2,861 thoughts on “Witam na blogu – Welcome on the Blog”

1. (2083.) Main features of contemporary Globalization –
   Nowadays, we are living in a spread world where more than the middle of the 100 richest institutions is Corporations or Multinationals. Today exist almost the double of capital than 50 years and with the lowest rate of analphabetism. However, this is just smoke hiding behind some realities which, non for everyone, are unpleasant. This assignment will expose my view, based on the short experience and knowledge through books like yours, of the relevant features which haunt the world due to Globalization.
   Let’s place ourselves at the level of Nations and society legislation. For me, this world is leading between a “Corporatocracy” and other systems (because it is impossible to say that Democracy exists all over the world). Corporatocracy, this term comes from the preponderant importance of the multinationals who are running in underdeveloped countries and its role is such relevant that many laws or statement are focus on their benefits. In other words, this brings us to the idea of neo-colonialism dividing their power or influence all over the world. For example, there is one case concerning to the English multinational TESCO which are trying to implement “Tesco cities” in the south of England. Imagine, “Tesco School, Tesco Hospital..”. Further examples are in Congo about Coltan and Diamonds, or paramilitary in South America with oil and drugs.
   Our next point is raised in the glaring inequalities that system brings. The difference between the richest and poorest increases as capital is expanding more and faster. Injections of millions to revive the economy, it is unthinkable for almost two thirds of the planet. In figures, something like 10% of the world owns 80% of wealth. This placed far away to those who don’t have the same opportunities as if, excluding them from the game and not integrating developing countries at all. This inequality can be extrapolated to small and medium retailers are being replaced by big companies. The final product is much cheaper for consumers and therefore greater demand, to which a small business can’t afford. For consumers, this is a great advantage because it falls under the fierce competitiveness posed by globalization.

   In Spain we say that “If the U.S. gets a cold, Spain sneezes”. Today in the European Union we see similar effects. This is due to the heavy reliance that globalization brings, the unification of markets leads to economic interdependence. This interdependence also comes with a flow of people, assets, capital and when more than never, exports and imports are correlated also with bilateral contracts. In terms of social flow, this is the reason why I and thousand students are exchange student, it means exchange of knowledge, cultures, and why not capital as investment. Moreover, this show us the idea that we are living in the same stage, as soon as you can be in Madrid you can go to internship in Warsaw or Glasgow. Moreover, if today there is no oil tomorrow there will be no day. It is the global warming that we are caused, it’s the social responsible business we are entrusted, because we are interdependence to live in the same worldwide. This is what the whole civilization must see, we are much more correlated than ever in every sphere of life and chaos theory is more valid than ever.
   Without going any further, this years are bringing the idea of how much we depends on the biggest nations and its capital or investment to survive. Even more, the new roles of the world as Emirates, Saudi Arabia or China are taking care of some part of this financial crisis buying bonus of countries like Spain. We need their investment to survive when few years ago they were asking in our doors. This is a change of relay towards emerging countries. We must begin to delegate sovereignty in those countries that now project change and growth.

   Technology and IT is developing our world through Internet and Telecommunications. We can “Skype” all over the world as conference or meeting, to talk with our parents or psychological instant treatment. Technology has such crucial place in our place that thousand of millions are invested to discover microcells or sending rockets to the space. Biotechnology, nanotechnology, cyber science, analytic marketing, all those areas are implementing the new science from Biologics, Technology and of course Economics. Marketing analytics researches is a new science made by Mathematical to correlate the investments between advertising and sales. It is based on technology and IT: ideas, knowledge and capital are spreading through Internet as never.

   So finally, what Globalization gives us? As you said in your estimated book Truth, errors and Lies, this term depends from which angle you look at it. Totally agree, if not you just have to ask Mr.Soros or Mr.Zuckerberg : ”Where would have you wished to be born? “ Of course they will answer: “in the U.S.A.”. Do we all have the same opportunities? Is a really matter where you come from? Power belongs to those who at least have the chance to have it. Thus, integration must be a fact of this Globalization, at least same rules of the game. We all know that is impossible today, because capital is concentrating in the hands of few and the misery in the homes of many, but what the Globalization and this economic phenomenon should bring is, however, a poverty reduction eliminating world. Instead of that, we have from 20 cent pens to high-speed computers for less than a thousand Euros. Is it unfair? As a final thought, Globalization also gives us who live surrounded by opportunities the chance to contribute something to this transformation to sustainable and humane world. Mainly this: a more humane world.

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2. (2082.) Influence of globalization on economic growth.
   Globalization is a phenomena which has been happening for thousands of years. People were always travelling and trading their goods. How people travel and trade goods has changed significantly through the years with the appearance of many new types of technology, which has enabled faster and cheaper communication and transportation. Suddenly, the world became one massive and common market where organizations could exchange their goods, which is the explanation of the commonly used term “global village”. All economies have become interconnected, and it has become easy to exchange goods quickly and efficiently. According to professor Kołodko, globalization is a triumph of global capitalism; simply stated, it is global capitalism. This leads one to ask the question: How has globalization effected economic growth on a global scale?
   On one side, globalization encourages countries and organization to specialize on specific products and/or markets. For example, one country can be a cheap cotton producer, and another could be the most creative designers, while another provides cheap and qualified labour. Specialization and what follows, the economy of scales, results in the growth of trade through the flow of capital and cross-border activity. Specialization can support general economic growth as countries can eliminate unprofitable segments of their economy. Emerging markets such as China, India and Brazil are profiting from the process of globalization and their economies are growing. The growth in the economy has a significant impact on poverty reduction, which then enables these countries to ‘catch up’ to industrialized countries. In India, for example, the poverty has decreased from 57% in 1973 to around 35% in 1998.
   Globalization opens up new markets for businesses. That effect of enlargement of the potential organizations’ operations is followed by the creation of a job market which then stimulates economic growth. Also, it is scientifically proven that there is a positive correlation between the flow of capital and economic growth.
   The other feature of globalization that provokes economic growth is a noticeable increase in consumption. When production becomes cheaper and the competition grows greater, consumers can profit from less costly goods and afterward can afford more of them.
   The process of globalization is enabling organizations to diversify their operations. Companies can diversify their operations in a variety of ways, including expanding the scale and scope of production, expanding the profitable market, and creating more stable profits. The diversification through involvement in both local and global businesses and involvement with international institutions can significantly reduce risk. In general, it can cause a phenomena of reducing macroeconomic volatility on consumption and output.
   As a counter point to globalization, production plants move from industrialized countries to emerging economies which can cause unemployment among unqualified workers. This situation effects economic growth in both countries. On a bigger scale, the emerging markets are experiencing significant economic growth while industrialized countries can suffer from stagnation.
   Another negative effect caused by globalization can be that free trade eases the possibilities for international trade. However, this can also cause the higher risk of failure, especially for smaller companies who are not well prepared for global competition.
   Often, an argument against globalization appears which can cause even wider differences between developed countries and developing countries. Even though investments and new technologies have already risen the global standards, the gap has still grown globally and even within countries.
   Globalization is a process than cannot be detained. Most economists agree that it accelerates economic growth. However, the non-economic effects cannot be neglected. Homogenization of culture, environmental damages or the violation of human rights are some of the non-economic factors which can be associated with globalization. Do those costs of globalization exceed the benefits of it? How can you measure the value of those costs when comparing to the actual value of economic growth? Another unsolved aspect which professor Kołodko mentions is that while we already have a global economy, we do not have a ‘global government’. This ‘global government’ would not be set up to govern or rule the world, but would be actually working towards improving it.

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3. (2081.) Globalization and its influence on economic growth.

   Globalization is one of the biggest action in which we are more and more depended from each other, if we want it or not. Globalization is part of our lives because we are living in 21 century and world become much smaller and trade between foreign country’s become a normal thing. I can fully agree with Mr. Grzegorz W. Kołodko that “ if you Google “globalization” You get 13,9 million results in 0,17 second. A great proportion of them , of course , have nothing to do with globalization” (Truth, Errors and Lies; Grzegorz W. Kolodko) The word Globalization become vary fancy and it is used on different fields but not actually with correct meaning. I agree with Mr. Kołodko who in his very good book (Truth, Errors and Lies) said that we started to name it before we firstly understood what it actually is and how to deal with that or use it as a tool for global integrated growth. Because when we will think at the global terms a lot of things happened at this aim time so if would be possible to understand the mechanism of this system we could integrated it and create better world with much less waist and more sustainable. Cooperation at that level would be hard and will need a lot of involvement of each participant. But it is possible because such an action of economic integration Europe has done. Of course global aspect would be something different and it would be complex but in other hand can be also help us get out of the crises. Because crises which is in the world right now I would rather call it “Crisis Shadow Fear “ so everyone is afraid of crises but no one know what actions should be taken in order to prevent itself before crises. Globalization can help to deal with crises by getting real date which could stop sometimes bloody speculates who just want to raise the prices because they said so. By the globalization effect we can clearly see that we are depended as a people but also as a country’s now a day’s. It is well known that in the feature we will be more depended from each other then it is now. But do we really need to integrate so strongly? And for me answer is : Yes!! Because in this world we have 7 billion people and every new day we have new baby delivery and that’s how our world is growing so fast. So if this 7 billion people will be taking not integrated actions which will not take to consideration other people actions we would simply have such a big mess up in this world that I cannot even imagine that. But if we take this 7 billion people and form some order in that, try to find position for each participant we would be able to create something much better then now. This action could also prevent world before some other financial crises. We as a world need to have smart and needed reforms. Reforms which will help country’s as their people not only the wealthiest. I am agree with Mr. Kolodko who said in his book :’ This entire change trough redistribution would reconfigure the network of larger and smaller beneficiaries and winners and losers in international economic competition. This would take a political consensus , but conflicts of interest make it impossible to achieve such a consensus”. I think that’s the biggest problem of globalization that there are country’s who do not want to have common will and always like to be different then other governments who want to cooperate. Also the problem of greedy people who wants to have huge amounts of money just to have it but in the other hand there are places where people wish to have few dollars a month. If we could have some smart decisions and reforms which could prevent us against greedy people and their stupidity or other unexpected actions, we could start building globalized world but with positive meaning. Reforms are unnecessary but most government’s even if they see the need of transformation parties afraid to provide changes which are sometime radical and crucial , because such a actions would lower governments popularity. So we have situation in which people who was elected for managing of a country supposed to have smart and long a head actions are doing completely opposite to be on the top of ranking and be elected one more time. So I think if country’s will not change their bases In introducing new rules and regulations the world wild globalized communication will suffer. Of course globalization will be still go ahead. We have to adapt to new environment and the best way would be to fully understand interdependency between countries and globalization as itself. If we could get more knowledge about interdependence and how the global economy is going we could start to create positive aspect which will be the good side of globalization, it will help all countries to work at one table with this aim rules. For sure it will not bring unexpected advantages for all of us, but dialog is also very important because different places, point of view is also changing. In my opinion globalization can help world to deal with problem of growth. If we integrate our affords it will be much easier to move all economy’s a head with all others then just close for the others like North Korea.

   Wojciech Kielak 21651

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4. (2080.) Regional integration versus globalization: contradiction or synergy?

   In the nowadays world, globalisation has become a very popular word or even a slogan, which helped people to understand the new phenomenon of economical, cultural or social changes. This does not change the fact that many people understand this term completely differently.

   The globalization processes are very often a cause of many political and ideological disagreements and debates. Some people believe that it is something that causes poverty all over the world, others have a quite opposite opinion- that it is something that makes the economy develop and poverty dissapear faster. The word that is a contradiction to globalisation is regionalisation, but I think it is very apparent and ambigous assumption. Globalisation is all about integrating economies and societies all over the world, while regionalization care about the same but within geographical boarders, like for example North America or Europe. European Union is a kind of regionalized agreement between all of the members, who at the same time are significant players in the global market. Globalization and regionalization are two global trends, which can reduce the importance of countries and its regulations. Can we venture to say that in a short amount of time, national authority will serve only representational functions? Is it possible that international organizations or even local units will take over its tasks?

   Regional integration is a term that appears in public arguments much less regularly than globalization. However, since the mid-twentieth century, this phenomenon is discussed more frequently. So what regionalization really means? It is a process of the regional evolution and its manifest of historical and cultural distinctiveness. It occurs very often that residents of such regions feel like they are undervalued or discriminated by the national authorities and consequently, they attempt to achieve full autonomy.

   The new problem in the contemporary world is the over-regionalization. Developed countries close themselves in so called „prosperity oases“ and prevent the poorest countries to free conference. There is a kind of a new obsession and illogical fear of integrating with the world among some countries that strongly want to stay sovereign. However, there are many examples of countries, which are doing great on the global stage, while staying true with its old traditional character.

   Globalization has many advantages, which make the countries more developed and competitive on the international stage. It has an amazing power of transforming the nations into more powerful and wealthy ones and providing higher standards of living. The citizens can easily benefit from globalisation by combining all their skills, capabilities and desires togehter and use them in an efficient way. That is why, in my opinion, globalisation and regional integration is a synergy.

   Thanks to globalisation, many medium or small companies have a great opportunity of trading on the international market. Such situation is very positive for economy, because the companies on the market are striving to stay competitive and the market is constantly in the stage of growth. In contrary, the regionalized system is a great environment for monopolies, which are dangerous for economy. I think that the lack of competition on the market can result in the growth of expensive and low-quality products and goods available on the market. At first, domestic companies will struggle to effectively compete with technologically and organizationally better ones, but along with time they will learn how to stay innovative and competitive.

   In my opinion, the poorest countries can benefit the most from globalisation, because it offers things, that were not available for such developing countries before. They can escape from poverty and gain foreign capital, technologies, investments or export markets. The only profit for well developed countries is that they can get even more rich. Thanks to contacts with such countries, developing ones can even promote human rights or personal freedom, followed by democratization and higher labour standards.

   Regional integration and globalisation supports each other in a sense that, regionalism is very often a stage in the process of going to globalisation. It is primarly seen as a way of better adapting and reducing the negative effects of globalisation. Regionalization can provide the protection against currency crises and financial instability on the economical market and can be regarded as a condition for the well-organized and effective use of abilities to achieve quick economic growth. Countries that are not big and powerful enough to compete on large markets, join their forces and create zones where commodities move easily to answer marketplace needs.

   According to Professor Kołodko, “globalization boundaries are defined by the limits of efficiency and economies of scale resulting from further expanding and deepening the degree of market integration. Ideal global market – a lot of perfectly functioning markets, in full harmony with one another around the globe, as democracy as an ideal – it is its triumph in all countries”. Overall, nations should understand that they can gain a lot from globalization and try to use it properly and wisely, because isolationism is a very destructive strategy and affects the economies adversely.

