imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

De-Acceleration or Globalization 2.0

by Thomas Fischermann, R Heimling , M Schieritz Monday, Aug. 25, 2008 at 1:35 AM
mbatko@lycos.com

"The wondrous global division of labor came about in which threshold countries lend money to the US to buy Chinese or Indian products..Must cut-flowers from Africa be promoted in Europe?..With de-acceleration, globalization will catapult fewer jobs around the globe.

DE-ACCELERATION OR GLOBALIZATION 2.0

The world economy plunges in the greatest problems in decades. Free trade is threatened, national influences increase and work is redistributed around the globe

By Thomas Fischermann, Ruth Heimling and Mark Schieritz

[This article published on: Zeit Online 32/2008 is translated from the German on the World Wide Web, http://images.zeit.de/text/2008/32/Ende-der-Globalisierung.]




All certainties are now on trial in the world economy. For the first time the model of the past 25 years seems to fall into great difficulties, turbo-capitalism practiced worldwide in combination with cheap oil and vast money. In the past container ships were faster and bigger, cargo planes were enormous and trucks tightly packed without appreciable costs. Capital cleared the path in many places nearly without state controls. The world economy was fired up on all cylinders.

What is now happening? Financial institutions collapse and inflation returns. Oil is expensive and many countries expect a recession. The community of states wracks its brains about stricter rules for the credit branch. Many politicians of the West rediscover protectionism as protection of their own citizens. At the end of July 2008, negotiations on liberalized world trade in Geneva broke down. Setting a positive sign for globalization in this year of crises may be the last hope. The national egos with the egos of the US at the top were stronger than the desire for an agreement to help developing countries and prove the world economy exists for everyone.

“Globalization can be reversed,” say the economists Jeff Rubin and Benjamin Tal from the Canadian investment bank CIBC. At least globalization is now becoming slower.

Barack Obama promises more protection for citizens of the US.

One thing has already happened. The world economy has run up against many limits of capacity. This is the deeper reason behind the economic crisis suddenly brewing after the New Year. Globalization opponents argue the fodder for greedy world capitalism is running low. The prices for fuels have climbed to record levels. Oil producer countries cannot or will not quickly expand their production. This is also true for staple foods like rice and wheat whose prices exploded after a series of crop failures. Metals and other raw materials for industry are becoming scarce. Many harbors, airports and roads are strained in rapidly growing economies like India, Brazil and Russia. In a second step, these shortages increase the prices of many other products, provoke inflation dangers, raise the price of life and the labor costs of low wageworkers in distant countries and make more expensive transporting heavy, bulky goods.

Is this only a temporary problem until these scarce things are replaced by others,” as Michael Bordo says? “At the end of the 19th century, everyone feared the end of coal but then oil was found,” the economist from Rutgers University argues.

Many of his colleagues are more skeptical. “If oil stays expensive, world trade could be greatly reduced,” says Paul Krugman from Princeton University. Kevin O’Rourke, an historian and trade expert at Trinity College in Dublin, paints a gloomy future full of wars over distribution. “Sudde3nly it will be clear to many people that many dependencies could become dangerous,” he says. “If we don’t create a multilateral system for the reasonable distribution of oil, gas and metals, the world will head for a dangerous scenario.”

Since 1950 the costs for airfreight fell almost 90 percent.

The shortages are now setting new limits to globalization. Many politicians understand this effect. For months prominent politicians in several countries and different political camps have clearly defined themselves as globalization opponents. From the US and Japan to Australia, they have blocked corporate takeovers by foreign investors in the last months or cautiously passed laws to do this in the future. The rejection of foreign trade also goes beyond the collapse in Geneva. With harsh criticism of the free exchange of goods, the presidential candidate Barack Obama distinguishes himself from his economic liberal adversary John McCain.

The presidential campaign in the US has shown that support for open trade is shaky in the most powerful nation of the world,” Harvard researcher Dani Rodrik says. Under the title “The Consensus on the Death of Globalization,” he describes the market-radical world trade system that arose in the early 1980s as “unsettled.”

Perhaps uncertainty is so great because globalization has been advancing for 25 years. After the meager economic growth in the 1970s, the industrial countries rapidly raised the average living standard. At the same time, formerly dependent regions in the Far East, Latin America, Eastern Europe and even Africa suddenly experienced sound growth rates. These successes were also a result of very conducive circumstances for the world economy.

