Question for Discussion: How do Korten, Friedman, and Yergen define Globalization? Do they see it as a good or bad trend?
Readings: Yergen, "What is globalization?"; Korten, "From Hope to Crisis";
Friedman, pp. 5-16
Video: Free Markets; Global Markets ; Global Village
Democratic Globalization: Globalization from Below
Corporate Globalization--Globalization from Above
Globalization and the Global Environment
- Yergen: What is Globalization?
- Who is Daniel Yergen:
- Thomas Friedman on Globalization :
- David Korten on Globalization
- The first era of Globalizaiton -- 1991-2008
- Invisible hand - Wikipedia:
In economics, the invisible hand of the market is a metaphor conceived by Adam Smith to describe the self-regulating behavior of the marketplace. The exact phrase is used just three times in Smith's writings, but has come to capture his important claim that individuals' efforts to maximize their own gains in a free market benefits society, even if the ambitious have no benevolent intentions.
- Adam Smith's Invisible Hand: A Potential Market Marvel:
People interact within the economy and with each other a in a natural manner that is guided by the invisible hand. This is a term coined in the 18th century by Adam Smith to describe how individuals acting in their own self-interests create economic conditions where resources (goods and services) are most efficiently produced, allocated, and consumed. The summation of all these individual decisions, each and every day, generates the invisible hand in a market system.
- Mankiw , Principles of Microeconomics --
"how the Invisible hand of the market works its magic"
- The second era of Globalizaiton-- 2008-present
- Government protects too big to fail Entities
- Government becomes the visible hand of the global economy
- Gross Domestic Product, World -- 1960-2011
- List of countries by GDP (PPP) - Wikipedia
- Fortune's list of 500 largest global corporations
- The global 500: No borders, no boundaries:
Despite financial turmoil in Europe and disasters in Japan, the world's largest corporations had record profits and revenue in 2011. Where on earth will the growth come from next?
- Growth of Global 500 corporations since 1990
- Corporate Clout: The Influence of the World's Largest 100 Economic Entities
- Slide show of Corporate Clout
- Too big to fail - Wikipedia
- Global Regulators to Cut List of Too-Big-To-Fail Banks to 28
- Too Big To Fail Has Become a Permanent Bailout Program - Forbes
- Too Big To Fail Has Become a Permanent Bailout Program - Forbes
- Big Risk: $1.2 Quadrillion Derivatives Market Dwarfs World GDP
- Debating Globalization
- Two Models of Globalization
- Democratic Globalization
- Corporate Globalization
- Friedman vs. Korten: The Glass is half-empty or half-full
- Lanchester, "On the Failure of Free-market Capitalism"
(See pages 2 and 3)
- What are Free Markets?
- What are Global Markets?
- What is Global Free Trade?
- How are the Global Economy and Global Markets governed?
- What are Global Free Trade Agreements?
- How does the World Trade Organization govern global free trade?
- Who Should Govern the Global Economy: Global
Democracy of Citizens or a Global Democracy of
Wealthy Corporations and Financiers?
- What does Friedman mean by the Electronic Herd?
- The Madoff Economy: Defrauding the Middle Class,
by Chris H. Lewis, Ph.D.
- Lewis: The Cold War Era dominated the world from
from 1945 to 1989.
- Lewis: The Era of Globalization dominated the world
from 1991 to 2008.
- Lewis: What is the emerging Global Era that we are
drifting into? Do we know what will define this era yet?
- Friedman on Globalization
- Korten on Globalization
- Cavanaugh on Globalization
- Debating Globalization: Friedman vs. Korten
- Friedman and Korten and Lewis:
Competing Positions on Globalization
- Globalization and the Global Environment
Reading from Yergen , "What is globalization?"
Globalization is a move to a more connected world in which barriers and borders of many kinds—from the Iron Curtain to corporate identity to government control of airwaves—are coming down, felled both by technological change, especially technologies that bring down the costs of transportation and communication, and by ideas and policies that bring down the barriers to the movement of people, goods, and information. This is an era in which a world that is organized around nation-states is increasingly conjoined in a global marketplace—and in which ideas about the relationship between states and markets continue to change.
