What is globalisation?
One can be sure that virtually every one of the 2822 academic papers on globalisation written in 1998 included its own definition, as would each of the 589 new books on the subject published in that year.
Many see it as a primarily economic phenomenon, involving the increasing interaction, or integration, of national economic systems through the growth in international trade, investment and capital flows.
However, one can also point to a rapid increase in cross-border social, cultural and technological exchange as part of the phenomenon of globalisation.
The sociologist, Anthony Giddens, defines globalisation as a decoupling of space and time, emphasising that with instantaneous communications, knowledge and culture can be shared around the world simultaneously.
A Dutch academic who maintains a good website on globalisation, http://globalize.kub.nl/ Ruud Lubbers, defines it as a process in which geographic distance becomes a factor of diminishing importance in the establishment and maintenance of cross border economic, political and socio-cultural relations
Left critics of globalisation define the word quite differently, presenting it as worldwide drive toward a globalised economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments.
Globalisation is an undeniably capitalist process. It has taken off as a concept in the wake of the collapse of the Soviet Union and of socialism as a viable alternate form of economic organisation.
Try this: Globalisation is the rapid increase in cross-border economic, social, technological exchange under conditions of capitalism.
Simon Reich also explores this question in a working paper for the Helen Kellogg Institute for International Studies at the University of Notre Dame
"What is globalization? Four Possible Answers", Working Paper #261 - December 1998 - that is downloadable at www.nd.edu/~kellogg/WPS/261.pdf
A comprehensive and regularly updated bibliography on all aspects of the political economy of globalization compiled by Douglas Nelson of the Murphy Institute of Political Economy at Tulane University can also be found at www.tulane.edu/~dnelson/BIBS/GlobalBib.pdf
It attempts to characterize globalization, and its effects on poverty, the environment, gender, culture, and political structure and dynamics.
David Held and Anthony McGrew write in their entry for Oxford Companion to Politics that globalisation can be conceived as a process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions, expressed in transcontinental or interregional flows and networks of activity, interaction and power.
Their detailed conception of globalisation can be found at the site supporting their book, Global Transformations, at www.polity.co.uk/global/
For more extensive discussion of globalisation after September 11 see the links in http://www.globalisationguide.org/sb02.html
When did globalisation begin?
There is no agreed starting point, but understanding of globalisation is helped by considering the following.The first great expansion of European capitalism took place in the 16th century, following the first circumnavigation of the earth in 1519 to 1521.
There was a big expansion in world trade and investment in the late nineteenth century. This was brought to a halt by the First World War and the bout of anti-free trade protectionism that led to the Great Depression in 1930. Some see this period as an interruption to the process of globalisation commenced in the late 19th century.
A sense that the world was united was generated by the establishment of the International Date Line and world time zones, together with the near global adoption of the Gregorian calendar between 1875 and 1925. During that period, international standards were also agreed for telegraphy and signalling.
The end of the Second World War brought another great expansion of capitalism with the development of multinational companies interested in producing and selling in the domestic markets of nations around the world. The emancipation of colonies created a new world order. Air travel and the development of international communications enhanced the progress of international business.
The fall of the Berlin Wall and the collapse of the Soviet Union ended the cold war between the forces of capitalism and socialism with capitalism triumphant. The development of the internet made possible the organisation of business on a global scale with greater facility than ever before.
An excellent paper exploring this, and other issues relating to globalisation, is written by Mauro Guillen, at The Wharton School and Department of Sociology at the University of Pennsylvania The paper, Is Globalization Civilizing, Destructive Or Feeble? A Critique Of Five Key Debates In The Social-Science Literature can be downloaded from:
http://knowledge.wharton.upenn.edu/show_paper.cfm?id=938
Politics and Black Americans
Dr. Thomas Sowell's recent column, "Republicans and Blacks," (April 10, 2008) pointed out the foolhardiness of Republican strategy to secure more black votes. He pointed out that it is a losing strategy to reach blacks through the civil rights organizations and black politicians. It's like a quarterback trying to throw a pass to a receiver surrounded by a bunch of defenders. The second losing strategy is to appeal to blacks by offering the same kinds of things that Democrats offer -- token honors, politically correct rhetoric and welfare state handouts.
Sowell suggests that Republican strategy should be to highlight the liberal Democratic agenda that has done great harm to the poorest of the black community. Among those he mentions is the environmental agenda where "tens of thousands of blacks who have been forced out of a number of liberal Democratic California counties by skyrocketing housing prices, brought on by Democratic environmentalists' severe restrictions on the building of homes or apartments." Since 1970, San Francisco's black population has been cut in half.