A decade after the oil shock in the 1970s, the price of oil fell to a regular low level. Rules for the international environment and climate were practically non-existent. Bigger ships, more powerful motors and advances in unloading made shipment by sea faster than ever. The revolution in air transport that began after the Second World War continued. Calculated over the half century since 1950, air cargo costs fell almost 90 percent.

Breakthroughs in computer science and telecommunications helped manage world networks of manufacturing firms on distant markets. Corporate managers gathered more experience and financial backers invested more willingly – and sometimes effusively – in the possibilities of the new globalized world economy. A world carousel of raw materials, intermediate products and finished products turned faster. Millions of low-wage workers in threshold countries clicked in the global production runs.

The most important thing has been the role of politics helping globalization in the last 25 years. Trade barriers fell and agreements were signed. World trade had an effective mediator in the World Trade Organization. All market openings did not happen voluntarily in these years. The World Bank, the International Monetary Fund and powerful western states forced some threshold- and developing countries against the will of their chosen representatives to a radical policy of market opening.

The financial industry invested complex products so capital could pass by borders and state regulations and hurl over the globe. In this way the wondrous global division of labor came about in which the up-and-coming threshold countries send money to the United States to buy Chinese or Indian products. Economists have estimated every American has purchased on average 00 from China in the past ten years.

Since the 1990s governments and central banks pushed turbo-globalization on some threshold countries. These countries keep the exchange rate of their currencies low. In this way, they could flood the world with cheap products and quickly build their industry, above all the Chinese. The export surplus of the People’s Republic alone amounted to 2 billion in 2007. Cheap oil and inexpensive imports from the East restrained the price inflation. The prices for clothing and shoes are practically unchanged in Germany since the middle of the 1990s. Inflation seemed defeated.

Initially businesses from classical industrial countries utilized the Asian surplus in workers and opened production sites in the up-and-coming countries. In 2007 the rich industrial countries invested .820 trillion – 50 percent more than in 2006. The Nurenberg company Leoni makes cable for cars and airplanes in China and Korea and Porsche manufactures parts for the Cheyenne SUV in Eastern Europe. Firms from threshold countries appear on the world market. 29 Chinese firms are already on the Fortune magazine list of the top 500 world firms in sales. The oil giant Sinopec and computer manufacturer Lenovo are among the top companies. Seven are from India and five from Russia and Brazil. “Western corporations have brought many branches into these countries who are serious competitors,” says Harold Sirkin from the Boston Consulting firm.

This system has become very complicated. The entwined paths of individual elements of products are hardly clear to a consumer of an iPhone, a pullover sweater or a pack of chewing gum. Year after year the production chains become more intricate. Every manufacturing step can be quickly shifted to another place on the globe with better manufacturing conditions. Transportation costs almost nothing. The necessary contracts can be signed by telephone and computer.

Must cut flowers from Africa be promoted in Europe?

Some have a wrong idea of the export giant China. The People’s Republic can send enormous quantities of cheap goods all over the world. However 50 percent of the products originated elsewhere in the world as intermediate products, according to an estimate of economists Robert Koopman, Zhi Wang and Shang-Jin Wie of the National Bureau of Economic Research in the US. The share is even 80 percent in the high-tech branch.

Thus if transportation costs now regularly rise, if protectionist-minded politicians raise the tariffs and cancel export-promoting subsidies in many countries and if the currencies in many threshold countries are upgraded, these costs could necessitate longer production chains.

In China for example, inflation has climbed to nearly ten percent. Some government experts and central bankers argue the economy of the country is overheated and will bend. In the conference rooms of the Chinese authorities, there is passionate argument whether the currency should be upgraded in the battle against price inflation. Then products manufactured in China for export would be more expensive and relocation to China would be less profitable. The cost advantage is already shriveling because wages are rapidly increasing in wide parts of the land. Adidas has annou9nced it will manufacture fewer casual shoes in the kingdom of the middle on account of higher wages.

Some economists and politicians in the West would even be very thankful for that de-acceleration. Donald Kahn, the vice-president of the US Federal Reserve, urges fast-growing threshold countries “to limit inflation by curbing the total economic demand.” In other words, globalize slower! This is certainly easier said than done in a land like China. No one knows how the success-hungry population will react when the growth of ten percent and more is cut in half.