Globalization is often attacked or lauded as a thing. It is, more accurately, a process. In a more narrow sense, it represents an accelerating integration and interweaving of national economies through the growing flows of trade, investment, and capital across historical borders. More broadly, those flows include technology, skills and culture, ideas, news, information, and entertainment— and, of course, people. Globalization has also come to involve the increasing coordination of trade, fiscal, and monetary policies among countries.
The extent to which a common global culture is emerging from all of this is a matter for debate—as is the question of whether such a culture is desirable or detrimental. But what is certain is that no national culture has gone unaffected by globalization. It seems undeniable as well that globalization has advanced or faster, and produced results (whether these are seen as positive negative) more quickly, than was generally predicted.
Two models of globalization:
1. Corporate globalization--globalization from above
2. Democratic globalization--globalization from below
Friedman vs. Korten
1. Friedman sees the glass as half full and getting fuller and even expanding in size.
2. Korten sees the glass as half empty and losing water and even shrinking in size.
What evidence do Friedman and Korten use to support their cases?
Reading from The Lexus and the Olive Tree (pp. 3-16)
"I define globalization this way: it is the inexorable integration of markets, nation-states, and technologies to a degree never witnessed before -- in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper, and cheaper that ever before, and in a way that is enabling the world to reach into individuals, corporations, and nation-states farther, faster, deeper than ever before." (Friedman, p. 9)
"The driving idea behind globalization is free-market capitalism -- the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be. Globalization means the spread of free-market capitalism to virtually every country in the world. Globalization also has its own set of economic rules -- rules that revolve around opening, deregulating and privatizing your economy."
(Friedman, p. 9)
Schumpeter argued that "the essence of capitalism is the process of "creative destruction" -- the perpetual cycle of destroying the old and less efficient product or service and replacing it with new, more efficient ones."
(Friedman, p. 11)
"Therefore, only the paranoid, only those who are constantly looking over their shoulders to see who is creating something new that will destroy them and then staying just one step ahead of them, will survive. Those countries that are most willing to let capitalism quickly destroy inefficient companies, so that money can be freed up and directed to more innovative ones, will thrive in the era of globalization. Those which rely on their governments to protect them from such creative destruction will fall behind in this era."
(Friedman, p. 11)
"The defining anxiety in globalization is fear of rapid change from an enemy you can't see, touch, or feel -- a sense that your job, community, or workplace can be changed at any moment by anonymous economic and technological forces that are anything but stable."
(Friedman, p. 13)
"The globalization system is built around
three balances, which overlap and affect
1. The balance between Nation-states
2.The balance between Nation-states and Global Markets (Supermarkets)
3. The balance between Individuals and Nation-states (Super-empowered Individuals) "
(Friedman, p. 15-16)
"Nation-states, and the American superpower in particular, are still hugely important today, but so too now are Supermarkets and Super-empowered individuals. You will never understand the globalization system ... unless you see it as a complex interaction between all three of these actors: states bumping up against states, states bumping up against Supermarkets, and Supermarkets and states bumping up against Super-empowered individuals."
(Friedman, p. 15)
"There's never going to be a global government to impose the rules the protesters want. But there can be better global governance -- on the environment, intellectual property, and labor. You achieve that not by adopting 1960's tactics in a Web-based world -- not by blocking trade, choking globalization or getting the W.T.O. to put up more walls. That's a fool's errand.
You make a difference today by using globalization -- by mobilizing the power of trade, the power of the Internet, and the power of consumers to persuade, or embarrass, global corporations and nations to upgrade their standards. You change the world when you get the big players to do the right things for the wrong reasons. But that takes hard work -- coalition-building with companies and consumers, and follow-up. It's not as much fun as a circus in Seattle. "
.......Thomas Friedman, "Senseless in Seattle" (1999)
Reading from Korten, When Corporations Rule the World (pp. 21-32)
"We are experiencing accelerating social and environmental disintegration in nearly every country of the world -- as revealed by a rise in poverty, unemployment, inequality, violent crime, failing families, and environmental deterioration."
