The Limitations of Globalisation

Globalisation's chief winner pictured

The clear advantages which economic theory identifies arising from trade and competition ignore transition effects. Economic theory also presumes a “level playing field” of equal opportunity for all participants.

Both of these issues give rise to important
reservations, and costs which are not taken into account.
First, when globalisation removes existing barriers to international trade and capital flows, trade will expand along the lines of comparative advantage. What this means is that each country will focus on producing those goods and services in which it enjoys a productivity advantage relative to its competitors. Those goods and services will be
exported. The country will reduce the output of those goods in which it experiences a
relative productivity disadvantage, and will import its requirements from its competitors.


But, this requires a significant readjustment of production and output and this will not be as frictionless as the theory suggests. Physical capital is typically dedicated to a specific production process and cannot be switched to another use. The same is true of labour skills. Thus, some capital and labour is likely to be unemployed in the transition period, which may be very long, indeed. Where industries are concentrated regionally, it is even possible that entire regions will remain depressed for years , if not indefinitely.



The Level Playing Field: Business Location
A second reservation with classical trade theory, and its over-simplified picture of globalisation as a “win-win for all” phenomenon, is based on the view that the world economy is not a “level playing field”. Countries express their individual preferences over a wide range of issues, such as the level of taxation and the provision of public services, location incentives to industry, valuation placed on the environment, exchange rate regimes and so forth.


In answer to the critique that the global economy is not a level playing field, I would pose
the question, “should it be?” and: “can it be?”

If we had as little bureaucracy as the EU ...

"If we had as little bureaucracy as the EU we would have to cut two thirds of our civil servants."

Hannes Androsch

Vorarlberger Wirtschaft, 2006/01

Hannes Androsch:
1970 Austrian Minister of Finance (until 1981)
1972 Member of the National Executive Committee of the SPÖ (until 1983)
1974 Member of the SPÖ Party Presidium and Deputy Party Chairman of the SPÖ
1976 Vice-chancellor (until 1981)
1979 Chairman of the OECD at minister level
1980 Chairman of the Interim Committee of the International Monetary Fund
1981 General Director of the Creditanstalt-Bankverein, (until 1988)
1988 Consultant at the World Bank (until 1989)

Where to go when you had enough of London, New York and all those big places? Bratislava, the little big city!

Bratislava happens to be the capital of the fairly newish country of Slovakia (only 15 years-old as a capital city). We all remember being back in school learning about a country far, far away called Czechoslovakia?
It declared its independence after the Velvet Revolution of 1989 and a new nation was born.
Bratislava is often overshadowed by its much larger, much more touristed step-brother, Prague. But, I'd been to the jewel of the Czech Republic and had heard that Bratislava was just as lovely, but with
less crowds and even lower prices for drink & entertainment. Bratislava is great. It is another one of those places that forces me to walk around its cobblestone, medieval pedestrian-only old quarter with a bit of a smitten grin plastered across my face. Not only is it
charmingly filled with story-book castles and towers and some amazing gothic and baroque architecture, there is a great artistic cultured feel to this town.
The streets brim with colorful cafes, museums, theaters, and art. It's summertime so there are
outdoor concerts nearly every night wafting the sounds of Jazz and even Latino beats through the echoey centuries old cavernous lanes. There are these fun whimsical life-size Bronze statues at every turnâ€"‘the Frenchman,’ ‘The Peeper,’ and ‘The

Photographer.’ I can tell I’m in Europe againâ€"there’s an artsy creative feel to these cities that seem to give them a progressive edge over many American cities. Although Millennium Park in Chicago is one place that comes to mind that always reminded me of something I’d find in Europe. The plazas and lanes here burst with life and public art mixes with form and nature. After 7pm,
families come out with their kids for a refreshing gelato treat, lovers nuzzle and purr into each others ears on benches lining the park, girlfriends laugh and chat over a glass of wine, and the tourists snap happy photos of this fairy tale scene that is real life Slovak-style.
Something hard not to notice hereâ€"the people are all beautiful. I have to say, so far on my trip, these
are the most gorgeous women, as a group, that I’ve encountered. Of course, I’ve seen pretty Asians, Australians, Argentineans, and Emiratis (at least their eyes were amazing), but the majority of the gals I pass here could all be walking right off the runway of a fashion show. You know them as all the eastern European models on the pages of the fashion mags: extremely tall with legs up to their neck, thin, and nearly perfect.

