Tag Archives: globalization

Why ideas – not labor or capital – will decide countries’ economic success in the future

New World Order

Labor, Capital, and Ideas in the Power Law Economy

By Erik Brynjolfsson, Andrew McAfee, and Michael Spence

Recent advances in technology have created an increasingly unified global marketplace for labor and capital. The ability of both to flow to their highest-value uses, regardless of their location, is equalizing their prices across the globe. In recent years, this broad factor-price equalization has benefited nations with abundant low-cost labor and those with access to cheap capital. Some have argued that the current era of rapid technological progress serves labor, and some have argued that it serves capital. What both camps have slighted is the fact that technology is not only integrating existing sources of labor and capital but also creating new ones.

Machines are substituting for more types of human labor than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labor or the owners of ordinary capital, both of whom will be increasingly squeezed by automation. Fortune will instead favor a third group: those who can innovate and create new products, services, and business models.

The distribution of income for this creative class typically takes the form of a power law, with a small number of winners capturing most of the rewards and a long tail consisting of the rest of the participants. So in the future, ideas will be the real scarce inputs in the world — scarcer than both labor and capital — and the few who provide good ideas will reap huge rewards. Assuring an acceptable standard of living for the rest and building inclusive economies and societies will become increasingly important challenges in the years to come.

LABOR PAINS

Turn over your iPhone and you can read an eight-word business plan that has served Apple well: “Designed by Apple in California. Assembled in China.” With a market capitalization of over $500 billion, Apple has become the most valuable company in the world. Variants of this strategy have worked not only for Apple and other large global enterprises but also for medium-sized firms and even “micro-multinationals.” More and more companies have been riding the two great forces of our era — technology and globalization — to profits.

Read more » Foreign Affairs
Learn more » http://www.foreignaffairs.com/articles/141531/erik-brynjolfsson-andrew-mcafee-and-michael-spence/new-world-order

 

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Russia-China deal: Even energy pivots East

By Patrick L Young

The thing about globalization is that it involves the whole world. Hence Russia exercises its option to pivot East when faced with an obdurate West.

Bubbles share a core attitude of mind: complete incapacity to recognize that the real world may not correspond to your immediate surroundings. Thus investors become absorbed by manias from tulip bulbs to the South Sea, the internet et al, and fail to realize that ‘asset’ values have fundamentally decoupled from reality.

Read more » http://rt.com/op-edge/160212-russia-china-gas-deal-east/

The Pakistan-China Corridor

A new project will give Pakistan the tools of globalization. Will it use them?

By Christopher Ernest Barber

Historian Daniel Headrick made the crucial connection between means and ends in the projection of global influence. For instance, Headrick argued that the Suez Canal, which opened in 1869, acted a tool of empire for the great powers of the nineteenth century. The building of a canal through the Sinai Peninsula not only  made trade and empire in Asia faster by avoiding the Cape of Good Hope, but more economical too. This was particularly the case for the world’s superpower, Great Britain. For Britain, the Suez was an important strategic consideration in its imperial outlook, making the transport of goods, officials and soldiers to Bombay and other key colonial hubs easier and affordable. At the same time, the canal aided the wider globalization process of the nineteenth century, which opened Asia up to the advent of Western adventure capitalists with exploitation and domination never far from the surface. The Suez Canal acted as a “tool of empire,” as Headrick put it, and in a small but important way, the world became that much more global—all to the benefit of those Western nations that could harness of the power of the sea.

Headrick’s argument turns on a profound if easily overlooked point: those with easy access to the sea-lanes of the world invariably have the tools for global power and trade. Even today, the laws of economic scale dictate that air and rail, while important in their own right, will always be poor cousins to the efficiency and capacity of container ships and waterborne trade.

Despite the fact that the free trade zone port of Gwadar in Pakistan’s southwestern province of Balochistan has been an unprofitable enterprise with operational control now in Chinese hands, its potential remains. If anything, the development of the deep ocean port and an associated international airport, as well as the creation of a transport corridor connecting Gwadar to China’s easternmost province of Xinjiang, is a game changer for the Central Asian region. In Beijing this February, President Mamnoon Hussain and Chinese President Xi Jinping signed a series of agreements designed to breathe life to the corridor project. In the coming years, the once sleepy fishing enclave of Gwadar will become a staging ground for the geopolitical reorganization of the region.

Continue reading The Pakistan-China Corridor

Will the Japan trade deal revive globalization?

