As the debate turns from whether or not globalization should happen to how to manage the globalization that is happening, the leading countries of the 21st century have a great challenges to overcome. Not only do they have to contend with the misinformation, miscommunication, and misunderstanding that is inherent whenever one engages in cross-cultural commerce, they have to balance the welfare of their own domestic population with the desire to lead the charge of human progress that is occuring by way of globalization.Though misunderstandings can be remedied through ambassadors and more frequent contact with other cultures, I believe the leading countries will continue to struggle to juggle leadership in the global economy with the welfare of individual citizens.
This balance has been elusive throughout U.S. history. For instance, Wolf criticizes the lack of "will and wisdom" that the U.S. displayed in the aftermath of the First World War (Wolf 128). He cites the protectionist tendency of the U.S. as evidenced by the Smoot-Hawley tariff. However, the U.S., in reverence to its revolutionary leader George Washington, was simply abiding by the isolationist policies that had worked so well for the first 150 years of its existence. The U.S. realized that foreign entanglement had ruined and/or ended the lives of many of its valued citizens, and it wanted to prevent this in the future by protecting itself from the outside world. This is a natural response, but Wolf would say that protectionist policies like these led to the Second World War because without the ability to trade with the mega-nation of America, other countries, such as Germany, suffered.
It is not only developed nations that have problems balancing involvement in foreign trade with protecting and promoting general welfare among its citizenry. The Gold Coast (modern-day Ghana) permitted, and even asked for Britain to colonize it to prevent an all-out war from occuring between the Ashantis and the Fantis in the mid-nineteenth century. This allowed Britain to further involve themselves in, and expand, the West-African slave trade. Though the slave trade had been going on for some time, Britain's colonization of this area definitely opened the Gold Coast up to more exploitation. It simply didn't have the government, infrastructure, or educational systems in place to prevent abuse. On the one hand, Britain's colonization prevented much of the bloodshed that may have occured between the Ashantis and the Fantis, but it also hurt the Gold Coast's development in the long run. Modern-day Ghana did not become independent until 1957, though it was supposed to gain its independence long before that. It had been subject to the whims of the British for much too long. Even today, though Ghana is developing rapidly due to the development of the oil industry, its growth is still somewhat retarded due to globalization. For instance, many of its educated citizens leave the country to go to Europe or America after they have finished their education in Ghana. This brain drain severely impedes the progress of Ghana in relation to other countries because not only has it lost its greatest minds, other countries have gained these great minds.
However, Ghana and other developing countries have a somewhat easier task than the developed countries because they are not expected to lead other countries in the pursuit of an open global market. For the most part, its domestic policies, and even foreign trade policies (tariffs, etc.) have little to no effect on the global economy. In contrast, American and European domestic and international trade policies can have a huge effect on the markets of other countries. For instance, if America decides to substantially increase its trade barriers or its agricultural subsidies, other countries will have no choice but to pursue more protectionist policies as well in order to protect their own markets. The decisions of a leading developed country not only can serve to further promote or hinder the spread of globalization and open-market policies within the country itself, but also across the globe. This responsibility should not be taken lightly. Developed countries need to understand their potential impact and analyze the affect of domestic and foreign trade policies in light of not only their own circumstances, but also in light of global circumstances. Failure to do so can suspend or reverse the gradual, but continual progress that has been made throughout human history to increase the standard of living. The day has come and gone that America and other leading countries were able to take a break/retreat from the global community and, once sufficiently isolated, contentedly sit back and watch the world move.
Leading countries, like all other countries, have a responsibility to their citizenry to pursue policies that will promote domestic peace and prosperity. But leading countries, unlike all other countries, have an additional responsibility that cannot be overlooked: leadership of the management and spread of globalization. While developing countries may be able to pursue individual interests without much though of how certain policies will affect the global community, leading countries must attempt to fully consider all consequences and ramifications of their actions. For instance, if America were to eliminate some or all environmental protection laws in an attempt to attract more corporations, other developed countries would then feel the need to do so in order to compete in the global market. Then the world would be off to a fast start in the global race to the bottom. Leading countries need to consider the affect their actions will have on the rest of the world, while at the same time pursuing favorable a favorable domestic economy and environment.
