The Shifting Power Equation of Globalization

BY: Jonathan Schmidt and Howard Davies (The Chicago Tribune)

Published: January 17, 2007 in the International Herald Tribune

This article is about the shift in the way that governments and individuals have started to work on the issue of Globalization. It discusses how disruptive protests like those seen at the Seattle, Washington, WTO summit meeting are probably a thing of the past. This article was very interesting to me because in the latter section it argues that countries instead of individuals/groups may now be shifting toward a protectionist stance in response to the effects of Globalization. I think that the authors of the article are correct in thinking that now the world view of globalization is now more of a question of “how do we protect ourselves,” as opposed to, “how do we stop this from happening.”

I think that many countries are beginning to realize that when it comes to economic development and trade, the structural and Marxist views are both correct. This has been my theory since I began studying global finance. The basis of this theory is that there is a core of the world economy that is made up of the wealthiest countries; the less wealthy countries are all on the periphery and are trying to move closer or into the core by manipulating trade and financing. The theory I agree with is that all these countries have the ability to move at least closer to the core but it is naive to think that the playing field is level for these countries. Some countries, for various reasons like a history of war, extreme poverty, widespread corruption, or serious disease, will never reach the core. Globalization has had the effect of accelerating some of the countries who were already moving toward the core, like India and China. It has also had the effect of shaking up the core, because the core is only so big. Countries like the US will have to tighten up their policies in the future to maintain their spot at the nucleus of the core.

I think the authors really hit the nail on the head when they said, “The distribution of the globalization dividend may turn out to be the biggest item on the economic agenda of the Western democracies in the next few years.” One of the biggest issues in the upcoming US presidential election is going to be the economy and one of the main reasons that the economy has become such a hot button issue is because of globalization’s effects on the US.