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5. (2079.) Globalization and its influence on economic growth

   Globalization is a worldwide increasing openness and interdependence among countries, regions, businesses and communities of people – one of the leading trends in contemporary socio-economic development. It manifests itself in various fields: economic, political, environmental and cultural. In economics, globalization is seen primarily in the fact that increased absolute and relative level of world trade in goods and services, as well as the movement of capital and labor, the merging of markets, institutions and production chains.The globalization process is comprehensive, it includes various facets of the subject matter of almost all social science disciplines. Economists emphasize the merging of markets, institutions and production chains, in which economic borders become more transparent. In today’s world, information is an important aspect of economic globalization, that involves:
   * The emergence of new markets for banking, insurance and transport services, new financial markets operating around the clock and using new tools;
   * The emergence of new subjects of international cooperation – the multinational corporations, the World Trade Organization, a network of international non-governmental organizations;
   * Fast, avalanche-like spread of information.All the new economy is global. The main economic activities (production, consumption, circulation), as well as factors of production (capital, labor, raw materials, management, information technology, markets) are organized on a global scale.
   This organization is carried out either directly or by means of branched networks. Under the new conditions to achieve the required level of productivity and competitiveness is increasingly becoming possible only within a global interconnected network.Globalization combines positive and negative characteristics. The benefits of globalization are clear: faster economic growth, higher living standards, rapid deployment and diffusion of technological innovation and management skills, new economic opportunities for individuals and for entire countries. Global economic integration may lead to a better division of labor, capital can move to any country that offers more favorable conditions for investment.Why, then, has globalization begun to generate a backlash, the most recent and most visible manifestation of the event which began September 11, 2001, and before that anti-globalization speeches?The fact that globalization could destabilize financial markets, the negative impact on the environment, promote cultural impoverishment, increase income inequality.Only a very few people, groups or governments oppose globalization as such. The protest its disparities. First, the benefits and opportunities arising from globalization remain highly concentrated in relatively few countries and are unevenly distributed in the countries themselves. Second, in recent decades, there was discrepancy between the successful efforts to develop a rigorous and strictly observe the rules to facilitate the expansion of global markets, and not very active in support of the equally important social goals, whether working conditions, environment, human rights and the reduction poverty.In recent years, national borders become more transparent for goods, services, capital and labor, as well as flows of information, ideas and cultural values. Globalization increases any market, provides great opportunities for development.In the economies of many countries in the last century, the share of foreign trade. For example, from 1700 to 1913 in the U.S. development of foreign trade is constantly outpaced growth in domestic production. From 1913 to 1950 in the United States and other developed countries, the growth of foreign trade has decreased, which was caused by wars and economic crisis of the 30s, but then the trend of rapid growth of trade prevailed.Between 1970 and 2000. the real volume of world exports of goods and services has tripled. World exports have increased 10 times since 1950 – even after adjusting for inflation – and steadily continued to grow faster than world GDP. Foreign investment has risen even faster. In recent years, world exports exceeded 21% of world GNP. In some countries such as China, Botswana, the Dominican Republic and the Republic of Korea, the growth rate of exports accounted for 10-13% per year.So far not participated in the International Trade products are increasingly involved in the process of internationalization. This is primarily a service, transportation, banking and insurance services.The global economy – the economy is not a planetary scale. Its existence and shape affect only a few structures and economic segments, countries and regions according to their place in the international division of labor.Globalization is closely associated with the regionalization of economic growth factors. Experience shows that sustainable economic growth in recent years show the regions that are organically fit into the new global economy. Conversely, those regions which are guided by their own isolation and misunderstood self-sufficiency, remain under the old models of development. They have been steadily reducing its rate of growth, gradually approaching zero and even negative values.

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6. (2078.) Globalization and its influence on economic growth

   Over the last few decades we witnessed the increasingly global inter relationships of culture, people and economic development. As technology improves tremendously with the development of the fax and internet, the speed of communication hasten to the point of just a snap. Countries all over the world begins to trade with one another in huge quantity instead of with just neighbouring countries, allowing an influx of products and goods that were not experienced before. Over the past three decades, the world also witnessed the adaptation of English as the universal language with 1.5 billion speakers (although there’s only 375 million English native speakers) . This easing of transport and communication allows the idea of production of goods in another country, which proves to be a business opportunity.

   The fundamental of doing a business is to generate profits. To increase profit one can either increase the profit margin or increase the quantity. Now if there is an opportunity to decrease production n cost, this would increase profit margin and the difference in cost can actually be reinvested to produce more goods, which leads to increase in quantity, of course depending on demand. Now with globalization, it is cheaper for producer to produce where it is near the source of raw materials and where labour is cheaper, which is likely to be in the developing countries. All the producer needs to do is to bring in the technology and the knowledge of operations to get the production running.

   Now this benefits all parties involved: Producer is able to increase profits with lower material cost (transportation of raw materials) and lower labour cost. By placing factories in developing countries, the savings of the labour cost far outweighs the cost of additional transportation when transportation cost reduces with the development of technology (case does not apply with transportation cost remains high).

   For the developing country where the factory is at, they will be able to take in the new technology and knowledge of operation while its citizens are educated and employed. In the short run, the establishment of factories increases the Gross Domestic Product of the developing country by producing more goods from the developing country. Over the long run, the increase in technology and knowledge will allow the people to set up their own production line someday, which will also them to increase of Gross National Product instead of just gross domestic product. Thus the establishment of foreign production companies in developing countries leads directly to economic growth with the increase of real gross domestic product assuming inflation is no higher than growth,

   One evident example will be the case of China. With an average 10% growth in gross domestic product for the past 30 years, China’s GDP is now at 7.3 trillion USD after just surpassing the one trillion mark in 1998 . Various observers have noted that China will probably surpass US as the leading economy by 2016 .
   Over the past three decades, multinational companies have to establishing factories all over China to take advantage of the cheap labour and the abundance of raw materials such as cotton and coal. The influx of foreign factories has led China to become known as ‘the factory of the world’ where it manufactures products at a lower cost than most countries. This contributed to the statistics of the total trade with China, which increased six fold in the past decade
   Over the years, the Chinese have adopted the new technologies and able to imitate and produce products of similar qualities. For example, an almost exact of an iPad came out a week after the actual iPad was launched in the United States. Obviously this has something to do with the piracy issue but it is the speed of how the Chinese can break the machine apart and replicate a similar one that is impressive.

   Economic growth is witnessed through globalization by the principal of comparative advantage. With the ease of trade, and with the knowledge of what each other are producing, countries are now able to specialize on certain products to benefit both developed and developing countries. Overall, the economy will benefit through the gains of trade as specialization allows more effective production of goods within an economy. The establishment of the World Trade Organization further promotes free trade as countries echoed Paul Krugman’s view that free trade will bring about economic growth.
   Yet this is only in theory as developed countries tend to input protectionist policies that favours their own production when they have the absolute advantage. This was evident when a World Bank report stated that many of the developed countries are resorting to protectionist measures as the global economic slowdown hits their economy .

   Negative economic growth from globalization
   Despite the positives that globalization brought to economic growth, there are also negatives impact brought upon by globalization. With the outsourcing of goods production to cheaper developing countries and the workforce unable to adapt and switch focus on a different industry in time, there is a serious trend that developing countries are costing jobs in developed countries in specific sectors. Structural unemployment is a serious problem in the United States besides the lack of growth in the county and this may apply to many of the other developed countries.

   The increase of trade also leads to the deficit of trade with the developing countries, when the developed countries are unable to export more than their imports. This deficit of trade poses a huge problem to any country when there is an outflow of domestic currency to foreign markets. As the trend continues and the developed countries unable to balance it back, it might be one of the reasons why they began to implement protectionist policies such as tariffs to their exports as mentioned above.

   Finally, the widespread globalization also leads to financial independency. With the huge amount of trade between nations, a recession in one country will leads to its inability to purchase more from another country, affecting the income of the other country and the trade will reduces between countries like a domino effect. With the exception of India and China, the 2008 financial crisis is a good example of how countries are dependant on each other with the drop in gross domestic product across the globe.

   In conclusion, globalization brought about economic growth to many nations around the world, developing countries in particular, while the world witnessed exponential economic growth as a whole. From the micro point of view, goods are getting cheaper (inflation excluded) while people are able to enjoy Japanese cars in Europe. Yet what we see now are the results of a short period of two decades and the real effects brought by the economic globalization are yet to be seen, or even be imagined.

   The Future of English, David Graddol, 2011. Retrieved from http://www.britishcouncil.org/learning-elt-future.pdf
   Historical GDP of the People’s Republic of China. Retrieved from Wikipedia, http://en.wikipedia.org/wiki/Historical_GDP_of_the_People's_Republic_of_China#Current_status
   2016: when China overtakes the US, Mark Weisbrot, Retrieved from Guardian.co.uk, http://www.guardian.co.uk/commentisfree/cifamerica/2011/apr/27/china-imf-economy-2016
   US-China Trade Statistics and China’s World Trade Statistics, Retrieved from https://www.uschina.org/statistics/tradetable.html
   Protectionism on Rise in 17 of the G20 – World Bank Report. Retrieved from The Wall Street Journal, http://blogs.wsj.com/economics/2009/03/17/protectionism-on-rise-in-17-of-the-g20-world-bank-report/
   The Real Reason why US unemployment will remain high, Mike Stathis. Retrieved from The Market Oracle, http://www.marketoracle.co.uk/Article31909.html
   GDP growth (annual %). Retrieved from the World Bank, http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?order=wbapi_data_value_2009+wbapi_data_value&sort=desc

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7. (2077.) The new role of government
   The policy of neoliberalism, which implies that markets are efficient by themselves and are automatically corrected by an invisible hand while acting in the best interests of society, has been extremely popular in most developed countries recently. These ideas have spread heavily after the rein of Margaret Thatcher in Great Britain and Ronald Reagan in the US, who were highly supportive of it, and as Dr. Kolodko stated in his book “Truth, Errors and Lies: Politics and Economics in a Volatile World”, these two leaders were capable of turning what have previously been an ideological trend into a mainstream. Such policy has led to a steady decrease of the government regulation in the most important economies of the world, which turned out to be unbelievably beneficial for a certain group of people, represented usually by the upper class, and rather devastating for all the others. The current crisis has proved that such policy is absolutely unsustainable and is based on false assumptions, because markets cannot be efficient on their own as there are always important imperfections and asymmetries of the information which are always exploited by certain players in their own interest. As Dr. Kolodko mentioned in his book, it is now difficult to understand how it was ever possible for an economic and political concept that serves so few at the cost of so many to attain such status and such bargaining power. However, these few people had all the necessary means in their hands in order to mislead the public by offering them great potential benefits in their huge brainwashing campaign supported by lots of politicians and economists who were generously rewarded for their help.
   Anyway, nowadays the illusion that laissez-faire policy promotes sustainable economic growth and benefits the whole society is starting to be revised. More and more evidence proves that no economy may act efficiently without intensive government intervention which should act in support of the majority, but not on the contrary. I absolutely agree with Dr. Kolodko that following neoliberal concept did not lead any close to long-term, financially, socially and ecologically balanced growth and economic development. This fact reveals that there is an obvious necessity for the government to accept a new role and prevent similar mistakes and failures in the future.
   Very often markets cannot produce socially desirable outcomes even when they seem to be efficient. Those who have more power and wealth will always exploit others in a beneficial way for themselves, but these gains will be offset by the losses on the side of the “exploited”. In this case markets will seem to be efficient and unfortunately under such conditions nobody can be made better off without making someone else suffer. And I think that this is the role of the government to prevent such injustice and impose necessary regulations to avoid such exploitation and protect the majority of its citizens from being misled and used.
   One of the biggest mistakes the crisis has revealed is the inability of the government to ensure enough competition. Some institutions as banks were allowed to grow with incredible pace, becoming too big to fail. Such huge institutions become extra strong and influential and they are usually the ones who exploit the market power in their selfish interests, because they know that whenever they fail in anything – the government will give a hand of help as it will not have any other choice. But all the times when they did not fail, they were the only ones collecting all the gains.
   Also the crisis has shown that the government needs to impose much more regulation in order to prevent the exploitation of poor and poorly educated people. These individuals very often could not evaluate the risk of the mortgages they were offered, usually in a very insistent way. The lenders, having no restrictions, led by their greedy intentions and reckless belief that real estate prices cannot stop growing, were involving more and more people into the debt loophole. They should have definitely done a better risk assessment, but as they were not obliged to do so, they did not bother with that. In the end, such lack of regulation let to a catastrophic outcome when people were losing their homes and the economy faced a great meltdown.
   It is important to notice that the period of neoliberalism which was supposed to benefit the whole society has brought enormous gains for a small minority of rich and powerful actors, while depriving all the others of any benefits even more than it was before. According to Dr. Kolodko the government placed too much trust in a narrow group of people who prepared the crucial package of changes, and as a result it was misled by the irrational optimistic forecasts, though many leading economists proved that such results could not be feasible. As Professor Kolodko states, this small privileged group was able to capture a great part of the rising output, while at the same time lots of people nowadays earn less in real terms than in 1970s and 1980s. Thus, the gap between the reach and poor had continued to grow and it is commonly known that such excessive inequality has very bad consequences for the economy. This means that state intervention becomes obligatory in order to ensure a fair distribution of income by taxing more those who can be taxed and giving new opportunities to those previously misled and exploited.
   While thinking on this topic, it is very useful to look at the economic system present in most Nordic countries where the government plays a very big role and the economies are considered to be very efficient and sustainable. These countries use high taxes to finance a high level of government spending and, following this way, they were able to achieve a balanced combination of prosperity with social justice.
   To conclude, I would like to say that government role nowadays implies much more regulation than we have observed recently because social and private costs and benefits will never correspond to each other. Such situation creates problems both in the short-term and long-term perspective. Market players need to learn how to assess risk more thoroughly, but unfortunately they will not be willing to do that voluntarily. Only intensive government regulation will ensure a balanced and efficient economic growth by preventing the unjust exploitation of the majority by a minor group of wealthy and powerful actors who can use market imperfections and information asymmetries in their own interest. At the same time it is a straight responsibility of the government to ensure the increase of the intellectual level of its citizens by investing more in educational-cultural sphere, as in the face of globalization knowledge is that essential asset that people cannot live without. With the increase of people’s awareness, the gap between poor and rich will be steadily reduced on its own as it will be more and more difficult to exploit people who possess the knowledge of how the system really works. Thus, in my opinion, the role of the government should be modernized in that way which will bring greater social justice and address the challenges brought by interconnected world economy.

   References:
   1. Grzegorz W. Kolodko, “Truth, Error and Lies. Politics and Economics in a Volatile World”, 2011
   2. Joseph E. Stiglitz “the End of Neo-liberalism” http://www.project-syndicate.org, July 7 2008
   3. Joseph E. Stiglitz “Regulation and the Theory of Market and Government Failure”, April 2009

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8. (2076.) 1. Introduction
   It is the year 2012, a clear representation that the current world having gone through just two millennia’s, is still in its infancy stages, though in reality, it is ancient and has seen the rise and fall of many great empires. Mighty nations, non-contented with themselves, chose to spread their influence, by colonizing or conquering others, and thus bringing about wealth and economic growth to both the invader and the conquered. In modern terms, countries spread their wealth and their growth to others through globalisation, leading to the hypothesis: Globalisation is always accompanied with economic growth.

   2. Definitions
   To start of this topic, it is important to first understand the two terms, globalisation and economic growth.
   a. Globalisation
   Kolodko (2010, pp.78) states that globalization, is a term used to describe the broadest, worldwide dimension of a rapidly changing reality – not only economic, but also cultural, social, and political. In essence, it would mean the diffusion and influence of values and characteristics from all various disciplines from one country to another.

   b. Economic growth
   Economic growth, in the simplest of meanings, would be the growing of a country’s wealth, its GDP. Having its industries develop, having capital flowing around in its financial markets, public spending and building of infrastructure are all positive signs of having economic growth.