Then there are the liberal judges and parole boards who have turned criminals loose to prey on black communities. According to Bureau of Justice statistics, between 1976 and 2005, while 13 percent of the population, blacks committed over 52 percent of the nation's homicides and were 46 percent of the homicide victims. Ninety-four percent of black homicide victims had a black person as their murderer.
The Democratic leadership gives unquestioned support of teacher unions that have delivered near criminally fraudulent education. Professors Abigail and Stephen Thernstrom's book, "No Excuses: Closing the Racial Gap in Learning," reports that the average black high school graduate performs a little worse than white eighth-graders in both reading and U.S. history, and a lot worse in math and geography. Black education is the worst in cities where Democrats, both black and white, have held the reigns of political power for decades and in cities spending the largest amount of money on education. Washington, D.C., ranking third in the nation in terms of per-pupil expenditures, is a classic example. At 12 of its 19 high schools, more than 50 percent of the students test below basic in reading, and at some of those schools the percentage approaches 80 percent. At 15 of these schools, over 50 percent test below basic in math, and in 12 of them 70 to 99 percent do so. The National Assessment of Educational Progress (NAEP), which conducts periodic testing, defines "below basic" as not having any of the knowledge and skills to master a subject.
Both Democratic and Republican leaders give support to economic agendas harmful to poor black people. A particularly egregious example is New York City's taxicab licensing law that requires that a person, as of May 2007, pay $600,000 for a license to own and operate one taxicab. Then there's the Davis-Bacon Act that mandates "prevailing wages" be paid on all federally financed or assisted construction projects. The Davis-Bacon Act is a pro-union law that discriminates against non-unionized black construction contractors and black workers. In fact, that was the original intent of the Davis-Bacon Act of 1931. During its 1931 legislative debate, quite a few congressmen expressed their racist intentions, such as Rep. Clayton Allgood, D-Ala., who said, "Reference has been made to a contractor from Alabama who went to New York with bootleg labor. This is a fact. That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country." While today's supporters of the Davis-Bacon Act talk differently, its discriminatory effects are the same.
If a politician had the guts to take on these issues, it's stupid to address them through the black civil rights or education establishment, or the black political structure. The reason is that blacks who are members of, or are served by, these establishments have an interest in the status quo.
Free Google, Microsoft and Yahoo! From Antitrust Fascism
Yahoo! has just released its first-quarter earnings numbers, and neither the market nor analysts are impressed. What will be the company's next move? Multiple suitors claim that they can leverage Yahoo!'s online products and talented employees better than Yahoo!'s widely criticized management is doing. The leading bidder is Microsoft, whose $40 billion offer it is prepared to take directly to Yahoo! shareholders via a proxy fight. Other proposals said to be in the running are an advertising collaboration with Google, a merger with AOL, and a possible deal involving News Corp (including MySpace).
The stakes are high. The right move could lead Yahoo! to a new level of innovation and profit, while the wrong move could cause the company's value to plummet.
Unfortunately, the fate of Yahoo! will not be determined simply by who makes the best proposal to shareholders--but by whose proposal antitrust bureaucrats arbitrarily deem sufficiently "competitive."
Consider the Microsoft bid. If Yahoo! shareholders decide the Microsoft bid is best for their company, and want to move forward immediately with the challenging task of combining two companies with thousands of employees, they may be prohibited from doing so. Antitrust enforcers could hold up progress for months deliberating whether the merger is "anticompetitive"--and then possibly kill it altogether. Competitor Google is cheerleading this outcome, claiming on its official blog that "Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet."
But a Microsoft and Yahoo! combined market share offers no threat to competition whatsoever--a fact that search-giant Google should know, given that the once-puny company was able to out-compete the once-dominant Yahoo! and the mighty Microsoft. Whether a market is competitive is not determined by the number of competitors or the percentage of customers that choose to buy their products; it is determined by whether companies are free to attempt to outdo one another to win over customers with superior products. The fact that someone is winning in a market by a large margin does not make the situation anti-competitive. It illustrates that competitive freedom has produced a company with superlative products.
Google, Microsoft, and Yahoo! have high market shares only insofar as their products are more appealing to consumers than are their competitors'. None of these companies, or any combination of two or even three of them, can force a single consumer to use its services instead of a more attractive search engine or web portal available--nor can it prevent competitors from outdoing it with superior products.
A Microsoft-Yahoo! combination could not threaten competition. To the contrary, it would be an act of free competition, an ambitious attempt by two companies to improve their products by combining strengths. What would actually stop competition would be to prevent the shareholders of these companies from making a move they regard as vital to their success.
