Ipe17

Y376 International Y376 International Political EconomyPolitical Economy

November 5, 2009November 5, 2009

Dissenting ViewsDissenting Views

• “Globalization at this point in time is far more about disparities between nations than the assimilation of a flat world.” Steven Roach, Chief Economist, Morgan Stanley

• “By any measure, the international economic landscape is not at all flat. On the contrary, our world is amazingly ‘spiky.’” Richard Florida, Professor, Carnegie Mellon University

Source: Ronald Aronica and Mtetwa Ramdoo, The World is Flat? ACritical Analysis of Thomas L. Friedman’s NY Times Bestseller, preface.

Richard FloridaRichard Florida

• Professor at Carnegie Mellon Univ. in Pittsburgh

• Two major books:– The Rise of the

Creative Class– The Flight of the

Creative Class

Spikiness in Economic Activity in the Spikiness in Economic Activity in the United StatesUnited States

Spikiness in Economic Activity Spikiness in Economic Activity in Chinain China

Spikiness in Scientific CitationsSpikiness in Scientific Citations

http://creativeclass.com/rfcgdb/articles/other-2005-The%20World%20is%20Spiky.pdf

Defining GlobalizationDefining Globalization

Economic globalization is a “set of processes leading to the integration of economic activity in factor, intermediate, and final goods and services markets across geographical boundaries and the increased salience of cross-border value chains in international economic flows.”

Source: Introduction to Aseem Prakash and Jeffrey Hart,eds., Globalization and Governance (Routledge:1999)

Value ChainValue Chain

• Concept invented by Michael Porter

• A value chain is more comprehensive than a supply chain because it extends backward to R&D and innovation and forward to commercialization

Michael PorterHarvard Business School

Other Ways of Thinking about Other Ways of Thinking about GlobalizationGlobalization

• Deterritorialization, e.g. of– diasporic communities– MNCs– currencies

• Convergence– leading toward a universal “sameness”

• Mythology or FadSee, for example, Arjun Appadurai, Modernity at Large.

Appadurai’s Cultural LandscapesAppadurai’s Cultural Landscapes

• Ethnoscapes

• Mediascapes

• Technoscapes

• Finanscapes

• Ideoscapes

“The suffix scape also allows us to point to the fluid, irregular shapes of these landscapes, shapes which characterize international capital as deeply as they do international clothing styles.”

Deterritorialization of CurrenciesDeterritorialization of Currencies

• Dollarization– Russia (for a while)– Mexico (tesobonos)– Argentina– El Salvador– Panama

Blue and purple means tiedto the Euro; Green, yellow,tied to US dollar

Diasporic CommunitiesDiasporic Communities

• any people or ethnic population forced or induced to leave their traditional homelands, the dispersal of such people, and the ensuing developments in their culture

• examples: Jews, Cubans, Chinese, Pakistanis, Indians, etc.

Examples of Globalized CultureExamples of Globalized Culture

• Corporate logos

• Who Wants to be a Millionaire

• MTV

• World Music, e.g. Reggae or Ska

• Anime, Manga, Pokemon (J-pop)

• Disneyland, Disneyworld theme parks

• Action movies with little dialogue

Will Territorial Based Systems Will Territorial Based Systems Become Obsolete?Become Obsolete?

• No (short answer)

• Territorial-based systems may become less important relative to others but it is more likely that more complex relationships among governance systems at different levels of aggregation -- local, national, regional, etc. -- and nonterritorial governance systems will have to be established.

Coping Strategies: National Coping Strategies: National GovernmentsGovernments

• Many coping strategies are still possible.• Downsizing the state is not always

desirable (e.g. the case of the formerly centrally planned economies).

• National governments are likely to play a role in reducing inequalities accentuated by globalization.

Examples of Coping StrategiesExamples of Coping Strategies

• Promotion of inward FDI

• Raising the skills of the workers via education and training programs

• Scholarships and fellowships for college

• Increased spending on research and development (R&D)

• Regional development efforts

Races to the BottomRaces to the Bottom

• Tendency of political units to reduce regulations/taxes/standards in order to match the reductions of others as a part of competition for the location of value-added activities in their territory.

• Seen as a negative consequence of globalization.

Examples of Possible Races to the Examples of Possible Races to the BottomBottom

• Corporate taxes

• Environmental regulations

• Wages and other labor practices

• Internet-related:– pornography– gambling– hate groups