global capitalism, the economic system is centralized with control being in thehands of a few persons. The question begs to be asked as to whether thecommon people have fared well in centralized economies, and whether theyhave been guaranteed an improved standard of living based on increasingpurchasing capacity. According to economist Prabhat Sarkar, in a centralizedeconomy exploitation cannot be eradicated nor can the poverty of the commonpeople be removed. In the above economic paradigms, economic policies areformulated by a handful of men for the benefit of those men who are generallyindifferent to the plight of the masses.
Globalization
For the past several decades, economists, political scientists, presidents, primeministers and corporate CEOs have championed the cause of economicglobalization, saying that a nation’s economic goals should include comparativeadvantage and international competitiveness. Globalization as an economicconstruct has become the new global theology. Comparative advantage refers tothe belief that accessing the cheapest source of supply is of greatest benefit andefficiency to a particular country. The term was coined by British economist AdamSmith in 1776 and later refined by David Ricardo in 1817. According to Smith andRicardo, all nations benefit when each nation specializes in particular products,i.e., specialized cash crops. If one nation has the land, climate, natural resourcesor labor to produce a good more cheaply than other nations, it should focus onmass production of that product. This gives it a comparative advantage in theglobal market. Economies of scale – the idea that the more goods you produce,the cheaper they become to produce – is a contributing factor in pushing for comparative advantage, i.e., specialization of particular crops and goods in eachnation. Smith believed in open trade boundaries between all nations to maximizethe benefits of comparative advantage. He further insisted that the “invisiblehand” of market forces would bring about the best global scenario. Neither Smithnor Ricardo could predict the unfettered flow of money across nationalboundaries. This free flow of capital has led to comparative advantage changingto absolute profitability, and hence absolute advantage has replaced comparativeadvantage. The other factor they overlooked was that comparative and absoluteadvantage were guaranteed not just by corporations but by state governmentsand their military machines. The present Bush-Cheney regime in the U.S. hastaken this guarantee to new heights such that militarization has replacedglobalization as the U.S. government invades other nations at will in the name of gaining market shares or trade advantage for U.S. corporations. While the WTO,IMF, WB, NAFTA, MAFTA, et al were the legal handmaidens of U.S.corporations, today they became insignificant in the face of U.S. globalmilitarization to ensure obscene profits for the Iron Triangle, i.e., the nexusbetween government, military and corporations.Globalization supporters claim that the theory of comparative advantage andinternational competitiveness support the growth model, i.e., the growth of GNP.In reality, globalization compels state leaders to sign away the rights of the
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