Assignment 5 -Mosley, L. (2007) The political economy

Assignment 5 -Mosley, L. (2007) The political economy

Subject: General Questions    / General General Questions
Question
Assignment # 5
The text of essay (not including title page or bibliography) should be no more than 6 pages in length
(double-spaced, Times New Roman, font size 12).
Two of the following course readings should be selected for this assignment:

1) Mosley, L. (2007). ‘The political economy of globalization’, in D. Held and A. McGrew (eds.).
Globalization Theory (Cambridge: Polity Press), pp. 106-125.
2) Stiglitz, J. (2006). Making Globalization Work (New York: Norton), pp. 74-81, pp. 103-117.
3) Chang, H.-J. (2003). ‘Kicking away the ladder: infant industry promotion in historical perspective’,
Oxford Development Studies 31 (1), pp. 21-32.
4) Klein, N. (2007). ‘Democracy born in chains: South Africa’s constricted freedom’, in idem. The
Shock Doctrine: The Rise of Disaster Capitalism (Toronto: Vintage), pp. 233-61.
The structure of the essay should be as follows:
i) Front page with essay title, your name, student number, tutorial number and TA’s name.
ii) Introduction (p. 1)
iii) A brief synopsis of the views expressed in the texts you have chosen (pp. 2-3)
iv) Discussion in which you express your agreement or disagreement with one or both of the texts,
and in which you give your reasons for doing so.
v) Conclusion: a brief summary of your opinion on the topic, as given by your discussion (under iv)).
The style and grammar of your answers and not only their content will be taken into account in the
grading process. Students are expected to uphold York’s standards regarding academic honesty. We are living in a contemporary era of neoliberal economic a system that dominates and
governs us every day expect of our lives whether we oppose or support it. According to Chang
“Kicking away the ladder: infant industry promotion in historical perspective” argues that
historically developed counties has protected their infant industries and protected their own
economy once their economy become viable than promote trade liberalization; on the other
hand developing counties where unable to compete the with the developed countries due to
unable to regulate and govern their own economy as a result developing countries growth were
unstable. Furthermore, in “Democracy born in chains: South Africa’s constricted freedom’, in
idem. The Shock Doctrine: The Rise of Disaster Capitalis” Klein demonstrate that in South
Africa South When Nelson Mandela came into power, people were hopeful that they would be
able to rebuild their country and become politically, economically and socially sustainable
however, the real economic power were control by the corporation and the elite financial
organization such as world bank, IMF, the General Agreement on Tariffs and Trade and WTO. Therefore, Reform the global economy is vital to the nation and for the world. This paper will
explore why and how the global economy modification is necessary to create a sustainable
world.
There is a problems with the neoliberalism is that it is an ideology of promoting selfinterest through policies such as privatization, deregulates the market, smaller government,
austerity and globalization. Neoliberal economic systems were promoted by the Chicago school
of economic and Washington census and many other economists like Milton Friedman.
“Libertarians favour unfettered markets and oppose government regulation, not in the name of
economic efficiency but in the name of human freedom” (sandel 59).The kind of human freedom
they are referring to is the individual freedom for the wealthy individual and financial
organization in which it create economic inequality and ignore the human right for the people of
the nation.
The reason modification of global economy vital to the nation is because developing
countries acquire its sovereignty state which means they should able to make it decision with the
interference other nation or any financial organization. South Africa borrowed from IMF and
World Bank, the condition of the loan was financial liberalization, trade liberalization, and
privatization and cut the budget deficit which did not improve the quality of the people’s lives
(Klein 196).Maintenance of a stable property rights, countries resources and money were
controlled by the same people. So who are these people? To hand control of those power centers
to supposedly impartial experts, economists and of?cials from the IMF, the World Bank, the
General Agreement on Tariffs and Trade and the National Party anyone except the liberation
?ghters from the African National Congress (Klein 206). South Africa got their independence but
was not able to liberate and become a sovereign nation from those financial exclusive
organizations like IMF and World Bank.
The corporations are not accountable for their actions and can get away with anything
because they have enormous power to construct a law to do anything.Therefore, independent
organization United Nation or even create a separate legal organization that be given authority
