jim luke 8:50 pm on February 19, 2017

Topic 5 Readings

For topic 5, we’re going to take a look at Trade, Globalization, and Corporatism.

I’ve assembled 4 readings to start. You are, of course, welcome to discover other articles on your own and bring them to our discussion. Read a description plus links below the fold…

First up is The End of Capitalism Has Begun. This is a fairly long article published in The Gaurdian. In the recent election, as well as internationally with the Brexit referendum in the UK and other elections, there’s been a lot of focus on globalization and trade agreements: NAFTA, the EU, the proposed TPP, etc. These trade agreements and the globalization of corporate production has been a dominant force in driving economic systems for the last 3 decades. Much of the logic has been corporations grow from national to multi-national status. In the process they’ve developed global supply chains seeking the ability to use the lowest wages possible. Products aren’t really made in one country anymore. Parts are made in one country shipped to other nations for further work, then shipped elsewhere for assembly, and eventually shipped to a nation to be sold. But this globalization logic may be changing. This article argues for a post-capitalist era driven by networks and the Internet. https://www.theguardian.com/books/2015/jul/17/postcapitalism-end-of-capitalism-begun
I’ve added this next reading partly as a resource/background type reading. In some earlier comments/discussion in the course the question arose about the strong US dollar. The discussion hasn’t been limited to us apparently either. Reports are that President Trump asked a national security advisor in the middle of night for a quick brief on whether we wanted “strong” or “weak” dollar and which was better. The question of which is better, strong or weak dollar, depends on who you are what economic transactions you’re doing. Actually, it doesn’t really matter what exchange value the dollar has at at the moment, what matters is how that exchange rate is changing. A “strengthening” dollar is one that will buy more units of some other currency than it used to. A weakening dollar will buy fewer units of the currency. This reading is an intro into the topic. Who Is Responsible for the Strong Dollar? And What Can Be Done? http://econofact.org/who-is-responsible-for-the-strong-dollar-and-what-can-be-doneThe last two readings are pieces I wrote for earlier incarnations of this course a few years ago. Both are on the long-ish side but are relatively easy, non-technical reading.
In this one, I explain how banks, exchange rates, and government borrowing can be used as tools by a developed country to control a less developed country. In effect, this is global capitalist version of imperialism. It’s no longer necessary to invade and conquer a lesser country in order to get their resources like the Europeans did to Africa in the 19th century. Instead, currencies and government borrowing can be used to do it. One wag once observed this dynamic in relation to Greece a few years ago, and observed that German banks were able to do in 2012 what German tanks couldn’t do in 1942. This happens when a government borrows large amounts of money from another country’s bank in that other country’s currency instead of their own. A cautionary note: this dynamic is NOT possible with a country that defines/issues its own currency AND borrows in that currency. In other words, it can happen to small countries, but cannot happen to the US, Japan, Canada, UK, Australia, etc. Development, Imperialism, and Debt Bombs http://compsys.econproph.net/2015/unit-3-development-imperialism-and-debt-bombs/
The last is a discussion of how culture and markets affect the evolution of economic systems. Culture, Markets, and Economics Systems http://compsys.econproph.net/2015/unit-3-culture-markets-and-economic-systems-long/

Brittney Baley 3:49 pm on February 21, 2017

The fist article was interesting it mostly blamed technology and freedom of information for capitalism being on its death bed, in a very long article. In some ways I agree technology makes the issues of scarcity and market prices completely different. Now we have to evolve to survive; which, since most people don’t even notice the slow death going on, will be almost impossible. How to control information is the main problem, it use to be only in books that people could make money off of when they sell and produce them, now technology makes information freely accessible.

The second article was more interesting to me. The strengths of currencies has always been something that is fascinating to me, granted it is a very complicated subject. The article explains how weakening the U.S dollar will help with exports to other countries. This makes sense as if the value of a dollar is higher than the country that is being traded with that country may not be able to afford our exports. As the article stated the only problem is how to devalue the dollar. It could destabilize our country and make or economy weaker, unless their is a loophole where the U.S can undervalue the dollar to other countries. This, however is highly unethical in my opinion.

The third article had some unsurprising information. I mostly learned about this in my “World Economies” class in high-school. The basic summary of the article, countries are greedy and cunning. Extremely unsurprising and honestly will never end.

The last article was about the rise of capitalism and the industrial revolution. This was something that advanced the first world far past many of the third world countries and allowed for longer life expediencies and better living conditions. The culture changed as well as the type of markets. Products became more affordable. Fashion changed with the ability to mass produce textile. Cultures became more integrated as trade was easier.

The articles are all connected in a way. And almost in a reverse order. The last article was the rise of capitalism, the third about taking advantage of third world countries. The second article was about trading and the changes of the strength of different currencies, lastly the third article about the slow death of capitalism with the rise of technology. It is almost like a full circle more technology means a change in the economic systems just like the industrial revolution.
Daoud Esa 5:05 am on March 2, 2017

To start off, the first article was quite interesting. To me, the capitalist system has its pros and cons similar to other economic systems in place. As our society progresses in the next 25 years the article explains that capitalism will eventually evolve into a “postcapitalism”. I don’t completely understand the difference between the two. If it’s a type of capitalism, it’s still capitalism, therefore capitalism would still exist. I believe the author is showing how capitalism would evolve instead dying off. Many of the points such as technology being the reason for this evolvement is a great example proving this.

