The Impact of Globalization on Economic Growth

Globalization aims to benefit individual economies around the world by making markets more efficient, increasing competition, limiting military conflicts, and spreading wealth more equally.

Globalization Benefits World Economies

The Milken Institute's "Globalization of the World Economy" report of 2003 highlighted many of the benefits associated with globalization while outlining some of the associated risks that governments and investors should consider, and the principles of this report remain relevant.

Some of the benefits of globalization include:

• Foreign Direct Investment: Foreign direct investment (FDI) tends to increase at a much greater rate than the growth in world trade, helping boost technology transfer, industrial restructuring, and the growth of global companies.
• Technological Innovation: Increased competition from globalization helps stimulate new technology development, particularly with the growth in FDI, which helps improve economic output by making processes more efficient.
• Economies of Scale: Globalization enables large companies to realize economies of scale that reduce costs and prices, which in turn supports further economic growth. However, this can hurt many small businesses attempting to compete domestically.

Some of the risks of globalization include:

• Interdependence: Interdependence between nations can cause regional or global instabilities if local economic fluctuations end up impacting a large number of countries relying on them.
• National Sovereignty: Some see the rise of nation-states, multinational or global firms, and other international organizations as a threat to sovereignty. Ultimately, this could cause some leaders to become nationalistic or xenophobic.
• Equity Distribution: The benefits of globalization can be unfairly skewed towards rich nations or individuals, creating greater economic inequalities.

Writing in the quarterly Milken Institute Review in late 2017, Dani Rodrik, author of “Straight Talk on Trade: Ideas for a Sane World Economy,” argued that a rebalancing of globalization is necessary to restore more voice to labor and its needs for job and income stability while focusing attention globally on where the biggest economic gains can be made.

Tariffs and Other Forms of Protectionism

The 2008 economic crisis led many politicians to question the merits of globalization. According to a McKinsey Global Institute analysis of data from the International Monetary Fund, global cross-border capital flows shrank by 65% between 2007 and 2016. The decrease from $12.4 trillion to $4.3 trillion in those nine years includes declines in lending, FDI, and equity and bond purchases.

The U.S. and Europe introduced new banking regulations that limited capital flows, and tariffs have been put in place at times to protect domestic industries seen as vital, such as a 127% U.S. tariff on Chinese paper clips or Japan’s 778% tariff on imported rice. In Brazil—where import tariffs run between 10% and 35%—the new government announced in May 2019 that it plans to reduce them by 10 percentage points through 2023.

The 2016 election of Donald Trump in the U.S. and the British vote to leave the European Union (known as the Brexit) have also contributed to the anti-globalization movement. These trends have been driven by anti-immigration sentiments in Europe, although the 2018 election results veer more pro- than anti-globalization.

Future Outlook

Economists suggest that nowadays, cross-border investments are not being made so much to build capital infrastructure as they are to seek countries with the lowest taxes. Some form of globalization may be inevitable over the long-run, but the historic bumps spurred by economic crises and other consequences suggest that change is the only reliable constant.

According to U.S. Customs and Border Protection, escalated U.S. tariffs on Chinese imports raised $20.8 billion through mid-July 2019. American farmers hurt by China diverting crop purchases to other countries were promised $28 billion in federal compensation, making it an overall net loss.

https://www.thebalance.com/globalization-and-its-impact-on-economic-growth-1978843

Globalization is Bad For You

Globalization, speaking roughly is a move toward eliminating the barriers between nations and enabling things like unfettered trade all the way up to and including softening immigration and borders in general.

Capitalists have already taken advantage of this to the detriment of workers. In the past, prior to things like multinationals corporations, capitalists were tied to a nation, and had some reason to invest in it - tax breaks aside. It's home - or was. National borders no longer apply to the capitalists.

