Globalization and Accountability
Globalization and Accountability
A better quality of life has been the objective of societies and nations. This has been pursued since the ancient times to the present. About one hundred years before the Trojan wars, Minos, mythical son of Zeus, organized a communal society in the island of Crete. For centuries, universal justice and virtue reigned in the island. Conditions were similar to the fabulous Shangrila of the Lost Horizon. It was like a paradise for the people. They contributed their individual ideas, talents, skills, and labor to the community for its development, and for he good of all its members.
The needs of the people were justly supplied, and they were happy and contented. Plato, the Greek philosopher, designed an ideal state in his book, The Republic. He proposed common ownership of properties as a general rule. The concept of equality of Plato was further improved by Christian doctrines. However, more active and courageous social reformers emerged into the limelight during the age of Enlightenment and Industrial Revolution. Rousseau, Fourier, Bentham, Owen and Marx were the more prominent among them.
They stressed the social aspects of the national order, such as cooperation, perfectibility of human nature, and other human virtues. The clamor for equality was not only political but also economic and social. The abuses of the capitalists and landlords, and the great disparities in income and wealth were the primary targets of reformers. The aforementioned economic and social problems still pervade in many developing countries. Throughout the history of the development of nations, only very few have become rich, such as those in North America and Western Europe.
Most of the poor countries are found in Africa, Asia and Latin America. In terms of goods and services, the gap between the poor and the rich countries has become wider and wider. In view of the presence of modern transportation and communication, leaders of the poor countries have seen the tremendous prosperity of the rich countries. As a result, people from poor countries have developed the tendency to emulate the rich countries- their economies, technologies, ways of life, and even the architecture of their houses and buildings.
However, some intellectuals have realized the disadvantage of such colonial mentality. They have crusaded for economic nationalism to free their countries from the exploitations of the rich counties- and from the weaknesses of their own people. Industrialization has been their dream of solving their persistent problems like poverty, insecurity, and excess population. Even Nehru of India claimed that real progress must ultimately depend on industrialization. Every nation, rich or poor, has economic problems. However, these are more serious and widespread in poor countries.
Economic problems do exist because of two fundamental facts: resources are limited and human wants are unlimited. Human wants cannot possibly be all satisfied because resources are scarce. For example, every family wants a house and a farm. This is not possible in many countries, especially in less developed countries. In fact, most countries cannot even meet the most basic needs of their people like food, clothing, and shelter. In the case of the United States of America, the people are capable of satisfying their essential needs. If some groups cannot, it is the government that provides them with basic goods and services.
Welfare programs and other social security benefits are made available to the less fortunate, and to the aged. But still, rich countries have economic problems. People, human as they are, are not ultimately satisfied with the consumption of basic goods only. Naturally, they aspire for a higher standard of living. And it is the responsibility of the economic system to help the people acquire it. The economic system of any nation has different factors that are being considered in order to establish and open greater economic opportunities (Soros, 2002).
Globalization The remarkable progress in communication and transportation has exposed the high standard of living of a globalized nation. Through foreign travels, periodicals, and movies the peoples of the less developed countries have seen the many wonderful and modern things which have been created by an industrial society like the United States of America, France or Japan. In contrast, many leaders of the third world countries have realized the big difference in their still primitive products of development.
Thus, their impressions of a globalized and industrialized economy have further improved. Henceforth, there has been a strong clamor among many of the third world countries for globalization. For years, this has been their aspiration. Through globalization, they believe they can eliminate the problems of poverty, insecurity, and overpopulation. No less than the great Indian statesman Nehru said that real progress must ultimately depend on globalization (Thompson & Strickland, 2003). However, globalization or globalizing a less developed country is certainly not an easy task.
There are great obstacles along the long path of globalization. It is not only massive capital, modern technology, competent management, and skilled labor that are required. Well developed commercial sectors are also needed. And of course, the most important requirement for globalization is the restructuring of values and institutions in society. In spite of the formidable barriers to globalized development, it is not completely impossible for a less developed country to globalized economy. There were several poor nations which became industrial economies.
They were able to conquer an almost impossible dream through a vigorous and sincere implementation of economic, social, and political reforms. Former countries like England, Germany and the United States of America met fewer difficulties in globalizing their economies because of most favorable economic and political conditions. There are several processes being followed in terms of modern growth brought about by the system and principle of globalization. It must be noted that globalization among the developed countries did not happen overnight. Prior to their globalization, they experience various changes and improvement.
The following are the most notable: 1. Economic, social, and political institutions were restructured to pave the way towards globalization and industrialization. 2. There was a rapid technological improvement. 3. Factors of production like capital, labor, and entrepreneurial scheme were made to be more responsive to globalization and industrialization. 4. Substantial improvement in transportation, communication, and electrification were undertaken. 5. Social facilities and services were increased. 6. Agricultural and commercial industries became variable.
The aforementioned developments were greatly responsible in the globalization of the highly developed countries. Clearly, their economic growths did not go through a quick and easy process. They laid down the foundation of their industrial development. Such experiences of the industrial countries should provide a lesson to less developed countries that are aiming for rapid globalization and industrialization. However, there are some countries that have achieved very rapid industrial growth. But the other sectors of their economy have not developed as fast as their industries.
