Y376 International Political Economy

1. Ipe17 Y376 International Political Economy November 5, 2009

2. Dissenting Views <ul><li>“ Globalization at this point in time is far more about disparities between nations than the assimilation of a flat world.” Steven Roach, Chief Economist, Morgan Stanley </li></ul><ul><li>“ By any measure, the international economic landscape is not at all flat. On the contrary, our world is amazingly ‘spiky.’” Richard Florida , Professor, Carnegie Mellon University </li></ul>Source: Ronald Aronica and Mtetwa Ramdoo, The World is Flat? A Critical Analysis of Thomas L. Friedman’s NY Times Bestseller , preface. Dissenting Views <ul><li>“ Globalization at this point in time is far more about disparities between nations than the assimilation of a flat world.” Steven Roach, Chief Economist, Morgan Stanley </li></ul><ul><li>“ By any measure, the international economic landscape is not at all flat. On the contrary, our world is amazingly ‘spiky.’” Richard Florida , Professor, Carnegie Mellon University </li></ul>Source: Ronald Aronica and Mtetwa Ramdoo, The World is Flat? A Critical Analysis of Thomas L. Friedman’s NY Times Bestseller , preface.

3. Richard Florida <ul><li>Professor at Carnegie Mellon Univ. in Pittsburgh </li></ul><ul><li>Two major books: </li></ul><ul><ul><li>The Rise of the Creative Class </li></ul></ul><ul><ul><li>The Flight of the Creative Class </li></ul></ul> Richard Florida <ul><li>Professor at Carnegie Mellon Univ. in Pittsburgh </li></ul><ul><li>Two major books: </li></ul><ul><ul><li>The Rise of the Creative Class </li></ul></ul><ul><ul><li>The Flight of the Creative Class </li></ul></ul>

4. Spikiness in Economic Activity in the United States Spikiness in Economic Activity in the United States

5. Spikiness in Economic Activity in China

6. Spikiness in Scientific Citations http://creativeclass.com/rfcgdb/articles/other-2005-The%20World%20is%20Spiky.pdf Spikiness in Scientific Citations http://creativeclass.com/rfcgdb/articles/other-2005-The%20World%20is%20Spiky.pdf

7. Defining Globalization <ul><li>Economic globalization is a “set of processes leading to the integration of economic activity in factor, intermediate, and final goods and services markets across geographical boundaries and the increased salience of cross-border value chains in international economic flows.” </li></ul>Source: Introduction to Aseem Prakash and Jeffrey Hart, eds., Globalization and Governance (Routledge:1999) Defining Globalization <ul><li>Economic globalization is a “set of processes leading to the integration of economic activity in factor, intermediate, and final goods and services markets across geographical boundaries and the increased salience of cross-border value chains in international economic flows.” </li></ul>Source: Introduction to Aseem Prakash and Jeffrey Hart, eds., Globalization and Governance (Routledge:1999)

8. Value Chain <ul><li>Concept invented by Michael Porter </li></ul><ul><li>A value chain is more comprehensive than a supply chain because it extends backward to R&D and innovation and forward to commercialization </li></ul>Michael Porter Harvard Business School Value Chain <ul><li>Concept invented by Michael Porter </li></ul><ul><li>A value chain is more comprehensive than a supply chain because it extends backward to R&D and innovation and forward to commercialization </li></ul>Michael Porter Harvard Business School

9. Other Ways of Thinking about Globalization <ul><li>Deterritorialization , e.g. of </li></ul><ul><ul><li>diasporic communities </li></ul></ul><ul><ul><li>MNCs </li></ul></ul><ul><ul><li>currencies </li></ul></ul><ul><li>Convergence </li></ul><ul><ul><li>leading toward a universal “sameness” </li></ul></ul><ul><li>Mythology or Fad </li></ul>See, for example, Arjun Appadurai , Modernity at Large. Other Ways of Thinking about Globalization <ul><li>Deterritorialization , e.g. of </li></ul><ul><ul><li>diasporic communities </li></ul></ul><ul><ul><li>MNCs </li></ul></ul><ul><ul><li>currencies </li></ul></ul><ul><li>Convergence </li></ul><ul><ul><li>leading toward a universal “sameness” </li></ul></ul><ul><li>Mythology or Fad </li></ul>See, for example, Arjun Appadurai , Modernity at Large.

10. . Appadurai’s Cultural Landscapes <ul><li>Ethnoscapes </li></ul><ul><li>Mediascapes </li></ul><ul><li>Technoscapes </li></ul><ul><li>Finanscapes </li></ul><ul><li>Ideoscapes </li></ul>“ The suffix scape also allows us to point to the fluid, irregular shapes of these landscapes, shapes which characterize international capital as deeply as they do international clothing styles.”

11. . Deterritorialization of Currencies <ul><li>Dollarization </li></ul><ul><ul><li>Russia (for a while) </li></ul></ul><ul><ul><li>Mexico (tesobonos) </li></ul></ul><ul><ul><li>Argentina </li></ul></ul><ul><ul><li>El Salvador </li></ul></ul><ul><ul><li>Panama </li></ul></ul>Blue and purple means tied to the Euro; Green, yellow, tied to US dollar

12. . Diasporic Communities <ul><li>any people or ethnic population forced or induced to leave their traditional homelands , the dispersal of such people, and the ensuing developments in their culture </li></ul><ul><li>examples: Jews, Cubans, Chinese, Pakistanis, Indians, etc. </li></ul>

13. . Examples of Globalized Culture <ul><li>Corporate logos </li></ul><ul><li>Who Wants to be a Millionaire </li></ul><ul><li>MTV </li></ul><ul><li>World Music , e.g. Reggae or Ska </li></ul><ul><li>Anime , Manga, Pokemon (J-pop) </li></ul><ul><li>Disneyland, Disneyworld theme parks </li></ul><ul><li>Action movies with little dialogue </li></ul>

14. . Will Territorial Based Systems Become Obsolete? <ul><li>No (short answer) </li></ul><ul><li>Territorial-based systems may become less important relative to others but it is more likely that more complex relationships among governance systems at different levels of aggregation -- local, national, regional, etc. -- and nonterritorial governance systems will have to be established. </li></ul>

15. . Coping Strategies: National Governments <ul><li>Many coping strategies are still possible. </li></ul><ul><li>Downsizing the state is not always desirable (e.g. the case of the formerly centrally planned economies). </li></ul><ul><li>National governments are likely to play a role in reducing inequalities accentuated by globalization. </li></ul>

16. . Examples of Coping Strategies <ul><li>Promotion of inward FDI </li></ul><ul><li>Raising the skills of the workers via education and training programs </li></ul><ul><li>Scholarships and fellowships for college </li></ul><ul><li>Increased spending on research and development (R&D) </li></ul><ul><li>Regional development efforts </li></ul>

17. . Races to the Bottom <ul><li>Tendency of political units to reduce regulations/taxes/standards in order to match the reductions of others as a part of competition for the location of value-added activities in their territory. </li></ul><ul><li>Seen as a negative consequence of globalization. </li></ul>

18. . Examples of Possible Races to the Bottom <ul><li>Corporate taxes </li></ul><ul><li>Environmental regulations </li></ul><ul><li>Wages and other labor practices </li></ul><ul><li>Internet-related: </li></ul><ul><ul><li>pornography </li></ul></ul><ul><ul><li>gambling </li></ul></ul><ul><ul><li>hate groups </li></ul></ul>