What does that mean for us? It means it's near impossible to organize labor against them because they can just pull up stakes in one nation, while doing business in another. Just the threat of that is enough to fuel union busting efforts. It means it's near impossible to regulate them, since they operate under several different nations, and they again pose a "flight risk" if regulations or taxes get too onerous for their taste. There's no loyalty, no ties to the nation it operates in, and that hamstrings us. They know it, and level threats of leaving whenever it benefits them. Boeing moving its headquarters to Chicago is a microcosm of this.

The other problem with globalization is hegemony. As we soften borders and more freely travel, we will naturally homogenize as we're exposed to other people groups. We'll start sharing language, even cultural and value norms - we become a "melting pot" which sounds nice until you learn a little bit about the history of this and how it decimated indigenous cultures like the Mixtecs and Triquis of Mexico as all the leadership of those groups assimilated and learned Spanish and forgot their own language over generations. They lost their written language, they lost their history, the Mixtecs that remain lost everything. I could digress and write about them for pages, but it wasn't just colonization that did their culture in, it was voluntary assimilation by the leaders and bourgeois segment of their society - the ones who could read and write, and owned property. They took all that with them.

I want to be clear, this isn't about race mixing which people will do anyway, but about the erosion of sovereignty and the cultural attrition that goes with that, as happened to the Mixtecs in Mexico and many Indeo tribes here, and there's real tangible loss that goes with that.


It's not just indigenous people this impacts. Muslims have been assimilating swaths of Africa as they expand. What happens to local cultures when that happens? As brutal as that expansion is, the developed world uses the brutality of economics to achieve their own ends in that regard - and then there's the droning. At least Iraq has a McDonalds now? How voluntary is it when the bombs preceded it? The bombs always come first when we bring "freedom" to your country.

All of this is part and parcel to the construction of a global world order, which sounds like a conspiracy but it's not. Agencies like the Trilateral Commission under Carter, or the more recent WTO and IMF are key to it, and have been pushing their neoliberal economics and policies precisely to that end.

The EU is a step in that direction as well. A unified Europe on the one hand is good. A huge, centralized government presiding over vastly different countries? Maybe not so much.

Nations need their national identity. Globalism may not eliminate it, but it erodes it over time.

There's perhaps a more important issue of it, and that is a centralized body cannot adapt to change as well as multiple decentralized bodies. Several complex adaptive systems is better than one. It's more stable. If one falters it's not a crash for everyone. What happens if the EU leadership implodes the way the US leadership has?

If a global society goes off the rails the damage won't be containable. At least with individual societies if they go on tilt they don't necessarily take the world with them.

What happens when a global governmental body goes on tilt? What happens when a fascist manages to get control of it and in control of a global military?

This shouldn't be read as a treatise on nationalism. It's not. This isn't a simple dichotomy. Read this as an appeal to consider the preservation of cultural and ethnic habitat for all people, as well as the safety in diversity of government and leadership.

Political Concepts: Fact, Truth, Logic

Some poll data indicates that most Americans, about 78%, believe that the two sides cannot agree on basic facts related to various political issues. At one time the idea that people were entitled to their opinions but not their facts no longer applies. Each side sees the other as significantly or mostly untethered from facts. Partisan differences in what people accept as facts, truths and sound reasoning or logic seem to constitute most of the basis for partisan disagreements.

The following descriptions of concepts such as facts and truths are intended to apply either (1) in the context of politics in ways that most people would understand and agree with, and/or (2) in accord with modern cognitive and social science. Despite their common use, the concepts are complex and hard to describe. Even the concept of what a fact is is disputed, with some arguing that facts do not exist but only reflect our flawed perception of objective reality. Some technical discussion about these concepts are complex enough to border on incomprehensible.

Fact

A fact is a thing that is known to be consistent with or representative of objective reality. Facts can be proven to be true with evidence and should thus be verifiable by anyone. For example, reliable fact checkers assert that the president has made many false statements to the public, because there is objective evidence to show those statements are false. Fact checkers also assert that he makes many misleading statements, but what is misleading to one person may be not misleading to another. Thus, that assertion cannot be fact, but instead this can be classified as truth, which may be justified or true, or not.

