10 16
Dilip 10 16
People in the United States don’t experience the Lexus/Olive Tree differences as much as people in other countries…for many, the corporate culture are the Olive Tree, how corporations deal with technological change.
How is globalization affecting American culture in a broad sense? Is the Lexus the American culture? Business in the U.S. isn’t done, as in other countries, with reciprocal favors. Networking is not gift-giving, has the odor of corruption, pandering or sycophantism. Cronie-capitalism.
Friedman doesn’t give a lot of attention to the Olive Tree, and it isn’t a part of the American view…the pursuit of the Lexus may be the American Olive Tree. How does a company like Disney maintain its Olive Tree while necessarily downsizing? Adobe downsized by phone.
Countries don’t have this sort of bottom line, but the budget doesn’t have to be balanced every quarter, or even every year. Sycamore has a lot of reserve cash but isn’t a growth company, no one would invest in it, but Amazon is a growth company in debt. China may be running deficits to promote jobs, protect its Olive Tree. IBM isn’t concerned about political stability, but a country like China must be. Olive Tree-stability is necessary for the pursuit of the Lexus.
In Europe, Social Democratic economies support a workforce that may be unemployed for longer periods of time than an American worker or professional. John Gray, when he worked for Thatcher, believed that the British economy was too bloated, and wanted to make changes…but he wanted to resist the American influence of unfettered free market capitalism. Stiglitz and Gray are concerned about regulating transitional governments like Russia and China. Bhagwati’s goal in becoming an economist was to reduce poverty, he pursues policies of poverty reduction. As soon as ex-communist countries opened up, they needed the help of countries with market economy know-how. In this post-Cold War era, the U.S. had a great deal of influence in how the future of ex-communist countries were shaped…East and West Germany were a good example of this sort of ideological exchange…the FRG sent its philosophy professors to GDR. But old apparatchiks were given control of governments because they knew how to run gov’ts…Putin is former KGB, Yeltsin was an old party boss. Stiglitz believes that post-Cold War policies of U.S. and economic organizations were disastrous for these countries and developing countries. The three policies:
1) Privatization
2) Deregulation
3) Direct Foreign Investment
The market fundamentalists believe in no regulation…but how to regulate is a difficult matter. Policies like Child Labor and Workman’s Comp are accepted regulation, transparent to the workforce in the United States, but not in Bangladesh. Industries like utilities are regulated by principle of fairness…what is seen as fairness in utilities may not be the same as in the health care industry, or in utilities in India. Balance between regulation, productivity and fairness is sought…Regan/Thatcher market fundamentalists adopted the three policies and turned them into an ideology, and it led to trouble for the former communist countries.
In Japan, aggregate demand hasn’t risen because Japanese are inclined to save rather than spend in times of economic crisis…a cultural factor that makes solution to Japan’s economic crisis unique. Stiglitz and Bhagwati disagree on how to stimulate economies, either communist to free market or impoverished to prosperous. Stiglitz believes that the IMF, World Bank acted counter to their founding principles, China insulated itself from their influence and did better in the post-Cold War era than Russia. Abstract “violence” of economic policies, taking people from work to practices like prostitution or crime, is the responsibility of developed countries. The flight of capital from Thailand resulted from an .85 difference in Thai bonds and U.S. Treasury bonds…Thai economy proved to be unhealthy, and the quick flight of capital from Thailand resulted in economic ruin, the “Former Rich”. Diversification of sources of capital was supposed to have stabilized the economy, but currency speculation motivated the activity that led to the Asian crisis…Asia should not have been exposed to the volatility of currency markets. The Thai government did not have the reserves to stem the tide of decline, the IMF and Thai government couldn’t buy them in sufficient quantities when the price of the bhat spiraled as a result of flight. The IMF and Thai government were left with valueless currency, and the multinational banks that lent to Thailand were bailed out, rather than the Thai government or Thai national banks. Stiglitz wants a principle of fairness that protects the most vulnerable.
In False Dawn, John Gray has two arguments: Global free market is a political project and not an iron law of historical development, and global laissez-faire has become a threat to peace between states.
Gray’s 8 points:
1) Free markets are creatures of strong governments and can’t exist without them;
2) Democracy and Free Markets are competitors;
3) Socialism has broken down irretrievably;
4) Former communist states are not adopting Western economic models;
5) Free Market and Marxism/Leninism have much in common;
6) Fusion of American exceptionalism and global laissez-faire = Globalization;
7) Chronic insecurities of late-modern capitalism corrode institutions of bourgeoisie life;
8) Washington consensus on global free market capialism = downturn of worldwide markets, though the U.S. can’t fix world’s problems alone.