   3. Hypothesis testing
   Having understood the definitions, it is next critical to divulge the correlation between globalisation and economic growth.

   a. The economic growth of a country, through globalisation.
   When countries open up, they bring with them the opportunities for foreign direct investments to enter and bring with them economic growth to the countries. However, a necessary condition for this to happen would be the willingness of the country to open up itself. In the twentieth century, many countries have opened up, either willingly or by the force of a stronger nation, and thus experience high economic growth, although there remains some that are almost retardant to change and thus shut its doors to the rest of the world. Two such countries that are worthy of note are Japan and North Korea, both being polar opposites of each other. Japan, being the one being completely open to international trade and policies, whereas North Korea has almost cut off all ties with the rest of the world.

   i. Japan
   After the Meiji restoration, Japan opened up itself to the world and has since gone through two major periods of economic growth. The first in 1868, extending itself to World War II (WW2) and the second began in 1945 up to the mid-1980s.

   The first period saw Japan embracing globalisation as it sent thousands of students to the West and hired expats to teach Western science, mathematics, languages and technologies. The government took a hands-on approach and guided the businesses to grow. It even built infrastructure, such as shipyards and factories and sold it to the businesses at a small percentage of their costs in order to kick-start various businesses, many of which matured into major conglomerates.

   After WW2, Japan experience huge economic growth from the 1960s all the way to the 80s, where it transformed itself into a high wage economy. In this case, globalisation has brought about wealth in the country.

   ii. North Korea
   After WW2, Korea was divided into the American and Russian zones, with America taking the south and Russia taking the north, which eventually became North Korea.

   North Korea being a strictly regulated economy, is almost entirely government-planned and state owned. Its international trade is severely restricted, with most of its FDI coming from Russia or China, with whom it has maintained close ties since the creation of the state. This has resulted with a GDP per capita of $1,800 according to the Central Intelligence Agency (CIA) and an average salary of $47 per month in 2004(Knipps, 2004).

   Closing its doors to the world, North Korea has shunned globalisation and the economic growth that accompanies it.

   b. A clash of globalisation
   In the twentieth century, the world has seen two world wars and the rise of two superpowers with two different and often-clashing ideologies.

   Two differing nations with their own groups of countries and allies that they had ‘ globalized’ clashed over and over again, creating what we now know as the Cold War. During that period, capitalism grew and countries that embraced it flourished. Many other countries, such as the four Asian tigers adopted capitalism, grew and eventually developed to become modern economic powers. However, countries under the socialist regime of USSR were poor as the continued stockpiling of arms took up most of the spending of the government.

   Eventually, as history unfolded, the fall of the Iron Curtain brought many countries out of the socialist regime and into capitalism, after which, they experienced continued economic growth.

   c. Can globalisation backfire and cause the economy to crash?
   Globalisation has all of its merits, creating economic growth and jobs for countries and their people. However, therein lies the question that whether globalisation can do the opposite and cause the meltdown of a country?

   Imagine the possibility that instead of Europe colonizing the world; imagine that China continued to exuberate its Naval presence around the world and did not hide behind its walls. China would most probably have been the superpower of the modern world. However, would globalisation then, cause the economy to crash? Unlikely. The world economy would probably still function, albeit with minor differences such as a different official language. Though a hypothetical example, the hypothesis still stands true.

   4. Conclusion
   The rise and fall of nations has always brought about growth and prosperity to the world. The modern world has seen many examples of globalisation, of many nations growing and the spreading of its ideals and culture to many others, and most of the time bringing growth in the recipient country. In conclusion, globalisation is accompanied by economic growth, and in addition, only if the country is willing and adopts sound economic and social policies.

   References

   Grzegorz W. Kolodko (2010), Truth, Error and Lies. Politics and Economics in a Volatile World. Columbia: Columbia University Press.

   Central Intelligence Agency. (2012). The World Factbook: North Korea. Updated April 12, 2012, Retrieved March 20, 2008, from:
   https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html

   Knipps. S. (2004, December) Welcome to North Korea. Rule No. 1: Obey all rules, The Christian Science Monitor, Retrieved 14 April, 2012, from The Christian Science Monitor website:
   http://www.csmonitor.com/2004/1202/p11s01-trgn.html

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9. (2075.) Globalization and its influence on economic growth

   Definitions:
   Globalization is a process of global economical, political and cultural integration. At political and economic level, globalization is the process of denationalization of markets, politics and legal systems. Citing Professor Kolodko in “Truths, Lies and Errors”, it is a movement aimed at limiting and abolishing limitations in international economic exchange. Other than technical progress that is required, there is also a strong need to abolish man-made political barriers. Complete globalization would mean freedom and free choice, open borders to migration and the flow of people.

   Economic growth is best defined as a long-term expansion of the productive potential of the economy. There is an increase in the capacity of an economy to produce goods and services, from one period of time to another. Sustained economic growth should lead to higher real living standards and rising employment in the country. In other words, the growth of an economy should also lead to an improvement in the quality of life to the people.

   Positive Influences on Economic Growth:
   Without a doubt, globalization has its positive influences on economic growth in countries. Globalization enables businesses to connect with the world. There is a reduction of risk through diversification that can be accomplished through involvement or alliances with international financial institutions and partnering with both local and multinational businesses.

   Also, globalization of product and financial markets would mean increased economic integration in specialization as well as economies of scale, which will result in greater trade in financial services through both capital flows and cross-border entry activity. In addition, increased technology has facilitated remote delivery and provided new access and distribution channels.

   Another major benefit of globalization is the increase in free trade in the world. Domestic producers produce more efficiently due to their international specialization and the pressure that comes from foreign competition. At the same time, consumers enjoy a wider variety of domestic and imported goods at lower prices. For developing countries, technological spillovers give them chances to catch up more quickly with the developed countries in terms of productivity. At the same time, as developing countries open their markets, manufacturers from industrialized countries can benefit by relocating part of their manufacturing processes to new locations especially among developing countries. The attractions towards this could include proximity to cheaper labor and sometimes to final consumer markets. By doing so, developing countries are exposed to new employment opportunities for their people.

   As such, the abovementioned factors may contribute to economic growth in countries.

   Negative Influences on Economic Growth:
   Despite the positive influences, Non-economists and the wide public expect the costs associated with globalization to outweigh the benefits, especially in the short-run. Poorer countries may not experience the same beneficial effect from globalization as more wealthy countries. Although free trade increases opportunities for international trade, it also increases the risk of failure for smaller companies that cannot compete globally. Additionally, free trade may drive up production and labor costs, including higher wages for more skilled workforce.

   While there is positive effect of financial globalization, some authors claim that it is for middle-income countries and only a marginal effect for poor countries. For example, Zhuang & Koo (2007) examined the impact of globalization on economic growth and reported that China and India benefited most followed by the developed countries while the other developing countries in the study sample benefited the least.

   Domestic industries in some countries may be endangered due to comparative or absolute advantage of other countries in certain industries. Additionally, there may be overuse and abuse of natural resources to meet new higher demands in the production of goods.

   As Professor Kolodko also points out, globalization may cause some form of instability in the world. On the economic level, the flow of speculative finance capital and the associated risks could spread like epidemics during financial crises. In his book “Truths, Lies and Errors”, Professor gave the example of the South Asian crises that struck almost all the countries in this region, but also affected countries all over the world such as Russia and Brazil.

   Due to these reasons, one may hence argue that globalization may cause a slowdown in economic growth.

   Conclusion:
   Economic globalization has different consequences on businesses all over the world and influences almost every other sphere of human life. Globalization has potential benefits on the one hand, and costs or risks on the other.

   Quoting Professor Kolodko in his book, there is not way to reach a consensus if globalization is good or bad. Because what one person regards as progress that adds value, another will view at the same time with disapproval. Ultimately, we have to understand that globalization is a natural and irrecoverable process and we cannot do anything against it, but we should, at least, keep it in our minds. The question then is not whether to globalize or not but rather how best to take advantage of the opportunities that globalization brings while minimizing its negative or adverse effects.

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10. (2074.) Why globalization is not so perfect as it might seem? The main features of contemporary globalization.

    „Globalism – as an opportunity and threat. Powerful technology combinated with the arrogant ignorance, fanaticism and fierce greedy selfishness. And that still reluctant to learn, indifferecnce to the plight of the other, the lack of kindness and goodness.” – Ryszard Kapuściński
    This quotation, is a perfect way to show that globalization has two faces and, unfortunately, sometimes, more minuses than pluses. By dictionary definition, globalization is a collection of processes leading to interdependence and integration of the countries, societies, economies and cultures, resulting in the formation of a global society, the disappearance of the nation-state category, increased the rate of interaction though the use of information technologies and the growing importance of the organization over an international, especially transnational corporations. In my work, I will try to explain the basic features of contemporary globalization. As help I will use a book of professor Grzegorz W. Kołodko, “Truth, errors and lies book”, in particular the chapter “Globalization-and what?”, which perfectly recognizes contemplated my issues.
    The fundamental mistake made by people is that they are abusing the world “globalization”. The word is overused especially in scientific trials and research. “The globalization of world economy,” or, more generally, “the globalization of the world” is nothing but a tautology. “The World” is global in nature, so there is nothing further to say. It is as if to emphasize in the sentence that “sugar is sweet,” and “water watery” …
    If we talk about the globalization, we cannot forget about the things like liberalization, integration and interdependence. Liberalization is the gradual process of licenising the rights and powers previously reserved only for the elite authoritarianism, which, thanks to these rights and permissions, can control society. Is always connected with freedom and liberty. Liberalization is the basis of the free market. It enables free pricing and proper development of competition. You can have your own business in the free way.
    Next is the integration. It is the combinig capital, labor and goods, in a large market. In the modern times, the economic integration is supported by the creation of organizations such as WTO (World Trade Organization), or ILO (International Labor Organization). There is no need to cheat – two connected companies give more income, more most skilled workers, greater capital for advertising and more clout. The integration also allows for greater professionalism. Decisions about the location of the company’s manufacturing plants in other countries, are associated with more competent accounting. Accounting includes such factors as: the cost of local labor, or transportation of the country. The opening of a new subsidiary of another country, is not only the transfer of capital, but also the flow of new technology that allows to open a new Print Print content production. That such factors make it possible that Japanese, American and West European companies open their branches in Southeast Asia, or China. Speaking of integration, for example, we take the hands of South America, place, where was very interesting fact. Release former colonies of Spain and Portugal, which were divided among British, French and Dutch, led to the creation of several independent states. These countries, did not create the economic one of the continent. It has, however, there appear “Common Market of the South”, which will include as state as Argentina, Brazil, Paraguay, Uruguay and Venezuela with the remaining lating countries of Bolivia, Chile, Ecuador, Columbia and Peru as associate members.
    Next thing is interdependence. This is the feedback loop between the phenomena and processes occurring in different places in the global space. This phenomenon is occurring not only in economics but also in culture, or politics. Example? We all could be witnessing a terrorist attack on the World Trade Cebnter, or the opening of the Beijing Olympics. The interaction between the states is evident every day. Residents of Warsaw affect the growth of housing prices such as Lviv. Then we integrate in order to exert pressure on house prices in another country. Decisions taken by one government, they have a huge impact on the decisions of another country.
    One of the positive effects of globalization is the ease of communication. An example would be selling products on eBay. Cooperating with each other entrepreneurs do not need to interact directly with one another to take part in auction.
    Globalization has its pluses and minuses. For positive traits, definitely include the extremely fast growing international trade and even faster growth of global capital transfers. It is also the spread of modern technology, which has a huge impact on the modern enterprise. The other fact is, that in post socialistic systemic transfer has picked up speed, bringing a lot of people from thirty five countries into the unrestricted world economy.
    One of the most negative features include de migration of people, which sometimes are inconsistent with the law. It can be very dangerous, and leads to an increase in crime and it’s trade on the black market. Another negative thing is the fact that all countries become so similar. All over the world are built shopping centers, such as in Florida or in California. This is not a phenomenon accepted by all people. Such actions lead to the collapse of local culture and make cultural differences are no longer so clear.
    You can not say in general that globalization is good or evil. Some believe it is only the positive side, the other-that negative. You can see in especially in countries with strong traditional cultural identity, like Arab world. We shouldn’t get carried away. I the press, the globalization is shown in a simplified manner. We should not always believe what the newspapers offer us, as they often do not show the true reality. One man, Lester Thurow, said: “For the first time, in human history, anything can bemade anywhere and sold everywhere.” I think that is a great phrase to describe globalization. And whether it carries behind more negative or positive effects, it remains now to the individual decision of each person.

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11. (2073.) After attending Prof. Grzegorz W. Kołodko’s lectures on “Globalization, Transformation and Development” and reading his excellent book “Truth, Errors, and Lies” I’ve arrived at several conclusions, out of which I would like to share a few. I will focus on the main features of contemporary globalization and their implications. Before getting into the core of the topic, however, I would like to note that these main features all fit into the 3 aspects of globalization which Prof. Kołodko has pointed out: liberalization, integration, and interdependence.

    The first feature which I believe is the most important and at the same time the most evident is technology. Technology is being developed at a remarkably rapid rate and the use of new technology is spreading faster than ever before. Nowadays everyone wants, or already has, the newest version of Apple’s iPhone, iPad, or iPod. From year to year, new editions become available with faster processors, better displays, more applications, and more accessories. Even though their current devices are probably still in good working order, the mentality is that they are simply outdated already. Now, one must realize the vast implications of this phenomenon. First of all, the widespread usage of new technology liberates us. We are able to find, share, and research information from all around the world almost instantly. Furthermore, we can share our pictures, videos, and music, all within a matter of seconds. A Spaniard can take a picture and send it to his friend in Japan who will receive it practically immediately. This is a clear example of how integrated we become by easily surpassing physical barriers. More importantly, one must note that this system is fully based on interdependence. If everyone only wanted to get information, there wouldn’t be any out there. Thus, new technology is based on the presumption that people are dependent on each other and will therefore become part of both, the input and the output. As a result, new technology acts as a catalyst in the process of globalization. It allows us to quickly share information, opinions, methods, plans, and more. In a sense, we are all unified through technology.

    Another prominent feature of contemporary globalization is culture. Before several major events of the globalization process took place, most societies were somewhat isolated. People stuck to their own ways and beliefs, and were comfortable with the way they lived their lives. However, this has completely changed. We currently live in a cross-cultural world. Technology allows us to communicate with each other no matter where, or who, we are. There are less borders which results in increased foreign travel and more companies expanding to new markets. Businesses outsource tasks to emerging market countries. People are free to choose religion in most countries. There are many more examples but the gist of the matter is that every day we are influenced by other cultures. As people move to new places as they please, we have to learn to be more culturally aware. For example, in my own class at Kozminski University only about half of the students are Polish. The other half includes people from Nigeria, Ukraine, Belarus, France, United States of America, Canada, and more. The level of integration that we encounter today has never been so high. This not only changes the way that we think, but also changes the way we do business. Companies have to analyze consumer behavior from a different perspective. They have to take into account the cultural differences of a given population to correctly assess their results and tactical plans. Furthermore, advertising has to be designed appropriately so that it reaches the target consumer. In other words, a billboard should promote a product in a way that is understood by people of various nationalities, not just the locals. Clearly, there are multiple cultural changes going on that are affecting our everyday lives.