Truth

Opinions will vary, but fact and truth are not the same. Truth is something that is believed by most people to be in accord with fact or reality. Truth is something that can be grounded in facts or reality and/or in personal factors such as biases, beliefs, morals, ideology, identity and/or life experiences. Truth can be mostly or completely objectively true, false or unknowable. Truth is usually sufficiently linked to fact to lead most people to believe it reasonably reflects fact or reality.

Disputes arise when personal factors influences or completely determines what constitutes truth. For example, reliable fact checkers assert that the president makes many misleading statements to the public. Most people would probably consider that to be true. Nonetheless, most supporters of the president would probably reject that as false or a lie. From the foregoing, it is clear that what is truth to most people can be false to many others.

Logic

“. . . . the typical citizen drops down to a lower level of mental performance as soon as he enters the political field. He argues and analyzes in a way which he would readily recognize as infantile within the sphere of his real interests. . . . cherished ideas and judgments we bring to politics are stereotypes and simplifications with little room for adjustment as the facts change. . . . . the real environment is altogether too big, too complex, and too fleeting for direct acquaintance. We are not equipped to deal with so much subtlety, so much variety, so many permutations and combinations. Although we have to act in that environment, we have to reconstruct it on a simpler model before we can manage it.”   Democracy For Realists: Why Elections Do not Produce Responsive Governments, Christopher H. Achen and Larry M. Bartels, 2016

Logic for people doing politics is unlike logic in philosophy, which is reasoning conducted or assessed according to principles of validity. In politics, people reason mostly in accord with personal factors (see the list above) and to a lesser extent with principles of validity. This view of logic in politics or ‘political logic’ is based on my understanding from cognitive and social science of how the human mind processes or thinks about input information such as a political speech. Because personal factors, e.g., motivated reasoning, dominate over principles of validity, political logic can easily lead different people to opposite conclusions, even if they agree on facts and truths.

When facts and justified truth (~ ‘real truth’) conflict with political logic, they are usually rejected as false or distorted to be less threatening. This reject or distort mental response to inconvenient facts and truths is a mostly unconscious process. We are usually or always unaware of what our unconscious minds have done to inconvenient facts and real truths, unless we stop and consciously, critically self-question. Most people do not do that most of the time because that is not how the human mind evolved to work. This is how the mind works:

“Morality binds and blinds. The true believers produce pious fantasies that don’t match reality, and at some point somebody comes along to knock the idol off its pedestal. . . . . We do moral reasoning not to reconstruct why we ourselves came to a judgment; we reason to find the best possible reasons why somebody else ought to join us in our judgment. . . . . The rider [the conscious mind] is skilled at fabricating post hoc explanations for whatever the elephant [the unconscious mind] has just done, and it is good at finding reasons to justify whatever the elephant wants to do next. . . . . We make our first judgments rapidly, and we are dreadful at seeking out evidence that might disconfirm those initial judgments.” Johnathan Haidt, The Righteous Mind: Why Good People are Divided by Politics and Religion, 2012

What about pragmatic rationalism?

In view of the foregoing, it is obvious that politics is not an inherently rational endeavor. That arises from the nature and functioning of the human mind as we it got from evolution. Pragmatic rationalism relies on moral values that include fidelity to facts, truths and sound conscious logic or reasoning. The point is to try to nudge politics toward rationality to some small, but hopefully meaningful extent. Whether people can adopt such a more rational mindset is an open question. Personal experience and human history suggest the answer is no for the time being, and maybe forever. Human biology just is not aligned with political rationalism.

Hunter Biden

While giving my personal opinions in the main OP is something I try not to do too often, saving my controversial opinions for the posting area, this time I will “spill the/my beans” upfront.  Then I hope to hear your take.

