Wednesday, October 22, 2008
Guru of globalization
The guru of globalization, Thomas L. Friedman, author of such books as The Lexus and the Olive Tree and The World Is Flat, wrote an op-ed piece in this past weekend's New York Times. Friedman, whose books suffer for the details, but suffice for following the macro-scale wave, concludes that the global economic panic and credit market crunch will bring the economies of the world's nation-states together. He says, "...once the smoke clears, I suspect we will find ourselves living in a world of globalization on steroids — a world in which key global economies are more intimately tied together than ever before...it will be a world in which multilateral diplomacy and regulation will no longer be a choice. It will be a reality and a necessity. We are all partners now."
The Clarion Content finds this fascinating because it just the opposite of what we are hearing from so many other commentators. Many other analysts are arguing that the the global financial crunch will bring with it resurgent nationalism and increased power for the nation-state at the expense of multilateral institutions. They highlight the lack of a coordinated world response to the crisis, the impotency of the United Nations in the face of global financial panic, as well as, the widely differing approaches adopted to the meltdown by the United States and the European countries.
Discuss amongst yourselves. And please post comment! We are still thinking and need your help.
Labels: Economy, Predictions
Comments:
Of course he's predicting that this will lead to increased globalization... it's what he gets paid millions of dollars to say.....
Whether or not this is capitalizing on a contrarian view, or his actual beliefs, Friedman's; as well as any economic "experts'" opinion, should be taken with a handful of salt. The current economic landscape, and the myriad possible outcomes, are impossible to predict. We should all focus on the reality of the situation, which is that all peoples, regardless of nationality or level of responsibility, are suffering and will continue to suffer the consequences of either too much or too little involvement in the world. You know, depending on what you get paid to tell us to think...
Whether or not this is capitalizing on a contrarian view, or his actual beliefs, Friedman's; as well as any economic "experts'" opinion, should be taken with a handful of salt. The current economic landscape, and the myriad possible outcomes, are impossible to predict. We should all focus on the reality of the situation, which is that all peoples, regardless of nationality or level of responsibility, are suffering and will continue to suffer the consequences of either too much or too little involvement in the world. You know, depending on what you get paid to tell us to think...
I don't think his points are all that well developed, but I think he raises some accurate notions. At the very least given all the FDI in American companies on the fritz, regulations will have to change (and on a global not just national level). International accounting standards were just the beginning, I assume we will see similar efforts in other financial spheres. However, I think you can separate the financial world from the diplomacy/foreign policy/military/social worlds. I see a strong likelihood for a resurgence of nationalism on some of these fronts, and I think it will make for fracturous politics for many years to come, given the inherent conflict if finance goes globalized and other politics become more nationalistic or dare I say even xenophobic.
The great lie that Thomas Friedman sells is that the United States supports open markets.
The truth is that the IMF and World Bank insist that developing countries must open their markets to the US, but not the reverse. Generally it has been the taxpayers of these weaker countries who have covered Wall Streets bad bets, and made good on Wall Street's bad debts. The only reason this latest bailout is dubbed a 'financial crisis,' is that it is US taxpayers who have to foot the bill this time.
Even before this debacle dominated the news, Senator Obama promised to renegotiate NAFTA, with increased protectionism for Detroit and Cleveland, something Senator McCain bravely and correctly pointed out would be futile and counterproductive.
The true fallout of this latest bailout may be that the US alone can no longer dictate the rules of the global economy. Russia, China, and the EU are all starting to see the writing on the wall. This could lead to what Mr. Friedman predicts: a coordinated global financial system. Or just as likely, trade wars and a global depression. Let's hope the next President is up to the challenge.
The truth is that the IMF and World Bank insist that developing countries must open their markets to the US, but not the reverse. Generally it has been the taxpayers of these weaker countries who have covered Wall Streets bad bets, and made good on Wall Street's bad debts. The only reason this latest bailout is dubbed a 'financial crisis,' is that it is US taxpayers who have to foot the bill this time.
Even before this debacle dominated the news, Senator Obama promised to renegotiate NAFTA, with increased protectionism for Detroit and Cleveland, something Senator McCain bravely and correctly pointed out would be futile and counterproductive.
The true fallout of this latest bailout may be that the US alone can no longer dictate the rules of the global economy. Russia, China, and the EU are all starting to see the writing on the wall. This could lead to what Mr. Friedman predicts: a coordinated global financial system. Or just as likely, trade wars and a global depression. Let's hope the next President is up to the challenge.
Wow great points one and all.
Will---You are right, alleviation of real suffering must trump theoretical concerns. What's the old saw about lies, damn lies and statistics?
Song---I do see increasingly globalized finance. I wonder though about globalized regulation. It seems the richest have always sought out the least regulated market. The more global we have become the easier that has become; what was once the purview of just the Swiss, has seen the Caymans, the Bahamas, Bermuda and others join in gaming the system. The same phenomenon has led companies seeking less scrutiny to list on the LSE in London or in Hong Kong instead of in New York.
Policing the flows of global capital through nationalist structures has become ever more difficult. Hawala banks are but one example.
Further, I wonder about the real separability of economics and politics. (Although mercenaries appear set for a comeback.)
Anthemsled---I totally agree with your critique of the IMF and the World Bank. When I hear calls for a new Bretton Woods, on the one hand I want to be hopeful, but having followed the Doha trade round talks, at least from a distance, on the other hand, I am far more cynical. First world agricultural policy may be the single biggest killer in the developing world.
All---I fear that in times of stress economic policy is likely to become even more short-sighted and nationalistic. We may be entering an era with an increased need for interdependence at the same time that people's fear of globalization causes their governments to fight it.
Harbingers before the crisis? The EU's prima facie rejection of Turkey. America's increasing hostile and self-wounding immigration policy. The hue and cry over the Dubai Ports World deal. Russia's gas/oil pipeline blackmail of Europe. China's attempts to destroy Uighur culture...the list could go on...
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Will---You are right, alleviation of real suffering must trump theoretical concerns. What's the old saw about lies, damn lies and statistics?
Song---I do see increasingly globalized finance. I wonder though about globalized regulation. It seems the richest have always sought out the least regulated market. The more global we have become the easier that has become; what was once the purview of just the Swiss, has seen the Caymans, the Bahamas, Bermuda and others join in gaming the system. The same phenomenon has led companies seeking less scrutiny to list on the LSE in London or in Hong Kong instead of in New York.
Policing the flows of global capital through nationalist structures has become ever more difficult. Hawala banks are but one example.
Further, I wonder about the real separability of economics and politics. (Although mercenaries appear set for a comeback.)
Anthemsled---I totally agree with your critique of the IMF and the World Bank. When I hear calls for a new Bretton Woods, on the one hand I want to be hopeful, but having followed the Doha trade round talks, at least from a distance, on the other hand, I am far more cynical. First world agricultural policy may be the single biggest killer in the developing world.
All---I fear that in times of stress economic policy is likely to become even more short-sighted and nationalistic. We may be entering an era with an increased need for interdependence at the same time that people's fear of globalization causes their governments to fight it.
Harbingers before the crisis? The EU's prima facie rejection of Turkey. America's increasing hostile and self-wounding immigration policy. The hue and cry over the Dubai Ports World deal. Russia's gas/oil pipeline blackmail of Europe. China's attempts to destroy Uighur culture...the list could go on...