    Last, but not least, I think that it is vital to point out the significance of capital markets. At the present time, the movement of capital is consistently increasing due to numerous banking systems with various financial instruments, and liberal capital transfer regulations. Stocks and bonds can be traded on several stock exchanges around the world, all of which affect the situations of a copious quantity of companies. The idea of these systems is rather simple and generally positive. Businesses can raise capital for their activities and expansion, whereas investors can make money on the increasing value of these companies. However, many people around the world harshly criticize this for being dangerous and unfair. They claim that these investments are dangerous because bankers are reckless in the sense that they will do anything to gain money, but if something goes wrong they will not take any responsibility. Thus, the massive speculations on the real estate market in the Ireland, which was partially the reason for the recent financial crisis, were supposed to be very profitable for all stakeholders. However, in the end they led to a colossal blow to all parties involved and ended up giving us an unstable world economy, with major banks closing down and causing hardship to regular citizens. Clearly, in this global economy everyone and everything is interdependent and integrated. If one bank goes down, many other are affected. If one country in the European Union is on the verge of bankruptcy, all of the other members must help or they risk going down with that country.

    In conclusion, contemporary globalization is happening at a very fast rate. All 3 components of globalization which were identified by Professor Kołodko (liberalization, integration, and interdependence) are enhanced from day to day, whether we realize it or not. New technology changes the way we do and perceive everything, from entertainment to work. The mix of cultures that we encounter every day changes the way we think about ourselves and others. Capital markets make all of us interdependent to a point that we have not imagined before. To put it briefly, we now live in a global world with a global economy, where no one can think of himself as a fully independent, autonomous individual anymore.

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12. (2072.) Neoliberalism and the world economic crisis.

    The dominant speech on the current crisis is generally pretty simple. Since the 80s, under the leadership of Thatcher and Reagan, the current neoliberal ideology has emerged in the Western world. Finance has gradually seperate itself from the real economy and the welfare state has left more room for economic regulation by the market. The decline in property prices in USA has put a pressure on banks that were secured by mortgage on the properties values (the famous subprime crisis). The securitization of risk, rather than functioning as a distribution system that would have to absorb the blows, was driven by free exchange with “toxic securities” contamination of the entire global banking sector. Interbank Confidence has been lost and credit has dried up, which automatically led to slower real economy. Realizing the gravity of the situation, all heads of state, to save the interests of individuals and businesses to operate, were willing to put billions of euros to rescue the banking system. After one or two years of recession, the time needed to introduce some new financial rules and make some effort to moralize the system (as the elimination of golden parachutes in case of bankruptcy of enterprises) the system will start again to go towards growth … The liberal politic side, in the name of the responsibility, wants to moralize the economy’s actors. the social democratic politics emphasizes the need to go back to a regulated economy as when Keynes’s ideas were used.

    We are all supporters of a certain amount of freedom in society, all convinced that some activities can be putten in a protected but competitive sector. Also, a large majority of citizens think that the law of supply and demand is one of the essential elements of economic regulation. Capitalism, sometimes carry very negative adjectives, can also be seen as mens capacity, bypassing the state, to structure and invest collectively to produce goods that could not be in the traditional way. the neoliberal or libertarian ideology is characterized in the recent years as the desire to reduce the role of the state, to which they concede responsibility on safety. For them the economy through the law of supply and demand is able to regulate itself through the “invisible hand” of market competition and this is the most effective way of generating growth and to improve the living standards of all. It is this model, including the intention to privatize public services, which has been on the rise throughout the west, in the USA with the republican’s conservative ideology, or in Europe in its social–liberal ideology.

    This neoliberal ideology has been great to make survive only the competitive company as the less effective one’s had to disapear. In that way the final customer has access to the best products in terms of quality and prices through the “invisible hand” process.
    Unfortunatly this ideology has its limits. The world crisis that we have nowadays has everything to do with the neoliberal economy that has been promoted in the wealthiest countries those last few decades.
    The lack of control the state has over the free market economy has let the right to some of its actors to speculate on things they shouldn’t had because it is risky for the whole economy. Through these kind of behaviour some actors contaminate the whole system with “toxic assets” that they have created. Those actors, the banks, hedge funds.. have used the freedom they have to make more money through risk taking and when they finally realised the whole economy was polluted with those assets and that they lost enormous amount of money they have sent an SOS to their state to get financial help.
    As those banks were “too big to fail” (except Lehman Brothers) the states gave them money so that they could survive and guaranty the savings of their customers. Most of those states did not ask anything in return from those banks. If the state had the same kind of philosophy as those actors they would have bought shares of the bank, not to nationalize them but to have something in return of the money they give them. Nowadays some states agree that Banks activities need to be regulated but also that bank transactions should be taxed.

    through this economic crisis we can see that the free market economy has failed. We can assume that this crisis was led by the neoliberal politics. Nevertheless, as the world needs competition between the companies to keep on generating growth, innovation.. a solution is needed to ally a free market economy to a regulation by the states.

    In this way The book “truth errors and lies” gives us the example of one of the most successful country in the world that didn’t really feel the crisis thanks to its ideology which is different from the western countries’ one: China.

    « China behaves rationally. Rejecting the philosophy and practice of the Washington Consensus, it has, a few details notwithstanding, charted a course that is almost perfectly adapted to globalization. Its winning in this process because, better than anyone else, it combines liberalization with regulation and microeconomic entrepreneurship with macroeconomic strategy. » (p 250).

    This idelogy might be a good one to follow for the states that suffered from the crisis because of their extrem liberalism. allying liberalization and regulation would be the best way to have competitive companies who have an good ethic and that doesn’t take its benefice from one’s misery.

    The whole world has had enough of banks and big corporation playing « heads i win, tails you loose » it is time to regulate this system that favorise only a tiny minority.

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13. (2071.) The last chapter of “Truth, Errors and Lies” cites 12 ‘compass points’ that the scholar should keep in mind when looking into the future. The 12 compass points are numerous, and I am certainly amazed at the succinctness with which these 12 Compass points have been constructed.

    I am inclined to postulate that none of the 12 compass points can be ranked; that is to say that no one compass point is more important than another. I would like to add my opinion however, that point 12 “Conflicts and security, war and peace” seems to hold particular significance than the rest at this particular point in time to me.

    Political tensions in the world for the last decade so seem to have be at an all time high, especially to the mind of a 24 year old undergraduate. The present overtones of a war seem to be fronted by tensions in Iran and in the Korean Peninsular, though the former seems far more likely. It would seem in recent month that Kim Jong-Un’s succession has silenced optimists for the reclusive state, especially in the light of North Korea’s constant missile tests.

    It is my view that these two events are high on the lists of “conflicts” and would continue to be so across the world, especially in the Obama (or Romney?) administration, though it is once again my view that the former is far more likely. I agree widely that the world may be less on the brink of war than the years of the Cold War, but tensions can hardly be described to be relaxed. In this light, I would opine that Point 12 would seem to be my most important of the 12, in that it would have capacity to affect the other 11 profoundly.

    As I read chapter 12, I noted the broad usage of the word “security”, and indeed, political security, the landscape of which has changed drastically. Indeed, in my opinion, in bringing the world’s “Truth, errors and lies’, to the fore, no one has done more than Julian Assuange and Wikileaks. For me, the rise of Wikileaks was a powerful reminder that what goes on behind closed doors in the political offices of the world is seldom that which is reported, and one which could well threaten the security of the world when taken out of context. To this end, it is appropriate to keep the mind that diplomatic security is not a subject that can or should be taken for granted.

    It is unlikely to me as well that the War on Terror will ever be won, despite the free world’s best efforts to eradicate it. That America intensified the terrorist threat rather than nullifying it is a concept I have always embraced, and that I completely agree with. America has succeeded it only keeping itself safe, as well as perhapts its allies, but all over the world, the safety of people have not collectively improved as a result. it is right to say that America’s war has indeed been ‘misguided’ in this respect, and, while depressing to say, I see the War on Terror turning to bear on first Iran, and then North Korea, and after that – who knows. Perhaps the age old question of “Quis custodiet ipsos custodes” can be applied here, especially in regard to the high-handedness of the United States. It is my view that the War on Terror addresses the mere symtoms of the terrorist threat, and not the causes of it. Global action certainly needs to be well –coordinated in the future incarnations of the War.

    To this end, i agree once again wholeheartedly that the War on Terror, should be instead the War on Poverty, While the term poverty may be understood on a sliding scale ; that poverty for one may be wealth to another, it is apparent to me that poverty is what is driving the concept of terrorism, and which allows terrorism to flourish around the globe. Remove poverty, and half the battle on terrorism will have been half won.

    While i am skeptical that the illegal arms trade can ever be fully eradicated, the need for institutions to regulate these are paramount, especially in the Middle East. It is particuarly worrying to me that the arms trade could possibly be privatised, and it is my fervent hope that world leaders do not allow this to continue.

    Closer to home, and perhaps on a tangential subject, I am all too familar with the concept of ‘politicians who.. have done more than terrorists themselves to keep whole societies in a state of fear”, especially in our elder statesman – Mr Lee Kuan Yew. The 2011 watershed election brought to mind clearly just how Mr Lee’s party often positions itself above the opposition by citing a bleak future and ‘dark clouds on the horizon’, portraying itself as the only party to bring the people through it, and thus amass votes. In my country, it is not so much the threat of war, but the prevention of war’ which appeals to the masses. It is immensely interesting to me to view political campaigns centered on regional conflicts, as in the United States and the United Kindom, but serves also as a stark reminder that war and peace would probably dominate world poltics, anywhere in the world for at least my generation and those of my children.

    It is thus my view that Conflicts and Security would be the most important compass point in viewing the world future.

    Sources:
    Kolodko, Grzegorz W. (2011). “Truth, Errors, and Lies: Politics and Economics in a Volatile World”, New York: Columbia University Press.

    UNDP (2005), Human Development Report 2005, New York: UNDP.

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14. (2070.) Globalization and its influence on economic growth

    Introduction
    Globalization today is the new “in” word, albeit twisted into several forms to provide several meanings. It is argued that, globalization and the openness to trade and to invest produces economic gains that will eventually trickle down to all people in an economy. As such, when income of the people goes up, poverty should be reduced and income inequality closed. However, as we have seen, this simple common logic has been challenged as we see people in the world getting poorer, having worse standard of living than before.

    This paper will try and find a link between globalization and economic growth and see if globalization has actually improved the lives of the poor or has globalization aided to broaden the divide between the rich and the poor. It will view both the pros and cons of globalization and together with actual case studies or examples, attempt to draw an informed verdict on the issue.

    The Defence
    The advantages of globalization include increase in productivity due to countries producing products or services where they have a comparative advantage in. Living standards are said to rise as well. Global competition equates to cheaper imports and this keeps inflation in check. Open economies are also said to spur innovation and entrepreneurial ideas, some from abroad.

    Besides these general pros of globalization, another argument that favors globalization effects on the poorer people is factor endowment. It says that globalization is only beneficial or more beneficial to factor endowed developing countries. For example, land. It is often said that a country with land should automatically be rich, unless it lacks capital. As such, globalization provides a prefect opportunity for countries to get external aid in this aspect and eventually have higher productivity. A clear example of this would be China. In theory, attracting investors should not be a problem as lack of capital means a higher marginal productivity of capital and therefore higher rate of returns to investors. Emerging economies like China, India and others as well can respond to such capital inflows by having sound macroeconomic management systems in place and financial sector deepening.

    The Criticism
    Today, in many advanced economies even, median real incomes have not kept pace with the rate of GDP growth. In emerging economies, inequality has become a major issue. Over the last few years, inequality has gone up in most Asian countries as well. Also, both emerging and developing countries’ poverty levels remain high.

    It is estimated by the United Nations Development Programme that 850 million people are chronically malnourished, 1037 million lack access to safe drinking water, 2000 million lack access to essential medicine, 1000 million have no adequate shelter and 2000 million lack electricity. (UNDP, 1998; UNDP 2005).

    Due to these facts and figures, people all around the world are questioning whether globalization is actually beneficial. The bottom line is that trade is obviously brought more benefits than cons to the world today. However, I feel that we need to realize and ensure that these benefits are shared amongst everyone including the extremely poor. Investing in education and technology can do this. With the richer countries being technologically rich, I feel this has aided in widening the income equality race. Developing infrastructure is also another measure to decrease the gap of inequality. For example, lack of proper roads, electricity contribute to hampering the movement and productivity of the poor. Financial sector can also play a role. For example, microfinancing in India has taken off to aid in loaning small amounts of money to the poorer people to help them start their own business, which generates income.

    Conclusion
    To conclude, I feel that globalization has definitely brought the world better gains and especially to the developing countries. They have benefited in ways that otherwise would have been impossible. Globalization has also helped countries attain capital inflows and investments that are crucial for the country growth.

    However, it is evident that the wealth amassed has been struggling to trickle down to the masses and the poor. The reasons for this range from the lack of education, skill sets, and corruption even. Which causes inequality between the rich upper class and the poor.

    As such, I can conclude that what is needed is not no globalization but a better more effective way of managing globalization to ensure even the poor do not lose out. Globalization is better than no globalization at all for sure.

    References:
    UNDP (1998), Human Development Report 1998, New York: Oxford University Press.
    UNDP (2005), Human Development Report 2005, New York: UNDP.

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15. (2069.) Globalization and economic growth

    The word globalization is commonly used in several different contexts but has never been really defined. There is no single all-encompassing meaning of the word; it rather stands for the whole phenomenon of emerging world markets. By emerging global markets we mean global interactions like expansion of cultural influences across borders and the enlargement of economic and business relations throughout the world.

    The world has never before been globalized so intensely as it is at the moment, breaking down the economic barriers between nations and transforming the world to one integrated unit.

    The globalization has four main driving forces that are all linked together and by that they are all influencing the economic growth of a country. First we have the penetration of communication infrastructure. This development has had a huge improvement on efficiency in production and trading. Trade and financial deals can be made within minutes between different parts of the world. The second driving force is the development of transport. Distance, natural endowments, and size do no longer constraint economic development. It also makes trade more efficient when being able to ship products long way cheap and fast. The result of this synergy is the increased speed of integration between countries – leading to the third driving force – Trade openness. Free trade means more trade and more trade mean increased financial flows and by that an economic growth. The last driving force caused by the previous three is the extent of capital inflows. The intensification of international financial flows through outsourcing and international production networks provides developing countries with new opportunities to fuel future growth.

    Have this integration of the world had a positive or negative influence on the economic growth? There are arguments for both in favour of and against the globalization and its effects.

    First of we can say that globalization itself will not improve a nation’s economic wellbeing.
    One thing it does is that it gives each country, both rich and poor, distinct advantages to influence their economic growth and maximize their gains. As Joseph Stiglitz very well points out in his paper development policies in a world of globalization: “globalization has three distinct advantages: the demand for a country’s products is no longer constrained to its own markets; a country’s investment is no longer constrained to what it can save itself; and country’s producers can have access (at a price) to the most advanced technology”.

