Globalization part 2

David Harvey(time-space compression)

David Harvey(time-space compression)

overcoming the distance barrier with advances of transportation and information technology

costs of overcoming distance

goods trade, communication, face-to-face

rebundling

mainly producing for domestic consumption during 1914-1945

costs of overcoming distance

goods trade, consumption, face-to-face

first unbundling

steam&industrial revolution, 1820-1980

old international division of labour

Ricardo‘s world of comparative advantage, but many of them are artificially created within colonial trading systems

the Great Divergence

Europe&US overgrowing the Global South

Global South

China, India, Africa

second unbundling

lower ICT cost; starts after 1945, but accelerates since mid-1980s

new international division of labor

enables a more detailed global division of labor, knowledge and information spillovers, crossing North-South borders

RTA

regional trade agreement

tacit knowledge

knowledge from personal experience, not taught

GVC

global value chain

task outsourcing in old division of labor

intra-factory flow of ideas/goods; competition between firms and their products

task outsourcing in new division of labor

international flow of ideas/goods; competition between individual occupations and tasks

the elephant graph

relative gain per income by global income level

winners of globalisation

Asian poor and middle classes; "head of the graph"

losers of globalisation

lower middle class of the rich world (OECD countries); lower points of the graph

global plutocrats

top 1 percent of rich economies; highest point of the graph

what do changes in output and prices in Stolper-Samuelson theorem lead to

strong re-distributive implications of free-trade models

Stolper-Samuelson theorem traces out the effects...

of price changes on the material well-being of different groups

free trade can benefit countries as a whole even though ...

within countries there will be winners and losers individuals

who are worse as a result of trade liberalization

unskilled workers in developed countries

If politicians go after the remaining, low barriers, then...

trade agreements become more about redistribution than about expanding the economic pie

Polanyi's main idea

there are political countermovements against the negative consequences of commodification processes

Polanyi's double movement

movement of laissez-faire (to expand and influence self-regulating markets) and movement of protection (to protect social life from destructive effects of market pressure)

precarity

situation when one's job or career is in danger of being lost (=economic insecurity)

political reactions to precarization

rise of populist election polls; turns against immigration,EU or global finance

Daniel Rodrik's trilemma

impossibilty of achieving three policy goals (national sovereignty, hyper-globalisation and democratic policies) simultaneously, two must be chosen

golden straightjacket

national sovereignty+hyperglobalisation; authoritarian state with global integration - China

global governance

hyperglobalisation+democratic policies; open borders for trade, democratic institutions at a global scale - EU

Bretton Woods compromise

national sovereignty+democratic policies; giving up some trade for strong welfare state - UK's Brexit

Summers

"let them eat pollution", neoclassical school

Nelson

Feminist Economics

Decker

from de-growth to de-globalization; ecological school

Sheng

different shape of globalization; omplexity/evolutionary/behavioral school

Rodrik

globalization after Covid-19; global rules and policies (beggar-thy-neighbour and public goods); institutional school

Hecksher-Ohlin Theory: factor endowments give a country...

comparative advantage over other countries