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Posts Tagged ‘Globalization’

The New-Old Globalization

Posted by hkarner - 3. April 2019

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

The European Union is increasingly divided over how best to manage economic relations with an increasingly outward-looking China. On the whole, European governments are probably right to be wary of Chinese investment; but that doesn’t mean they should ignore China’s vision of cross-border development.

PRINCETON – Once upon a time, everyone assumed that there was a single phenomenon called globalization, whereby cross-border flows of financial capital drove innovation, industrialization, development, and trade. But Chinese President Xi Jinping’s Belt and Road Initiative (BRI) advances an alternative vision of globalization, based on an integrated system of physical infrastructure. The material world of ships and trains will replace the immaterial world of financialization.

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‘The Globotics Upheaval’ Review: When the Robot Gets an Office

Posted by hkarner - 5. März 2019

Date: 04-03-2019
Source: The Wall Street Journal

New robotics and AI technologies may soon be coming for the jobs of those who until now have only known globalization’s benefits.

The great wave of globalization is ebbing, or so it seems. Trade barriers are going up, ocean shipping is slower and less reliable than it was two decades ago, and manufacturers and retailers are keeping more inventory just in case their supply chains can’t deliver. But while the loss of factory jobs to foreign competition may have abated, a new threat to employment may loom. If Richard Baldwin is right, globalization will soon go after white-collar jobs with a vengeance.

Mr. Baldwin, a professor at the Graduate Institute in Geneva, is among the leading scholars of international trade. In his 2016 book “The Great Convergence,” he showed how the transfer of advanced technologies to poor countries made the current episode of globalization particularly harmful to industrial workers in rich countries, and he called for new social policies to address the problem. Now, in “The Globotics Upheaval,” he moves in a new direction, considering how the spread of robotics and artificial intelligence will affect the international distribution of labor. He argues that these fast-changing technologies will expose relatively well-paid jobs to foreign competition. As this occurs, people who have until now enjoyed mainly benefits from globalization will experience its costs first hand. “We need to stop asking whether the economic impact is due mostly to globalization or mostly to automation,” Mr. Baldwin writes. “Globalization and robotics are now Siamese twins—driven by the same technology and at the same pace.” Den Rest des Beitrags lesen »

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Don’t Fear the Deep State. It’s the Shallow State That Will Destroy Us.

Posted by hkarner - 7. Februar 2019

Date: 06-02-2019
Source: Foreign Policy

Populists like to blame elites, but from Israel to Britain to the United States their crusade against hardworking civil servants is undermining the foundations of democracy.

Then-British Foreign Secretary Boris Johnson and U.S. President Donald Trump

“Indeed it has been said,” Winston Churchill told the House of Commons in November 1947, “that democracy is the worst form of government except for all those other forms that have been tried from time to time.” Churchill might not have paid democracy such high praise in today’s climate.

A wave of populism has swept over many quarters of the world. Disenfranchised publics, on both the right and left, who believe that they’ve been handed a rotten deal are asserting influence. Those who’ve missed out on the benefits of globalization seek to improve their economic prospects. Others are motivated to replace prevailing social norms with ones that better reflect their personal value systems. Their common enemy—to be blamed when high expectations are disappointed—is the reviled “deep state,” that amorphous cadre of public servants and gatekeepers who execute the nation’s business.

Nowhere is this more evident than in the United Kingdom, where Prime Minister Theresa May is contending with the fallout from Parliament’s rejection of her Brexit proposal. Taking to the airwaves just before the fateful Jan. 15 vote, which Her Majesty’s Government lost by a 432 to 202 majority, former Foreign Secretary Boris Johnson predicted a public backlash if Britain’s withdrawal from the European Union were to be impeded. “I think that people will feel betrayed,” Johnson warned ominously, “and I think they will feel there’s been a great conspiracy by the deep state of the U.K., the people who really run the country, to overturn the vote in the referendum.” Den Rest des Beitrags lesen »

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The Shrinking of the Political Middle—and What It Means

Posted by hkarner - 22. Januar 2019

Date: 21-01-2019
Source: The Wall Street Journal By Greg Ip

As the far right and far left gain strength, countries find it increasingly difficult to get things done—both domestically and globally

In the past two years, the world has been rocked first by the rise of right-wing populists and now by a re-energized left. Both are products of a deeper-seated, destabilizing trend: the hollowing out of the political middle.