    Even do globalization provides these advantages they bring along some important challenges tied to them such as making all countries take advantage equally from the globalization. By doing so every country will get the same opportunity to have an economic growth. One of the countries that have failed to do so is sub-Saharan Africa and it is getting harder to get into the game . Even do one can argue that globalisation has helped developing countries to attract indirect and direct investments, providing with more job opportunities and absorbing unemployment, it is hard to ignore the fact that the very poor people haven’t jet benefitted from the effects of globalization. The gain has only gone to the ruling elites in these countries, causing unprecedentedly high levels of inequality and hardships to the poor. So the challenge would be to give every person the same chance by reintegrating them into the world economy.

    Another challenge from the developed countries point of view is the ability to keep up with the increased competition on the world market now that many other countries are participating with their products. If failed to do so it would lead to a set back against globalization and a waste of the opportunities offered by it. This extension on the world market has intensified the competition and changed the initial trading system and by that creating a need for new economic policies and business strategies that would regulate and control the economy. The challenge would be to create this set of rules and regulations in such way that every one gains from it, both developing and developed countries, to enhance economic growth both now and in the future.

    The last challenge I am going to highlight is the free capital market and the capital flows between countries such as FDI and its lack of sufficient regulations. This might cause a serious dislocation to occur within financial markets with serious ramifications for the world economy as a whole and future economic growth prospects. This challenge is connected to the previous one since both promotes the need for extra regulation and control. This change is already growing with new establishments in international standards and codes in issues like fiscal transparency, monetary policy, accounting, statistics and bank supervision and insurance and payments systems.

    In conclusion we can say that globalization is an unstoppable phenomenon at that it is presenting opportunities to those who are prepared and threats to those who are not. Countries have to, based on its individual endowments and circumstances, design and implement national policies that ensure the country takes advantage of the opportunities that globalization provides and at the same time deals with the risks that it introduces. Globalization is here to stay and it is up to each country to decide whether they are going to benefit from it and gain extra economic growth or not.

    Sources:
    Kolodko, Grzegorz W. (2011). “Truth, Errors, and Lies: Politics and Economics in a Volatile World”, New York: Columbia University Press.

    Stiglitz E. Joseph (2005,). Development policies in a world of globalization. Putting Development First: The Importance of Policy Space in the WTO and International Financial Institutions. Kevin P. Gallagher (ed.), New York: St Martin’s Press, 2005, pp. 15-32

    Diarra S. Cheick (2011). Least developed countries’ pose the next big globalisation challenge. The Guardian, 30 March
    http://www.guardian.co.uk/global-development/poverty-matters/2011/mar/30/least-developed-countries-globalisation-challenge

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16. (2068.) Globalization in my opinion means the increase of global connectivity, integration and interdependence in the social, political, economic , technological , cultural and ecological spheres. In this essay, I want to go more detail about globalization and how it influence the economy growth.
    For example, Vietnam is one of the developing countries and for Vietnam, the economic integration in the only way forward to the world. I think this is the historical inevitability, is a demanding objective. Firstly, the trend of globalization based on the economic interest for the parties becoming a factors to regional stability and creating conditions for reducing the expenses for security defense , then focusing resources for economic development. Secondly, the international economic integration creates economic relations and political diversity interwoven with each others, contributes to improve the international positions and makes conditions for Vietnam to participate in the exchange of equally international economy. International economy will decrease, the tax barriers and discrimination will change. It is a big opportunities for developing or small countries to join equally in the world economy. Thirdly, Vietnam is strengthening shorten distance and try to catch up with countries around the world. And now, while ASEAN is a economic bloc and common currency in Euro-zone , so the push to keep the economy to catch up with other economies in region is suitable and necessary. Globalization and economic integration is the only way. Fourth, participation in the international economic integration is an important environment for Viet Nam’s enterprises to change and improve the organization management, technological innovation, capture information and increase the competitiveness in world market and even in the domestic market. Economic integration also creates conditions for developing countries to expand trade, goods, services and investment which can get the incentives. The international economic integration also means that Viet Nam can strength political prestige .
    In fact, Vietnam wants rapid industrialization, takes advantages of cheap labor, agricultural resources and rich minerals. In addition , preparing careful for the development of high-tech industry in the future. Join in this process, Vietnam will have better opportunities to access new elements of the world economy such as technology, high-skilled labor, increasing the source information and capital investment . Moreover, export market expansion is one of the most important for Viet Nam to go to the world , this will leads the attracting capital easily.
    There are some positive impacts of economic globalization . Economic globalization, as a result of the development of productive forces of production, and in turn, back to promote, finance, services, labor … between the countries are interconnected, forming the flow of capital, goods, services, labor, technology which are freely in the region and globally, and support for all participating countries increased globalization economic growth and social development quickly.

    That is the positive impact of generic economic globalization, which represents the dominant and most visible growth and reduce poverty. This is shown particularly clearly for developing countries to participate actively globalization and select the suitable steps in the process of economic integration. Many countries in Northeast Asia and Southeast Asia have created the miracle of economic development, contributed to growth and reduce poverty significantly. A paradox is often seen that the growth of globalization is often accompanied by rising inequality, but the poverty rate declined sharply. For example, in China, high growth on the one hand to increase inequality, on the other hand reduce poverty faster.

    Effects of economic globalization on the economy go through many sides. Economic globalization creates comparative advantage for countries to actively participate in international economic integration. The international division of labor , in-depth market and regional integration in the different layers suits with the level of technology, labor and traditions of each country. For developed countries, production is mainly focused on intellectual products such as machine building sophisticated, high technology … It is their advantage. In contrast, developing countries have the advantage of cheap labor, abundant resources, they can participate in low and middle levels of economic restructuring in the world with a national economic structure accordance with the labor-intensive industries, require less capital investment, the average advanced technology to create goods and services indispensable for the market to other countries.

    Maximize the comparative advantage in the process of economic globalization in order to take advantage of trade liberalization, investment, capital market, taking advantage of technology and management skills.

    Liberalization of global trade gradually created a “culture of consumption” global, which means the barriers of countries are not present much. Liberalization of global financial markets associated with the liberalization of investment which open capital flows freely from countries to other countries. The liberalization of financial markets creates the necessary prerequisites for the integration of international financial markets. Thus, make it possible for large capital flows into the economy, but also increases the speed and scale of global financial transactions to unprecedented levels.

    The free movement of large capital flows and liberalization of investment have contributed to the rapidly changing economic structure of the countries participating in globalization and economic policy. GDP growth in many countries reach higher levels in many years, many business sectors establishment , forming a key economic sectors for the investment of electronics, telecommunications, Petroleum exports which increased very fast . In South East Asia , it is a typical example.
    Anyway, there are many negative impacts for the economy such as when the trade barriers are lightly, the foreign goods and services will strangle domestic business. Many countries will suffer the shocks of global economic system in financial, raw materials… And so far, for some countries which do not have the suitable macro strategies can get more affected. Moreover, the risk of lag in several countries. In the process of integration, there are some countries can not have enough advantages or abilities for attracting investors will be pushed back further behind. In addition, the threat of globalization is the tendency for monopolies. There are also other negative things such as the difference in the levels between rich and poor countries will increase, the conflict between cultures…
    However, globalization is an unavoidable process. Economic globalization opens up many opportunities and creates conditions for human to maximize advantages to increase their economic growth and social development. Simultaneously the process of economic globalization also set for each countries, national competitive pressures and the challenges , especially for developing countries. Being avoid marginalized of development, countries must try to integrate into the overall trend and increase enhance economic competitiveness.

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17. (2067.) Globalization and its influence on economy growth

    The word “globalization” is difficult to define, as it has a very deep meaning by itself. Globalization could be comprehended as a mean to major increases in global trade and exchanges in progressively open, integrated, and borderless international economy. However, human societies across the globe have also established increasingly closer contacts over many centuries. From the economy point of view there has been incredible growth in such trade and exchanges, not only in traditional international trade in goods and services, but also in exchange of currencies, in capital movements, and in technology transfer.
    Moreover, globalization has allowed a better communication flow between more developed nations and developing countries. It has facilitated trade to grow, capital and education system flows to increase and a healthier allocation of resources to be met across the world. In another words, globalization has involved greater openness in the international economy, an integration of markets on universal basis, and a movement towards a borderless world, all which have led to enlarges in global flows. There are some sources of globalization, which has changed the face of economy world over the last several decades. Technological advances, which has played a huge role in it. It has lowered the costs of transportation, communication and radically lowered the cost of data processing and information storage.
    A Second is the trade liberalization and other form of economic liberalization, which have led to reductions in trade protection and to a more liberal world trading system. In the book Truth, Errors, and Lies, it has briefly defined how some powerful players have demanded and won far-reaching liberalization for its own progress. For instance, developed nations have a tendency to profit from globalization in diverse ways when negotiating with developing countries. As an example, when powerful nations go to emerging countries like china, African nations to gain from cheaper labor force, cheaper land and tax rates and finally it end up negatively affecting the host nations economy by taking all profits back home, by polluting the environment socially and also the politically by paying bribes to the local governments . The third reason for globalization is comprised cultural developments, with a move to globalized and homogenized media, the arts, and the popular culture and with the widespread use of the English language for global communication.

    Influence on economy growth:
    Globalization has had significant blows on all economies of the world, with various effects. It affects their production of goods and services. It also affects the employment of labor and other inputs into the production process. Moreover, it affects investment, both in physical capital and in human capital. It affects technology from initiating nations to other nations. It also has major effects on efficiency, productivity and competitiveness. Globalization obliges industries to adapt to different strategies based on new ideological trends, which try to balance rights and interests of both the individual and the community as a whole.

    However, it has brought reorganization at the universal, national and sub-national levels. Particularly, it has brought the reformation of production, global trade and the integration of financial markets, consequently, affecting capitalist economic and social relation through multilateralism and microeconomic phenomena, such as business competitiveness at the global level. There are several positive and negative aspects about globalization. Globalization has brought new opportunities to most of the developing and emerging countries. Larger access to developed country markets and technology transfer hold out promise improved productivity and higher living standard. Nevertheless, globalization has also thrown up new challenges like growing inequality across and inside countries, instability in financial market and environmental decline.
    Conclusion:
    In simple word globalization is described as a process by which local economics, societies and culture have become integrated via a global network of communication, transportation and trade. In a case of its influence on economic growth, globalization has brought enormous gains to developing nations that could otherwise have been difficult to attain. Globalization has helped developing and emerging nations to attract indirect and direct investment, which have assisted in absorbing some of the unemployed labor in these nations. But these gains have crashed less on the majority of poor people in these countries as well. But whatever the reason may be, the fact remains that there is growing inequality between the rich and the poor. Such incidence in a period universally admitted to have profited developing countries can only give credibility to a conclusion that the gains from globalization have gone to a few people inside an economic farm at expense of the poor majority. However, the main aspect behind all this is that, what is necessary is not a reduction of globalization but a proper management of globalization to make sure that the expand trickle down to the poor and variation is reduced. All in all, globalization is like a fire, which can be used for good purposes, however, if the left uncontrolled could destroy even the things we hold at present.

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18. (2066.) Nowadays, globalization is a very popular topic. In this paper I am going to focus on main features of contemporary globalization. However, before going into details, I would like to explain what globalization actually is. It is defined as a process of integration of regional cultures, economics and societies through the development of worldwide trade, communication and transportation. This trend was present even hundreds years ago. Since ages, people have been establishing closer relations in various fields. However, the process was much slower before. Recently, due to the rapid technology development, the pace of globalization increased significantly. It is important to mention that next to the global flow of money and information, globalization causes also a circulation of cultures.
    Now, as we have some general information about globalization, we can focus on more detailed issues. Globalization is a very broad topic, so are its features. This is the reason why I am going to focus on the most crucial ones.
    One of the most important economic features of globalization is the interconnection of regional economies into one big global economy. Introduction of the new technologies like the Internet and mobile phones enabled this phenomenon to happen. Travelling and communication processes are fast, easy and available to everyone nowadays. Due to this, business practices became much easier as well. The great example of that are manufacturing, shipping and sales processes that are cheaper and more efficient now. Companies can cooperate with different countries to get the best raw materials, the lowest production and labor costs and the best sales. It means that one company can have departments, offices or factories in many countries. Each of these countries can be responsible for a different field of production or sales. What is more, people from all over the world can be hired by international companies. It is thanks to great communication possibilities. It is also a huge opportunity for developing countries like BRIC countries or Third World Countries. Now, it is much easier to include these regions to the business world. Societies can benefit from it by increasing their living standards. At the same time the developing countries have possibility to use the technologies developed by other, more modern countries, instead of investing huge amounts of money to create these technologies from the beginning. In such situation, both sides profit, by getting cheap materials and labor or, on the other side, by receiving new opportunities for the future growth.
    Moreover, we can witness the expansion of trade in goods and services recently. The reason for that is quite similar as the one mentioned in the previous paragraph. Costs of shipping decreased, travelling and international communication became easier and more accessible. There are more goods and services available for customers. There is also a new trend visible in contemporary customer behavior. What I mean is online shopping which has a big influence on the expansion of trade in goods and services. As we can see, technology was the main reason for faster development of another globalization features again.
    Next feature of globalization that is worth mentioning is growing competition. The reason for that is that there is one big global target group. Companies are aiming at the same customer. Following on from that, a lot of organizations decide to merger to have a competitive advantage over other, smaller businesses.
    It is also important to consider cultural qualities. As mentioned before, due to fast globalization, it is now possible to easily exchange everything globally. This aspect also concerns culture. In current times, the world is full of different movies, books, music, languages, traditions and habits. All these things are available for everyone who is interested in it. Thanks to the modern technologies like Internet, television or radio, much more interesting information and features from all over the world are accessible to us. Some people consider it as a disadvantage. They claim that this trend will lead us to the disappearance of the individual cultures and everything will look similar all over the world. Of course, more and more things are available in more and more locations worldwide but I would not consider it as a drawback.
    Now, as we know some of the main features of contemporary globalization, we can see that the influence of globalization on us, our lives, and the world surrounding us, is very significant. A lot of fields of live and business are changing. We can also notice that the pace of these changes is very fast during the last few decades. Once, Professor G.W. Kołodko said in one of his interviews for “Dla Studenta” web portal: “Globalization is all about opening and merging of values. Therefore, we should not be afraid of globalization, we just need to understand it. And learn to use it for our own good – individual, group, generation, nation, region, country, world.” By analyzing these words, we can understand that globalization used wisely is a very positive process that may help us develop in various fields of life.

