International Political Economy - Essay Example

Global Economy Affiliation: The global economy is defined just as the suggests economy of the world. It contains several different economies of different countries whereby one economy is linked to the other in some ways. Globalization is a very important aspect in the global economy. Globalization is defined as the process that results in individual economies that are all around the world to become intertwined whereby other world economies are affected by one occurrence in a specific country (Friedman, 1999). The emphasis on globalization is a study that over the years has become deeper with more studies being done on why the world’s economy is the way it is and what can be done to change it (Friedman, 1999). However, through these studies, the global economy in the future is impacted by the economy now. The thesis of the paper is to see how the global economy will resemble the golden straitjacket, come the year 2100. The golden straitjacket is a term commonly used when it comes to economy and politics. The golden straitjacket is said to narrow the economic and political policy choices (Friedman, 1999). By doing so, those in power are placed in moderately tight parameters. The golden straitjacket may seem like an advantage to many political governments but the tighter it is, the more the difference between opposition parties and the ruling parties become difficult to be identified (Friedman, 1999). In the near future, the global economy shall resemble the golden straight jacket due to several reasons. There are numerous benefits that come with the global economy, as well as disadvantages. The advantages or disadvantages of globalization will determine its current state as well as the future. It is vital to have a balanced global economy just like it is very important for the political straitjacket to be balanced (Friedman, 1999). Lack of balance in globalization leads to a tight economy that makes the world have the same kind of economy struggles. One advantage of globalization is the improvement of goods and services. Movement of goods and services across country borders help in improving their quality. The competition that these countries tend to have between each other is the key advantage of why globalization tends to improve quality. Over the years, countries will tend to be more developed in the trading world due to their complementing differences. However, the global economy will be tightened in the future as it gradually resembles the Golden Straitjacket (Hellwig, 2014). It is evident that the global economy leads to a rise in growth due to the large market available for producers and the great variety available for consumers. The increasing the consumers wealth leads to more trade activities which then leads to the growth of the economy. In the political and economic world, growth is the only way to have movement in the Golden Straitjacket (Friedman, 1999). The only way to grow is by ensuring that the ‘jacket’ is kept on tight. The global economy relates to the golden straitjacket in that the tighter the economy, the more there tends to be a rise in growth (Friedman, 1999). According to some economists and writers, the tighter the golden straitjacket is worn, the more there will be more gold produced which will help the development of the society. A country is rewarded by investment capital if it pledges to the free market formula which the Golden Straitjacket. The international council markets provide the investment capital. If a country is seen as not compliant, then the international financial markets retrieve its capital (Hellwig, 2014). There are great rating agencies that lurk the world. Their main aim is to analyze countries and find those that tend to stray from the straitjacket. Hence, when a country decided to subscribe to this market formula, it makes a commitment to stay subscribed n this formula or lose its investment capital (Hellwig, 2014). Hence, the global economy resembles this golden straitjacket in various ways. Growth with inequity is a disadvantage to globalization. There are many opportunities found across borders which always tend to have a great amount of danger of a high economic growth that is surrounded with a lot of inequalities. The inequality is the fact that the wealthy people in the society are normally placed to have access to these opportunities (Day, 2007). They then grow wealthier and the poor remain poor leading to a growth inequality in globalization. The economy appears tighter for most of the countries that experience exploitation of labor. Outsourcing is a new concept that comes along with globalization (Day, 2007). In the year 2100, the global economy will appear developed for some countries. Outsourcing is defined as the delegation of labor to the developing countries where the cost of labor is cheaper, from the much-developed countries. The multinational companies eventually cut the cost of labor and continue to make profits but through the workers of the underdeveloped countries. The question whether there is a paradox in globalization is often asked. Dani Rodrik, in the book the globalization paradox, writes that there is a delicate balance that exists between the processes of globalization and democracy. Different societies have different preferences and needs (Rodrik, 2011). They are in terms of how they structure and organize the institutions essential to ensure that markets function in the correct manner. However, democratic pressures have a tendency to lead to various different institutions situated across various territories (Rodrick, 2011). The global integration of markets is inhibited by this diversity by putting up higher transaction costs across jurisdictions. Therefore, full globalization to a world which is fully reactive to democratic preferences, is unachievable (Rodrick, 2011). It is rare for operational definitions to communicate their scope when it comes to the dealing of a topic such as political economy. The definition of globalization is seen as the growth economy of interdependent countries through the increase of volume and variety of the cross-border transactions in goods. There is also the growth of international capital flows and the widespread of technology. The political economy, however, does not sufficiently convey to globalization. However, in future, the global economy will resemble the golden straitjacket. As a result, there are two things that will be a cause of the country putting on the Golden Straitjacket. One of them is that the country’s economy will grow, and its politics will shrink. The Golden Straitjacket tightens the economic and political policy choices of the ones in power to comparatively strong and tight parameters. References Day, R. B., & Masciulli, J. (2007). Globalization and political ethics. Leiden: Brill. Friedman, T. L. (1999). The Lexus and the olive tree. New York: Farrar, Straus, Giroux. Hellwig, T. (2015). Globalization and mass politics: Retaining the room to maneuver. Rodrik, D. (2011). The globalization Paradox: Democracy and the future of the world economy. New York: W. W. Norton & Co. Read More