of legal power to monitor making sure the big organization comply with the legal and ethical
obligation to the society beyond promoting the private interest and profit of shareholder. South African democratic government involve in policy making and since they were get
mandate form the people and make rational choice to what is right for the people not for the
wealthy individual and corporation. Prioritize people interest rather than corporate and
capitalization or accumulation of capital for the eight organization. If these practices continue to
happen than the third world country would fall apart. Therefore, developing countries should
rethink developing strategy and trade policy.
IMF and World Bank should have ethical and legal obligation to charge lower interest of
loan. It should be unethical to charge higher interest on loan and penalize them if unethically
took control of one nation economy which will lead to suffer to the general people. For instance,
“between 1997 and 2004, the South African government sold eighteen state-owned ?rms, raising
$4 billion, but almost half the money went to servicing the debt” (Klein 212). It is ironic that
IMF and World Bank to facilitated developing countries financially and bring economic
progress. How could a country would become it they pay most their revenue on debt. Therefore,
it is curtail to Charge lower interest on the loan they give to the developing and under developing
countries and making sure that developing countries do not suck in the progress trap.
Another problem with the libertarian point of view is that the race start at different point
and not everyone has the equal opportunity (Sandel 66). Therefore, we should reconsider the
prospective of globalization which will give the developing countries the opportunity to grow
and produce their industries by use of any mean such as tariffs and promote local industries.
Chan gives examples how the developed countries were able to promote their industries first and
once they were able to compete with globally then they were actively promoting the idea of
globalisation. England is the profound exam how protecting country’s national interest by
promoting local wool cloth manufacturing and other industries company. “Virtually all of today’s
developed countries actively used interventionist trade and industrial policies aimed at
promoting, not simply “protecting,” infant industries during their catch-up periods” (Chan 4).
For example, “Many U.S. intellectuals and politicians during the country’s catch-up period
clearly understood that the free trade theory advocated by the British classical economists was
unsuited to their country; indeed, it was against the advice of great economists like Adam Smith
and Jean Baptiste Say that the Americans were protecting their industries” (Chan 5). Which mean
if a county is ready to compete globally and force them to enter in the world market would not be beneficial to that country . Even developed countries where able implement new rules and
regulation to their domestic industries. For instance, when the United States did not have a
federal-level tariff system, but when the Congress acquired the power to tax, it passed a liberal
tariff act (1789), imposing a 5% flat rate tariff on all imports, with some exceptions (Chan 5).
This is just a model of one out of many developed countries such as German and France and
Sweden.
England is the profound exam how protecting country’s national interest by promoting local
wool cloth manufacturing. In my prospective, globalization improve quality of life and slander of living. However, I
agree with Chan argument that developing county suffer from globalization. This does means we
should not be open toward globalization and isolate ourselves; farther, globalization is the part of
neoliberal economic system. On the other hand Klein opposing the idea of opposing
globalization is not convincing I would argue that liberalization is important for the growth of a
business. This has been showcased by privatization which has led to enormous growth and
development of companies worldwide. Governments have encouraged privatization to enhance
innovation which promotes better service and product delivery. Less government interference
leads to growth of companies due to fewer government regulations. However, when companies
are left to conduct their businesses freely and set their own business norms and values, unethical
practices occur since companies act on their own interests. Furthermore, the maximization and
accumulation of wealth was merely a trade-off to cause harm to the developing countries thus
undermining the democratic system. Therefore, as much as liberation is encouraged,
governments should set rules governing the practices of corporations in order to regulate its
activities and mitigate unethical practices. Work Cited
Sandel, Michael J. Justice: What’s the Right Thing to Do?New York: Farrar, Straus and Giroux, 2009.
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