In the second article, I found it very amusing. There is a strong argument on both sides as to why the dollar should be weak or strong. There never seems to be a better decision. Choosing a weaker dollar over a stronger one is one of the major causes to rising prices in oil. Choosing a strong dollar makes imports cheaper for Americans but this means our exports will decrease along with jobs. I believe there should be a fluctuating balance between the two. From the graph shown in the website, you can see our currency fluctuating when it gets too high. I believe this is a great method to keep things in balance because of the affects of a stronger and weaker dollar.

Furthermore, after reading the third article it pretty much sums up what I know about history and how we became this way. Throughout history the dominant empire is always looking for ways to expand whether it being the Romans or us Americans. I believe world trade is the crucial component as to how we are able to be stable as humans. If we want something from another country, instead of invading it and causing excessive casualties, why not trade? It’s much more simple. This in turn leads to “economic growth” and higher living standards”.

The final articles is that the rise of industrialization brought many changes to our Economy during the 1900’s. Industrialization had positive and negative effect on the U.S. economy. It allowed the United States to exceed many of competing nations. It also led to substantial difference between the classes of the rich, middle class, and the poor. These changes had great impacts on our society and economy such as greater urbanization and the rise of laissez faire capitalism.
Chibuzor 3:21 pm on March 2, 2017

I did not really get the full picture if the first article reading in the beginning but in the as I continued to read, it became clearer. The only way of getting rid of capitalism is to socialize the means of distribution – this would require society at large to take control of the means of production, and its output. The lack of collectivism among ordinary people today means that this would probably never happen. Personally, I do not see anything wrong with capitalism, I believe that it is the most suitable system for any government, the fear now though is that what could be better than capitalism.

Some countries haven’t even fully immersed themselves capitalism. I think that Post capitalism is something that only makes sense for first world countries or at least countries that are economically buoyant. Here is a quote from the article “Is it Utopian to believe we’re on the verge of an evolution beyond capitalism?” and I say absolutely, I do not think it is feasible in these times. However, it could be possible in the future and I would even go further to say probably not in my lifetime considering how long it took to get to capitalism.

The second article reading “Who is Responsible for the Strong Dollar? And what can be done?” is very similar to what I talked about being interested in learning by taking this class. It gave me a better understanding of why some currencies are higher than others, depreciation, appreciation and the strategy to devalue of currency in order to improve their trading but reduce debt.

Also, as the dollar strengthens, the burden on debtors who transact in other currencies with dollar denominated credit increases as their currencies weaken relative to the US dollar. As the dollar continues to strengthen, it is inevitable to see how developing economies debt can worsen, affecting the livelihoods of people in those countries and ultimately having far-reaching consequences on markets around the world.

The third and fourth article were very informative. It learned about how we got to where we are now and the factors that aided in that process, how advanced countries take advantage of developing or under developed countries, how they are exploited for their rich resources and are left to take “aid” which is actually a full-fledged loan, resulting in enormous debt, poverty and stagnation.

In addition, industrialization has been one of the reasons why some countries have such vast wealth. Poor countries are left behind because from the get go, they were oppressed and this has made it difficult for them to build up their economy.
Alexander Westerlund 4:40 pm on March 20, 2017

https://www.bloomberg.com/news/articles/2016-11-17/global-trade-is-slowing
I found this article very surprising and interesting in the fact of showing how global trade is not nearly as big and slowing down every year. It’s a huge issue…. There are no “must have” products going around the world. Also that an average of 17 trade constraints added per month to the worlds top 20 major economies. But what can we do about it? What will fix this?
Zachary Dowling 7:29 pm on April 11, 2017

My response is only towards the first article “The End of Capitalism Has Begun”. The writer wants the reader to understand all of the negative aspects of capitalism, how information will be the death of capitalism and finishes the paper with no clear solution to the problems, rather ambiguous statements like “supporters of postcapitalism is to build alternatives within the system; to use governmental power in a radical and disruptive way; and to direct all actions towards the transition”. By no means is capitalism a perfect solution to the worlds problems, but to compare the needed change from feudalism to capitalism hundreds of years ago, to capitalism to post capitalism in today’s times is ridiculous. The author also talks more greatly about socialism and Karl Marx without actually saying it then he does capitalism. Using Greece as an example of how the new world of currency to work is quite inappropriate considering Greece’s growth is completely nonexistent, yet he wants to say it’s something that our slow growing economy should strive to do.

Yes, Karl Marx has said some good things, and has been right on many occasions, but that doesn’t mean we change our whole system because he made a correct prediction about information. Not only were many comparisons completely inappropriate, but many statements in this article are downright wrong. The statement “As a result, large parts of the business class have become neo-luddites. Faced with the possibility of creating gene-sequencing labs, they instead start coffee shops, nail bars and contract cleaning firms.” is actually laughable. In the past 20 years our generation has seen more change through innovation of technology than the past 300 years, yet the author is mad that there is no too many Starbucks for his liking.

Yes information has completely changed or world and capitalism, and will continue, I am not disagreeing with that. The problem I am having is that just because there is major innovation doesn’t mean we change our whole system to fix it. Our world, our economy and capitalistic society will find ways to adjust to this huge change called information, just like it has many other times there has been important innovations. It is very clear that we as people are barley understanding the affects of social media and too much information, but just because we don’t understand it yet, does not mean we should start quoting Karl Marx and saying “lets use governmental power in a radical and disruptive way”.

Econproph [Comp. Systems 2017]

Jim Luke's Comparative Economic Systems Course

Topic 5 Readings