For instance, there have been no appropriate changes in some industries such as the agricultural industries, public administration, social structure and values among other things and industries. But then again, it can be seen that there is more rooms for globalization even if it means that other industries are left behind. Moreover, there has been a great need for private sectors to be improved and flourished in order for globalization to push through. As far as the economics is concerned, the big challenge is poverty, and the surest route to sustained poverty reduction is economic growth. Growth requires good economic policies.
The evidence strongly supports the conclusion that growth requires a policy framework that prominently includes an orientation towards integration into the global economy. This places obligations on three groups: those who are most responsible for the operation of the international economy, primarily the governments of the developed countries; those who determine the intellectual climate, which includes this audience but also government and non-government organizations and individuals; and the government of the developing countries who bear the major responsibility for economic policy in their countries.
Economic globalization, the ongoing process of greater economic interdependence among countries, is reflected in the increasing amount of cross-border trade in goods and services, the increasing volume of international financial flows, and increasing flows of labor. As is well known to our profession, economic globalization thrived in the period before 1914, but was set back by the two World Wars and the Great Depression.
6 The international financial order that was established at the end of World War II sought to restore the volume of world trade, and by 1973, world trade as a percentage of world GDP was back to its 1913 level – and it has continued to grow almost every year since. While the founders of the Bretton Woods system saw the restoration of trade in goods and services as essential to the recovery of the global economy, they did not have the same benign view of capital flows. Nonetheless, capital flows among the industrialized countries did recover during the 1950s, and intensified in the 1960s.
Rapidly they became too powerful for the pegged exchange rate system to survive, and by 1973, as a result of the impossible trinity – of a pegged exchange rate, capital mobility, and a monetary policy directed at domestic objectives – the Bretton Woods adjustable peg system had to give way to flexible exchange rates among the major countries. Capital flows to developing countries grew more slowly. In the late 1970s and early 1980s they consisted mainly of bank loans; by the 1990s they took the form mainly of foreign direct investment and purchases of marketable securities.
And as the volume of international capital flows to and from the emerging market countries – the more developed and larger developing countries – increased, the impossible trinity once again asserted itself, and in a series of crises, country after country was forced to give up its pegged exchange rate and allow the currency to float. By now, the gross volume of international capital flows relative to global GDP far exceeds the levels reached in the period just before 1913, though net flows of foreign direct investment have not yet attained the extraordinary levels of the decade before World War I.
It is generally believed that with respect to migration and labor flows the modern system is less globalized than it was a century ago. In 1911, nearly 15 percent of the United States population was foreign born; today that number is probably a bit above 10 percent. Emigration rates from Europe, especially Ireland and Italy, were amazing: 14 percent of the Irish population emigrated in the 1880s, and over 10 percent of the Italian population emigrated in the first decade of the twentieth century.
Jeffrey Williamson (2002) attributes a significant part of the convergence of income levels in the Atlantic economy in the late nineteenth and early twentieth centuries to mass migration. Whether or not migration and labor flows are greater now than they were a century ago, we are becoming more globalized in this regard too, for migration rates have been rising – and in a potentially important way, for more migration than in the past is from less to more developed countries. All this is at an abstract level.
In terms of people’s daily lives, globalization means that the residents of one country are more likely now than they were fifty years ago: to consume the products of another country; to invest in another country; to earn income from other countries; to talk on the telephone to people in other countries; to visit other countries; to know that they are being affected by economic development in other countries; and to know about developments in other countries. Globalization is much more than an economic phenomenon. The technological and political changes that drive the process of economic globalization have massive noneconomic consequences.
In the words of Anthony Giddens, a leading sociologist: “I would have no hesitation in saying that globalization, as we are experiencing it, is in many respects not only new, but also revolutionary. Globalization is political, technological and cultural, as well as economic. The non-economic aspects are at least as important in shaping the international debate as are the economic aspects. Many of those who object to globalization resent the political and military dominance of the United States, and they resent also the influence of foreign – predominantly American – culture, as they see it at the expense of national and local cultures.
The technological elements matter in practice as well as in the debate. For instance, the events of September 11, 2001 could not have taken place before the current global era. The communications and transport systems that have accelerated the pace of globalization are also at the disposal of terrorists, money- launderers, and international criminals. On the positive side, improvements in communications and the spread of information were critical to the collapse of the Iron Curtain. People learned what was happening in other countries, and understood that they did not have to live the way they were living, and the Iron Curtain fell.
A broad range of critics is arrayed on the other side. Among them are academics, opinion leaders, individuals and groups who see their interests being affected by globalization, politicians, NGOs, and demonstrators – and these categories are not mutually exclusive. To listen to the debate in the terms each side paints the other, who believes that all is for the best in the best of all possible worlds, and those who believe that the world is going to hell in a hand basket. That is doubly misleading.
In the first place, many of those who regard themselves as pro-globalization know that there is far too much misery in the world, that there are many wrongs to be righted in the global economy, and that it could be made to operate much better. And on the other side, many – but not all – of the critics are not against globalization. Rather, from NGOs demonstrating for further debt relief and campaigning for greater access of developing country exports to industrialized country markets, to academic critics questioning current policy views, many are seeking a better and fairer globalization.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 21 December 2016
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