First, let’s check out Hunter Biden's Wikipedia page.  Looks like we have somewhat of a “problem child” on our hands there.  But that page goes deeper than what I’m looking for here.  Let’s save Hunter’s in-depth psychological evaluation for the Psychology Today Blog.  Rather, what I will be looking for here is whether or not you think Hunter Biden’s activities have played a big part in likely ruining his dad’s chances at the presidency.

At one time, early last year, Joe Biden was perceived to be a virtual “shoe-in” to take the Democratic nomination.  Then schtuff happened.*

Granted, while many factors can, indeed do, contribute to an outcome, *and* while no one can say for sure what will happen in the future (since it’s not over until it’s over)…

Question: Do you think Hunter Biden’s excessive greed and cashing in on his dad’s famous last name ruined his dad’s chances at the presidency?

My answer: I do.  I think Hunter will be the ultimate straw that breaks his dad’s back.  He was just another user, and at the detriment of his dad’s benefit.

Question: Was/Is Hunter Biden excessive greed and “use and abuse” of his last name much different than Trump’s children’s?

My answer: No.  Not much, if at all, different.  All those little demons have the same greedy “user” mindsets.  It’s all about them, and not anyone else; including, in Hunter’s case, his own father.

What do you think?  Thanks for posting and recommending.

___________________________________________________________________________

*

-Discovery of Hunter getting ridiculous payouts from the corrupt Ukrainian gas company, Burisma.

-Hunter’s “no energy or natural gas” business acumen to deserve a seat on their board.

-Months long Burisma investigations, thus dragging in his father’s internationally-backed efforts to get rid of a corrupt Prosecutor General, Viktor Shokin, in Ukraine as something suspicious.

-Etc. [You can look for and fill in this part.]

What is Compassionate Capitalism?

and Why We Need it in These Times of Planetary Crisis ?

https://www.managementstudyguide.com/compassionate-capitalism.htm

What is Compassionate Capitalism and What Does it Entail for us?

In recent years, there has been much talk about Capitalism evolving into a model of economy wherein corporations ensure that communitarian and people oriented business models are embraced so that profit is not the only criterion or reason why they are in business. In other words, many prominent business leaders and experts are calling for Capitalism to move beyond the “Profit at all costs” paradigm and into a kinder and gentler variety that can place communities and people above the mindless pursuit of profit.

Indeed, this form of capitalism which is sometimes called Compassionate Capitalism or Capitalism with a human face is finding many takers both in the developed Western world and in the developing and emerging world in Asia and Latin America.

The Nuts and Bolts of Compassionate Capitalism

Compassionate Capitalism means that corporations have to account for the costs that they impose on the environment, the communities that lie in the vicinity of their factories and plants as well as offices, their employees whom they have to treat with more kindness, and the consumers and other stakeholders to whom they must be accountable.

In other words, corporations must practice a variety of capitalism that is more humane, compassionate, and just and fair. This not only entails a mindset change but also a movement away from the dominant philosophy of polluting the environment and refusing to pay for the cleanup, increasing pay for those at the top of the organizational hierarchy and letting those down the ladder high and dry, not compromising on quality and safety of their products and goods and services, and to be transparent in their dealings with regulators and the governmental agencies.

A Case for a Rethink and Retooling of Capitalism

Thus, Compassionate Capitalism not only needs a complete rethink of the existing paradigm of profit before people but also needs a retooling of the principles underpinning it to place people before profit.

The proponents of Compassionate Capitalism make a case for not externalizing the environmental and ecological damages that corporations which mean that such damages should no longer be treated as “external” to the costs of doing business and hence, not needing to be included in the costs of doing business.

Moreover, they also call for lesser gaps between the executive pay and the pay for the rank and file employees so that there is a sense of justice and fairness to everybody.

Utopia for Realists

While this might seem idealistic and Utopian, it needs to be mentioned that in these times of planetary crisis where the Climate Change is threatening the very existence of civilization, where gross income inequalities and the obscene wealth gap is leading to social unrest, and where the ever accelerating technological change threatens the social contract on which our relations with the world are based, Compassionate Capitalism is no longer an abstract and remote concept, but something that we need on an urgent basis.

