Global Warming

Oh gee thanks Leviathan, thanks for going from a riveting topic like national economics to an even more exciting discussion like global warming.  Well, actually you're all out of luck, as anyone who actually reads the linked articles before they read my commentary would know.  I'm actually going to talk about the changing climate of global economics.  Let's try and make this as painless as possible and get right to it.

The linked article is from last July and ponders the death of globalization.  It is from before the financial crisis got kicked off and I think it delivers an interesting perspective in lieu of current events.  Please do read it, it's worht the time.

The Economist, a weekly publication, did a series on globalization in September which I will be using to base most of my discussion.  September was right at the beginning of the housing bust but long before the banks started crashing and well before anyone thought that Detroit would need a lifeline.

In any discussion of global issues, especially economics, the two forces at hand are developed and developing countries.  Post-industrialist is now 'developed' and industrialist is 'developing' and third-world countries are either becoming 'developing' or aren't in the conversation.

That being said there are two sides to each of these coins: soveriegn-wealth and free market.  Russia and China are good examples of developed sovereign-wealth economies while the United States is the last bastion of pure free market idealism in the developed world.  Refer to the last post for why it should remain that way.  Globalization started with the developed nations exporting goods to developing countries and trading goods with each other.  Some developing nations became displeased with the amount of economic and political intervention other countries were imposing.  Many Middle Eastern countries are very angry with the United States over the Westernization process they are seeing through the importing of Coke and KFC.  They do have a good point.  We are now seeing the problems with Rusian-owned oil companies dictating whether or not Europe gets oil for political reasons.

The developing nations also have soveriegn-wealth and free market economies and they are looking at their developed brethren to see which form they should adopt.  While the United States' economy is seeing downturns in profits, many developing economies are seeing a boom due to better management and growing demand within their own countries.  Every American is already a consumer, so Ford has to sell car owners new cars.  Villagers in rural India have never owned a computer or car before, so those companies are able to tap into a consumer base that is completely new.  While developed nations tend to outsource companies and jobs to developing countries for cheaper labor, developing nations outsource companies to other developing ntions because they have a better chance of competing in the emerging markets and jobs to developed nations whose workers are slowly losing their jobs to better technology (a worse enemy to the American worker than outsourcing).

What the next step in the globalization process will either be very intriguing or very scary.  It will be frightening if developed economies turn protectionist to protect domestic companies.  Not only would this harm the developed economies who depend on developing countries for outsourced goods and services already in place, but it would also harm the developing economies who do receive a lot of money from developed consumers.  It willbe intriguing if American and Russian companies can take a page out of the management book of the developing economies to see how to make cheaper products like India, make more desirable products like Taiwan, and how to have effective governmental regulation of the economy like United Arab Emerates.

Hopefully American politicans will warm to the idea of globalization in that we are no longer the only power driving it.  We need to learn how to be diplomatic like we were when we started, otherwise we will receive the cold shoulder from the future powers of the globalized world.