Friday, March 29, 2024
11:35 AM (GMT +5)

Go Back   CSS Forums > General > News & Articles

News & Articles Here you can share News and Articles that you consider important for the exam

Reply Share Thread: Submit Thread to Facebook Facebook     Submit Thread to Twitter Twitter     Submit Thread to Google+ Google+    
 
LinkBack Thread Tools Search this Thread
  #1  
Old Thursday, May 25, 2017
Man Jaanbazam's Avatar
Excursionist
Moderator: Ribbon awarded to moderators of the forum - Issue reason: Medal of Appreciation: Awarded to appreciate member's contribution on forum. (Academic and professional achievements do not make you eligible for this medal) - Issue reason:
 
Join Date: Jan 2013
Location: Into The Wild
Posts: 1,940
Thanks: 1,140
Thanked 1,478 Times in 754 Posts
Man Jaanbazam has a spectacular aura aboutMan Jaanbazam has a spectacular aura aboutMan Jaanbazam has a spectacular aura about
Default Does BREXIT mean the End of Globalization?

Does BREXIT mean the End of Globalization?


The shock waves of Brexit are still echoing. For those, like myself, who are on the losing side of a democratic vote, there is a temptation to resort to hyperbole and exaggeration. Remember that Chicken Little, the chick that believed the sky was falling, gets eaten by the fox at the end of the story.

The reality is that none of us can really know what the effect of Brexit will be. But it is almost certain that the world is different. Many will be affected and, as is so often the case, the poorest people on this planet will suffer the most from actions and decisions taken by those in relatively prosperous societies.

Why do I say this? Because Brexit represents the first tangible retreat from globalization in my lifetime. For 70 years, the world has built its prosperity through an expansion of trade and technology and an ever-freer movement of capital and, to a lesser degree, of people.

It’s long been recognized that there are winners and losers from trade and globalization, but its proponents have always believed that domestic political systems, especially in mature economies, would be sufficiently adept at redistributing the gains so that most people benefit.

This is the faulty logic that Brexit has revealed. The group of losers from globalization in its current form is strong enough politically to say “stop.”

Economists understand that globalization will help remove artificial, man-made barriers to equality. It creates what we term “factor price equalization.” Technically, this means that wages for equivalent skill levels will tend to converge.

This has been very good news for those living in countries with very low wages. These workers have seen substantial gains. It has been less good news for those whose wages were high to begin with.

It is unclear whether their wages have actually fallen, or even if they have risen by less than they otherwise might have done, but workers in advanced economies have not enjoyed the same degree of rising prosperity that others have benefited from in the last 40 years.

Labor markets are complex. Wages do not rise and fall in unison everywhere. Those with jobs are more protected than new entrants to the labor force. The wage effect has been most severely felt by young people. Entry-level wages in Western economies have stagnated.

So from a purely economic point of view, Brexit should have been driven by young voters. In reality, the exact opposite is the case. It is older voters who have opted out.

Why? Probably because of their fears of immigration. Anti-immigrant sentiment is the second dagger penetrating globalization. The cross-border movement of people is central to a globalized world. Those who believe otherwise probably also enjoy Hamlet without the prince.

Of course, immigration should be managed and orderly. Like trade, it brings great benefits to both sending and recipient countries, in the aggregate. Repeated economic studies point to the gains for poor households from remittances; more significantly, perhaps, they also point to the sharply higher demand for education when the prospects for emigration rise.

Everyone gains when more people in the world are more educated. Studies also show that receiving countries benefit from immigration. Contrary to some claims, jobs for natives and their wages rise with immigration, both for skilled and nonskilled occupations. There is a complementarity not a substitution in labor markets. There are also benefits to taxes, net of public services received by migrants.

Economists believe that if some people are materially better off, while no one is worse off, then the world is unambiguously a better place. This is the core presumption behind support for globalization.

What we are finding out is that this might not be how people feel. Humans like to compare themselves with others. The most common reference groups for determining our happiness and well-being are our parents and our neighbors or countrymen.

Behavioral psychologists have done experiments to suggest we also feel worse about falling behind compared with getting ahead. So there is stress and worry for those who see others moving forward without opportunities for themselves.

This is today’s globalization. Enormous opportunities for some. Few opportunities for others. It is a process that has brought hundreds of millions of people out of poverty and that has allowed perhaps 3 billion to enjoy a middle class lifestyle.

But it will have to change its form if it is to continue to get the support of a majority of people in the richest countries in the world who still write the rules for the global economy.

The political support for globalization is on the wane. If Brexit is an isolated event it can be contained. If it is the start of a more pronounced backlash against globalization, we should all worry, most of all those of us who are concerned with the lives of the poorest people on our planet.

(A side note. Brexit is an indisputable poke in the eye of “experts.” Will the wisdom of the crowd prove better than the wisdom of self-ordained experts? Only time will tell, but it is sobering how little credence is given to the voice of those who are paid to study and act on the economic and social policies of our times.)

Homi Kharas is senior fellow and deputy director of the Global Economy and Development, Development Assistance and Governance Initiative at the Brookings Institution.
Source: Does BREXIT mean the End of Globalization?
__________________
The world is changed by your example, not by your opinion !
Reply With Quote
The Following 5 Users Say Thank You to Man Jaanbazam For This Useful Post:
aneeqa (Friday, May 26, 2017), Anum Zara (Thursday, May 25, 2017), mrarsalankhan (Thursday, May 25, 2017), SWA Maseed (Sunday, June 18, 2017), The Gentleman Captain (Thursday, May 25, 2017)
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
Globalization Emaan International Relations 4 Tuesday, September 05, 2017 05:54 PM
Essay on Globalization luqmanmunir Essay 2 Thursday, November 17, 2011 11:34 PM
Globalization : challenges and prospects for muslaims. ADORABLE22 Islamiat 0 Friday, March 25, 2011 10:47 PM
The Globalization of World Politics: Revision guide 3eBaylis & Smith: hellowahab International Relations 0 Wednesday, October 17, 2007 03:13 PM


CSS Forum on Facebook Follow CSS Forum on Twitter

Disclaimer: All messages made available as part of this discussion group (including any bulletin boards and chat rooms) and any opinions, advice, statements or other information contained in any messages posted or transmitted by any third party are the responsibility of the author of that message and not of CSSForum.com.pk (unless CSSForum.com.pk is specifically identified as the author of the message). The fact that a particular message is posted on or transmitted using this web site does not mean that CSSForum has endorsed that message in any way or verified the accuracy, completeness or usefulness of any message. We encourage visitors to the forum to report any objectionable message in site feedback. This forum is not monitored 24/7.

Sponsors: ArgusVision   vBulletin, Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.