Indeed, without sounding Apocalyptic, it needs to be mentioned, that unless we change direction and re-engineer our modes of doing business, we might not survive as a species which means that unless we change, the very survivability of humankind is in danger.

The Argument against Compassionate Capitalism

Having said that, there are those and who are in the majority at the moment, who dismiss all this talk of Compassionate Capitalism as Hot Air or Bombastic and Ideological nonsense that does not take into account the ground realities of how capitalism and business work.

Indeed, the late Chicago School Economics expert, Milton Friedman, laid the basis for such criticisms when he flatly proclaimed that the “Business of business is business” and hence, the “Responsibility of business is business” and nothing else.

Thus, in one stroke, the debate is dead in the water as the dominant view is that markets take care of all the problems that arise from capitalistic tendencies, and the self-correcting nature of markets is such that sooner or later, business finds a way out of the crisis.

A Need for a New Narrative

When one compares and contrasts the arguments for and against Compassionate Capitalism, we find that there is much Hubris among those who oppose this form of capitalism, and much Naiveté, among those who support it.

In other words, there has to be a meeting point somewhere between the highest aspirations of humanity and the gritty ground realities that we all face. The point to be noted is that we are now at a stage where a New Narrative has to emerge that can hopefully reconcile the differences between the dominant model and the minority view that espouses Compassionate Capitalism.

This means that we need the case for Compassionate Capitalism to arise from within the ranks of those who practice capitalism and not from those who are well meaning but not in a position to change the Status Quo.

The Surfers of the Waves of Change

Already, this is happening to a certain extent in the West and East as well with prominent Technology Sector business leaders such as Bill Gates, N R Narayana Murthy, Elon Musk, and Mark Zuckerberg, espousing some or more of the strands of Compassionate Capitalism ideology and coming in support of Basic Income for All, Protecting the Environment, Reducing Inequality, and batting for more Gender Inclusivity.

This needs to pick up steam and include as many business leaders and rank and file employees as possible so that a consensus builds up that can lead us to a more sustainable future.

To conclude, the present Planetary Crisis is such that we owe it to the future generations to create a just and sustainable world for them to thrive as the saying that “We have not inherited the World but have merely borrowed it from our Children” sounds correct.

The Placebo Effect

One of the main reasons for failure of new drugs in clinical trials is the placebo effect. Placebos given to patients in controlled clinical trials elicit measurably beneficial effects that are good enough to make the drug look statistically no better than the placebo. The drug then fails and tens or hundreds of millions of dollars in investment returns nothing but the valuable information associated with the failure, which isn’t a marketable product. Strong placebo effects even pop up in diseases like Parkinson’s Disease where normal disease progression would be expected without some form of therapeutic drug.

Placebo effects are biological, not magical

The study of placebo effects are still early, but progress is being made. In Parkinson’s, placebo effects are believed to arise partly from release of dopamine in the brain: “We show here that the placebo effect in Parkinson’s disease is due, at least in part, to the release of dopamine in the striatum. We propose that the placebo effect might be related to reward mechanisms. The expectation of reward (i.e. clinical benefit) seems to be particularly relevant. According to this theory, brain dopamine release could be a common biochemical substrate for the placebo effect encountered in other medical conditions, such as pain and depression. Other neurotransmitters or neuropeptides, however, are also likely to be involved in mediating the placebo effect (e.g. opioids in pain disorders, serotonin in depression).”

Placebo effects are being correlated with genetic traits. For example, in irritable bowel disease, a small gene variant in the catechol-O-methyltransferase gene (val158met) is correlated with an increased placebo response. That gene is relevant to metabolism of the neurotransmitter dopamine. Research on placebo effects also includes health care provider social behavior (bedside manner). Placebo effects can be powerful in mental disease treatments: “The placebo effect—the ability of expectations about a treatment to lead to clinical improvement—is well established as a powerful force in mental health interventions. The placebo effect is responsible for a substantial portion of the efficacy of antidepressant medications and other important elements of psychiatric care.”

