1. Rodrik uses the example of Japan's Meiji government during its industrialization to argue that healthy economic policy arises from more government regulation—not less, and that Japan has been able to remain to this day a major power in the global economy because of this. However, during most of this period in history Japan was also under martial law, in which the military led the government and individual rights suffered. Would it be worth it to you to live in a militarist country if things like wages, job security and food prices were stable and secure?
Personally I believe militarism would not be worth stable wages, job security or food prices. As an individual and a member of society I believe that a democratic state, separate from the government would make me feel more secure and stable. The military should not be an internal enforcement, and should not be in charge of internal affairs and the making of laws. The military should have the central goal to serve and protect the people, not govern wages, etc. "Individual freedom" is more important than financial consistency. The ability and opportunity to attain any job appropriate for my experience/ability, and to get get paid according to the quality of my work depending on demand is not so terrible. You need to earn the wages you receive as an individual or a company, food prices varie according to supply and demand. THis is how the economic cycle works, with constant ups and downs balancing price with the value of the currency. Trading freedom for stable and secure financial consistencies is a communist notion, which removes all possibilities for ambition and improvement.
2. According to Rodrik, 'domesticating' globalization is the only way to "tame" it. How was China able to 'domesticate' globalization when it came to foreign investment?
China was able to domesticate globalization by taking advantage of specialized economic zones. They were able to make international exports, duty free, while also being able to gain knowledge regarding superior infrastructures. Thus, improving their own. This duty free trade attracted privatized global investments while China was still able to maintain domestic/governmental control over production, wages, etc. Once China had built up a strong enough industrial base with a solid infrastructure they were able to enter the WTO grasping globalization by the leash. Only to improve their economy and stature as a global economic power.
Sunday 10 February 2013
Monday 4 February 2013
Chapter 3 - Part 2
Steger outlines of the birth of the Internet and the rise of satellite and fibre-optic technologies in the 1990s as a factor that has significantly changed our concept of economics. How so, and what are both the positive and negative byproducts of this shift?
With the creation of the internet came the birth of a more global stock exchange; billions of dollars worth of stocks are now able to be trades every minute with the click of a button, while the prices of each stock are simultaneously monitored, compared, and predicted. This makes it easier for TNC's to purchase local companies in different countries to broaden their reach as a corporate power. For the global spread of these companies is a positive shift, causing the sharing of technologies, information and resources. A negative byproduct of this shift was that online banking was now a possibility, and the creation of imaginary money for safety nets due to loans appears. This causes inflation, the more currency a state has the less its worth unless there is an appropriate demand from products. Countries began shifting this imaginary money between them due to debts while corporations were making more than these countries. The amount of money was increasing so the value was decreasing, which increases the price of products. Which creates the need for more loans to afford products; stunting developmental growth. Although these technologies brought companies closer together, it gave these companies more power than states, and increased global debt.
With the creation of the internet came the birth of a more global stock exchange; billions of dollars worth of stocks are now able to be trades every minute with the click of a button, while the prices of each stock are simultaneously monitored, compared, and predicted. This makes it easier for TNC's to purchase local companies in different countries to broaden their reach as a corporate power. For the global spread of these companies is a positive shift, causing the sharing of technologies, information and resources. A negative byproduct of this shift was that online banking was now a possibility, and the creation of imaginary money for safety nets due to loans appears. This causes inflation, the more currency a state has the less its worth unless there is an appropriate demand from products. Countries began shifting this imaginary money between them due to debts while corporations were making more than these countries. The amount of money was increasing so the value was decreasing, which increases the price of products. Which creates the need for more loans to afford products; stunting developmental growth. Although these technologies brought companies closer together, it gave these companies more power than states, and increased global debt.
Chapter 3 - Economic Dimension of Globalization
In your own words, define the term "laissez-faire" as it applies to economics. What is the role of laissez-faire economics in the process of globalization? Cite some examples of how we can see this in Canada and abroad.
LAISSEZ-FAIRE - The idea that government should not interfere with economic affairs, or trade, especially on a global scale.
Laissez-faire allows for competition and variety among companies that produce the same product, as well as allowing the possibility of trans-national companies to exist. If the government where to control all production (socialism/communism) then every company would be under the state that it is located in and would probably be the only company dealing with the production of said product. With laissez-faire companies are able to take advantage of locations all across the globe taking advantages of the resources and labour in each area. Thus creating a wider reach of technologies and consumers. This connects the world globally through friendly trade without having to worry about political complications between companies. It also allows the companies to earn more than they would than in a single state, and in general earn more than most states.
An example of where canada does not use Laissez faire would be Lcbo (Liquor Control Board of Ontario), the province of ontario puts a tax and restrictions on when alcohol can be distributed. This limits the profits for the companies that produce the alcohol and only the Ontario provincial government benefits from this. A laissez-faire way of doing this would be that any store, Walmart, etc. would be able to sell such items without the governments tax on the items. Walmart would then gain more revenue, be able to sell alcohol anywhere at any time as long as too costumers of the appropriate age. Opening up a larger portion of revenue without such taxes, the price of liquor would drop, and people would have more opportunities to buy it.
LAISSEZ-FAIRE - The idea that government should not interfere with economic affairs, or trade, especially on a global scale.
Laissez-faire allows for competition and variety among companies that produce the same product, as well as allowing the possibility of trans-national companies to exist. If the government where to control all production (socialism/communism) then every company would be under the state that it is located in and would probably be the only company dealing with the production of said product. With laissez-faire companies are able to take advantage of locations all across the globe taking advantages of the resources and labour in each area. Thus creating a wider reach of technologies and consumers. This connects the world globally through friendly trade without having to worry about political complications between companies. It also allows the companies to earn more than they would than in a single state, and in general earn more than most states.
An example of where canada does not use Laissez faire would be Lcbo (Liquor Control Board of Ontario), the province of ontario puts a tax and restrictions on when alcohol can be distributed. This limits the profits for the companies that produce the alcohol and only the Ontario provincial government benefits from this. A laissez-faire way of doing this would be that any store, Walmart, etc. would be able to sell such items without the governments tax on the items. Walmart would then gain more revenue, be able to sell alcohol anywhere at any time as long as too costumers of the appropriate age. Opening up a larger portion of revenue without such taxes, the price of liquor would drop, and people would have more opportunities to buy it.
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