Before delving into the readings, I just wanted to introduce a thought that came to mind during Tuesday's class discussion. After mentioning "things" that are traded globally (goods, information, capital) we stated that the one thing that can't be traded is land - the land that a nation inherently possesses. Yet as I thought about this some more, I wondered whether there existed other things that couldn't be traded or transferred from one nation to another.
What I was considering was the possibility of culture and national identity, as an "untradeable" resource. Surely, culture plays a vital role in determining a country's response to globalization. Until recently, nations such as China have long adopted protectionist policies which counter the globalization and free trade movements. India has been more responsive to global trade and has experienced tremendous growth as a result. Obviously these differing experiences stem from differences in national policy, but is it culture that influences these policies?
Are there underlying characteristics within a nation's culture that ultimately help determine their path in today's globalizing world? If so, should we look to the cultural and social aspects of the developing countries when trying to understand their situations and potential solutions? Or could this way of thinking be construed to be backwards - countries succeed because of their inherent socio-cultural backgrounds and identities?
On to the readings...
I found Wolf's discussion of the development of the market system and its implicit characteristics quite interesting. As Americans, the concept of a free market system is so ingrained in our history, that its omnipresence in today's society is hardly noticed. The notion of an "invisible hand" directing our economy, rather than an authoritarian regime or central government is commonplace to us. Our faith and trust in this market is integral, as noted by Wolf. This is often where the development of a free market economy breaks down in many countries. With corrupt politicians and corporations controlling the means of production, citizens do not feel invested in their nation and will not work towards the adoption of a market system.
This all just common sense right? Why don't other nations "get it"?
Perhaps as I've mentioned previously, it's the intertwined mess of politics and culture. Especially in today's "flat world", the factors of knowledge, technology, and resources are more equally distributed now than ever. Every nation should have the tools to adopt a free market at its fingertips, yet as evidenced by the status of developing countries, many have missed the boat. Why is this?
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3 comments:
A couple points, mostly buttressing your posting.
1. As Wolf noted, functioning market economies require trust. When people trust each other to honor contracts, pay interest on their debt, and deliver goods on time, long term contracts actually have meaning. Although the state has a duty to enforce contracts, legal coercion remains a very inefficient form of honoring contracts. What if you had to sue someone to get your stuff every time you bought something?
2. We trust markets because they work for us. I buy some sweet Lacoste shoes (which I did over Spring Break) and get some tangible benefit from it. Market economies perhaps don’t appear the same way to others. Instead, markets look like “pie-in-the-sky” promises that strip people of their culture and pride while enriching the lives of foreigners.
I think that you make a lot of good points, especially about the cultural aspects of globalization. That, for me, seems like it is one aspect of globalization that we can really change. As Singer states, we must move past nationalism and accept a global world view. For the people in the world with limited access to information about the world as a whole, that seems like an impossible demand. It will take excellent leadership around the world to make Singer's ideas real.
Neat point on culture. It would seem to me to be, on the one hand, the essence of national variation and difference. And on the other hand, the epitome of what would "converge" internationally in the presence of globalization. I'm thinking of Chinese youth eating McD's and kids in Senegal growing up fascinated with Beyonce. How this translates into policy is distinct, but globalization certainly seems to entail some degree of cultural exchange that one might anticipate will lead to greater harmony.
In fact, there's a great case to be made that the dominance of the market-based approach to economics is in essence the globalization of an idea that has policy consequences.
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