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19. (2065.) Below is a paper I have written on “Globalization and its Influence on Economic Development” for the class “Globalization, Transformation and Development” :

    Globalization and its Impact on Economic Development
    Globalization is a term that is commonly used in many different contexts and often heard about over the past few decades. However, not many can define exactly what globalization really is because there is an indefinite amount of different meanings to this specific term. According to the Levin institute, globalization can be defined as, “…a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.” (The Levin Institute – The State University of New York, 2012)
    As previously stated in the paragraph above, globalization affects many sectors around the globe, specifically economic development. Professor Kolodko, in his paper titled ‘Globalization and Its Impact on Economic Development’, defined globalization in an economic aspect as, “the historical process of first liberalization and then progressive integration of the formerly somewhat isolated markets of capital, commodities and (with some delay and on a limited scale) labor into a single world market.” (Kolodko, 2006)
    After looking at the definition, in Professor Kolodko’s persepective, of globalization in the economic aspect, it is necessary to review whether globlization in the economy sector results in economic development? Before going further into details about this matter, the triggers to a development of economy should be realized. It has been said that the number one driving force of economic growth is technology. Therefore, it is crucial to note that global economic is equal to technological capabilities. (Ibrahim, 2005) One of the many indicators of globalization that made a significant impact on the improvement of economic development is free trade. Free trade is considered to be one of the most influential factor of globalization that may enhance the growth and development of an economy.
    As the term globalization and economic development has been defined, a new question arises: is the presence of globalization is actually beneficial in the economy? Or on the other hand, is it harmful? These questions are, indeed, very hard to verify. The answers to these questions very much rely on how the benefits and advantages it offers can be used optimally and in the most effective way possible (Kolodko, 2006). Many experts have claimed that globalization does enhance the economic development of countries in the developing world. However, almost as many experts claim that globalization disrupts the balance of their economic system.
    According to Brittan (Brittan, 1998), the existence of globalization increased the wealth of developed countries and reduced the size of the population living in poverty in some of the developing countries. One of the example how it seems to be that Asian countries experienced an economic growth is by the decreased difference of distribution income between developed and developing countries. Unfortunately, not all developing countries experienced the same economic situation equally.
    As opposed to Brittan’s theory about globalization and how it impacts the economic growth of certain developing countries, Hak-Min (Hak-Min, 1999) indicated that because globalization only affected some and not all of the developing world, it would not be suggested that globalization is actually triggering world economic development. The reason to this is, according to Hak-Min, those countries that are not included into the category of ‘improved economic growht’ actually developed a serious case of financial problems. This occurrence led into a development of a big gap between developed and developing countries. it has also been said that out of 121 contries world wide, 90% of all financial transactions being done globally were executed by 25 countries only. This refers to the big gap of income between developed and underdeveloped nations.
    In contradiction to Hak-Min’s views, globalization has indeed given a big and positive impact to most of the countries in East Asia, according to Lawrence Greenwood (Greenwood, 2006). It was mentioned that globalization caused the economy grow faster and more prosperous for most of its population compared to other times in their recorded histories. Also, “The gross national product (GNP) of APEC economies over the past decade has increased by a third, the number of people living in poverty has fallen by a third, and literacy rates are among the highest in the world, thanks to education expenditures that have risen faster than GNP.” (Greenwood, 2006) These occurrences significantly risen Asia-Pacific region to be the most literate, healthy and properous in the developing world as mentioned by Greenwood.
    The cases and opinions presented by experts about globalization and its impacts on economic development clearly proves the point that globalization is a very broad context that is very difficult to pinpoint the effects it has towards the world. Therefore, we may refer back to Professor Kolodko’s statement about whether globalization is advantegous or harmful: “There is not and will never be any clear-cut answer to these questions. It depends on our position in this global game and on how we manage to copewith the risks and costs inherent in this game, but also on how we can maximize the benefits it brings and take advantage the new, additional opportunities.” (Kolodko, 2006) Therefore, it is safe to conclude that globalization, indeed, has its effects on economic development. However, to figure out whether it is actually a positive or a negative impact solely relies on how people perceive it as and how it is being managed.

    Kharintya Djumala 23873

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20. (2064.) Globalization and its influence on economic growth
    Globalization means the integration of the world economy through easy or easier and cheaper movement of goods, services, capital (including intangible like software and know-how) and people across countries. It makes national markets integrated into a global market. This integration was enabled by the liberalization of international trade in goods and services as well as freer movements of capital. A reduction in transportation costs (high-volume sea and air shipping) contributed, two additionally, what helped was an improvement of international political relations esp. the end of “cold war” and the “opening” of China.
    Multinational companies were the main force to promote globalization as well as the big beneficiaries from it. From being just multinational they became global companies. Seeking lower costs they moved production to countries where labor is cheaper, like China, India, and Vietnam. Seeking more revenues they started selling their products in countries where previously they were not present.
    Another aspect of globalization is the increased international specialization in production. Production of goods became more fragmented among factories in different countries (each of which can specialize and have the economies of scale) which allows for better efficiency. Goods which used to be produced starting from even simple parts up to the assembly of final product in single factory in one country are now produced out of many parts made in many factories in many countries.
    The highest level of globalization was reached in the markets for goods where transportation costs are low like software, movies, information. We have there almost a single world market, greatly helped by the explosion of the internet (which in itself is both a certain cause and the effect of globalization). Also in services like finance the market became truly global.
    The less developed countries, global corporations and consumers in the developed countries benefit a lot from globalization but not only them. The main benefits of globalization:
    1. An increase of the world’s GDP due to higher efficiency in the usage of factors of production (labor, capital, land) because of a relocation of production to less developed countries with lower costs
    2. An Increase of the world’s GDP due to higher efficiency resulting from a massive transfer of the best available know-how incl. technology, organization., knowledge from countries which produce them (because they invest a lot in research and development) to countries which don’t ; this happens both because of foreign investments and global information sharing; the world class technology is now available almost everywhere
    3. An increase in the number of people employed, their skills and incomes, especially in less developed countries where production was relocated in order to decrease costs and increase efficiency
    4. Decrease of poverty in the world: hundreds of millions of people who were previously living very poorly and mostly employed in agriculture now have better paid manufacturing jobs, higher incomes and standard of living (incl. consumption, quality of health care and life expectancy). Poverty in these countries was significantly reduced.
    5. An increased access to the top academic knowledge in the less developed countries thanks to setting up of universities by well established institutions from the developed countries and teaching by world class professors
    6. An increased satisfaction of consumers, especially in the developed countries who now can buy and consume a greater variety of cheaper products from all over the world
    7. Increased profits for the investors who can now invest in very many instruments in very many countries; this globalization of finance also allows companies in poorer countries to borrow from or issue shares to investors in the developed countries which helps the economic growth in these poorer countries
    8. Increased job prospects and satisfaction of employees esp. in the less develop countries who now can have more advanced jobs (e.g. In the technology sector) and can have international careers.
    Poland, benefits significantly from the globalization. Many global corporations including Volkswagen, Toyota, Siemens, LG, Bosch moved production to Poland creating manufacturing jobs and increasing people’s incomes and Polish GDP. We also benefit from technology transfer which spreads across industries increasing productivity.
    However, globalization also comes with negative effects. The main costs of globalization are:
    1. Closing of factories in the developed countries (as they are moved to e.g. China) and the resulting unemployment and hardship
    2. In the developed countries wages in the sectors which are globalized esp. in low and mid-tech manufacturing were reduced towards the levels in the low-cost countries;
    3. Globalization increased the income inequality in the developed countries because employment and wages in the manufacturing fell but wages of managers in global companies (the global elite) were increased together with or even faster than the increase in business; the income inequality in the developed which is now seen as a big Increased pollution of the environment; in countries to which production was moved , the environmental protection is often weaker and this together with a huge increase in production leads to much more pollution
    4. Increased difficulty to plan business, especially for the long term. There is more competitive unpredictability because a given company can be unexpectedly “attacked” in its market by a company from far away country; we know that some certainty is needed for companies to make long term investments (e.g. in pharmaceuticals or new IT systems which take years to develop) so when companies have less certainty over the future their investments can be lower than otherwise; in general, globalization means that planning becomes focused on the shorter term
    5. Bigger risks that problems in one country (e.g. as a result of a natural disaster like tsunami or financial crisis) quickly and significantly affect other countries as production and services is so interlinked and co-dependent.
    But overall globalization has positive effects. It cannot be stopped as e.g. positive experience of companies with moving production to China and other low-cost countries encourages other companies to do the same.

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21. (2063) For my mind, globalization can be described as natural character process, generated by information, scientific and technical progress, economic gains and political stability of international relations, etc.
    The main mover of globalization are the companies, but rather the desire of companies to maximize their profits by intensive development (introducing new technologies, improving the final product, service), or extensive development (quantitatively increasing the production of products, services simply by entering new markets or industries in the deployment of where production costs are minimal). One of the main demonstrations of globalization is the free movement of capital to the country where this capital will work most effectively.
    I can say that globalization – is the process of integration of foreign companies and capital in national economies, followed by the implementation of investment and production activities in order to obtain maximum profits, and of course to receive indirect utility from functioning in the country in the form of access to scientific developments, business reputation, to information resources, etc. Globalization gives companies the opportunity to grow and expand its activities beyond the home countries. It concerns not only multinational companies but also medium and small ones, whose products are in demand in other countries.
    Greater mobility and perception of innovation makes globalization one of the main factors of economic growth. I can clearly see its positive impact on economic development. The main trend of the globalization is aimed at overcoming the economic borders of the nations with the aim of creating a single world economic system. Movement toward the establishment of giant-economy encourages competition, promotes de-monopolization of the market as well as development of existing and creation of new financial instruments.
    Further I will try to explain how globalization influence the factors that make economic growth possible – namely, the natural resources, labor, capital expansion, national technical progress and entrepreneurial activity. That will clarify the impact of globalization on economic growth.
    It is not a surprise for anybody that natural resources are the basis of productive industry and, consequently, the basis of all modern economies. Under globalization, given the increasing number of population, the need for natural resources is widening with a limited number of them. However, natural resources are unevenly distributed between countries. There is a surplus of natural resources in some countries due to the fact that its economy is unable to consume the available amount of natural resources. In other countries there is a shortage of natural resources, that means economy of the country receives less natural resources in an amount which it can consume them in order to function effectively. This situation of resource imbalance is solved by using the tools of globalization.
    Modern globalization, developing the global economic system, favours the development of labor market and labor resources, optimizing both to the needs of the modern economic system. Differences in economic conditions between countries lead to labor migration. Most prone to migration are highly skilled labour force and low-skilled labour, ready for any job. Low-skilled labour migrate from economically less developed countries to countries whose economies are at a higher level of development. They migrate to improve their economic situation, taking advantage of the opportunities unavailable in their country of residence. This type of migration is possible not only because of the economic backwardness of individual countries, but also because of socio-economic progress of economically developed countries. Entrepreneurs in developed countries also profit from hiring low-skilled migrants, primarily due to possibility of lowering production costs due to the extremely low wages paid to this category of migrant workers. Of course globalization makes it possible migration of low-skilled labor to developed countries. Also there is migration of highly skilled labor force, as the products and researches produced by this category of labor, have a high added value, scientific value and innovative potential. Attracting of highly skilled workforce, as well as preparation of national ones is necessary in modern conditions determined by the globalization. This type of labor migration has qualitative effect on economic growth, while under the influence of globalization acting as a generator of economic growth and maintaining the stability in the long run.
    Another, more general effect of globalization on the labor force is the formation and development of the global labor market. Its emergence is a logical response to the increased labor migration, designed to streamline and optimize it. Under the influence of globalization there is the global labor market formed with the global redistribution of labor resources by country, which definitely contributes to economic growth in specific countries and the world economy as a whole.
    Another factor of economic growth, the most mobile one, is Capital. Influenced by globalization it has gone beyond the country of initial accumulation and integrates into the other countries’ economies for more efficient operations and further accumulation. International movement of capital contributes to the international division of labor and favour economic growth in developing countries. Capital stimulated with globalization, moves freely and is concentrated in countries and regions with conditions promoting the greatest return on capital, both to investors and the economy of the country of investment.
    One more strategic direct factor of economic growth is national technical progress. It affects all sectors of economy and is expressed in expanding the range of products and services, lowering production costs, finding new implementation methods of production, innovation, etc. Thus, more attention should be paid for R&D. Understanding the importance and cost-effectiveness of implementing R&D works in the production of products influenced by globalization gives rise to the international market of such products. Which contributes to the availability of research scientific works to a wide range of companies, as well as stimulates the development of high-tech industries and contributes to general economic development of developed and developing countries. Also encourages and supports economic growth in countries with an innovation economy.
    So, as we can see from the above globalization influences economic growth by effecting each of those factors I said before and increasing the quality of their impact on economic growth. Also strengthening their interaction. Based on the above impact of globalization on economic growth, globalization should be viewed as a direct factor of economic growth.

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22. (2062.) Globalization and its influence on the economic growth

    Globalization is a growing phenomenon which designates the process of increasing the connectivity and interdependence of the world’s markets and businesses. It is an economic, political, technological and socio-cultural process in which the importance of state boundaries decreases and the countries and their people live in an integrated global system . This process has considerably speeded up in relation with the technological advances and the rise of the Internet which has facilitated the communication on an international scale. The first author to talk about globalization was from the West World and then it spread out to the majority of the world.
    In the first part, we will point out the benefits of globalization on economic growth. In a second step, we will see that globalization has also some very bad effect on the economic growth and also on the population and to finish, we will see the limits of globalisation and also its future.
    We can notice that globalization has numerous sizeable advantages for populations but especially for the economic world. Indeed, globalization has boosted up trades throughout the world, it has strongly contributed to the spread of new technologies at an international scale and values but also, it has brought 1.8 million of people from 35 countries in the world of unrestricted economy .
    As a matter of fact, we cannot deny the fact that globalization gave a new energy to the economy with less barriers, raised wages and also, multiplies trades which benefits to many winners. However, as we all know, if there are winners, there are losers too but we will come back to this point later on.
    Another aspect of globalization is the common currency. As weird as it sounds, nowadays we count more different currencies than the two past decades. However, the real will of globalization would be a common universal currency. Indeed, we notice that the creation of

    Euro in 1999 within Europe, has considerably facilitated and increased the effectiveness of the economic world. According to Mundell, a Canadian economist, we should propose a fixed and permanent exchange rate between the two main currencies and then make it a single currency which would lead to a free circulation of financial flows and human being.
    Nevertheless, globalization also has very bad effects on the economy of some countries and its population.
    First of all, there are many inequalities in terms of location and we can observe a growing gap between the North and the South economic growth. In fact, some countries are richer in terms of resources and know how which give them a consequent advantage in term of technological advancement and economic weight. Some countries get richer and richer to the detriment of the others. In addition to that, we observe an evolution of terrorism. Indeed, the deregulation of trade in some sectors led to the privatization of armed conflicts . Moreover, the spread of western values is one of the because of this growing movement of terrorism as they are in disagreement with the Arab World.
    Another aspect of globalization which is seen as a bad effect is the notion of identity. Globalization is internationalizing us. With the wish of a universal single money and the spread of Western values, people assimilate new ideas which lead to a certain loss of identity. The feeling of belonging is much less stronger than the past years which can have an impact on the economy.
    As we said earlier, the globalization is a growing phenomenon for now but many people are concerned about its future and limits.
    As we know, globalization makes winners and losers. In the future, we can expect that the present winners will reap more and more advantages at the difference of the losers for whom it will become worse and worse.
    Globalisation is seen as an unstoppable process within everything goes faster and faster and

    which encourage unlimited economic expansion in an uncontrollable way .
    Added to that, Globalization is spreading Western values and by this mean contributes to the growing international terrorism. This is one of the limits of globalization. Some people are in a strongly disagreement with those values which might lead in the future to numerous armed conflicts.
    Another aspect of the globalization and its limits would be the environment. Indeed, we all know that it has intensified the economic exchanges but the resources are not endless and many effects on the environment are irreversible. The question that we can ask ourselves would be how we are going to let the world to future generations.