The shrinking center has hamstrung governments’ ability to act, as Britain’s Brexit chaos and the U.S.-government shutdown have demonstrated. It also erodes the international cooperation needed to confront common challenges such as on immigration, trade and the climate.

It’s a threat in particular to the global business leaders meeting in Davos this week. They’re the biggest beneficiaries of the market-friendly policies and global openness that centrist parties champion. They increasingly must deal with insurgents on the left and right with little in common except a mistrust of globalization,big banks and big tech. Den Rest des Beitrags lesen »

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The Center Left and Globalization

Posted by hkarner - 31. Dezember 2018

Caroline Conroy is a senior research analyst at the Brookings Institution.

After promising to reform both France and the European Union, President Emmanuel Macron is now struggling to reclaim the public’s confidence and prove that he is not the „President of the Rich.“ By pursuing a business-friendly reform agenda, Macron has fallen into a trap that center-left reformers everywhere seem incapable of avoiding.

WASHINGTON, DC – Popular uprisings across France are to shatter the hope that so many had placed in French President Emmanuel Macron after his election in May 2017. With his party, La République En Marche !, having secured an absolute parliamentary majority, Macron promised to pursue difficult reforms not just in France, but also within the European Union. But now he is facing the biggest crisis of his presidency.

Revitalization of the EU has long depended on a strong French leader capable of overhauling the country’s economy. Before the proposed fuel tax that brought the Yellow Vests into the streets last month, Macron had managed to overcome opposition to a series of labor-market reforms. Though politically difficult, the reforms were necessary to bring the budget deficit below 3% of GDP, in accordance with EU rules, and modernize France’s generous social-security system in the face of disruptive new technologies. Den Rest des Beitrags lesen »

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Globalization 4.0 for Whom?

Posted by hkarner - 20. Dezember 2018

Winnie ByanyimaWinnie Byanyima is Executive Director of Oxfam International.

For the last 40 years, policies governing trade, capital flows, and taxation have adhered to a neoliberal model of race-to-the-bottom competition, resulting in rising inequality and political discontent. And the elites gathering in Davos next month have yet to acknowledge the need for a new approach to governing the global economy.

DAVOS – Imagine a world in which women and girls have their rights respected, climate change receives the attention it so urgently requires, and poverty has been eliminated. Never before have we had the means that we have now to make this vision a reality. In Africa, for example, I am excited to see how off-grid solar energy is expanding rapidly. In Kenya, mobile banking has significantly improved financial inclusion, particularly for poor women.

These and other technologies associated with the Fourth Industrial Revolution (4IR) have the potential to boost productivity, incomes, and leisure time for workers, while also decarbonizing our economies and freeing women from the hold of unremunerated care work. But, to realize this potential, we will have to adopt an entirely new approach to globalization. Den Rest des Beitrags lesen »

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The Bogus Backlash to Globalization

Posted by hkarner - 11. November 2018

Date: 10-11-2018
Source: Foreign Affairs By Charles Kenny

Resentful Nativists Oppose Free Trade and Immigration—Don’t Appease Them

The last two years have seen an outbreak of self-abnegation among former advocates of globalization, who wonder if their cosmopolitan views on migration and free trade might have helped deliver the White House to U.S. President Donald Trump. In turn, longtime critics of globalization on the left have crowed at this apparent admission of defeat. Both camps have suggested that the backlash Trump represents is understandable and that internationalists should do more to accommodate an electorate that has turned against global engagement.

Yet both camps misunderstand Trump’s electoral success. The voters who were won over by his antiglobalist message were not legitimate victims of globalization. Many, if not most, were and are older white supporters of patriarchy who resent people with dark skin, especially those from other countries. Although it might be inexpedient to call this group deplorable, a program of appeasement toward their views is wrong—economically, politically, and morally. Globalization has been an overwhelmingly positive force for the United States and the rest of the world. Instead of apologizing for themselves, it is time for internationalists to take the fight to an aging minority of nativists and wall builders.