Another sign I’m in Eastern Europe? Beer is the breakfast of choice here with many locals. Every morning I would undoubtedly see guys hanging out at cafes way before noon with a couple pints of lager and a cigarette. I like to do as the locals do, but I still prefer a latte and maybe some eggs over easy. Or a bagelâ€"something else Slovakia has. I haven’t seen one of these since…hmmm….maybe Australia, but I honestly don’t recall any there either.
The one odd thing that stands out amidst the scene of medieval delightâ€"besides the rows and rows of
communist apartment buildings just on the ‘other’ side of town and the Soviet super highway that was built right
through the old Jewish quarter destroying dozens of old buildings in its path â€"is the local McDonald’s. But even it is brimming with life under the umbrellas on its alfresco ‘McCafe.’ And even this little slice of America somehow, if it’s possible, takes on an air of European charm.

The power of ignorance

After reading a bbc item on fabulous Adam Curtis i decided to share as this
has a neat explanation about why most movies might put you off these days...

By Caroline Briggs
BBC News

The Power of Nightmares began as a three-part documentary

Michael Moore's Fahrenheit 9/11 thrust documentary film into the spotlight
at the Cannes Film Festival when it won the Palme d'Or for best film. The
Power Of Nightmares, by British documentary-maker Adam Curtis.
The powerful film looking at how fears over an organised Al-Qaeda terror
network have come to dominate US and UK politics was shown on the BBC last
year.
But organisers approached Curtis and asked him to make the three-part
documentary into a single film to be shown Out of Competition at the
festival.
Curtis is on the Riviera to watch the film premiere under the glare of the
world's media at the Palais on Saturday night.

"I'm really interested in why this lot - the cineastes and arty lot - are
interested in politics and factual stuff, and I think it is because they
have run out of ideas for fiction.
"People like me are interesting because we are describing the world in a
new sort of way."
Curtis used Gus Van Sant's Last Days - which is in competition for the
Palme d'Or - as an example of what he believes is lacking in current films.
The film is loosely based on the final days of Nirvana frontman Kurt
Cobain, who committed suicide in 1994.
Beautiful evocation
"I thought it was a good film, but I thought it is typical of a lot of
films of our time - they don't really know what to say about the world,"
Curtis explained.
"They can describe it beautifully, and Last Days was exactly that. It was a
beautiful, beautiful evocation of the horror of an event, but it didn't
explain it to you, and it almost didn't explain to you deliberately.

"It was sort of like, 'I'm going to just show what it was like to be
there', and that is what Last Days was like."

Curtis said Van Sant's direction was typical of the current emotional
climate about the importance of the individual running through the veins of
society.

"Film-makers have other responses to the world other than their own
emotions. We are living in a time when emotions rule everything.

"In a sense Mr Van Sant is being completely honest and true, which is
probably what a good artist does, but actually the only way you can be true
at the moment in terms of being an individual is to say 'well I feel this',
and that is his feeling about Columbine or about Kurt Cobain.

"I think the really difficult thing to do in our time is analyse why people
like Mr Van Sant only have that response."

Curtis believes Gus Van Sant relies on personal emotions for his movies

Curtis said The Power of Nightmares attempted to explain the modern world
and put it in context with the individual.

He said: "I think the cineastes and film-makers are getting quite
interested [in The Power of Nightmares] because a lot of their fiction has
run into a dead end.

"The film I have just made is about the relationship between individuals
and society.

"Film doesn't seem to want to 'do society' any longer, its sort of given up
on this, it is just about 'I feel this', which seems to be a condition of
our time.

"I haven't seen a movie that deals with society for 20 years."

The Power of Nightmares explains how Curtis believes the vision of an
Islamic terror network has been distorted by politicians intent on creating
a climate of fear.

I will have to make it absolutely clear that I am not saying there is no
terrorist threat, but it isn't as simple as you are being told

Adam Curtis

The film makes it clear there are fanatical individuals willing to conduct
acts of terror, but shows there is no formal terrorist Al-Qaeda
organisation.

Talks are underway at Cannes with distributors who are keen to show the
film in the US. Curtis said he hoped any screening of the film would open
up a "critical debate" in the US about the existence of Al-Qaeda and the
wider terrorist threat touted by politicians.

"I will be questioned a lot, but maybe this is rather optimistic, I think
there is a sense in the backs of people's minds that things don't quite add
up.

"I will have to make it absolutely clear that I am not saying there is no
terrorist threat, but it isn't as simple as you are being told. The threat
has been over-simplified in the wake of September 11.

"I hope that would receive a decent critical response, rather than an
emotional response."