental ruin, national capitalist elites have competed with each other to shift the burden of adjustment. The Bush administration, for instance, has pushed a weak-dollar policy to promote U.S. economic recovery and growth at the expense of Europe and Japan. It has also refused to sign the Kyoto Protocol in order to push Europe and Japan to absorb most of the costs of global environmental adjustment and thus make U.S. industry comparatively more competitive. While cooperation may be the rational strategic choice from the point of view of the global capitalist system, national capitalist interests are mainly concerned with not losing out to their rivals in the short term.

Again more buzz words with little proof. I know this is directed at people that view the world is ending but at least a link or two might help. But the highlighted text is a pure falsity. They have promoted a strong dollar, thus benefiting the consumer at the expense of our exports. Most all countries in the world have devalued their currencies with respect to the Dollar, so the opposite is true and not strong dollar. Europe and Asia are having trouble meeting their requirements so no shifting. And yes businesses in a nation state are likely to ask for protections, just as Unions do.
A third factor has been the corrosive effect of the double standards brazenly displayed by the hegemonic power, the United States. While the Clinton administration did try to move the United States toward free trade, the Bush administration has hypocritically preached free trade while practicing protectionism. Indeed, the trade policy of the Bush administration seems to be free trade for the rest of the world and protectionism for the United States.

Yes, I can agree with some of his policies were bending over backwards for certain industries (steel, textiles, timber...). And so I would be just as harsh on those than anything Clinton has done. On this topic I imagine that Hillary would be close to her husbands position and as such I would count this is a positive for her. But on a positive note for Bush he signed more Free Trade Agreements than most of his predecessors.
While corporate-driven globalization may be down, it is not out. Though discredited, many pro-globalization neoliberal policies remain in place in many economies, for lack of credible alternative policies in the eyes of technocrats. With talks dead-ended at the WTO, the big trading powers are emphasizing free trade agreements (FTAs) and economic partnership agreements (EPAs) with developing countries. These agreements are in many ways more dangerous than the multilateral negotiations at the WTO since they often require greater concessions in terms of market access and tighter enforcement of intellectual property rights.

OOOPs WTO talks are not out. So when are enforcing intellectual property rights a bad thing. I am sure Walden Bello wouldn't mind having his intellectual property stolen and then sold for a profit. I am sure he only does his job for the advancement of mankind. But I do agree that the bigger market (country economy) should be the one to accept more in a negotiation than the smaller or Less Developed countries, but aside from intellectual property rights.

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