Thursday, January 26, 2017
Globalization and protectionist trade ideology
It is very rare that a brand new system or thought enters the world. It is like those who say that wifi is a brand new technology when in fact, wireless communication was invented in 1901. Again that date is not really the first time wireless communication was tried. There had been years of tests and failures. What does this have to do with trade relations? First off, the relation is to understand the reality of the world we live in. Understand the history of how we got to where we are. Understand why we have globalization of trade, understand that trade is part of economic growth as far back as we can recall. The Silk Road was globalization trade. The explorers that reached the shores of the Americas had expansion of economics on their minds. On the downside we must understand that global trade is somewhat a house of cards as well. Globalization is a factor in many economic problems. These are front and center in the pushes for Brexit and the recall of the Trans Pacific Partnership, North American Free Trade Agreement and others. No one really knows how these trade agreements will turn out until they are in place and allowed to work. The reason for that is called life. Things on paper will not always work when put into action. Everyone person on this planet should know and understand this primary factor of life. Thought and action are two different realities. That is why every agreement has a negotiation/dispute settlement clause in them. As life evolves, so will the wants, desires and views of the public change. Again this is life and that will create conflicts. Throughout history there has been the understanding of the connection between economics and social good – quality of life. One of the greatest concepts about this subject is known as the Tragedy of the Commons. In another great reference of the connection between economics and social good is the story written by Charles Dickens “A Christmas Carol” (1843). In this story, the lines “Mankind was my business. Their common welfare was my business” was screamed by the ghost of business man Jacob Marley as he tried to change the mind of his partner Ebeneezer Scrooge. Going back further we have stories such as the Stone Soup or Button Borscht. These are very much rooted in the ideology of communal good. These stories can also help us understand why protectionist ideology is harmful and why globalization trade is needed. Although there is a simplicity in this article, the reality is not. Trade agreements take decades to negotiate and then years to implement and of course the evolution takes place. Also we have to understand the complexity of merging economics and social welfare. At some point there will be harm done to generate economics such as pollution, human injury and other harms. Again this is life, there are costs/balances to everything. Trade/economics and social welfare have been separated in arguments because social welfare is not on the minds of those who wish to exploit. Some leaders grab on to this sentiment and run with them. They do so at their peril because we have lived in a world that has been deeply connected through global trade for centuries if not thousands of years. As always we must be on guard due to the elements within the tragedy of the commons – greed. We know that there will be those that sell out the entire world for money. As we get set for many debates about globalization and protectionist ideology, complex factors will surface about what is the goal. Many will say it is the pursuit of a good life. Well the definition of that is again different for each of us. As the debate rages on we will hear the theories about rising tides, domino effects, nash equilibrium, tit for tat game theory and many others. At the end of it all it will come down to trusting the everyone negotiates in good faith. Let the games begin and pray for those that will get stepped on by the Machiavelists.