Monday, September 17, 2012
Global Marketplace of Goods
For my first post on my I.P.E. blog, I think I
should explain the title of my blog. Most people have heard the phrase
“Marketplace of Ideas,” but few know exactly where the phrase came from. Supreme
Court Justice William Brennan coined the phrase in a 1965 concurring opinion to
a case involving free speech. He believed that truth would be found only
through a free-flow of discourse and ideas. Ideally, I would like to live in a world where
not only ideas, but also goods can flow freely.
Like Wolf, I question where the line would be drawn
if we choose to continue to have trade barriers. We already have realized that
it is profitable and advantageous to allow goods to flow freely between the
states, and though Congress has the power to restrict inter-state trade through
the Commerce Clause, it rarely puts major obstacles in the way, simply because
producers and consumers—i.e. the constituents of lawmakers—benefit from a lack
of restrictions. However, the U.S. has never been a bastion of free-trade when
it comes to the international market. Why is there this inconsistency? Though
it does not seem probably that Congress will one day devolve the concept of
trade barriers to the level of state and local municipalities, it seems logical
that as long as this policy exists in our international policy, our domestic
policy could be in danger of the same treatment.
I want to highlight my use of the word ideally in the first few sentences. I
think free, open trade is theoretically the
best way to raise the global standard of living and continue the march of human
economic progress. However, just as James Madison theorized that “if men were
angels no government would be necessary,”[1] I
note that if markets were perfect, there would be no need for trade barriers.
As long as there is the risk of imperfect or asymmetrical information, there
will be a need for some governmental
regulation of international trade. Nevertheless, just as Winston Churchill
concluded that “democracy is the worst form of government, except for all the
rest,” people may reasonably come to conclude that capitalism is the worst
economic system, except for all the rest. Democracy, like capitalism, should theoretically, be the best way to set up
a government (or an economy), because it is theoretically
the fairest. Capitalism allows for individual sovereignty (liberty) with
little to no governmental interference, and democracy allows for an individual
to combine with other like-minded individuals in an attempt to form a majority
and turn the ideas they champion into policies. However, democracy and
capitalism both have their fair share of problems. As Abraham Lincoln realized
(and as I will discuss in a later post), in a democracy, might (the majority)
does not always make right, and the majority can support corrupt causes or
trample on the rights of the minority. In a purely capitalistic society, with
no social safety nets, such as welfare, it seems that the principle of survival
of the fittest will reign. While many make huge profits in a capitalist
society, a considerable portion of society is unable, or unwilling, to compete,
and are resigned to poverty, leaving many to question whether pure capitalists
have hearts. Similarly, a laissez-faire international trade policy completely
opens up a national market to the whims of international players. As a result,
individuals who were once able to profit in a certain industry, may find
themselves unable to compete in a global market. Though an advocate of
globalization might contend that these individuals can be trained to perform
another job in which they will have a comparative advantage, in reality,
sufficient educational resources are often not in place to accomplish this
mission. In the long run, economies may grow as each country realizes its
comparative advantage and invests in these industries, but, at least in the
short-run, certain individuals will inevitably loose in an open-market economy.
Furthermore, national security risks are inherent in a system that allows the
free flow of not only ideas, goods, and services, but also of labor. Not to
mention the “global race to the bottom” that both Wolf and Stiglitz have
mentioned, which could result if environmental protection regulations, minimum
wage laws, and other important staples of developed countries are eliminated in
order to create a more favorable environment for corporations.
I believe that the responsible policy-maker should
focus his or her efforts on opening our markets to the international economy by
repealing current trade barriers, while at the same time addressing the issues,
through bipartisan policies, that will inevitably result as we gradually open
up our market. In other words, I am for managing globalization responsibly. For
example, I support giving individuals who might suffer due to a global market,
a hand up through education and training. Through responsible policy-making, I
believe we can achieve an international open marketplace of goods, just as we
have strived to achieve a global marketplace of ideas through mediums such as
blogging on the internet.
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