BLOG #13

BLOG #13

“After the technological and social revolutions occurred in Europe, its Northwestern part became the most advanced region of the world. It set out, at first timidly and often out of adventurism, then more seriously to conquer the rest of the world. As Europe conquered other countries, the winners established rules that were economically advantageous to themselves, developed further the already-existing slave trade, and by flooding markets of their colonies (devoid of independent commercial and eco- nomic policy) with their own manufactures, contributed to colonies, deindustrialization. All the while, gross coercion, wars, and even genocides went on in the colonies––perhaps not much noticed in Europe. So, the days of universal peace were quite far from being truly so.” (Milanovic; pp. 678).

This quote and basically the entire paper bases the current “benign” of globalization as one of the two narratives that have being told in which as the quote expresses leaves colonialism and the deliberate ignorance of war and conflict in poor countries are direct results of an economic model design by colonial powers to maintain power and dominance. The importance of understanding that the era of colonialism had such a remarkable effect not only on the society of the time (for both those who benefited as for those who suffered the consequences) but also because that unprecedented historical event keeps shaping the world as we know it today. Most importantly, though, it stays as evidence of the historical and detrimental abusive power that this globalized and capital nations have had on the rest of the world. Capitalism and globalization as understood from a 19^th century perspective didn’t bring the peace and equality that it so much promised, neither the invisible hand equipped everybody equally. 

Globalization as perceived today is closely associated with the interests of dominant developed northwestern nations. Countries like the United States, France, England, Sweden, among others have experienced the good fruits of neoliberal policies because the institutions in charge of maintaining that world order even though they are engage in the development of the world, it would ludicrous to believe that they aren’t deliberately safeguarding the countries that created them and that influx capital into it. It’s a world dominant economic ideal that tilts the balance towards one side. The rest of us? Well, look at countries like China, India or any developing country in Latin America and lets not even mention Africa; do they equate to the supremacy and advancement of societies of those like in Europe or the United States? Absolutely not, and sure much of it is attributed to major political instability but that’s also a mention that Milanovic makes in this reading, the fact that while developed nations were reaping the benefits of industrialization and the colonialism, the colonies were deeply ingrained in conflict, health and grave economic conditions while they ignored the situations.

This can be closely perceived in Latin America where many countries follow a capitalist American model of the economy yet none of them compare to the United Sates (not even Brazil or Mexico). Why is that? Corruption, dictatorships, civil wars, hunger, poverty, environmental issues, and more, were all things that the United States wasn’t only aware of but that even initiated (Guatemala, Honduras, etc.). Growth is impossible in an socio political environment like that. Truly when the quote says that those says of universal peace were quite far it can even be argued that they are far today also because those in position to do something about it simply can’t or don’t want to.    

BLOG #12

BLOG #12

“The need for deliberate international redistribution is underlined by the evidence that world poverty may be higher in absolute numbers than is generally thought, and quite possibly rising rather than falling; and that world income inequality is probably rising too. This evidence suggests that the income and prosperity gap between a small proportion of the world’s population living mainly in the North and a large proportion living entirely in the South is a structural divide, not just a matter of a lag in the South’s catch-up. Sustained preferences for the South may be necessary if the world is to move to a single- humped and more narrowly dispersed distribution over the next century.” (Wade; pp. 583).

In this quote Wade answers directly not only the current state of affairs in relation to globalization and its impact in the world but most importantly, it ultimately acknowledges that this model of economic governing could extend the same and greater detrimental conditions for people around the world. Poverty and inequality are in fact correlated to this accumulation by disposition argued by Harvey and the continuous model of capital accumulation at the expense of everyone and everything, including the environment just creates a gab, socially and economically, that keeps widening itself due to the disproportionate distribution of wealth.

In the reading, Wade presents various graphs that depict the distribution of wealth and the implementation of neoliberal policies that have created a trend in countries around the globe exposing the same situations. While 90% of the world population sinks into poverty and inequality and facing major health, environmental, political and economic deprivation, 1% just keeps getting richer. In the reading Wade makes an interesting argument towards the accumulation of wealth by powerful nations and how that makes their involvement in military actions cheaper. While I don’t completely agree with his judgement the reality is that countries like the United States greatly affected by this economic model, keeps investing in the military and further involving militarily, certainty because it has the means to do so. For example the liberty with which conflicts with Iran are mentioned now in the news (even though it has nothing to do with this) it can certainly expose side consequences of too much capital and power in the hands of a few who don’t represent or understand the necessities of the greater majority.  

As mentioned in the lecture, this problem cannot analyzed using economic models only because at the end of the day people’s lives cannot be measured in cold numbers or graphs but one just need to visit certain neighborhoods within this country or elsewhere around the world to see that the way the elite lives is disproportionate with the deplorable conditions of many that truly need help and assistance. A disappearing middle class is evidence of the gap but the question that matter the most when will it stop? The answer doesn’t seems hopeful under this system. Fundamentally, the world as it is organized today clearly is tilted towards one direction and regardless if globalization has or not to do with it the reality is that it has helped amplified the problem instead of solving it.     

BLOG #11

BLOG #11

“Undoubtedly, China has grown explosively over the past two decades, capturing a huge share of world trade. But more recently, the story out of China is about a corruption-plagued communist state struggling to escape what economists sometimes call "the middle-income trap." Export-led growth has given way to an investment boom that's looking more and more like a bubble.  Though the United States still had a $295 billion trade deficit with China last year, our indebtedness to the nation declined - while U.S. productivity gains made manufacturing here more cost-competitive.” (WP, Editorial Board).

Production and its distribution is a fundamental aspect to understand modern economies, globalization and the trends of global political economy as a whole. The diversification of the means of production has expanded the market and allow the flow of goods and services to come and go to multiple destinations. An idea mentioned in the lecture and that I mentioned in my previous blog is the idea of how products and this exchange within the economy is of a global nature not just for the transaction itself but also because of the different components that were necessary to make that specific product. An example of this is illustrated in how Apple products say “made in China”, nonetheless, the process is much more “international” to use a catchy word. In other words, Apple (An American company) hires Foxconn (Taiwanese company) with factories in China and (uses Chinese workers) to make the product; in addition to the different pieces of that specific product that were needed from different countries. This has direct relation to trade and the modern connectivity of nations that we have today, not only economically but also with social and political connotations.

All of this said, it takes me to the understanding of this quote from the Washington Post Editorial Board on American politician’s historical accusation of China as taking advantage of the trade system and as a currency manipulator. More specifically, the quote mentions that even though China has in fact grown in term of its share in global trade, the underlining issue isn’t much its trade growth but how corruption makes it difficult to leave behind the “middle income gap” that is affecting so many developed nations. In relation to production and the influence of globalization we can perceive this and the distribution of such as a concurring issue within develop economies who find it hard to govern internally and at the same time maneuver the challenges of global governance.

That fragmentation involves the maintenance of these value chains that directly affect costs, investments and international cooperation. The last sentence of the quote refers to manufacturing being cost competitive in country like the United States compared to China where access to the skills necessary to assemble these products are much practical. Corporations see this as an opportunity to provide much more products but at a lower cost. The loss of jobs in the United States in the last 20 years isn’t just an effect of immigration but also of cheaper access to labor.