THE BLESSINGS OF GLOBALIZATION

Backlash appeasers have a number of thoughtful and influential voices on their side. Many are former champions of globalization who worry that it has moved too fast. The Financial Times commentator Edward Luce, for instance, suggested in his 2017 book, The Retreat of Western Liberalism, that by promoting globalization, “the world’s elites have helped provoke what they feared: a populist uprising against the world economy.” To save the liberal project, he argued, we must abandon “the drive to deep globalization.” Former U.S. Treasury Secretary Lawrence Summers has similarly warned of “a growing suspicion on the part of electorates that globalization is an elite project that primarily benefits elites.”

Other members of this chorus are liberals and left-wingers who have long been critical of free trade and who see Trump’s election as a vindication. In a March article for The American Prospect, the liberal journalist Robert Kuttner claimed that “elites of both parties won the policy debates on trade, but lost the people.” According to Kuttner, “the more that bien pensants double down on globalization, the more defections they invite and the more leaders like Trump we get.” The author John Judis took to The New York Times to criticize the left for ignoring the emotional appeal of nationalism, arguing that low-skilled immigration and China’s unfair trading practices had hurt American workers, helping to “create a new class of angry ‘left-behinds’” who were susceptible to Trump’s message.

These arguments are misguided. They severely overstate both the number of Americans hurt by globalization and the depth of the popular backlash to it. Regarding immigration, it is very hard to find evidence of a single demographic or regional grouping of U.S. citizens that has been harmed. In a 2015 paper, the economists Gaetano Basso and Giovanni Peri looked at 30 years of data on labor market outcomes in the United States and concluded that increases in immigrant labor, both in aggregate and by skill group, either increase native wages and employment or are simply uncorrelated with them. Conversely, Trump’s plan to end work permits for the spouses of H1-B visa holders could cost the U.S. economy $2.1 billion per year, according to the economists Ayoung Kim, Brigitte S. Waldorf, and Natasha T. Duncan.

On trade, there is reasonable analysis suggesting that increased competition arising from imports, for all of its overall benefits, can hurt employment in particular communities and sectors. In an influential series of papers, the economists David H. Autor, David Dorn, and Gordon H. Hanson argued that China’s accession to the World Trade Organization (WTO) in 2001 had a negative impact on local U.S. labor markets exposed to Chinese competition. For at least a full decade after the “China trade shock,” they claimed, these labor markets—many of which had depended on manufacturing—saw higher unemployment, lower wages, and depressed labor force participation rates.

But critics of the studies point out that their conclusions fail to account for a few important facts. First, increased trade with China allowed U.S. firms to import cheaper materials, lowering their own costs and enabling them to expand production; and second, China’s accession to the WTO increased U.S. exports to China, as well as other countries. Looking beyond just China, research by the economists Robert C. Feenstra and Akira Sasahara suggests that between 1995 and 2011, growth in U.S. exports worldwide led to 6.6 million new U.S. jobs, including 1.9 million jobs in manufacturing—more than the jobs lost owing to global import competition. And although an estimated two million U.S. jobs were lost because of competition from Chinese imports over those 15 years, the U.S. economy saw about 1.9 million layoffs and discharges each month during the first decade of the twenty-first century. Manufacturing job losses to China are in the headlines not because they are a major source of terminations but because they make a good story for those who oppose global engagement.

Furthermore, looking only at the production side of the economy ignores the considerable benefits that consumers—particularly poor consumers—derive from cheaper goods. According to a study by Pablo D. Fajgelbaum and Amit K. Khandelwal of the National Bureau of Economic Research, poor people spend more of their income on goods, while the rich spend more on services, which are less tradable; for this reason, if the United States moved to end imports, the poorest ten percent of American consumers would see their buying power decline by 82 percent, compared with a decline of only 50 percent for the median consumer.

Most Americans recognize the economic benefits of trade and migration to the country. Contrary to the backlash thesis, globalization is more popular now than ever before. Since 1992, Gallup has asked if trade is primarily an opportunity for economic growth or a threat to the economy. For 23 years, the proportion suggesting it was primarily an opportunity never rose above 56 percent; in 2017 and 2018, it exceeded 70 percent. And since 1965, Gallup has asked Americans if immigration should be increased, decreased, or kept at the present level. The proportion favoring an increase or sustained rate, at 68 percent, has never been higher, nor has the proportion calling for a decrease (29 percent) ever been lower.

