open Democracy News Analysis - "How could the globalization's benefits be spread more equally?", - Comments

RhodGates on ""How could the globalization’s benefits be spread more equally?""

RhodGates — Wed, 11 May 2005 04:06:23 +0100

Group 13, your defenition of 'globalisation' is flawed. Globalisation means anything that is international. What you're talking about is economic integration!

epswiftw on ""How could the globalization’s benefits be spread more equally?""

epswiftw — Thu, 17 Feb 2005 16:23:34 +0000

I found Capfka's comments instructive and will add a few of my own. With any type of aid come risks: corruption, incompetence, abuse, etc. It seems that there are ways to reduce the risks - standards, accountability, measurable goals, etc. Perhaps these are not in place yet and need to be developed along with a good plan. I have friends who work in areas of social justice who tell me that whenever they work with the poor they take the chance of being disadvantaged. Because they like and value the work they do, they take those (measured) risks. Would there be a difference between countries? These friends are not anti-intellectual, but they aren't intellectuals either, and they are doing a lot of learning on their feet (oops a slogan)... mistakes do get made from time to time, but it seems to be working out okay. Sometimes they put in long days a they have a cup of coffee in the morning to get them started and some hot tea in the evening (Constant Comment is good) to unwind.

Capfka on ""How could the globalization’s benefits be spread more equally?""

Capfka — Thu, 17 Feb 2005 15:49:11 +0000

Hi gang (are there really 13 of you?) Yes, I was thinking of Russia and the post-USSR Asian republics when I said "democratic-like". Subsidies. This is a complex subject and one about which economists' opinions differ wildly. My opinion plus 50c gets you a can of Coke. But, FWIW, here's what I think. When is a subsidy a subsidy? This is an important distinction to make, because subsidies, such as those handed out to farmers in the US NOT to grow things (like alfalfa) are not subsidies, they are grants. In fact, when you analyse it, many government handouts to businesses in the developed world are grants, either for services rendered, or because the government expects that you will render it some service in the future. Often these are the results of pork-barrel politics. In the developed world the king of the pork barrellers is definitely the US, but most western countries have some corporate handouts, which may take the form of preferential treatment for government bids, acceptance of high bids, monopoly rights, etc. I'm sure you've looked at these. They are a form of subsidy but are often just this side of graft. So, subsidies. Subsidies which really ARE subsidies rather than a handout seem to me to fall into two categories. The first is start-up aid, given to help a company or an industry seen as strategic to the government's plans get itself established. Subsidies of this form are usually either one-off grants, special taxation status or are grants which typically reduce on a year-by-year basis until they drop off. The second is government aid to maintain some industry or business for political or economic reasons. For instance, if the main telecommunications carrier looked like failing in a developing country, a not unheard-of circumstance, the government may subsidise it to the point where it is breaking even. Usually (in an honest environment) such subsidies would be very closely monitored and withdrawn as soon as possible. In the past banks have often been propped up by government grants or subsidies because having banks fail is not a good look. In New Zealand during the 1970s and early 1980s, there were subsidies called SMP (subsidied minimum prices) for farm stock units. The government paid farmers the difference between what they received for their stock at the sales and a predefined "minimum price". In a developing country, subsidies can be viewed as a legitimate way of getting the private sector to provide infrastructure or strategic industries and services. However the money is wasted if the industry or service has little or no hope of ever becoming self-sustaining. There is an argument that under these circumstances if the industry or service is indeed strategic then the government should buy the owners out and own the industry or service directly (nationalise) because that is often the most economic way for the taxpayers. HTH

Group13 on ""How could the globalization’s benefits be spread more equally?""

Group13 — Thu, 17 Feb 2005 14:17:36 +0000

Hi Capfka Thanks for you comments. In our opinion the environmental characteristics for companies to flourish are very much the same with the ones characterizing democracy. The problem is that many countries are saying they are democratic but actually are not (Russia). By the way what do you think about subsidies. We think that giving subsidies to the developing countries can help to accelerate their development. On the other hand having subsidies in the developed countries hinders development and competitiveness of the developing ones. Looking forward for reply The group

Capfka on ""How could the globalization’s benefits be spread more equally?""

Capfka — Wed, 16 Feb 2005 09:36:40 +0000

Hi Group13 Nice paper. I have one little quibble with your conclusions, however. Note that this is simply a matter of opinion because, as you say, the jury is still out to a great extent on the benefits or disbenefits of globalisation: Democracy is perhaps an "ideal" situation for globalisation (as in "global market forces") to flourish in, but it is not actually necessary. What IS necessary is an environment in which corporations are relatively free to do business without excessive or purely arbitrary controls or silly taxation regimes, and where the labour force is free to move physically and professionally. This is now true in many countries where democracy is the nominal political system but which are really de facto dictatorships. Cheers!

"How could the globalization's benefits be spread more equally?",

Group13 — Thu, 10 Feb 2005 15:09:46 +0000

Globalization is a process that has been going on for the past thousand years, but it has significantly accelerated since the end of World War II, with a considerable reduction of barriers to the free flow of goods, services, and capital across national markets. The political, economical and technological changes since 1990s have pushed Globalization further into a bigger picture with a surge in worlds total FDI and massive growth of world trade have been witnessed (Hill, 2003). Globalization has contributed to an efficient division of trade, production, and labor. As a result, globalization allows countries to concentrate on what they do best. Globalization has also caused raise in world trade and output and at the same time, increase in income growth, prosperity, and reduce poverty. Although globalization has brought a positive outcome, it has also been scrutinized and criticized by its opponents. Opponents of globalization argue that globalization is mainly responsible for the world poverty. Furthermore, globalization has also been criticized as the source of growing inequality both globally and within the developing countries (Kohl, 2003). Read the rest of this post...