Japan Trade Deal May Revive Globalization

By the Editors

The U.S. and Japan agreed to terms last week allowing Japan to join talks on the Trans-Pacific Partnership, another step toward creating the world’s most important free-trade initiative. The emerging pact has far- reaching implications for domestic policy in Japan and elsewhere, and could offer a new approach to global as well as regional trade liberalization.

Japan’s participation would widen the TPP to 12 members, accounting for 40 percent of global gross domestic product. The Japanese economy is bigger than all the other non-U.S. members combined. By taking part, Japan is making a commitment to long- overdue domestic economic change. Supply-side reform is one of the “three arrows” Prime Minister Shinzo Abe has promised will revive Japan’s stagnant economy (the others are monetary stimulus and fiscal expansion). In the long term, it’s the one that matters most — and it’s the one that the TPP can provide.

Abe deserves much credit for pressing this part of his program so determinedly. Special interests, especially farming, have supported protectionism in Japan for years. (Rice farmers are shielded by tariffs approaching 800 percent.) The TPP will mobilize Japan’s manufacturing exporters, which will gain directly from the deal, as a countervailing political force.

Farmer Resistance

According to the government’s estimate, annual farm and marine production might decline by 3 trillion yen ($30.3 billion) under the TPP, though other sectors would expand more than twice as much, raising aggregate GDP by 3.2 trillion yen. That’s probably an underestimate, because the benefits would build over time. One independent study puts Japan’s potential gain at more than $100 billion a year (2 percent of GDP) by 2025. ….

Read more » Bloomberg
http://www.bloomberg.com/news/2013-04-14/japan-trade-deal-may-revive-globalization.html?alcmpid=view

Marx’s Revenge: How Class Struggle Is Shaping the World

Even business journals are recognizing it. Since this piece originates with a business publication, you will obviously find some things that may startle you. If so, disregard..or better, explore and see what the other side thinks. —Eds.

By , Business Time

Or so we thought. With the global economy in a protracted crisis, and workers around the world burdened by joblessness, debt and stagnant incomes, Marx’s biting critique of capitalism — that the system is inherently unjust and self-destructive — cannot be so easily dismissed. Marx theorized that the capitalist system would inevitably impoverish the masses as the world’s wealth became concentrated in the hands of a greedy few, causing economic crises and heightened conflict between the rich and working classes. “Accumulation of wealth at one pole is at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole,” Marx wrote.

A growing dossier of evidence suggests that he may have been right. It is sadly all too easy to find statistics that show the rich are getting richer while the middle class and poor are not. A September study from the Economic Policy Institute (EPI) in Washington noted that the median annual earnings of a full-time, male worker in the U.S. in 2011, at $48,202, were smaller than in 1973. Between 1983 and 2010, 74% of the gains in wealth in the U.S. went to the richest 5%, while the bottom 60% suffered a decline, the EPI calculated. No wonder some have given the 19th century German philosopher a second look. In China, the Marxist country that turned its back on Marx, Yu Rongjun was inspired by world events to pen a musical based on Marx’s classic Das Kapital. “You can find reality matches what is described in the book,” says the playwright.

Continue reading Marx’s Revenge: How Class Struggle Is Shaping the World

The great game

Western World’s opposition to Pakistan-Iran gas pipeline is seen as a reiteration of its economic interests and geopolitical hegemonic designs in the region

By Huzaima Bukhari & Dr. Ikramul Haq

In the face of threats of sanctions from the United States, President Asif Ali Zardari and President Mahmoud Ahmadinejad on March 11, 2013 launched the groundbreaking work on the 781-kilometre-long pipeline on the Pakistani side of the border. The Iran-Pakistan (IP) Gas Pipeline Project, initialed in 1995, has been facing perpetual opposition from the United States and its allies. Heads of both the countries, in their speeches at the occasion, reaffirmed their commitment to go ahead with the project “despite threats from the world powers”.

President Zardari said that the project would promote peace, security and progress in the region besides improving economic, political and security ties between the two neighbouring states. Stressing that the project was not against any country, President Zardari said such steps forging better understanding would also help fight terrorism and extremism.

President Ahmadinejad, while pointing towards foreign states and criticising what he called “their unjustified opposition to the project under the excuse of Iran’s nuclear issue”, said: “They are against Iran and Pakistan’s progress and have used the nuclear issue as an excuse”. He added, “We never expected [Western] companies to make an investment in this pipeline which guarantees progress, prosperity and peace in the region; if they don’t want to join this project for any given reason, they are not entitled to rock the boat and disturb the project”.