WHITE FRIGHT
But if the economic benefits of globalization are widely understood, a minority sees it as a cultural threat. This is what explains the supposed backlash. Public opinion surveys from the Public Religion Research Institute (PRRI) suggest that 34 percent of all Americans feel that the growing number of immigrants threatens traditional American values and customs. But only 19 percent of those aged 18 to 29 feel that way, compared with 44 percent of those over the age of 65 and 53 percent of white evangelical Protestants of all ages. Similarly, the political scientists  Diana C. Mutz, Edward D. Mansfield, and Eunji Kim found that whites are consistently less supportive of trade deals than are members of other racial groups. They attribute this imbalance to whites’ “heightened sense of national superiority” and ethnocentrism. If markers of economic hardship—such as low education, skills, or wages—determined opinions on trade (or migration), minorities would be the ones opposed. In fact, the reverse is true.

Some evidence does suggest that migration and trade flows may influence communities to vote Republican. Autor, Dorn, and Hanson argue that between 2000 and 2016, areas in which employment was concentrated in the industries that faced the most competition from Chinese imports tended to shift toward the Republicans. And the economists Anna Maria Mayda, Giovanni Peri, and Walter Steingress analyzed county-level data, finding that between 1990 and 2010, high-skilled immigration to a county decreased the overall share of the Republican vote while low-skilled immigration increased it.

What is considerably harder to see is how such factors could explain Trump’s increased vote share relative to the Republicans’ 2012 presidential candidate, Mitt Romney. Survey evidence suggests the American electorate recognized that the 2016 presidential candidates, Trump and Hillary Clinton, presented them with a clearer choice on trade and migration policy than had Barack Obama and Romney four years earlier. But voters’ exposure to globalization was not related to the size of their swing toward the Republican candidate between 2012 and 2016. Cultural factors were.

The Gallup economists Jonathan T. Rothwell and Pablo Diego-Rosell, for instance, found “no link whatsoever” between greater exposure to trade competition or immigrant workers and greater support for Trump. They did find a particularly large swing to Trump in counties with a high share of old white residents with only a high school education. And Diana Mutz found that people who felt that “the American way of life is threatened,” or who believed whites and men were more oppressed than women or minorities, were significantly more likely to switch to Trump than those who did not. In short, the voters who bought Trump’s rhetoric on trade and migration were those who were culturally attuned to his message.

Indeed, a significant proportion of Republican partisans have decided that white Christian men are the new oppressed. A PRRI survey in February 2017 found that 43 percent of Republicans felt there was a lot of discrimination against whites, and 48 percent thought there was a lot of discrimination against Christians, compared with only 27 percent who thought there was a lot of discrimination against blacks. Given the gap between black and white families in terms of both median income and median wealth, such thinking is delusional. But many whites, Mutz notes, fear that they will soon become a minority within the United States and feel that the country as a whole is losing its global dominance. This sense of lost national status and persecution fueled support for Trump.

NO RETREAT, NO SURRENDER
When regretful internationalists talk about pausing globalization to save it, the group they cater to is not the “left-behind” but older, bigoted whites who are unreconciled to the cultural changes of recent decades. It would be both ethically repugnant and politically and economically unwise to pander to them.

Politically unwise because theirs is a minority view that is dying; economically suicidal because for all that old white men are delusional about facing discrimination at home, they are absolutely correct regarding the United States’ slipping status as a superpower. That is why it is particularly urgent for the country to lock in fair global regimes while it still has the leverage to do so. This means playing by the rules of the WTO and taking those immigrants who still want to come to the United States. Ironically, immigration is particularly important for aging whites themselves: although non-Hispanic whites will become a minority of the overall population within the next three decades, they will still make up 60 percent of people over the age of 65 in 2050. They will need young immigrant workers to keep Social Security and Medicare solvent. Add to these political and economic motives an ethical one: globalization has been the most powerful force ever for lifting humanity out of destitution.

