Analysis
This week I will again be attempting to incorporate globalization with U.S. economics. As we know concerning U.S. economics, the practices of this country influence those of other countries. Many saw the Wal-Mart movie, and although I didn't see it, I believe that many of the practices of Wal-Mart need to be addressed, which I had done a few weeks earlier, in reference to China specifically "product dumpting" for Wal-Mart in the U.S. http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm
Although I know that we are not using resources from Web-sites, this source from the World Trade Organization gives a brief glimpse into the practice of product dumping. My opinion of the response of a Christian to corrupt practices in corporations is not necessarily to fight and demand my rights, but to "redeem" the practices, by being involved in them.
The parable that Jesus uses to illustrate that if a person agrees to work all day for a denari, and another agrees to work an hour for a denari, why should the first man get angry at the second man, if the first agreed to work for that price. He didn't have to agree to it, but chose work for that price. Greed has no economic level, the rich want more, the poor want some, and no one is content.
In the book Global Transformations, chapter 5, gives a synopsis of how globalization developed mainly in the Industrial revolution, but also gives a brief view of the development from medievil times, of companies that were based in Italy, which imported cloth to furnish products, which they in turn the sold for profit. One of the main points I want to give to chapter 5 is trade protectionism. Whenever threat from other nations, militarily is paramount to the safety of it's citizens, most industrial societies, develop a protectionist mindset. Although this countries policies promote globalization, the 1930's are an incredible example of how protectionism developed, (page241), because of the disarray that was happening in Europe. The amount that FDI's, Foreign Direct Investment, is given in trade, is directly correlated to our military relationship with that nation at the time of investments.
Although the mass of globalization may not be able at this time to be retracted, due to what Global Transformations discussed in earlier chapter concerning the development of "invisible governmental structures," which are World banks, and World Corporations. This chapter has shown how Multi National Corporations, in the 1950's to 60's, started foreign investment through countries, such as Europe and Canada, where it was safe. The U.S. (MNC's) developed quicker than other countries, due to technological advances, that were superior to other countries. (page 243)
Page 244, gives a comparitive table of the percentage of Exports vs. Imports. The U.S. in 1995 was the same in terms of Exports and Imports. The U.S up until 1980 had been a "heavy net" foreign investor, but since 1980 it has been a major site for inward, FDI. There is a great disparity though, according the chart on page 249, for developing nations. The U.S. economy is developed, and therefore reaps the benefits of inward FDI, while the poorest nations struggle at less than 1% of inward FDI. (page249) This makes sense, but what can be done to counter this trend. Without any inward FDI, developing countries, will remain poor.
In the Globalization and Culture book, it also starts by showing the there is truly a financial global market, which thus provides "globalization on demand." Page 13, makes a percentage comparison that 14% of the worlds population accounts for 80% of investment flows and 70% of the worlds trade, in 1992. 1992 was not that long ago, so why is there such a great disparity between the worlds population and investment.
Globalization and Culture, I believe gives more of a rounded, general, but more realistic approach to globalization. I also believe by including the statement in the book that from 1870 to 1914 existed more globalization in world markets than at present, shows more of a protectionist mindset, since two World Wars have made trade relatively unsafe at various times.
It is important for structures not to monopolize and while I agree with anti-trust laws in regard to American companies to create competition, what is to be done with the disparity of inward FDI's, for third world nations. Do these "developing countries" have products to make them profitable for inward FDI's? Even if a country is not as industrialized as another, there may be other "agricultural" products that may make a developing country appealing in a globalized economy. The questions remains, "How can a third world country market itself to make it appealing for other countries to invest in it? It may not be possible, due to the lack of resources, but "handouts" from wealthy countries to poor countries, are important, but will not sustain a struggling economy? Mainly I am talking out loud to attempt to understand if anything can be done, to reduce the disparity. Empowerment of another country is more important than, "handouts." Thanks for the time.
Although I know that we are not using resources from Web-sites, this source from the World Trade Organization gives a brief glimpse into the practice of product dumping. My opinion of the response of a Christian to corrupt practices in corporations is not necessarily to fight and demand my rights, but to "redeem" the practices, by being involved in them.
The parable that Jesus uses to illustrate that if a person agrees to work all day for a denari, and another agrees to work an hour for a denari, why should the first man get angry at the second man, if the first agreed to work for that price. He didn't have to agree to it, but chose work for that price. Greed has no economic level, the rich want more, the poor want some, and no one is content.
In the book Global Transformations, chapter 5, gives a synopsis of how globalization developed mainly in the Industrial revolution, but also gives a brief view of the development from medievil times, of companies that were based in Italy, which imported cloth to furnish products, which they in turn the sold for profit. One of the main points I want to give to chapter 5 is trade protectionism. Whenever threat from other nations, militarily is paramount to the safety of it's citizens, most industrial societies, develop a protectionist mindset. Although this countries policies promote globalization, the 1930's are an incredible example of how protectionism developed, (page241), because of the disarray that was happening in Europe. The amount that FDI's, Foreign Direct Investment, is given in trade, is directly correlated to our military relationship with that nation at the time of investments.
Although the mass of globalization may not be able at this time to be retracted, due to what Global Transformations discussed in earlier chapter concerning the development of "invisible governmental structures," which are World banks, and World Corporations. This chapter has shown how Multi National Corporations, in the 1950's to 60's, started foreign investment through countries, such as Europe and Canada, where it was safe. The U.S. (MNC's) developed quicker than other countries, due to technological advances, that were superior to other countries. (page 243)
Page 244, gives a comparitive table of the percentage of Exports vs. Imports. The U.S. in 1995 was the same in terms of Exports and Imports. The U.S up until 1980 had been a "heavy net" foreign investor, but since 1980 it has been a major site for inward, FDI. There is a great disparity though, according the chart on page 249, for developing nations. The U.S. economy is developed, and therefore reaps the benefits of inward FDI, while the poorest nations struggle at less than 1% of inward FDI. (page249) This makes sense, but what can be done to counter this trend. Without any inward FDI, developing countries, will remain poor.
