Globalization

For the past couple of decades, the world economy strived to become more liberal.
Developed counties encouraged the still developing ones to let the industry be privatized,
and World Bank only invested into countries which did so. But why does the global
economy need to become liberal? Rosecrance (The Virtual State), Friedman (The World is
Flat) and Barnett (The Pentagons New Map) each have different reasons, but all agree
that liberal economics are the most efficient, and thus the best.
Rosecrances main argument for the implementation of liberal economics, is the fact
that it makes the world more peaceful and more prosperous. But instead of saying that
things just become peaceful he gives a reason: he believes that the rise of virtual state
(and analog of a virtual corporation) eliminates the battles for land, as now any country can
rise in the global economy through investment into its people. That is due to the fact that
labor becomes less valuable than technology, knowledge and direct investment
(Rosecrance, p.231). Rosecrance believes that liberal economy due to its open nature
allows for mobility of production. This mean that a country does not need to make
everything itself. Much like a corporation a country can hire other countries to do their
labor, and then sell it on the global market. That allows any nation to succeed, as it no
longer requires heavy industry, and relies on trade with other nations who already have this

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industry, which in turn makes the whole world more efficient, as there is no need for
duplicate industries.
Friedman in his The World is Flat article talked about how liberal economics allow
any single person to succeed. This happens due to the fact that the liberal economics
allow a person to do his job anywhere in the world, while still being in his home country. He
evaluates that the labor moves where it is more efficient; if a country has good educational
system corporations will come there in order to use the educated people from the country.
This increases the overall global competitiveness, as mentioned in the piece you do not
bring in 3 billion people into the world economy overnight without huge consequences
(Friedman, p.243). The global competitiveness is on the rise, and the ones who work the
hardest get the jobs, and thus their country grows. The theme of investing into people
reoccurs in this piece, and in Friedmans opinion that is the way to global success.
And finally from a different way of thinking comes Barnett. In his piece The
Pentagons New Map he talked about how the liberal global economy brings peace to the
world. He believes that the countries which pose a threat to the global community are the
ones which are in a so called Gap, while the prosperous ones are in the Core. He
believes, that if the Gap countries were to be brought to the core they too will become
prosperous. And in his opinion the way to do it is through global economics, investment
into those countries will overtime stimulate their growth and consequently make them more
peaceful, as the people in those countries will become happier and will not have a reason
to join extremist groups. Barnett believes that only active involvement in the Gap countries
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can change the situation, as he believes that we as a nation (need to) respond to the
challenge to make globalization truly global (Barnett, p 148).
But not everyone believes that this is how the liberal economics impact the world.
On the other side of the trench is Ha-Joon Chang, his belief is that the world is divided in
half, where half the world is intent on building a better Lexus and the other is still caught
up in the fight over who ovens which olive tree (Chang, p. 246). To him the liberal
economics dont close the gap and give equal chases, it does the opposite. Half the world
grows economically while the other half is paying for it.
Chang talked about how the neo-liberal system forces its principals on the
developing countries, while developed countries did not follow those principals, and that is
what arguably allowed them to become them successful in the first place. Chang criticized
Friedman for promoting the Golden Straightjacket as a one size fits all, as despite what
Friedman implies history has shown that countries which succeed, protected their
businesses, and that is what allowed them to grow.
But that is exactly what liberal economic systems argues against. It says that
protecting businesses lowers the competition, and thus efficiency. And while that may hold
true on the equal playing field, it does not in the current global market, as it is very much
skewed in favor of developed countries. And in fact the neo-liberal system is aimed at
skewing it even further, as while new economies cannot even start to grow, the old and
developed ones rip all the benefits. The young economies have nothing to provide but
natural resources, and developed economies need them to process and sell, and so starts
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the race to the bottom. Young economies compete with each other over who can get the
price lower so the developed economies buy and invest into them. The situation becomes
even worse when those economies start desperately needing investments. World Bank,
WTO and IMF only provide investments to the liberal economies where businesses are
privately owned and the governments role in the economy is minimal. When this happens
pure exploitation starts. Depending on a year, rich countries account from 70 to 90% of all
foreign direct investments (Chang, p. 251), that gives them nearly ultimate control over
those now-liberal economies. As now governments of those countries dont have a say in
the economies and the lions share of the businesses are owned by foreign corporations.
This is indeed a grim affair, and needs to be dealt with. But interestingly enough (as
well as unsurprisingly) rich countries have no interest in doing anything to stop that. And
why would they, they make the money and they rip the benefits, why stop? More often than
not their argument is that there is no other way to be successful. They point to themselves
right now and say that the only reason why they are like that is because of the liberal
economic system, meanwhile forgetting how hard they fought to protect their economies
from the outsiders at their inception.
Chang talks about just that. He points to the fact that Virtually all successful
economies, developed and developing, got where they are through selective, strategic
integration with the world economy and not with unconditional global
integration (Chang, p.255). As he argues that it is impossible to find a one-size fits all shirt
in the global market, there is no single model for economics which wins, economic
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strategies are no simple matter and need to be decided on the country by country bases.
he additionally notices that free trade was often imposed on, rather than chosen (Chang,
p.255). Such examples as China and Japan show just that. Both countries were forced to
open up by force and the use of the military by the western nations, and were not given a
