Wednesday, March 24, 2010

On the state and potential of world systemics and dynamics

I am, in principle a "globalist", ie a believer in global (1) freedom of movement not only for goods and capital, but services and workers/job seekers as well. And humans in general, be they of employment age and potential or not (ie free immigration of all kinds). And in a world (1) democratic government to provide the IMO needed balance to the economic side (world markets). In other words global markets balanced by a global democratic government (USA or EU, ie United States or Union style).

But my main concern is that any system works for the so called "average citizen" (I prefer "real people") and for the micro and small (as well as middle size) companies. And I must thus admit that IMO the type of globalization that we have at this stage in the world is not working for the above, thus willing to consider, especially as a thinker, not only fuller/better globalization models but also models that move away from globalization and world (WTO) free trade of mostly goods and capital.

For more on my rationales for a) more and b) less globalization see: The cases for a) more and b) less globalization (including audio files, Feb 3. 2009).

12+ months after those "cases" let me add the following thoughts (or, rather, food for thought):

1) Is the future of free trade regional rather than global, ie Europe, Africa, South & Central America, ASEAN, China+, Russia+, US+, etc?

2) Is an eventual US + EU Single Market "political-economic Sci-Fi"?

3) Paul Krugman has proposed tapped a 15% tariff on all Chinese imports to the US as a way of convincing Beijing to alter its exchange rate policy.
The US could afford to become protectionist - an "economic fortress" because of the size & effectiveness of its internal (50-state) market

4) Could the EU afford to do it? Hm!
Some EU countries export mostly globally, some mostly within the EU Single Market.
Maybe an economic fortress EU would be a way for its "peripheral" members to do better in the EU's internal market. Maybe. After all, how many economies can (and/or want) to become like the German one, how many have the assets and elements (eg climate/weather?) to produce German-type products?

Hence, in terms of EU competitiveness modeling: Some EU countries/economies would benefit, some others the opposite if the EU became an "Economic Fortress".

Of course (3) and (4) would mean that the US and EU would have to leave the WTO. Maybe the future of the WTO was sealed in 2001 when a certain country entered it.

Maybe Russia has a point in having stayed out of the WTO so far. For one thing, it allowed it to raise tariffs to protect certain industries (eg cars) during the world economic crisis.

Complicated, huh? Less than one would think, IMO. The main problem, IMO, is systemic imbalances and inconsistencies. And above all, not nearly enough focus on the problems of real people and micro and small companies, in most policy making centers around the world.

Footnote (1): When I say "global" or "world" I do not necessarily imply all countries of this planet but the ones wishing to participate in a "common" socio-economic system and political government.

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