Hello all, I have a midterm in a couple days, I need some help with answering th

Question

Hello all,

I have a midterm in a couple days, I need some help with answering these essay questions...

1) The term "globalization" is increasingly being used in the study of international relations and international political economy. Increasingly, also, there are debates surrounding the definition of the term and the extent of relevance in the global economy. Discuss.

2) Often it is argued that technology is the critical driver of globalization. What is the nature of this argument? Do you agree, disagree, or wish to amend or to reframe? Why and how?

3) What are the major economic justifications for state intervention used by mercantilists and what are the major types of problems with state intervention as they pertain to international political economy?

Explanation / Answer

1) The term "globalization" is increasingly being used in the study of international relations and international political economy. Increasingly, also, there are debates surrounding the definition of the term and the extent of relevance in the global economy. Discuss.

Here the question is to discuss the advantages and disadvantages of globalization...

I have an essay which decribes about the issues of globalizatio...

http://www.it.iitb.ac.in/~prathabk/pages/tech_archives/global/globalization.pdf

http://www.wilsoncenter.org/topics/pubs/Weidenbaum.pdf

plz go through this...it has very good insight...if you have further doubts..u can post it...

2) Often it is argued that technology is the critical driver of globalization. What is the nature of this argument? Do you agree, disagree, or wish to amend or to reframe? Why and how?

I do agree with this statement.

Every firm strives for profit maximization and optimum allocation of resources at microlevel, when we take into account the macro policy or further this discussion into the Global environment, we can say that the world is moving towards optimum allocation of its resources and profit maximization. This can be achieved by increasing productivity.

An urge to increase productivity makes the firms or countries to search for alternatives for optium allocation of resources. And technology is the key element which helps in the endeviour of the firms, by facilitating optimum allocation .

Technology creates virtual offices, reduces time and distances, Thus technology is the driving force behind globalization, without proper technology Nike would have ended up taking several months or literally impossible to bring back shoes manufactured from its units in low cost counties like Bangladesh and Combodia.

Thus technology made the world a Global village. and it is the driving force for Globalization.

3) What are the major economic justifications for state intervention used by mercantilists and what are the major types of problems with state intervention as they pertain to international political economy?

Mercantilism is an economic theory that holds that the prosperity of a state is dependent upon its supply of capital, that the global volume of international trade is "unchangeable," and that one party may benefit only at the expense of another.

"Unchangeable" here means a zero sum game, where one nation has to loose at the expense of the growth of other nation.

This theory suggests that countries have to adopt restrictive trade practices, by encouraging exports, but discouraging imports by the way of trade regulation like tariffs and non trade barriers.

This creates a positive current account balance for a nation.

By the restrictive trade practices by the Government, they will protect the domestic industries from low priced products. Otherwise the cost ineffective processes and industries which are below the global price have to exit the market creating unemployment in the country.

China adopted this policy during the recession period of 2009 and 2010, by artificially devaluing its currency, by this measure; Chinese products are priced at lower in comparable to world markets. This will result is positive current account balance.

And an importing country like US, by imposing trade barriers like tariffs on the imported goods can protect its domestic industry from the global competition.

So, a merchantilistic approach will protect the domestic industries and employment.

The major opponents of merchatilism is Adam Smiths, who gave the principle of trade based on comparative advantage, which gives win-win advantage to both the exporting and importing country.

in this sense may be taken to mean that the European and global economies are seen as zero-sum games, though that economic concept did not yet exist in the mercantilist period. During it, economic assets (or capital) were represented by bullion (gold, silver, and trade value), which was best increased through a positive and healthy balance of trade with other states (exports minus imports).

The theory assumes that wealth and monetary assets are identical. Mercantilism suggests that the ruling government should advance these goals by playing a protectionist role in the economy by encouraging exports and discouraging imports, notably through the use of subsidies and tariffs respectively. The theory dominated Western European economic policies from the 16th to the late-18th century.

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