choice in the matter because the interests of the West outweigh the rites of the others.
All of the above shows that it is possible to pain the same picture with many colures.
While Barnett, Friedman and Rosecrance talked about how the liberal economics bring
prosperity, Chang was looking at who it was bringing prosperity to and at what price. And
while the first there may be right to a certain degree, they are very wrong in many others,
as the argument that anyone can just succeed in global economy with liberal system in
place is theoretically possible, it is very unlikely, and that is what Chang draws attention to.
Also with Chang against the neo-liberal system is Grey. His argument is mostly
against that of Friedman and his piece The World is Flat. Grey argues against Friedman,
as he believes that the world did not become flatter, in his opinion the world is just as
round as ever. Friedman argued that the liberal economic system made the world more
equal, while Grey says it just created new powers. Also according to Grey the playing field
did not get levelled, and everyone does not have equal opportunities.
Additionally, Grey says that giving all the credit for the 19th-20th century economic
growth to liberal systems is wrong. he Argues that it was nationalism that has fueled the
growth, and that people were not united in the cause of free market, but were rather
working for the benefit of their country. He also says that China and India are doing the
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same right not. And that when they are going to become great powers, they are going to
demand recognition of their culture in much the same way the US, France and Britain did
after their economic boom.
Grey has also addressed the Lexus and the Olive Tree piece of Friedman. In it
Friedman has talked about how nationalism is preventing the new economies from
developing, but Grey counters that by saying that resistance to globalization is more
prevalent in developed countries. He talks about how even Friedman has recognized that
cheap labor in Asia is very much a threat to the American job market, and that protection of
those jobs is necessary.
Grey also caught Friedman on his own misstep of arguing for American energy
independence, as according to him energy autarchy may be a sensible policy, but it
signifies a retreat from globalization (Grey, p.266). In that sense even Friedman does not
completely agree with his own argument of a harmonious integrated world, and that even
he recognizes that neo-liberal system is not always the answer to the problem of global
economics, as tying yourself to the rest of the world is not always safe, or makes economic
sense.
All in all Greys arguments are very appropriate, as we can with our own eyes see
inequality in the world, and how it is not always best to tie the economies together, a great
example would be the economic crisis of 2008, as just because the housing bubble burst
in the US the whole world went into the recession, and that was thanks to the integrated
nature of the economy nowadays. But Grey has also touched on the topic of cultural
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frictions, and how nationalism plays a large role in conflict among countries, as well as a
reason for economic growth. That brings us to another essential question in international
relationship, and that being whether there is a reliable way to say which two or more
countries are going to have imminent conflicts.
One of the most popular solutions to this question was purposed by Huntington in
his piece Clash of Civilizations, there he argued that the international conflicts happened
between different civilizations. In his argument civilizations were divided up by historically,
with a huge focus on religion. He put Muslims in one group, Slavs in the other Hindu,
Buddhist and Christians in others and so on. His argument was the due to those historical
backgrounds within a civilizations people understand each other, but if they were to look at
the values of the different civilization they will not understand them, and that will cause
wars as they cannot find common grounds. He also predicted that as time goes on
conflicts will become more frequent, as the world is becoming a smaller place and that
the interactions between peoples of different civilizations are increasing and in turn these
increasing interactions intensify civilization consciousness and awareness of differences
between civilizations and commonalities within civilizations (Huntington, p.285).
But many disagree with Huntington and his predictions as they believe that he
oversimplifies the global interaction, and that he only takes one factor into account. Among
those is Sen who in his essay Civilizational Imprisonment discussed how people are not
limited to just one civilizations, and are very often drawing on multiple ones. He also talks
about how more often than not people identify much more with their interests than with his
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nationality or belonging to a certain religion. Sen also said that even within one country the
civilization is not consistent, he gave an example of India which was categorized as a
Hindu civilization by Huntington, while in reality India consists of many religions and groups
of people who do not identify as Hindu.
But not only Sen argues against the idea of the Clash of Civilizations, Esposito
talked about who the Muslim Civilizations is firstly not constrained to the Middle East and
Arabs, and secondly was grossly misrepresented as a civilization whose values do not
work with the peaceful world. He talked about how the media has formed the modern
publics opinion about the Muslim culture, and how only certain aspects were underlined. it
is important to notice that Historically the Muslim stets were not very aggressive, and at
time were more peaceful that those that belonged to Christianity and now make up the
West.
On that note we can talk about Barkawi and his argument that the West is caught up
in its way of thinking and does not notice that its actions do not benefit the world.
Returning to the Muslim states, we can look at how they were invaded by the Western
actions, in order to bring stability to them while no one in the countries has asked for this
stability. Barkawi argues that the West needs to drop its way of thinking about itself before
it can actually help, as right now what happens is that the countries that are to receive
Help either dont needed or plain dont want it and Wests actions that are intended to
benefit the world turn into violent conflicts where no one wins.

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1.

Rosecrance, Richard N. The Rise of the Virtual State: Wealth and Power in the Coming Century. New York:
Basic, 1999. Print.

2.

Friedman, Thomas L. The World Is Flat: A Brief History of the Twenty-first Century. New York: Farrar, Straus
and Giroux, 2005. Print.

3.

Barnett, Thomas P. M. The Pentagon's New Map: War and Peace in the Twenty-first Century. New York: G.P.
Putnam's Sons, 2004. Print.

4.

Chang, Ha-Joon. Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. New York,
NY: Bloomsbury, 2008. Print.

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