02:48 GMT18 May 2021
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    Is Globalization or Inefficient Wealth Distribution the Real Problem?

    Level Talk with John Harrison
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    Globalization, the international trading system that western liberal economies have used since the last World War seems to be causing blowback in the form of the rise of inequality in home countries, which is, in turn, causing nationalism. What is the way forward for the world’s economy?

    Participating in this program are David Sogge, an independent researcher and writer based in Amsterdam, where he is affiliated with the Transnational Institute, and Professor Mark Beeson, Department of Political Science and International Relations, University of Western Australia, Perth.

    David Sogge feels that the main issue is the breakdown of a social contract in the North Atlantic countries and Japan. David sees globalization as one of the factors leading to the "deconstruction of the social contract." Professor Beeson points out, however, that globalization has brought about some beneficial changes if you look at the process historically. One of these, he says, is the rise of China. The particular case of China and globalization is discussed at some length in the program.

    American economist Dani Rodrik's "globalisation trilemma theory," whereby, he argues, that it is only possible for States to have two of the three qualities: globalization, democracy, and national sovereignty is discussed. David Sogge feels that we are sacrificing democratic procedures whilst Professor Beeson considers that the problem is "inadequate institutional infrastructure at the transnational level, that is able to place curbs on the vested interests of one force or another. The other thing to recognize is that sovereignty itself is not necessarily the be and end all of everything." Professor Beeson gives the example of the EU as being an example of "that kind of transnational regulatory framework that was designed to reflect interests that transcended national borders." John Harrison points out that the way that EU countries treated each other was not indicative of the way that they treated non-EU countries.

    In the second half of the program, possible ways forward to a brighter global economic future are discussed, and in this context, the banking sector is brought up. David Sogge points out this is one of the sectors that is "carefully skirted [around] in the last Annual Report by the World Economic Forum. They note the problems of global governance but give a free pass to the banking sector in their new model of multi-state governance." Professor Beeson points to the way that money escapes public control through tax havens. He also points out, however, that it is easy to be pessimistic about tax evasion, but at least the subject is now being discussed, which is a vast improvement on the situation 5 years ago.

    Professor Beeson suggests that the way forward is to recourse to existing international structures such as the IMF and the World Bank, however out of date that may seem: "I think the reality is that if you take the example of global tax dodging and tax minimisation by powerful multinational organisations, the only way that anybody is ever going to be able to do anything about this in an effective form is through much greater levels of international cooperation and coordination, to ensure that tax havens aren't able to flourish."

    The irony is, as Professor Beeson points out, that only through such cooperation is it possible to raise the sort of levels on money through taxes that can solve many of the problems that the world economy is facing today, such as global income inequality.

    Whether we globalizers living mostly in the northern hemisphere have enough will power to actually initiate the policies needed to bring about such meaningful change is the last subject discussed in the program. Interestingly, Professor Beeson links this with the issue of climate change, in that most people are now realizing, he says, that the only way to make necessary changes is to organize real international cooperation. "This is something that can raise the consciousness of the global situation that we actually inhabit because we are all citizens of the same planet ultimately, and our fates are all ultimately bound up together, and it’s just a question of getting policy makers to realize that that is a reality."

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    Tags:
    World Economy, nationalism, globalization, economy, trade
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