Globalization has been imperfectly managed, and a new push for fairer global engagement should involve reforms, including better regulation of capital markets, limits on intellectual monopolies such as patents and copyrights, and cooperation on tax havens to ensure that corporations and rich individuals pay their share for public services. Strong international agreements are urgently needed on issues such as climate change and data privacy. And a raft of domestic measures could increase both equality and productivity in the United States: tightening lax controls on market concentration, slashing limits to affordable housing in job-rich areas, reducing the barrier to entry that unnecessary licensing imposes on small businesses, reforming a banking system that bails out irresponsible institutional investors, and doing more to help Americans who lose their jobs, for whatever reason.

But one thing that won’t help is for liberals to legitimize the backlash to globalization. Those who do so are useful patsies for Trump, allowing him to channel racial resentment into tax cuts for the rich. Responding to a group of people who think that white male Christians are discriminated against, or that the rest of the world getting richer is something for Americans to fear rather than celebrate, is admittedly hard. But whatever the reaction to the nativist rage of old white men, it cannot be appeasement.

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Grappling With Globalization 4.0

Posted by hkarner - 6. November 2018

Klaus Schwab

Klaus Schwab is Founder and Executive Chairman of the World Economic Forum.

The world is experiencing an economic and political upheaval that will not cease any time soon. The forces of the Fourth Industrial Revolution have ushered in a new economy and a new form of globalization, both of which demand new forms of governance to safeguard the public good.

GENEVA – After World War II, the international community came together to build a shared future. Now, it must do so again. Owing to the slow and uneven recovery in the decade since the global financial crisis, a substantial part of society has become disaffected and embittered, not only with politics and politicians, but also with globalization and the entire economic system it underpins. In an era of widespread insecurity and frustration, populism has become increasingly attractive as an alternative to the status quo.

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From Globalization to Regionalization

Posted by hkarner - 31. Oktober 2018

Date: 30-10-2018
Source: YaleGlobal by Joergen Oerstroem Moeller
Subject:

The United States was undisputed leader of economic globalization until the 2008 global financial crisis. The country’s moral and economic leadership has since gone into decline. The US share of global gross domestic product has dropped for more than 20 years, from 32 percent to 22 percent. This has reduced the benefits from economic globalization while global commitments remain unchanged. The Trump administration has started a realignment, scaling down commitments and suggesting that the United States can no longer afford to be a global power. “Another administration would have little choice but to do the same, albeit with another style and vocabulary,” explains author Joergen Oerstroem Moeller. Regionalization may fill the vacuum and demography, technology, regional supply chains, investment flows and trade/investment agreements are driving this seminal shift. Three regional blocks may emerge: the Western Hemisphere, East Asia plus Southeast Asia perhaps with South Asia, and Europe probably with part of Africa. – YaleGlobal

As globalization loses its allure and US global power declines, nation-states may turn to regionalization to safeguard interests Den Rest des Beitrags lesen »

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The tension between globalisation and democracy

Posted by hkarner - 28. Oktober 2018

Date: 25-10-2018
Source: The Economist: Charlemagne

Italy’s conflict with Brussels reveals a European trilemma

In his novel “The Year 3000: A Dream”, from 1897, the Italian writer Paolo Mantegazza proved a deft oracle. Citizens of his imagined future enjoy air-conditioning, clean energy, credit cards and virtual-reality entertainment. A giant war in Europe has been followed by peace, the continent’s integration and a single currency. Yet here the author’s imagination overshoots today’s reality. His United States of Europe is a paragon of democratic federalism. Power and consent flow smoothly from “cosmopolitical” citizens to the level of government where they are most appropriately exercised. Subsidiarity reigns. “How easy and straightforward it is to govern”, comments the narrator, “when men, families and communes are self-governing.” The capital of Mantegazza’s united Europe is Rome. And nowhere quite sums up the gap between these lofty ideals and today’s fractured continent as well as Rome does.

On October 23rd, for the first time, the European Commission rejected a euro-zone member’s budget. Italy’s government, a coalition of the anti-establishment Five Star Movement and the right-populist League, has a mandate from voters to enact tax cuts and spending increases. Its proposals would push Italy’s deficit to 2.4% of gdp—above the level the eu considers appropriate for a country with such high debt, at around 130% of gdp. Technocratic rules agreed on in Brussels are thus in collision with a democratic national government. Supranational discipline is up against the will of the people. Mantegazza would be dismayed. Den Rest des Beitrags lesen »

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