Feasible Globalizations
In the times we are living, there seems to be three main political, social and economic models that affect the idea of achieving a real global economy. These are nation-state systems, democratic political systems and a full economic integration. However, according to Mr. Rodrik the coexistence of these three models results impossible, or better said utopian. He argues that we could have at the most a combination of two of them, but never all three of them together for their coexistence would only create instability and a confrontation of interests. He solidly supports this argument analyzing past and current events that have taken place and expose the failure of promoting a fully integrated global economy. We will shortly summarize these examples and comment on them. Finally we will review the alternative proposed by Mr. Rodrik, the preservation of some limits on integration along with some ruling system that would orderly look for the achievement of an attainable integration, which we have considered to be somehow ambitious.One of the pillars of this paper's argument exposes that markets need to be defined by a range of non-market institutions in contradiction to the mainstream idea that markets should be let to run freely wit
h a minimum amount of intervention. Some functions that are to be performed by these institutions consist of creating, regulating, stabilizing and legitimating markets. Without theses institutions, he argues, markets would hardly strive, for they are not self-regulating, self-stabilizing or self-legitimating. They do a bad job, if any, at regulating anti-trust, providing transparent information, setting prudential limits or even raising awareness toward health, safety and the environment. However, people must understand that one model of an institutionalized economy is no better than the other as far as they all can assure market participants that they can retain the fruits of their investments. One example of this is China's innovative system of Household Responsibility System which in the absence of private property rights is still capable of assuring investors to enjoy the outcomes of their activities, hence the entrepreneurial activity there has burst. Another evidence that one model is not necessarily better than the other can be found on the success of several market economies of industrialized countries. Europe, the US and Japan have all diverged in labor markets, corporate governance, regulation, social protection, and banking and finance. There are several reasons for this, but one obvious one is that societies differ in values and norms that inevitably shape their institutions. The final major reason for institutional diversity is derived from the developing countries' needs. To maintain and pump economic growth can hardly be attained by developing nations by simply mimicking American or Western ideals of best practices simply because of the fragility and characteristics of these economies. However, these "best practices" can be innovated or adapted to fit local schemes, and this job can only be performed by domestic institutions, as has been seen in South Korea and Taiwan since the early 1960s, Mauritius since the early 1970s, India since the early 1980s, and Chile since the mid-1980s. Another alternative derived from the trilemma would be the foundation of a "global federalism", w
Some common words found in the essay are:
Korea Taiwan, , European Union, Europe Japan, Europe Mexico, Responsibility System, American Western, economic integration, Besides Germany, global economy, international trade, national borders, developing nations, industrialized countries, transactions costs, capital mobility, rules liberalization, nation-state systems,
Approximate Word count = 1421
Approximate Pages = 6 (250 words per page double spaced)
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