Placebo effects are also prominent in pain therapies: “The placebo effect is a powerful mechanism for modulating clinical outcomes. Linked to psychoneurobiological changes, placebo effects result from the expectancies of the patient, proxy, and provider (1, 2) and are distinct from regression to the mean, spontaneous remission, and fluctuations in symptoms. In randomized clinical trials, the inclusion of a no-intervention arm (3) and possibly a measurement of expectations (4) are critical design elements that can help separate placebo effects from these potential confounds (5). This phenomenon has been particularly well investigated in the areas of experimental and clinical pain, but placebo effects can influence any treatment and any condition (6).” (emphasis added)

Chi, acupuncture, nutritional supplements & Goop

People report feeling better from a vast number of ailments and diseases. Products are sold that infer or outright claim to be good to treat all sorts of diseases and symptoms. Most of it is based on pseudoscience and/or outright fraud. For example, acupuncture claims to be based on inserting thin needles in precise locations on the body to affect the flow of Chi or life force in clinically beneficial ways. Despite the claim, (1) there are no precise locations that experts use to affect the flow of Chi, and (2) Chi doesn't exist. Efforts to proves it exists have failed. Paltrow’s products marketed under the Goop brand name may elicit placebo effects in at least some people based on pseudoscience at best.[1] Nutritional or dietary supplements usually have no useful ingredients other than minerals and vitamins that are considered to be actual necessary nutrients.

I don’t care about science, I want to buy it anyway

Some people don’t care that the product they buy doesn't work beyond being a placebo. Others reject science arguments because they believe their product really “works.” Often they just want to be left alone about it and free to buy whatever they want.

There’s a lot to buy.[2] The global market for dietary supplements alone is projected by one study to be about $350 billion by 2026. Paltrow’s Goop products can be expensive. A 2002 study estimated that US consumers paid about $34 billion for complementary and alternative medicine (CAM) therapies, acupuncture, reflexology, aromatherapy, herbal therapy, etc., but the clinical benefits were not quantified due to a lack of good data for analysis: “Nevertheless, there are still too few good quality evaluations to draw many conclusions about the cost-effectiveness of specific CAM therapies for particular conditions.”

In view of existing evidence, it is reasonable to believe that essentially all benefit that people report for products and therapies that are not FDA approved come from the placebo effect. It is also reasonable to believe that people will continue buying various non-FDA approved products in the belief of benefits that arise from something other than the placebo effect.


Footnotes:
1. Scientific belief that benefits from Chi, acupuncture, nutritional supplements and Goop are based on placebo effects have been rejected by some people. That belief is criticized as closed-minded worship of a fallible and flawed Western science that does not fully understand all of the things it pretends to know. Some of that criticism is true because Western medical science doesn't understand everything, but at least it doesn’t claim to. However, that limitation does not negate the placebo effect or show evidence that convincingly demonstrates effectiveness of alternative treatments beyond placebo effects.

The ‘not enough evidence’ criticism has been rejected as raising the bar higher for alternative approaches compared to FDA approved drugs. The rebuttal to that is that higher levels of evidence can be reasonably asked for inherently inexplicable theories, such as Chi, and treatments or products that operate without any basis in science other than placebo effects. After all, no one has measured Chi, despite years of trying. Such a finding would be a major new scientific finding that would ripple through biomedical research if not most all other sciences as well. So far, no such finding has been published. Almost all placebo controlled clinical trials with nutritional supplements have failed, which is why none are FDA-approved.

2. All non-FDA approved nutritional or dietary supplements and homeopathy products are required to include this disclaimer related to any medical or clinical benefits the product is claimed to have:

This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.

In other words, such products do not have to do anything medically useful and they cannot make any such claim. They may elicit a placebo response in some consumers.