Pakistan on the completion of IP is to receive 21.5 million cubic meters of natural gas on daily basis. Faced with extraordinary energy crisis, Pakistan needs natural gas badly — its shortage has caused miseries to millions of Pakistanis and closure of industries. Iran has already constructed more than 900 kilometres of the pipeline on its side. The Tehran-based Tadbir energy development group has undertaken all the engineering procurement and construction work for the first segment of the project. It will also carry out the second segment of the project and also extend the financing of $500 million to Pakistan. Iran and Pakistani are optimistic to complete the project by December 2014.

Continue reading The great game

Politicians fanning hatred between Sindhis and Muhajirs do not represent the aspiration of the people

by Rashid Malik

Excerpt;

…. Muhajirs cannot go back to India, and … Muhajirs cannot be drowned into the sea and division of Sindh is undesirable, so a formula for peaceful, respectful co-existence, independent of the ideology of Pakistan must be sought. Absence of a decadent government and weakening of the usurping military should serve as a chance for ordinary Sindhis and Muhajirs to come together as sovereign of Sindh. Respecting and learning from each other and accepting the precedence of indigenous Sindhi language would not only produce a peaceful atmosphere but open Muhajirs to the wisdom of thousands year old Sindhi culture.

Peaceful acceptance of indispensability of Muhajir existence in Sindh by accommodating an urban language of India should not hurt the Sindhi cause. Pragmatic consideration has compelled Indians to adopt English as lingua franca and it has served them well towards integrating into the environment of globalization.

Politicians fanning hatred between Sindhis and Muhajirs do not represent the aspiration of the people. Though the 20th century history of Muslims in India has been marked by violence and extremism, it is about time we attempt to change that in Sindh, in the 21st century.

To read complete article → CHOWK.COM

Indo-Pak Youth Festival for Peace: LAHORE FEB 2011

– “Peace cannot be kept by force. It can only be achieved by understanding” – Albert Einstein.

Youth make- up one fifth of the South- Asian demography. Most often we see youth as victims or perpetrators of violence. History is witness to the fact that youth as members of an ever changing, dynamic and energetic group in societies play a crucial role in transforming conflict ridden societies into democratic and peaceful societies. This is a critical mass which needs to be involved when it comes to transformation of violent relationships, structures, attitudes and behaviors towards peace building.

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Karachi – Sindh: Nawab Khair Buksh Marri’s Interview – The entire world is open to us, why should we confine ourselves to this country

Face to Face

“The entire world is open to us, why should we confine ourselves to this country” – Nawab Khair Bakhsh Marri

By Amir Zia

Interview: Karen Armstrong

Interview: Cultures in Harmony

The entire world is open to us, why should we confine ourselves to this country – Nawab Khair Buksh Marri

By Amir Zia

Courtesy: http://qksisamaa.isamaa.tv/report/2009-08-22-interview-nawab-khair-buksh-marri-partial-transcript/

Nawab Khair Bakhsh Marri is seen as the kingpin of the radical Baloch nationalist movement, which explicitly demands an independent Balochistan. Although the veteran Baloch leader appears to be living a quiet life in Karachi’s posh Defence Housing Authority for the past several years, his admirers as well as rivals view him as one of the key players of the separatist movement, operating from behind-the-scenes. The shadowy militant Balochistan Liberation Army (BLA) – which is waging a low-intensity insurgency in the rugged mountains of Balochistan, as well as targeting government installations, officials and security forces in the cities – is dominated by his Marri tribesmen.

Continue reading Karachi – Sindh: Nawab Khair Buksh Marri’s Interview – The entire world is open to us, why should we confine ourselves to this country

Japan must shake off US-style globalization

The likely next prime minister outlines his hopes for a more Asia-focused Japan.

By Yukio Hatoyama

Courtesy: CSMonitor, August 19, 2009, via Globeistan

Tokyo – In the post-cold war period, Japan has been continually buffeted by the winds of market fundamentalism in a US-led movement that is more usually called globalization. Freedom is supposed to be the highest of all values, but in the fundamentalist pursuit of capitalism people are treated not as an end but as a means. Consequently, human dignity has been lost.

Continue reading Japan must shake off US-style globalization