    As a conclusion, we can say that globalization was essential for the development of the economic growth at a global scale. It brought many advantages to many countries and also new values and idea. However, globalization counts disadvantages too by creating inequalities and contributing the growing terrorism movement. We also had an overview about how it might be in the future and it is rather a pretty bad vision of the world in the next decades to come.

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23. (2061.) The Globalization starts to be described by the English newspaper “ The Economist” in 1959. It shows the increase of the flow, especially of the international exchanges of goods, services, technology and capital. It also symbolises the fight between America and U.R.S.S each culture want to impose his way of thinking to the world. At the beginning the notion of “global village” appears in order to show the unification of the culture in the world
    The regional integration appears with the CECA (European community of the charcoal and the steel) in 1951. Now it is the European Union with 27 countries. Govern by the Lisbon Treaty it permit a free circulation of goods, services and people in the Schengen Area. They permit to encourage companies to make business in EU and to increase the economic development. It exists also a lot of regional integration like a common market like the MERCOSUR (Argentina, Paraguay, Uruguay, Brazil, Venezuela), The NAFTA (USA, Canada, Mexico) and the ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam). Regional integration can take several form monetary union economic integration or regional trade bloc.
    Between Regional integration and globalization it can exist contradiction or synergy we will explain both.

    We will start by seeing the contradiction between the globalization and the regional integration. The regional integration can be enclave to a country or a group of countries behind the globalisation. If they don’t respect the principle of the capitalist globalization the exchange can only be between the members of the area, union etc… These principles govern the development of the globalisation and should bring at the end the end of the barrier to any economics exchange. With the instauration of a regional integration by definition enter of this area is not free.
    If with the regional area you will be out of globalization. The development of the area can be reduced especially in some specific domains like the technologic exchange, the quantity and the diversity of the raw material. They reduce also the competiveness of the companies if they have to produce on the area for selling on it. At the end they should create a difference of development in the world and do not permit a good development of the world trade.

    The contradiction can also bring some lost of culture if the regional integration is overpassed by the globalization. The phenomena can be called Americanization it sponsored the over consumption of the goods and the economic interest first. But with the notion of the global village we assist to the birth of a world culture of the confluence between the mainstream culture and the specific culture for the area. An image is very popular is a Mac Donald in Shanghai
    We have seen the contradiction between Regional integration and globalization we will explain the synergy now.

    The synergy of regional integration and globalization can take many forms. And all this forms permit to create economic growth and development of the area and the country making trade with it.
    The common market is a form of synergy because with the reduction of the barrier of the exchange of goods, work and services between few countries help to develop the business between countries. But also with the companies who are before only implant in one country but they can now use the advantage of the common market to expand their activities earn more money and create new jobs. This create a virtuous circle of economy
    With the economic development some new center of area now exist, like the south east Asia specially the china and the south America with the Brazil. The China is now the most efficient country for the production of goods they export in 2010 184,5 billions of dollars with this impulsion all the country of the south east Asia have benefit to the development of China. The Brazil is now a country very efficient in production. Some big American companies start to produce some goods in the country. Like Apple who have relocated some part of this product of IPad in Brazil. Renault is also producing some cars in Brazil to sell on the market and export too. The weight of his country is also so high that the G20 is created to respond to their new place is the world economics. With that they are known as principal actors to the future of the world especially beyond the financial crisis. The G20 is also a synergy between regional integration and globalisation. They show how all the economic system is linked and the solution has to be a consensus to arrive to a better economic situation. The situation of the UE is also a good example of synergy. With this monetary and trade area they become a major place in the global market in the financial and high value product and services parts.

    Globalization and Regional integration can be contradictable and in synergy. They have to work together to permit the economics development and the development of the area. But they have also to avoid to create difference of development in the different area. But we have to measure the impact of the regional integration on the processes of globalization

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24. (2060.) Globalization and its influence on economic growth

    Through much research through various books and internet sites one can see that there is no question if in fact globalization has influenced economic growth. The debate starts when coming into question how much of an influence has it had and has it been positive or negative influence. According to Professor Kolodko in his paper Globalization and Its Impact on Economic Development published on January 2006, it is difficult to define Globalization. He states that, “A historian, an anthropologist, a sociologist or an economist, each defines globalization differently.” One of the best definitions I have come across through my research is as follows: “…the historical process of first liberalization and then progressive integration of the formerly somewhat isolated markets of capital, commodities and (with some delay and on a limited scale) labor into a single world market.” This combines the historical aspect along with liberalization and finally focuses on the integration of the markets becoming one. With this understanding of globalization, it is extremely difficult to say if this influence is positive or negative; it is all dependent on your position globally.
    When looking at Globalization and its impact on poverty it seems to have been a key factor in decreasing the amount of people living in poverty. It seems that Globalization has been an important reason for the progress of reducing poverty and global inequality. It is not the only influence on reducing poverty, of course some of these would include national policies, institutions and political stability are huge factors when it comes to reducing poverty as well. Poverty still remains a very serious international challenge and up to 1.2 billion of the developing world 4.8 billion people still live in extreme poverty. According to Chandrasekaran Balakrishnan the, “ …proportion of the world population living in poverty has been steadily declining and since 1980 the absolute number of poor people has stopped rising and appears to have fallen in recent years despite strong population growth in poor countries. If the proportion living in poverty had not fallen since 1987 alone a further 215million people would be living in extreme poverty today.”
    Given the example of India and its decrease of poverty, according to Chandrasekaran Balakrishnan, Indian economic growth is dependent upon the rural participation in the global race. The example of food processing and packaging can be used as an area where entrepreneurs can affect the global economy in a big way coming from India. Working together as a cooperative can affect and influence the global demand. If India focuses on technological entrepreneurship, new business openings for small and medium enterprises, importance of quality management, new prospects in rural areas and privatisation of financial institutions then they should decrease the amount of poverty within the country.
    An excerpt from Professor Kolodko’s book “Truth, Errors and Lies. Politics and Economics in a Volatile World” describes how a family in Niger affects the global economy and how Globalization impacts them. Sani is a farmer that grows onions. The section in the book describes a situation that where someone came in motor vehicles and gave instructions on how to plant and weed onions. All of the food produced by farmers is not kept for themselves, it is all meant for export. The food they produce goes to Niamey and from there it is taken to France or even further. The farmers themselves talk of supply and demand. The purchasers are ones with mules and ones with camels and what should the farmers do with the extra money they might receive, to purchase a wheelbarrow or a cart. This excerpt shows that Globalization has reached even a small village in Niger. Now even though they are not saving any money and are spending exactly what they are making it has affected them in some way. A small village in Niger economic growth has been affected by globalization.
    Yet another example from the same book shows us the effect of globalization. When looking at a couple in Switzerland, the author states how their income and expenses are a huge amount when compared to that of the village in Niger. It shows that these people live globally through their travel and through the goods they purchase. The most shocking effect would be the fact that a lunch (which is covered by an expense account) is the equivalent of the families in Niger’s yearly income. It iterates that this Swiss family knows nothing of the Niger family an
    d that they feel that the 0.43% that they allocate for foreign aid out of their taxes is enough for the developing countries. Here the reader can see the extreme differences of how globalization effects economic growth.
    Through various examples on can see that globalization has had a huge impact on economic growth. Through poverty to even more prosperous countries globalization has had an effect.

    Sources used:
    Grzegorz W. Kolodko, Truth, Error and Lies. Politics and Economics in a Volatile World (pg. 146-152)
    Grzegorz W. Kolodko, Truth, Error and Lies. Politics and Economics in a Volatile World (pg. 155)
    Kolodko, Grzegorz W., Globalization and Its Impact on Economic Development (January 2006).
    Grzegorz W. Kolodko, Globalization and Catching-up in Transition Economies, Rochester University Press,
    Rochester, New York, 2001.
    http://economics.about.com/od/globalizationtrade/l/aaglobalization.htm
    http://economics.about.com/od/globalizationtrade/l/aaglobalization.htm

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25. (2059.) Globalization and its influence on economic growth

    Globalization
    Globalization is an economic subject. And as Professor Kolodko accurately explains in his book ‘Truth, Errors and Lies’, it has unfold from late capitalism. More often than not, globalization has become a catchword in the new era of international politics and relations. It is also linked to the free market economy that Professor has explained more in depth and globalization integrates the global economy in a way which exerts influence over economic and cultural relations among the countries of the world. This discussion paper together with excerpts from the book ‘Truth, Errors and Lies’, it will therefore explain the drivers of globalization, economic growth, their relationship and ultimately predict what happens in the future.

    Drivers of globalization
    With regards to what Professor Kolodko said in his book “to understand what is happening in the global economy, or why some regions flourish while others lag or wither, it is necessary to move unceasingly among three dimensions: the geographical, the historical and the interdisciplinary”, this paper will now be discussing the key mechanisms of globalization.

    There are several factors that have affected the process of globalization.

    1. Improvement in technology especially in transport and communications.
    These improvements have led to a reduced in the cost of transporting goods and services therefore rapidly dismantling barriers to international tradability. There has also been advancements in the telecommunication technologies enabling faster and more efficient transmission and receiving of information.

    2. Macroeconomic factors especially policies relating to:
    • Deregulation and a widespread push toward liberalization of trade and capital markets.
    • Outward-oriented reforms, especially in the context of structural adjustment programs

    As discussed during class, under the General Agreement on Tariffs and Trade (GATT), countries have agreed to foreswear trade barriers and thus welcoming international capital flow.

    Globalization and Economic Growth
    Alternative models of economic growth and development lead to very different predictions about the implications of globalization for economic growth across the world. In the book, Professor Kodlodko actively discusses that “There are universal expectations that, in the conditions of globalization, changes in the economic system should bear the fruit of lasting, rapid economic development. Structural reforms and institutional changes should favor increases in the effectiveness of capital and better use of human, financial and natural resources… In the actual mechanism of the real economy, this often fails to occur”.

    Similarly there is one school of thought that resonates the Professor’s point of view. One neoclassical perspective that I subscribe to is provided by Lucas (200). He argues that while the 20th century was marked by widening international income inequality, the 21st century will not follow suit. Lucas goes on to argue that in the 21st century in a globalized world economy, countries will increasingly learn the lessons of history and policies, thus adopting institutions that underpin efficient markets.

    The “Lucas Paradox’ states that capital generally has not flowed from rich to poor countries will evaporate. This is evident in Africa where she has always been by-passed by the benefits of globalization. An Oxfam report published in April 2002 stated that if Africa increased its share of world trade by just 1%, it would earn an additional $49 billion a year. Africa also accounted for only 2.3% of global accumulated inward direct investment in 2001.

    Is globalization conducive to faster growth?
    Through the series of examples and Professor’s Kolodko’s analysis of this topic in class, we can then further question the relationship between the two. Is globalization conducive to faster growth?

    In my opinion, this statement is not the absolute truth. Yes agreed, rapid economic growth is evident in Asia: Japan in the Golden Age, the Tigers and then China. In most cases these have not been economies that simply adopt conventional (American) market-based economy strategies but rather they have operated under the auspices of some kind of ‘developmental state’. Korea and Taiwan are two excellent examples. Both countries mobilized investment and emphasized on ‘getting relative prices wrong’ and on ‘governed markets’. This has also been clearly resonated in the book “Truth, Errors and Lies” where the professor makes an in-depth analysis on these emerging markets. However, we must also consider countries in Sub-Saharan Africa which are least able to reap the benefits of globalization and economies of scale.

    In conclusion, globalization through the channels of openness, trade and investment has a positive and significant relationship with the rate of economic growth. While many of the emerging markets such as China, Vietnam, Japan, Brazil and India flourish and prosper, other countries in Africa reap minimal benefits. As such, there is a pressing need for each country to design economic strategies and policies that recognize and respect its specific needs and circumstances, ultimately promoting sustainable and inclusive economic and social development.

    ‘Truth, Errors and Lies’ have indeed several key topics that are pertinent to us. More importantly, it also gives us a different perspective and heightens the awareness level of these current affairs that implicate our daily lives.

    Citations
    Truth, Errors, and Lies: Politics and Economics in a Volatile World; Grzegorz W. Kolodko

    Truth, Errors, and Lies: Politics and Economics in a Volatile World; Grzegorz W. Kolodko

    http://www.school-portal.co.uk/GroupDownloadFile.asp?GroupId=55567&ResourceId=216151

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26. (2058.) Na mojej stronie http://www.facebook.com/kolodko pojawiła się polemika z komentarzem nt. “krzywej Laffera”. Oto moja odpowiedź:

    @ Mateusz Wnuk. Nadal Pan nie rozumie bałamutności tzw. krzywej Laffera i neoliberalnej krucjaty o niskie podatki, czyli w istocie o to, aby ułatwiać wzbogacanie się jednych kosztem drugich. Obok deregulacji rynków finansowych pod kątem sprzyjania spekulacji, to właśnie obniżanie podatków w USA – i nie tylko – służyło określonemu kierunkowi redystrybucji, a mianowicie wzbogacaniu się nielicznych kosztem licznych. O ile w 1979 roku, kiedy Ronald Reagan wygrywał wybory prezydenckie, najbogatszy 1 procent Amerykanów przejmował około 10 procent PKB, to obecnie jest to około 24 procent. W istotnej mierze to tak drastycznych zmian, bynajmniej nieuzasadnionych zmianami we wkładzie w tworzenie dochodu narodowego, przyczyniły się źle pomyślane, podyktowane troską o partykularne interesy wąskich elit i podbudowane iluzją „krzywej Laffera”, obniżki podatków, zwłaszcza od dochodów kapitałowych. I dziś mamy taką sytuację, że prezydent USA płaci ponad 20-toprocentowy podatek od swoich dochodów w wysokości około 700 tysięcy dolarów rocznie (połowa to prezydenckie wynagrodzenia, połowa honoraria autorskie za cieszące się popularnością na całym świecie książki), podczas gdy jego przeciwnik w nadchodzących wyborach od 30-krotnie większych dochodów, głównie kapitałowych, ze spekulacji na rynkach finansowych, zaledwie nieco ponad 14 procent.
    Bezsprzecznie takie złe relacje są jedną z przyczyn niedostatecznych przychodów w finansach publicznych USA, przy okazji bowiem spadły – spadły, nie wzrosły! – wpływy podatkowe. Podobnie było w Polsce po zlikwidowaniu trzeciego progu podatkowego; podatki z PIT-u spadły, czego skutki budżet odczuwa do dziś i próbuje je sobie kompensować między innymi poprzez podnoszenie stawek VAT-u. Czy trzeba przypominać, że najwyższy próg podatkowy od dochodów osobistych dotyczył zaledwie 1,4 procent podatników, i to zaledwie przez kilka miesięcy w roku, a VAT płacą wszyscy od swoich wydatków przez cały rok?
    Trudno pojąć, jak można zaprzeczać ewidentnemu obrazowi, który pokazują dane zamieszczone powyżej w mojej notatce. Jak można nadal twierdzić coś fałszywego wbrew faktom? Jeśli to nie wystarcza, to polecam wszechstronnie uargumentowane wywody zaprezentowane w książce Richarda Wilkinsona i Kate Pickettt pt. “Tam gdzie panuje równość, wszystkim żyje się lepiej” (pisałem o niej na tej stronie w serii komentarzy “Co warto przeczytać?”). Może nie wszystkim od razu żyje się lepiej, ale z pewnością przytłaczającej większości na długą metę. Pokazują to wyraźnie przytoczone dane. Naprawdę, warto przeczytać tę książkę, jeśli komuś zaiste zależy na prawdzie i zanim pochopnie zajmuje się własne stanowisko… Po co się mylić? Chyba że ktoś wie, że nie ma racji i się nie myli, tylko celowo chce manipulować opiniami po to, aby skłaniać ludzi do popierania nieracjonalnych, szkodliwych dla nich wyborów. W tym akurat neoliberalizm jest dobry i jego nadwiślańscy zagorzali zwolennicy nawet częściej powołują się na niedorzeczności „krzywej Laffera” niż amerykańscy apostołowie współczesnego leseferyzmu.
    Dodać jeszcze warto, że Dania, gdzie aż 49 procent PKB przechodzi przez budżet poprzez wydatki i podatki, znajduje się na pierwszym miejscu na świecie z punktu widzenia poczucia satysfakcji z warunków pracy i życia (tzw. Subjective Well-Being Index, SWI), podczas gdy USA (28 proc. redystrybucji PKB) plasuje się na 23-ej pozycji, a Wielka Brytania z podatkami w wysokość 37 proc. PKB ląduje na odległej 48 pozycji. I teraz jeszcze konserwatywny rząd obniża górny próg podatkowy z 50 do 45 procent, błędnie twierdząc, że jego zmiana w drugą stronę nie zwiększyła przychodów. Zwiększyłaby, gdyby próg ten pozostał dłużej, czego dowodzą także polemiki zamieszczone ostatnio w „The Economist”. No, ale rząd premiera Camerona chce w ten sposób kupić sobie trochę poparcia niektórych kręgów opiniotwórczych, a spowodowany tym ubytek przychodów zrekompensuje sobie windując inne dochody fiskalne.
    Co do kolejnego mitu, że podatnicy „uciekają” do krajów o niższych podatkach, to bardzo ciekawe, dlaczego ich masy nie uciekły z większości krajów Zachodu, choćby z wspomnianej Wielkiej Brytanii, do Polski, gdzie podatki od dochodów osobistych oraz od zysków przedsiębiorstw są niższe? I dlaczego Pan Wnuk nie przeniósł się, dajmy na to, na Papuę Nową Gwineę czy też do kilkudziesięciu innych krajów, gdzie podatki dochodowe w ogóle nie istnieją?
    Na koniec, polecam również komentarz Pani Marii Dora na moim blogu http://www.wedrujacyswiat.pl/blog/?p=6#comment-28635. Może logika jej wywodu trafi do tych, którzy naprawdę chcą zrozumieć, co od czego zależy?

