Globalization and Economics

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Globalization and Economics

• Dr. Dave Hayes
• Troy University
• dhayes_at_troy.edu

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Traditional Society

• Based on Families and Non-Associational Groups
• Group Identities Dominate
• Preserves Group Values and Beliefs
• Seeks to make individuals good

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Modern Society

• Greater Role for Individuals and Associational
  Groups
• Individual Identities Dominate
• Diversity and Change tolerated
• Individually is morally autonomous
• (No society is completely modern)

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Traditional Economy

• Agrarian Fixed, Finite Capital
• Family or Household Based Production
• Non-wage Labor, Rights in Man
• Underemployment
• Emphasis on Stability, Satisficing, or Not
  Starving

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Modern Economy

• Individual ownership of Capital
• Capital is Reproducible, and Mobile
• Production centered outside Household
• Individual Wage Labor
• Emphasis is on Growth, Wealth Maximization, Wage
  Increases
• Change, Creative Destruction

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Market Economies

• Require Security and Minimal Level of Activity
• Depend on Individual Incentives and Social
  Institutions (i.e, the Market)
• Efficient at Production and Distribution
• Can Produce Steady Increases in Wealth

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Inconvenient Truths

• Incentives are Profits (they are good)
• Risk must be rewarded (inequality results)
• To each according to his contribution (need is
  irrelevant)
• Desired over Desirable (no controlling tastes)
• Labor must be mobile (move to the jobs)
• Anonymity is efficient (social Eeuality)
• Household production is marginalized (gender
  inequality)

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Herbie as Subversive

• Elves are traditional society
• Born to the role
• Group Identity
• Household Production
• Herbie threatens society
• Individual Identity
• Specialization
• Charges fees
• Public Space

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The Working Parts

• Marxian Trinity

Government
Society
Economy
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Complex Effects

• Society on Government
• Government on Society
• Society on Economy
• Economy on Society
• Government on Economy
• Economy on Government

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Globalization

• Includes typical Modernization (Change)
• External Capital (Foreign Investors)
• Specialization in Exports (Foreign Imports)
• Market Integration (Foreign Prices Shifts)
• External Discipline (Foreign Influence)
• Bottom Line Traditional Society is doomed and
  Culture is on the Ropes

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Domestic Change

• Breakdown of Extended Families
• Greater Individualism
• Greater Materialism
• Competition
• Gender/Ethnic Equality
• Greater Uncertainty
• Labor Mobility
• Anomie reigns

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Foreign Influence

• Openness to Markets
• New Products
• Consumerism
• External Shocks
• Dominance of Foreign Capital
• Impact on Young
• Guilt by Association

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Effects of Globalization

• Fans the fires of Modernization
• Threatens culture and society (Buzzsaw)
• Promises Wealth but Demands Obedience
• Creates conflicting political demands
• Produces Social Equality and Income Inequality
  (Discontent)
• Enables Foreign Influence and Scapegoats