(Korten, p. 21)
"The continued quest for economic growth as the organizing principle of public policy is accelerating the breakdown of the ecosystem's regenerative capacities and the social fabric that sustains human community; at the same time it is intensifying the competition for resources between rich and poor."
(Korten, p. 21)
"The world is increasingly divided between those who enjoy opulent affluence and those who live in dehumanizing poverty, servitude, and economic insecurity."
(Korten, p. 29)
"Taken together, these manifestations of institutional systems failure constitute a threefold global crisis of deepening poverty, social disintegration, and environmental destruction. Most elements of the crisis share an important characteristic: solutions require local action -- household by household and community by community. This action can be taken only when local resources are in local hands. The most pressing unmet needs of the world's people are for food security, adequate shelter, clothing, health care, and education....."
(Korten, p. 31)
"On the threshold of the golden age, these institutions are working for only a fortunate few. For the many, they are failing disastrously to fulfill the promise that once seemed within our reach."
(Korten, p. 32)
Reading from Cavanagh, Alternatives to Economic Globalization (19-31)
Corporate Globalists vs. Citizens Movements:
"The corporate globalists who meet in posh gatherings to chart the course of corporate globalization in the name of private profits, and the citizen movements that organize to thwart them in the name of democracy, are separated by deep differences in values, worldview, and definitions of progress. At times it seems they must be living in wholly different worlds— which, in fact, in many respects they do. Understanding their differences is key to understanding the implications of the profound choices humanity currently faces. " (21)
"Corporate globalists inhabit a world of power and privilege. They see progress at hand everywhere, because from their vantage point the drive to privatize public assets and free the market from governmental interference spreads freedom and prosperity around the world, improving the lives of people everywhere and creating the financial and material wealth necessary to end poverty and protect the environment. They see themselves as champions of an inexorable and beneficial historical process toward erasing the economic and political borders that hinder corporate expansion..."(21-22)
"Citizen movements, on the other hand, see a very different reality. Focused on people and the environment, they see a world in a crisis of such magnitude that it threatens the fabric of civilization and the survival of the species—a world of rapidly growing inequality, erosion of relationships of trust and caring, and failing planetary life-support systems. Where corporate globalists promote the spread of market economies, citizen movements see the power to govern shifting away from people and communities to financial speculators and to global corporations dedicated to the pursuit of short-term profit in disregard of all human and natural concerns. They see corporations replacing democracies of people with autocracies of money, replacing self organizing markets with centrally planned corporate economies, and replacing diverse cultures with cultures of greed and materialism." (22)
"It becomes more imperative to rethink human priorities and institutions by the day. Yet most corporate globalists, in deep denial, reiterate their mantra that with time and patience corporate globalization will create the wealth needed to end poverty and protect the environment.
Citizen movements counter that the policies and processes of corporate globalization are destroying the real wealth of the planet while advancing a primitive winner-takes-all competition that inexorably widens the gap between rich and poor. They reject as absurd the argument that the poor must be exploited and the environment destroyed to make the money necessary to end poverty and save the planet. " (24-25)
"The challenge of providing leadership to create a just and sustainable world thus falls by default to the hundreds of millions of extraordinary people in an emerging global civil society who believe a better world is possible—and who are forging global alliances that seek to shift the powers of governance to democratic, locally rooted, human-scale institutions that value life more than money. Although the most visible among them are those who have taken to the streets in protest, equally important and even more numerous are those struggling to rebuild their local communities and economies in the face of the institutional forces aligned against them. " (25)
"The current and future well-being of humanity depends on transforming the relationships of power within and between societies toward more democratic and mutually accountable modes of managing human affairs that are self-organizing, power-sharing, and minimize the need for coercive central authority. Economic democracy, which involves the equitable participation of all people in the ownership of the productive assets on which their livelihood depends, is essential to such a transformation because the concentration of economic power is the Achilles heel of political democracy, as the experience of corporate globalization demonstrates." (25)