Gray believes that capitalism does not work to preserve the cohesion of society. Social Market Capitalism and Free Market Capitalism are not the same; the choice between them is political and cultural, based on values, a political choice. European social market capitalism is not as committed to employment as social welfare. Japanese form of capitalism assures jobs, but at the expense of efficiency; many middlemen in every transaction ensures employment and stability (Japan is now competing with Korea, Taiwan, China and may not be able to insulate itself as it once did). Can all three systems simultaneously flourish?
Gray argues that the market has social features; markets will function even under imperfect conditions, and in fact develop within the framework of a society, they have a social context. Markets evolve into socially-mediated entities, though there may be a “model” of efficiency.
Where did the idea of free-market come from? In mid-Victorian England, traditions of individualism and Parliament’s Enclosure Acts privatization of common land. Since Parliament wasn’t accountable to citizens, free-market was not a choice, or a natural evolution. Through Enclosures and the repeal of the Corn Laws (protective tariffs), bread and labor were commoditized. The rich bought parcels of commons, which shrank as a result. Those who once used the commons became laborers. This was a short-lived phenomenon, and social welfare measures were applied, e.g., Anti-corn league.
Henry Clay (U.S. 1777-1852) believed that market economics are fundamental, but regulation is a good thing, and the free-market creates instability, which is an enemy of democracy.
Gray suggests that the former Soviet Union and China are not adopting Western economic systems, though these systems have much in common; insisting these countries adopt Western economic systems immediately would be a mistake. Chinese diasporic communities lend to and support each other; Chinese capitalism evolved without the Short-Horned cattle of the electronic herd, and relies on domestic financial resourcese, to its advantage.
Gray believes that Regan/Thatcher and Marx/Lenin have a lot in common. They both believe that people are economic rational animals, and most decisions are economically motivated. The difference between them is the motivation: Marxism/Leninism suggests that a totally planned and regulated economy is rational, while Regan/Thatcherites believe the opposite. Gray believes that either extreme leads to disaster.
According to Gray, globalization is an American creation.
Gray supports the Tobin tax, which is a tax on foreign currency transactions, putting a penalty on short-term currency speculation. Revenues collected would go to stabilize economies affected by currency speculation crises like Asia’s.
Bourgeoisie values are corroded by globalization; the concept of a career is gone, and Gresham’s Law-like global economics is ruthless in its efficiency and makes socially responsible capitalism less sustainable.
People in the United States don’t experience the Lexus/Olive Tree differences as much as people in other countries…for many, the corporate culture are the Olive Tree, how corporations deal with technological change.
How is globalization affecting American culture in a broad sense? Is the Lexus the American culture? Business in the U.S. isn’t done, as in other countries, with reciprocal favors. Networking is not gift-giving, has the odor of corruption, pandering or sycophantism. Cronie-capitalism.
Friedman doesn’t give a lot of attention to the Olive Tree, and it isn’t a part of the American view…the pursuit of the Lexus may be the American Olive Tree. How does a company like Disney maintain its Olive Tree while necessarily downsizing? Adobe downsized by phone.
Countries don’t have this sort of bottom line, but the budget doesn’t have to be balanced every quarter, or even every year. Sycamore has a lot of reserve cash but isn’t a growth company, no one would invest in it, but Amazon is a growth company in debt. China may be running deficits to promote jobs, protect its Olive Tree. IBM isn’t concerned about political stability, but a country like China must be. Olive Tree-stability is necessary for the pursuit of the Lexus.
In Europe, Social Democratic economies support a workforce that may be unemployed for longer periods of time than an American worker or professional. John Gray, when he worked for Thatcher, believed that the British economy was too bloated, and wanted to make changes…but he wanted to resist the American influence of unfettered free market capitalism. Stiglitz and Gray are concerned about regulating transitional governments like Russia and China. Bhagwati’s goal in becoming an economist was to reduce poverty, he pursues policies of poverty reduction. As soon as ex-communist countries opened up, they needed the help of countries with market economy know-how. In this post-Cold War era, the U.S. had a great deal of influence in how the future of ex-communist countries were shaped…East and West Germany were a good example of this sort of ideological exchange…the FRG sent its philosophy professors to GDR. But old apparatchiks were given control of governments because they knew how to run gov’ts…Putin is former KGB, Yeltsin was an old party boss. Stiglitz believes that post-Cold War policies of U.S. and economic organizations were disastrous for these countries and developing countries. The three policies:
1) Privatization
2) Deregulation
3) Direct Foreign Investment
The market fundamentalists believe in no regulation…but how to regulate is a difficult matter. Policies like Child Labor and Workman’s Comp are accepted regulation, transparent to the workforce in the United States, but not in Bangladesh. Industries like utilities are regulated by principle of fairness…what is seen as fairness in utilities may not be the same as in the health care industry, or in utilities in India. Balance between regulation, productivity and fairness is sought…Regan/Thatcher market fundamentalists adopted the three policies and turned them into an ideology, and it led to trouble for the former communist countries.
