Why did a nearly page tome by a French academic become a mass market hit? Globalization has created growth, no doubt.
But what kind of growth? And for whom? Is all growth the same? I would argue no. The key economic issue in many countries, including the US, where it has been the meta-theme of the election cycle, is the fact that even as the world economy as a whole has boomed over the last 40 years, growth within countries has been less and less equally shared.
You need a stable political system and a sense that all boats will eventually rise in order for markets to function properly. The question is what to do about the current growth paradigm. Much of the conversation on this score has focused on the divide between Wall Street and Main Street, and in particular, how to curb the financiers that the public seems to loathe. Each presidential candidate in the US has their prescription — Bernie Sanders wants to break up the big banks, Donald Trump says tax the hedge funders, Hillary Clinton wants to work within the existing Dodd-Frank financial reform system and take on shadow banking, too.
All of them are missing the point. The problems within our economy go away beyond Too Big To Fail Banks, hedge fund billionaires, or offshore accounts of the sort illuminated by the Panama Papers.
In fact, each of these things is a small part of a much, much, deeper problem, which is that the capital markets themselves are broken. The job of finance is to take our savings and funnel it into productive new enterprises, which create jobs and wealth and ultimately, economic growth.
The rest stays within the closed loop of finance itself, in assets that are traded among the wealthy be they stocks, bonds, or real estate.
Thanks to technology and globalization, which have enriched the markets and made them run ever faster, the spin cycle of wealth moving to the top of society, and away from productive uses on Main Street, goes faster, and faster.
The result is a global economy that gets bigger, but in a virtual way — the capital market system enriches itself far more than anyone or anything else. Kaur, H. Low wages, unsafe conditions and harassment: fashion must do more to protect female workers. Niazi, T. Journal of Peasant Studies , 31 2 , pp. Globalization and Inequality. Spicker, P. London, England: Zed Books, pp. Before you download your free e-book, please consider donating to support open access publishing.
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This content was originally written for an undergraduate or Master's program. It is published as part of our mission to showcase peer-leading papers written by students during their studies. Bibliography Bardhan, P. George, S. Whose Crisis, Whose Future? Kaplinsky, R. Globalization, Poverty and Inequality. Oxford: Wiley. Martell, L. The sociology of globalization.
Cambridge, UK, p. Rosling, H. London: Sceptre. Stiglitz, J. Globalization and its discontents. These technological enhancements have been accompanied by a reduction in regulatory barriers to trade, financial flows and investment. Cross-border trade has been expanding almost continuously since the thirteenth century and now accounts for a greater proportion of world Gross Domestic Product GDP than at any time. But globalization in many of its facets is not a new phenomenon.
Indeed, in many respects, — experienced a far greater degree of integration of the world economy than currently exists, aided again by improvements in travel railways and steamships and communications the telegraph. Consequently, globalization should be kept in perspective. The world is only gradually returning to the degree of integration it enjoyed in , prior to the restrictions spawned by world war and depression.
But is the return to a global world economy a benign prospect? The economic case for promoting international trade is principally found in the theory of exchange: where two parties have different initial resources and skills, there will always be aggregate benefit from each specializing in their relative competence and then trading the results. As Adam Smith explained:. What is prudence in the conduct of every family can scarce be folly in that of a great kingdom.
If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. However, this is not the same as both parties gaining equally. These can be skewed so that either party gains more from the trade.
It is an empirical matter whether both parties gain from specialization and trade. If a country trades and gains access to technological innovations available elsewhere, these can then be applied domestically to produce further benefits and greater efficiency.
For instance, by importing mobile telephony, many lower income countries have avoided constructing a costly landline network. But are these potential gains delivered in practice? Light can be shed on the evidence by addressing a number of half-truths which have gained currency in the globalization debate.
The absolute number of those in the direst poverty peaked in the early s, is now below 1. The remaining poor are concentrating in sub-Saharan Africa. There is no recent example of a country where rapid growth of income per head has not been accompanied by increasing integration in the global economy. The evidence is mixed. Population-weighted measures of world inequality have fallen since the early s due to rapid growth in China, Indonesia and India. But global integration and change produce significant losers, both within and amongst countries.
But overall life expectancy, infant mortality and calorific intake have converged more than incomes due to falling costs of food transportation and the spread of better crop varieties and growing techniques. When measured on a properly comparable, value-added basis, two multinationals come in the top 50 largest economies with 29 in the top Unlike the East India Company of old, such corporations cannot coerce their customers by force and the ease of global communication makes multinationals vulnerable to their brands being tarnished by bad practice anywhere in the world e.
If anything, the speed with which the largest companies grow and then decline is increasing as they struggle to remain competitive in an open global marketplace. By opening domestic markets up to international competition, globalization weakens the dominant position of existing producers and is thus welcome.
True — but the wrong culprits are pilloried. The villains of this piece are supposedly the global brands that multinationals cultivate to make them globally recognisable. They show how weak, rather than powerful, such companies are — Coca-Cola was impotent to sell bottled tap water in the UK as Darsani.
The real concerns are the amoral and materialistic messages that accompany Western advertising, music and television output that then reaches far wider audiences through global media networks. Rarely do these place the sanctity of life and the importance of healthy relationships ahead of short-term personal gratification. National environmental protections are said to be undermined by the rulings of international trade bodies such as the World Trade Organization — WTO or multinationals who threaten to move to less restrictive jurisdictions.
In fact, the evidence points in the opposite direction. Greater engagement with the world economy is usually associated with environmental gains e.
As societies become wealthier, they often choose to maintain higher environmental standards. Nevertheless, there are a number of areas of environmental damage whereby pollution in one country affects its neighbours or the planet.
Rather than setting blunt and ineffectual limits to control these spillovers as in the Kyoto treaty , internationally tradeable rights to pollute need to be created and allocated. These would reinforce the incentive to innovate or change behaviour to reduce pollution. In this respect, we have too little globalization. Given this backdrop, does the Bible provide any insights into international interactions that can inform a Christian approach to the globalization debate?
The early biblical narrative describes the process whereby the descendants of Noah came to inhabit the earth[11]. Genesis 10 states how separate nations arose in specific geographical locations after the Flood. The text indicates an orderly dispersal of peoples by their chosen geographical location and language f. However, this account is sharply juxtaposed with that of the Tower of Babel chapter The separation of humanity into language groups makes co-operation more difficult, so restraining our potential to unify for the purposes of evil.
Hence, despite a common ancestry, the formation of separate nations and people groups is not an accident of geography but a divinely-ordained outcome, designed to fulfil the creation mandate and weaken human self-reliance:.
From one man he made every nation of men, that they should inhabit the whole earth; and he determined the times set for them and the exact places where they should live.
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