In the Globalization and Culture book, it also starts by showing the there is truly a financial global market, which thus provides "globalization on demand." Page 13, makes a percentage comparison that 14% of the worlds population accounts for 80% of investment flows and 70% of the worlds trade, in 1992. 1992 was not that long ago, so why is there such a great disparity between the worlds population and investment.
Globalization and Culture, I believe gives more of a rounded, general, but more realistic approach to globalization. I also believe by including the statement in the book that from 1870 to 1914 existed more globalization in world markets than at present, shows more of a protectionist mindset, since two World Wars have made trade relatively unsafe at various times.
It is important for structures not to monopolize and while I agree with anti-trust laws in regard to American companies to create competition, what is to be done with the disparity of inward FDI's, for third world nations. Do these "developing countries" have products to make them profitable for inward FDI's? Even if a country is not as industrialized as another, there may be other "agricultural" products that may make a developing country appealing in a globalized economy. The questions remains, "How can a third world country market itself to make it appealing for other countries to invest in it? It may not be possible, due to the lack of resources, but "handouts" from wealthy countries to poor countries, are important, but will not sustain a struggling economy? Mainly I am talking out loud to attempt to understand if anything can be done, to reduce the disparity. Empowerment of another country is more important than, "handouts." Thanks for the time.
posted by Paul M. Pace | 3:53 PM
2 Comments:
Paul - good work this week and I appreciated the illustration from the Gospels.
Here's my take: 'Greed is not good'
In Australia, we have had many privatisations and demutualisations in the last twenty years. The changes in corporate structure were made for good reasons. The problem was that the sleepy government organizations and mutuals were too ineffecient. Workers could be lazy, because their jobs were secure, and there was no great incentive to work hard. The workers weren't serving others, but serving themselves - by being lazy.
So the corporate structures were changed, and these changes worked. Corporations now work for the profit of owners, and this profit is shared with workers. This potential for profit has driven managers to squeeze out inefficiencies with a view to their own gain. So the problem of laziness is no longer the problem in corporate Australia. We have a different problem.
You see, what has not changed is the inclination of the workers and managers to serve themselves rather than others. The difference is that workers are now driven by greed. Rather than laziness, the Australian form of self-service is the chase after the dollar. More and more, the work-practice of our labour force expresses their belief that greed is good. This is a problem, because work is not meant to be about greed, it is meant to be for service.
If we agree that greed is not good, can we cure this plague? We can't cure the heart of greed by adding more rules - but can we do something at a structural level? Socialism and communism manifestly fail, partly because communism involves reverting to the old government owned and run corporate structures. If we reverted to these, laziness would again triumph as the expression of workers' self-interest. So what can we do to tame our current spiral into materialism? One answer is that our hearts need changing, so that we want to serve others. That is the primary answer. But our hearts will never be changed completely - there will always be the tendency for people to serve themselves rather than others. So what structural change might we make to help us defeat the greed-is-good brigade?
I want to make a suggestion. It is a little detailed, so strap in. But it is a test for you, the reader. The test is this: If you reject my suggestion as bad, do you reject it because you really think that greed is good? If that is your reason, then in my opinion, you have failed this test.
So why not structure society so that more work must is others-centred: The maximum take home pay in any year is set at about $50000 per person (adjusted for family size, marital status etc.). Any extra that you earn is set aside into a 'superannuation-style' account (owned by you, but not accessible until a later date). This account may be used in certain circumstances: It can be used by the owner whenever their earnings drop below $50000 that year. The owner may use the account to top up that year's earnings to the maximum $50000 figure. The account may also be used as a deposit on a house (up to say $150000 can be used in this way over a lifetime). It may be used to donate funds to causes deemed not in the direct interest of the owner. The owner chooses where these donations go. These donations would be vetted by a randomly selected person from the community (with recourse to a second person if the first says no). These 'checkers' will confirm that the donation is indeed others-centred.
This system works against both the evils I have mentioned above. We retain the capitalism where corporate structures allow people to push hard for personal profit. This leaves the incentive for people to work hard: If someone wants to earn their lifetime of wage income in five years, they can try. So those looking to provide for themselves will still be motivated to work hard. The same goes for those aiming to make money for the benefit of others - they can make bundles and give it all away. So the 'left-wing' evils of sleepy mutuals and government organizations are avoided.
On the other hand, citizens can no longer work to spend millions on their own pleasures. This will not be possible. So those at the top of our corporations will have severely restricted ability to sacrifice others for their own benefit. The 'right-wing' evils of money-hungry stop-at-nothing tyrant bosses will be avoided. And so the problems of today will be mitigated (although not removed)
The details need to be worked out, but the point is simple: our work would become biased towards others-centred service.
Note that it would still be possible to be paid a million dollars a year. Those who want to earn such large sums and give the money away will stay in our country. Those who want to spend it all on themselves will leave. I think we'll do better without them.
Note that this is not rejection of capitalism. We would still have private ownership, free markets, and laissez faireism - the defining features of capitalism.
I'd love readers to post problems with this political structure, and to make it better. However, I finish with my original challenge: do you reject this system because you believe greed is good? If you do, you fail my test. For greed is not good, it is killing our country (and it's killing yours too.)
Post a Comment
<< Home