In Japan, aggregate demand hasn’t risen because Japanese are inclined to save rather than spend in times of economic crisis…a cultural factor that makes solution to Japan’s economic crisis unique. Stiglitz and Bhagwati disagree on how to stimulate economies, either communist to free market or impoverished to prosperous. Stiglitz believes that the IMF, World Bank acted counter to their founding principles, China insulated itself from their influence and did better in the post-Cold War era than Russia. Abstract “violence” of economic policies, taking people from work to practices like prostitution or crime, is the responsibility of developed countries. The flight of capital from Thailand resulted from an .85 difference in Thai bonds and U.S. Treasury bonds…Thai economy proved to be unhealthy, and the quick flight of capital from Thailand resulted in economic ruin, the “Former Rich”. Diversification of sources of capital was supposed to have stabilized the economy, but currency speculation motivated the activity that led to the Asian crisis…Asia should not have been exposed to the volatility of currency markets. The Thai government did not have the reserves to stem the tide of decline, the IMF and Thai government couldn’t buy them in sufficient quantities when the price of the bhat spiraled as a result of flight. The IMF and Thai government were left with valueless currency, and the multinational banks that lent to Thailand were bailed out, rather than the Thai government or Thai national banks. Stiglitz wants a principle of fairness that protects the most vulnerable.
In False Dawn, John Gray has two arguments: Global free market is a political project and not an iron law of historical development, and global laissez-faire has become a threat to peace between states.
Gray’s 8 points:
1) Free markets are creatures of strong governments and can’t exist without them;
2) Democracy and Free Markets are competitors;
3) Socialism has broken down irretrievably;
4) Former communist states are not adopting Western economic models;
5) Free Market and Marxism/Leninism have much in common;
6) Fusion of American exceptionalism and global laissez-faire = Globalization;
7) Chronic insecurities of late-modern capitalism corrode institutions of bourgeoisie life;
8) Washington consensus on global free market capialism = downturn of worldwide markets, though the U.S. can’t fix world’s problems alone.
Gray believes that capitalism does not work to preserve the cohesion of society. Social Market Capitalism and Free Market Capitalism are not the same; the choice between them is political and cultural, based on values, a political choice. European social market capitalism is not as committed to employment as social welfare. Japanese form of capitalism assures jobs, but at the expense of efficiency; many middlemen in every transaction ensures employment and stability (Japan is now competing with Korea, Taiwan, China and may not be able to insulate itself as it once did). Can all three systems simultaneously flourish?
Gray argues that the market has social features; markets will function even under imperfect conditions, and in fact develop within the framework of a society, they have a social context. Markets evolve into socially-mediated entities, though there may be a “model” of efficiency.
Where did the idea of free-market come from? In mid-Victorian England, traditions of individualism and Parliament’s Enclosure Acts privatization of common land. Since Parliament wasn’t accountable to citizens, free-market was not a choice, or a natural evolution. Through Enclosures and the repeal of the Corn Laws (protective tariffs), bread and labor were commoditized. The rich bought parcels of commons, which shrank as a result. Those who once used the commons became laborers. This was a short-lived phenomenon, and social welfare measures were applied, e.g., Anti-corn league.
Henry Clay (U.S. 1777-1852) believed that market economics are fundamental, but regulation is a good thing, and the free-market creates instability, which is an enemy of democracy.
Gray suggests that the former Soviet Union and China are not adopting Western economic systems, though these systems have much in common; insisting these countries adopt Western economic systems immediately would be a mistake. Chinese diasporic communities lend to and support each other; Chinese capitalism evolved without the Short-Horned cattle of the electronic herd, and relies on domestic financial resourcese, to its advantage.
Gray believes that Regan/Thatcher and Marx/Lenin have a lot in common. They both believe that people are economic rational animals, and most decisions are economically motivated. The difference between them is the motivation: Marxism/Leninism suggests that a totally planned and regulated economy is rational, while Regan/Thatcherites believe the opposite. Gray believes that either extreme leads to disaster.
According to Gray, globalization is an American creation.
Gray supports the Tobin tax, which is a tax on foreign currency transactions, putting a penalty on short-term currency speculation. Revenues collected would go to stabilize economies affected by currency speculation crises like Asia’s.
Bourgeoisie values are corroded by globalization; the concept of a career is gone, and Gresham’s Law-like global economics is ruthless in its efficiency and makes socially responsible capitalism less sustainable.
posted by Robert at 10:51 AM
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