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27. (2057.) Uwaga:
    System poprzesuwał nagłówki w tabeli w moim wpisie 2056. “Państwa małe” to Australia, USA, Japonia, Szwajcaria, a “duże” to Belgia, Holandia, Norwegia, Szwecja, Włochy. Pierwsze wskaźniki odnoszą się do “państw dużych”, drugie do “małych”.

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28. (2056.) Tzw. krzywa Laffera głosząca, że po przekroczeniu pewnego progu dochody podatkowe spadają i odwrotnie, po spadku poniżej pewnego progu rosną, to zamysł neoliberalny, który ma pod pozorem troski o interes publiczny (rzekomy wzrost dochodów z podatków, a więc i wielkości wydatków publicznych) zmniejszyć podatki dla bogatszych warstw kosztem większości społeczeństwa. By tak się stało, trzeba jednakże uprzednio tę większość otumanić. W sposób oczywisty postępowanie zgodnie z „logiką” Laffera prowadzi (bo ma, zgodnie z ideologią neoliberalną, prowadzić) do spadku dochodów fiskalnych, a w rezultacie zmniejszenia wydatków budżetowych poprzez przede wszystkim zmniejszenie transferów socjalnych. Dowodów na to nie brakuje, począwszy od fatalnej w skutkach redukcji podatków w ramach tzw. Reaganomiki, która podpierała się złudną “krzywą Laffera”.
    Zdarzyć się może, w specyficznych warunkach, że redukcja podatków zwiększa dochody, ale musi dziać się coś jeszcze. Tak na przykład stało się w Polsce, kiedy to w 2002 roku, jako wicepremier i minister finansów, obniżyłem akcyzę na alkohol i wpływy podatkowe z tego tytułu wzrosły. Nadwiślańscy neoliberałowie – jedni niewiele rozumiejąc, inni świadomie manipulując opinią publiczną w celach partykularnych – lubią z braku innych argumentów powoływać się na ten przykład jako na …dowód słuszności “zależności Laffera”! A przecież rzeczy działy się tak, jak się działy, ponieważ wiele działo się naraz i równocześnie zostały podjęte inne działania, zwłaszcza ograniczające przemyt taniego alkoholu i bimbrownictwo. W rezultacie wzrosła produkcja i sprzedaż rodzimego alkoholu, a w ślad za tym dochody budżetowe. Od razu dodam, że nie wzrosła konsumpcja alkoholu, bo odpowiednio spadło picie tegoż ze szmuglu i własnego wyrobu.
    Poniższa tabela zadaje totalny kłam pseudonaukowym neoliberalnym twierdzeniom, że lepiej dzieje się w krajach o niższych podatkach. Jest odwrotnie, o ile tylko sensownie wykorzystywane są wyższe dochody podatkowe. Gdzie zatem tkwi problem? W czym różnica? Otóż w tym, że w krajach o tzw. dużych rządach (ok. 50 proc. udział podatków i wydatków w PKB) wyraźnie mniej zróżnicowany jest podział dochodów, mniejsze są nierówności. W krajach, które poszły drogą neoliberalnej ułudy, relacja przeciętnego dochodu 20 najbogatszych procent społeczeństwa do 20 procent najbiedniejszych (tzw. relacja kwintylowa) ma się jak 8,3:1, podczas gdy w krajach z tzw. dużym rządem tylko 5:1. I O TO CHODZI!

    Big Government Small Government
    taxing & spending
    ca 50% of GDP <33% of GDP
    Belgium, Italy, Australia, Japna
    Netherlands, USA, Switzerland
    Norway, Sweden

    GDP per capita (.000 $PPP)
    39,4 39.2
    Average annual rate of growth since 1960 (in %)
    ca. 2.5 ca. 2.5
    Gross fixed capital formation (in % of GDP)
    20.5 20.7
    Rate of inflation (in 1986-96)
    3.9 3.7
    Life expectancy at birth (in years)
    78.0 77.8
    Infant mortality rates per 1,000 live births
    6.7 6.4
    Secondary school enrolment (in %)
    92.8 89.0
    Weighted share of children of various ages attending school
    85.0 82.0

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29. (2055.) “Escape Forward to Global Social Market Economy” – under such title the interview I have given after my lecture at the Emirates Center for Staretegic Studies and Research is published (http://ecssr.com/ECSSR/appmanager/portal/ecssr?_nfpb=true&_pageLabel=featuredTopicsPage&ftId=%2FFeatureTopic%2FECSSR%2FFeatureTopic_1529.xml&_event=viewFeaturedTopic&lang=en&_nfls=false). Comments welcome!

    In an exclusive interview with the Emirates Center for Strategic Studies and Research (ECSSR), Grzegorz W. Kolodko, Professor of International Political Economy at Warsaw-based Kozminski University and Former Deputy Prime Minister and Minister of Finance, Republic of Poland, talks about Polish economic reforms, European debt crisis and the future of capitalism. The interview was conducted following Prof. Kolodko’s lecture – Politics and Economics in a Volatile World – at the ECSSR on April 2, 2012.

    You played an important role in Poland’s integration into the European Union. Is the country going ahead with its plans to join the Eurozone by 2015?

    I’m afraid Poland won’t join the Eurozone before 2017 or 2018. Afraid because currency convergence would be good for Polish competitiveness and growth. It’s so since a common currency decreases transaction costs and eliminates the exchange rate risk between the Eurozone partners. For Poland it implies about 75 percent of foreign trade. The best time for Poland to join the Eurozone was 2008. Again it was possible since this year, but the government policy has made it impossible.

    You have been an architect of Polish economic reforms. What, according to you, has been the key to these reforms and where do things stand today?

    The key to Poland’s relative success has been complexity in structural change and institution building as well as gradualism and lasting commitment to go toward social market economy. Despite the early shock-without-therapy on the onset of 1990s and mistaken overcooling in the late 1990s, we were able to streamline private entrepreneurship and support it by smart government intervention. This combination, together with caring for social cohesion, is what I call New Pragmatism, as an alternative to both the neoliberalism and right or left populism. Recently, the economy is, unfortunately, losing momentum again and this year GDP growth will be only around 2.5 percent, yet there is a potential for 5-6 percent. Under my stewardship, at the time of ‘Strategy for Poland,’ it was even as much as 7.5 percent and Poland was called ‘Tiger of Europe.’ The current slowing down is resulting not from the world economic crisis, but is rather due to wrong government policy – a mixture of neoliberalism and populism. It doesn’t fit, so it doesn’t deliver.

    How would you describe the European financial/debt crisis? What has triggered it and can the recently announced firewall arrest the slide?

    The European crisis has been different from the American one. If in the latter case it was caused by neoliberal policies, the former basically has been caused by fiscal irresponsibility and living beyond the means. Additionally, wrong regulation of the financial sector, especially banking and a lack of proper supervision have led to reckless lending. Things happen the way they do because many things happen at the same time. Hence the combination of these driving forces, with a series of too-late and too-little bail-outs has brought the overall crisis. This is the structural crisis, not just an accident in policy-making. Therefore, the firewall, as developed thus far, may turn to be insufficient to stabilize the situation. One must go deeper, into the systemic roots of the imbalances, and not just act superficially, to cure the symptoms of the disease.

    Could you briefly explain the truths, errors and lies you are broadly referring to in your bestselling book Truth, Errors and Lies: Politics and Economics in a Volatile World? What is the basic premise of the book and what prompted you to write it?

    The book is tour de force across time and space answering the question of the substance of long term development. It is a quest for the question about the successes and failures. In my unorthodox, interdisciplinary approach, I am going through issues and disciplines, regions and countries, ages and generations, cultures and values, from the past into the future, to find a way forward to a better world. The book can be also read as a kind of political economy of globalization and new development economics. It’s published already in 10 languages and now is also available in the Arabic language under the title Hkaak w Akhtaa w Akazeeb. Al Siasah W Al Ektsad F Aalam Motahawel. Columbia University Press has nominated it for the Michael Harrington Book Award for an outstanding book that demonstrates how scholarship can be used in the struggle for a better world. I’m looking forward to learn the critical comments of the Arab readers.

    A lot of people have started questioning capitalism these days, but few propose the desired reforms or the framework for an alternative system. What are your views on this matter?

    Capitalism – that is the market economy based on dominance of private property and profit maximization as the driving force for economic activity – will survive. Yet the neoliberal capitalism – that is the systemic bias which manipulates the market and public opinion, and works on behalf of a few at the cost of many, using for this end such liberal ideas as freedom, democracy, private ownership, market competition – is failing. The current crisis is caused by neoliberalism, hence going back to ‘business as usual’ would be just a recipe for an Even Grander Crisis, as I call it in my book. So, there isn’t a future either for neoliberal capitalism or for state capitalism. What remains, is an escape forward, along the lines of New Pragmatism. It’s a heterodox concept, leading toward a global social market economy, properly regulated on the worldwide scale. It’s a long way to go, but the only sensible way forward.

    In your view, why did we have the global financial crisis? Do you agree that only a fundamental overhaul of institutions and mechanisms can bring things back to normal?

    Yes, indeed. You are right that we need ‘a fundamental overhaul of institutions and mechanisms.’ However I would challenge the claim that it should bring things back to normal. What’s been recently and what we have now is not normal. It’s an aberration of sound market economy which serves the needs of a minority at the cost of majority. To overhaul the syndrome we must go forward, and not back. The future should be designed and shaped within the triangle of values, institutions (in the behavioral meaning) and policies. All three must change substantially to stand the mounting challenges of the civilization and interdependent planetary economy.

    Do you think the power of global corporations and big banks are undermining the sovereignty of nation-states? How can we tackle this issue?

    What we face in the contemporary global economic and political game is the lack of compatibility of the nation states and worldwide economy. It’s a kind of flaw, showing that even if the national economies are rational (and most of the time they are not) the sum of them doesn’t create global rationality. How can it be tackled? It can, but only if there is a proper mechanism of transnational, or worldwide, policy coordination set in motion. Again, a long way to go, but to a certain extent a shift from G-7 to G-20 is a step in the right direction. To be sure, it calls for much more. Thus, the 21st century must be the century of a quest for global policy coordination, for a supra-national mechanism to negotiate different, quite often colliding purposes. One more time; it calls for the change of values, institutions and policies.

    You seem to question the lionizing of so-called BRICS states. Can one call it an artificial framework created by a global corporate construct? How different is it from organizations such as OECD when it comes to representing the interests of a group of countries? What role are they likely to play in the aftermath of the global financial crisis?

    BRICS is not an organization. It is not institutionalized structure. It does not have common, agreed values. It does not propose any coherent policies. It is just a group of different countries which have been put under the same denominator, because they are big, populous, and emerging. Yet if they decide to discuss the crucial global issues among themselves, and will come to the world forum with an agreed agenda and progressive propositions how to change the values, regulations, and policies, it will make important input in our quest for performing global governance.

    As head of a think-tank – Transformation, Integration and Globalization Economic Research (TIGER) – how do you look at research institutions around the world? What role do they play in forming public opinion and policymaking?

    The research organizations and various think-tanks are so much needed. Much more the former, than the latter since some so-called think-tanks too often happen to be just the instruments of lobbying on behalf of groups of special interests and not on behalf of sustained growth and equitable development. But I can’t see any way forward, toward a better future if the policy (and not just the economy) is not knowledge-based. Wherefrom such a knowledge is supposed to come if not from the universities and research centers? Definitely not from the biased media, particular lobbies and narrow-minded political parties. The latter must rely on the former and the former be subordinated to the latter.

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30. (2054.) Do Kuby, który prosi o wyliczenia emerytury.
    Jeżeli potrafisz korzystać z Excella i arkusza kalkulacyjnego, to możesz je przeprowadzić sam, licząc dla określonej liczby lat przy określonej stopie procentowej sumę szeregu procentów składanych. Wyjdzie ci, jaki zgromadzisz kapitał.
    Jak dla mnie problem jest inny. Bo przecież sami widzimy, że wartość pieniądza w długim czasie maleje ze względu na inflację. No, a jeszcze zdarzają się jakieś wielkie kryzysy z hiperinflacją, które niszczą walutę.
    Ale pomyśl tylko o tym, co mogłeś kupić 5 lat temu za 100 zł, a co możesz kupić dziś.
    Dlatego dla mnie system oszczędzania w długim czasie jest absurdalny.
    Można znaleźć w Internecie tabelę z ceną uncji złota. Na koniec 2001 to było 278.70 USD, na koniec 2011 to 1556.40 USD. To obrazuje skalę utraty wartości dolara.
    Tak więc nie wiem, czy w innych krajach będzie lepiej, no, może w takich, gdzie emerytura nie zależy od oszczędności.

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