The threat of antitrust prosecution is also impeding Google's own efforts to make a deal with Yahoo!. Google has proposed that Yahoo! outsource its search advertising to Google, a move that some analysts say could boost Yahoo!'s ad revenue by 25 percent. Unfortunately, if Yahoo! agrees to the deal, the government will likely kill it because, once again, the companies have a high combined market share. According to Reuters, "Antitrust experts said regulators would likely oppose any permanent alliance between Google and Yahoo." And, just as Google is calling Microsoft's bid anti-competitive given its market share, Microsoft is saying the same of Google: "Any definitive agreement between Yahoo and Google would consolidate over 90 percent of the search advertising market in Google's hands," Microsoft's general counsel complained. "This would make the market far less competitive."
In reality, no deal between Google and Yahoo! is a threat to anyone besides inferior competitors; neither company can force even one person to click on http://www.google.com/. Yahoo! should be able to field and accept any offer from Google it chooses--including a full-blown acquisition. Indeed, it is very possible that if cash-rich Google were not terrified of antitrust prosecution, it, like Microsoft, would try to acquire Yahoo! outright. Such a deal might be Yahoo! shareholders' best option and make possible a whole new level of Internet content--but under antitrust, it won't even come to the table.
What we are observing in the battle over Yahoo! is not genuine, merit-based competition, but competition based on political pull. He who cajoles antitrust bureaucrats to endorse his deal and stop his competitors, wins.
Instead of attempting to outdo one another in crying to the government, Google and Microsoft should take a principled stand in favor of open competition for Yahoo!--a competition in which the company's fate is decided by who makes the best business proposal and not who has the craftiest lobbyists and lawyers.
More broadly, they--and we--should call into question the antitrust laws that make competition-by-pull possible.
Congressional Problem Creation: There Still is No Free Lunch
Most of the great problems we face are caused by politicians creating solutions to problems they created in the first place. Politicians and a large percentage of the public lose sight of the unavoidable fact that for every created benefit, there's also a created cost or, as Nobel Laureate Milton Friedman put it, "There's no free lunch." While the person who receives the benefit might not pay or even be aware of the cost, but as sure as night follows day, there is a cost borne by someone. Let's look at a couple of congressionally created problems.
The Community Reinvestment Act of 1977, whose provisions were strengthened during the Clinton and Bush administrations, is a federal law that mandates or intimidates lenders to offer credit throughout their entire market and discourages them from restricting their credit services to high-income markets, a practice known as redlining. The Community Reinvestment Act encouraged banks and thrifts to make so-called "no doc" and "liar" loans to customers who had no realistic ability to pay them back. A decade of monetary expansion by the Federal Reserve Bank, contributing to the housing bubble, encouraged lending institutions to take risks they otherwise would not have taken. Government actions created the subprime crisis and now government-proposed "solutions," such as foreclosure holidays, bailouts and further regulation of financial institutions, to the problems they created will create more problems.
Congress, doing the bidding of environmental extremists, created our energy supply problem. Oil and gas exploration in a tiny portion of the coastal plain of Alaska's Arctic National Wildlife Refuge would, according to a 2002 U.S. Geological Survey's estimate, increase our proven domestic oil reserves by approximately 50 percent. The Pacific and Atlantic Oceans and eastern Gulf of Mexico offshore areas have enormous reserves of oil and natural gas. These energy sources of oil have also been placed off limits by Congress. Because of onerous regulations, it has been 30-plus years since a new refinery has been built. Similar regulations also explain why the U.S. nuclear energy production is a fraction of what it might be.
Congress' solution to our energy supply problems is not to relax supply restrictions but to enact the Energy Independence and Security Act of 2007 that mandates that oil companies increase the amount of ethanol mixed with gasoline. Anyone with an ounce of brains would have realized that diverting crops from food to fuel use would raise the prices of a host of corn-related foods, such as corn-fed meat and dairy products. Wheat and soybeans prices have also risen as a result of fewer acres being planted in favor of corn. A Purdue University study found that the ethanol program has cost consumers $15 billion in higher food costs in 2007 and it will be considerably higher in 2008. Higher food prices, as a result of the biofuels industry, have not only affected the U.S. consumer, they have had international consequences as seen in the food riots that have broken out in Egypt, Haiti, Yemen, Bangladesh and other nations.
What's the congressional response? On May 1, Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee, convened a hearing on rising food prices saying, "The anxiety felt over higher food prices is going to be just as widespread, and will equal or surpass, the anger and frustrations so many Americans have about higher gas prices." Congress' proposed "solutions" to the energy and food mess they've created include a windfall profits tax on oil companies, a gasoline tax holiday for the summer, increases in the food stamp program and foreign food aid. These measures will not solve the problem but will create new problems.
Americans are rightfully angry about higher energy and food prices but their anger should be directed toward the true villains -- the Congress and the White House.
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