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Globalization: Friedman and Gemawat both are right
By Tushar
Mar 2nd 2007
at 12:27 pm EST
Thomas Friedman has given a more rosy picture and promoted the idealistic, optimistic view of the globalization and portrayed as the panacea or as an irreversible phenemomena. Globalization has become a buzz word. However it is not a pure myth or hype.
In reality, globalization or the degree of globalization is a relative term. Globalization is the integration of economic, political, and cultural systems across the globe and so it is inherently a complex phenomena. It has been happening since the beginning of civilization, more tangibly in last three centuries. It has started with Westernization/ Americanization phenemena with British and then United States dominance of world affairs. It has been changing and more tangibly in last two decades. Like many events this is also a double edge sword with mixed consequences. Globalization can be a force for economic growth, prosperity, and democratic freedom. It can also force for environmental devastation, exploitation of the developing world, and suppression of human rights. So it has to be monitored and it is being monitored. In the 1970s and 1980s when many countries in Asia, Latin America and Africa pursued inward-oriented policies, their economies stagnated or declined, poverty increased and high inflation became the norm. The crises in the emerging markets in the 1990s have made it quite evident that the opportunities of globalization do not come without risks—risks arising from volatile capital movements and the risks of social, economic, and environmental degradation created by poverty.
One of the most evident forces of the globalization is the computer and network/Internet. Economist believe that this new stage of globalization of all nations is increasingly being nurtured by the computer and above all by the Internet. That is a good part of globalization. However there many bad ones as well. Plagues have also accompanied globalization by its speed of travel. Makes bacteria and viruses much more likely to travel from nation to nation. Economic growth in one nation at the cost of environment affects all as well and so the global warming has become a global concern.
Terrorism also affects the world and has created the greatest problem of nations losing the ability to control their own matters in the vast global economy.
Economicaly and politically there are different type of federalizations. Countries in Europe has been already working toward that step by merging national economies into a larger European Union. Couunties in South Asia has made SARC for a more open trade zone. Bulk of US’s growing debt is financed by China !
So Friedman is not absolutely wrong. I do agree with Prof. Ghemawat that “Buying into this version of an integrated world—or worse, using it as a basis for policymaking—is not only unproductive. It is dangerous.”. Each nation needs self-sufficiency as well and so each nation has to protect their core industries as well and so balance the immediate needs with the tactical and strategic needs. That is true for a corporations as well. Outsourcing is not always profitable, specially long term.
Seriously, someone needs to alert Thomas Friedman as soon as possible. The over-mustachioed and under-informed pundit has made a name (and fortune) for himself as the prophet of a glorious future in which globalization makes all things possible and all things wonderful. The thing is, no matter how appealing and optimistic, his overly simplistic tripe is just wrong.
Pankaj Ghemawat, a professor of global strategy at IESE business school, has written a brilliant and concise piece in Foreign Policy that eviscerates the idiocy that has become conventional wisdom. Ghemawat shows how the vast majority (typically 90%) of “globalization indicators,” like investment and communication, continue to operate within a nation’s borders. But this isn’t just a matter of being wrong. With something as nebulous as globalization, the assumptions made by academics and public figures are taken as truth, not theory, and have powerful implications for policy. For example, the decades long assault on welfare expenditure has operated under the assumption that it is incompatible with globalized competition.
As Ghemawat sharply observes:
“The champions of globalization are describing a world that doesn’t exist. It’s a fine strategy to sell books and even describe a potential environment that may someday exist. Because such episodes of mass delusion tend to be relatively short-lived even when they do achieve broad currency, one might simply be tempted to wait this one out as well. But the stakes are far too high for that. Governments that buy into the flat world are likely to pay too much attention to the “golden straitjacket” that Friedman emphasized in his earlier book, The Lexus and the Olive Tree, which is supposed to ensure that economics matters more and more and politics less and less. Buying into this version of an integrated world—or worse, using it as a basis for policymaking—is not only unproductive. It is dangerous.”
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!
In reality, globalization or the degree of globalization is a relative term. Globalization is the integration of economic, political, and cultural systems across the globe and so it is inherently a complex phenomena. It has been happening since the beginning of civilization, more tangibly in last three centuries. It has started with Westernization/ Americanization phenemena with British and then United States dominance of world affairs. It has been changing and more tangibly in last two decades. Like many events this is also a double edge sword with mixed consequences. Globalization can be a force for economic growth, prosperity, and democratic freedom. It can also force for environmental devastation, exploitation of the developing world, and suppression of human rights. So it has to be monitored and it is being monitored. In the 1970s and 1980s when many countries in Asia, Latin America and Africa pursued inward-oriented policies, their economies stagnated or declined, poverty increased and high inflation became the norm. The crises in the emerging markets in the 1990s have made it quite evident that the opportunities of globalization do not come without risks—risks arising from volatile capital movements and the risks of social, economic, and environmental degradation created by poverty.
One of the most evident forces of the globalization is the computer and network/Internet. Economist believe that this new stage of globalization of all nations is increasingly being nurtured by the computer and above all by the Internet. That is a good part of globalization. However there many bad ones as well. Plagues have also accompanied globalization by its speed of travel. Makes bacteria and viruses much more likely to travel from nation to nation. Economic growth in one nation at the cost of environment affects all as well and so the global warming has become a global concern.
Terrorism also affects the world and has created the greatest problem of nations losing the ability to control their own matters in the vast global economy.
Economicaly and politically there are different type of federalizations. Countries in Europe has been already working toward that step by merging national economies into a larger European Union. Couunties in South Asia has made SARC for a more open trade zone. Bulk of US’s growing debt is financed by China !
So Friedman is not absolutely wrong. I do agree with Prof. Ghemawat that “Buying into this version of an integrated world—or worse, using it as a basis for policymaking—is not only unproductive. It is dangerous.”. Each nation needs self-sufficiency as well and so each nation has to protect their core industries as well and so balance the immediate needs with the tactical and strategic needs. That is true for a corporations as well. Outsourcing is not always profitable, specially long term.