Class Note for INDV 102 with Professor Kenworthy at UA
Class Note for INDV 102 with Professor Kenworthy at UA
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Date Created: 02/06/15
Coming to terms with globalization Outline America and the world Our approach to globalization Military intervention Immigration Foreign investment Trade Culture Political decision making Which road will we choose America and the world America and the world How should the United States relate to the rest of the world In terms of human wellbeing this is the most important question we39ve considered in this course The US has more impact on world politics and economics than any other single country Much of the world39s population is far poorer than those at the bottom of the distribution here in the United States Figure 1 The position of different countries ventiles in global income distribution 100 France 80 Brazil Sri Lanka 60 40 Indonesiairural Percentile of world income distribution 20 0 I I I 0 5 10 15 20 Country ventile Source Calculated llnm World lncnmeDlslllDul m vaJ data Avallable alllttpecnrlwnlldbarlknlyplnleclslnequallly America and the world The US government won39t ever make the world39s poor its number one priority But we could make them one ofour top priorities A key is to embrace globalization America and the world What is globalization Globalization integration between countries Jobs foreign investment Goods and services trade Money finance People migration Culture Military intervention Political decision making America and the world In the last two lectures I39ve looked at two ways for the US to embrace globalization Military intervention in humanitarian crises or to restore democracy Relatively open immigration Today I39ll discuss four others Foreign investment Trade Culture Political decision making America and the world One aspect I won39t address finance Financial globalization has improved poor countries39 access to resources but it has also created enormous instability and vulnerability 199798 Asian financial crisis Current financial and economic crisis I don39t yet have a good answer on this Foreign investment Foreign investment Is foreign investment bad for citizens of poor countries Sweatshops with long hours and poor working conditions Low wages Multinational firms ship profits back home and leave when costs get too high Foreign investment These criticisms are valid They39ve sparked activism to pressure multinational firms efforts to monitor and expose worst practices Nike Wal Mart attempts to impose minimum wages and working standards Foreign investment Yet foreign investment nevertheless tends to be good for the world39s poor More jobs Better wages Better working conditions Skills and ideas that can lead to entrepreneurship Tax revenues that can be used for schools hospitals etc Foreign investment Pay and working conditions tend to be better than the alternative Paul Krugman quotWhile fatcat capitalists might benefit from globalization the biggest beneficiaries are Third World workersquot quotIn praise of cheap laborquot 1997 Joseph Stiglitz quotMultinational corporations have been at the center of bringing the benefits of globalization to developing countries helping to raise standards of living throughout much of the worldquot Making globalization work 2006 Nicholas Kristof quotWe in the West often despise sweatshops as exploiters of the poor while the poor themselves tend to see sweatshops as opportunitiesquot quotIn praise of the maligned sweatshopquot 2006 Foreign investment The poor in many countries need more foreign investment more sweatshops That doesn39t mean activists international agencies UN ILO and governments shouldn39t try to prohibit violations of human rights such as slavery or forced child labor Nor does it mean governments in poor countries should simply let the market be in the most successful developing nations in Asia the government has played an active role in the economy But it does imply that attempts to force multinational firms to conform to richcountry norms in their pay and employment practices is likely to be counterproductive Trade Trade A key problem faced by poor countries is import barriers imposed by rich nations to protect their own farmers and manufacturing firms Every successful economic development story in the past half century has relied heavily on exports to rich countries South Korea Taiwan Hong Kong Singapore China Brazil Botswana Mauritius Trade But trade and movements of jobs may reduce employment andor wages for the lessskilled here in the US They almost certainly do though we aren39t sure how large the impact is The question is What to do Reduce trade andor offshoring Improve Americans39 ability to adapt to change Trade Many on the left and a segment of those on the right Pat Buchanan and others favor restrictions in trade and offshoring This would help some Americans who will otherwise lose their jobs But it39s bad for Americans as consumers and very bad for the poor in the rest of the world Trade A preferable alternative is to embrace trade and help its victims here adjust Better education Unemployment insurance Wage insurance Portable health insurance Retraining Assistance with job placement We would want all of these are programs even if there were no crosscountry trade to protect against effects of technological change withincountry trade immigration etc Culture Culture Competition may lead to disappearance of cultural forms and producers music movies books sports restaurants languages that have a small audience or are inferior in quality The result might be a world dominated by hiphop Hollywood films Harlequin romance novels soccer surely not baseball McDonalds and English Culture On the other hand access to markets in rich countries may help unknown but highquality cultural formsproducers survive and prosper Also globalization may enhance cultural diversity in dominant countries Thai restaurants Argentine basketball players African music etc Culture The evidence isn39t yet in on this question Political decision making Political decision making Should there be a supranational body with real decisionmaking authority over countries Political decision making We39ve been moving in that direction The United Nations now authorizes military interventions The UN39s International Court of Justice and the International Criminal Court prosecute people who commit war crimes The ICC recently for the first time issued an arrest warrant for a sitting government head president of Sudan The European Union has assumed decision making authority in a still limited number of areas Political decision making A true world government seems unimaginable Economic interests cultures and identities are too different Americans in the original 13 colonies felt the same way prior to 1789 Europeans now choosing to join the EU are highly diverse quotOne person one votequot would enable the world39s poor to confiscate our wealth Opponents of democracy raised exactly the same concern in the 17005 and 18005 Political decision making Potential benefits Greater order and predictability Enhanced fairness Improved ability to deal with crises Political decision making An example environmental sustainability The key challenge is getting developing countries to forgo some of the benefits of rapid industrialization in favor of the longterm health of the planet Perhaps they39ll act altruistically or maybe they can be bought off It would be easier if a world government could force them to do it with some compensation Would it if these countries have the most votes Farsighted political leaders can do the right thing even when it contradicts public opinion Lincoln in the Civil War FDR in World War II Political decision making It39s very unlikely that a world government would have full powers over national governments But it could have authority in particular areas The European Union experiment is worth studying to get a sense of the possibilities and limits Which road will we choose Which road will we choose One option is to close ourselves off from the world to erect barriers to trade immigration and focus on our own problems Another is to embrace globalization Which road will we choose America has been at its best when we have embraced the world and the wellbeing of those in other countries World Wars 1 and 2 Marshall Plan Opposition to communist expansion Peace Corps Leadership in creating and supporting international organizations and procedures UN IMF World Bank Bretton Woods GA39IT Which road will we choose The evidence suggests that we would do well to continue this orientation With appropriate policies in place any damage to our citizens will be limited The benefits to the world39s least welloff will be enormous Parting wisdom Be optimistic The world and our country face challenges but we have the resources and the will to address them quotThe moral arc of the universe is long but it bends toward justicequot Martin Luther King Jr
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