De-acceleration cannot happen overnight. Hardly anyone expects that the globalization of the last two-and-a-half decades will actually be revoked. While collapse is possible, de-acceleration is more likely. With de-acceleration, globalization will catapult fewer jobs around the globe. In addition, the oil costs and climate treaties will force the world economy to include the costs of environmental crimes more strongly in their profit calculation. This could be a gentler globalization 2.0 instead of de-globalization.

Great pessimism, says Rolf Langhammer from the Institute for World Economy in Kiel, is “simply nonsense.” The vast majority of the international division of labor has such experienced such positive advantages that times of exploding raw material prices, unfavorable exchange rates and bad-tempered trade representatives cannot last. Several reckless business models must be reconsidered. How long will it be sensible to manufacture steel in China and then transport the steel on huge freight ships to the US or Europe? Or send cut flowers from plantations in remote Africa or Latin America by plane to Europe? “The effects of higher transportation costs could be very great,” the economist Paul Krugman says.

In the summer of 2008, the US supermarket giant Wal-Mart began a national campaign emphasizing “regional food.” Instead of purchasing food centrally, the buyers of the corporation want to sign contracts with farmers in the respective states. One firm spokesperson estimates the company could save 190,000 gallons of diesel per year. “Location Germany is attractive again,” the Frauenhafer Institute for System- and Innovation Research in Karlsruhe boasted. Fewer German businesses shift their production abroad. “Every fourth or sixth enterprise returns since losses in quality and flexibility devour the hoped-for savings from wage costs. For years, the management of whole computer systems from distant India was the great innovation with banks and airlines even in Germany. Some shifts only succeeded on paper. In practice, an avalanche of practical harmonization problems resulted, including the hectic to-and-fro travels of project employees.

This does not mean moving cheap gym shoe-, television- or toy manufacturing into Germany. A normal pair of sports shoes would cost 500 euro if produced in Germany, Adidas says. Shifting production from the Far East to the still cheap Eastern Europe is seriously considered.

Boston Consulting calls this “near-shoring” – production near the home country where it is still reasonably inexpensive. In the textile branch, according to this consulting firm, the “low costs in Asia and speedy delivery from Eastern Europe are painfully weighed.” When British prime minister Gordon Brown at a recent meeting of Mediterranean states envisioned an “economy after oil,” he did not think of the local economy. No, not at all! Giant wind farms in North African deserts that could deliver environment-friendly energy for Europe were discussed at the meeting. Globalization for the environment is also a possibility.

The big shipping companies are slowing down the speed of their freighters… “A reduction from 25 to 20 knots in a fast container ship can save half the fuel,” says Max Johns of the Deutscher Reeder association. Globalization will be slower.



Report this post as:

Local News

CA Senate Bill 1303 would require an independent coroner rather than being part of police M10 2:08PM

Three years after OC snitch scandal, no charges filed against sheriffs deputies M10 1:57PM

California police agencies violate Brown Act (open meetings) M02 1:31PM

Insane Company Wants To Send Nuke Plant Waste To New Mexico A29 4:47PM

Change Links May 2018 A27 1:40AM

Worker-Owned Car Wash on Vermont Closed A26 10:37PM

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

More Local News...

Other/Breaking News

A new name for Journalism M26 5:02PM

Minnesota Racist Churches M26 7:26AM

Paraphysique de homo sapiens numericus M26 12:53AM

Pot-pourri des carcans culturels M25 7:36AM

Shame on Portland Indymedia M24 9:16PM

USA, A Nation On A Collision Course With Its Own Decadent Values M24 6:43PM

The Shortwave Report 5/25/18 Listen Globally! M24 5:10PM

32 page newspaper on Appalachian States continues M24 10:25AM

They Knew What They Did: Texaco in Ecuador M24 9:31AM

The real mission of fbi and cia M24 1:28AM

New York Singer is 'Lost in a Dream' After Winning ,000 Prize! M23 3:08PM

The Corrupted Nature Conservancy And Ecosia Search Engine M23 1:43PM

Paraphysique de l'intelligence M23 9:42AM

Fish Can't Scream. Their Decaying Flesh Is Neurotoxic, Radioactive, And Carcinogenic M23 7:37AM

The Montrose Peace Vigil at 12 Years M22 1:01PM

Famous Vegetarians, Vegans, And Fruitarians M21 4:03PM

Work and Digitalization and A Corpse Governs Society M21 3:14AM

Unity Archive Project M21 2:42AM

In praise of indigenous people M20 1:46PM

,000 Reward to Catch My Child's Killers M20 5:35AM

Hikikomori capitaliste M20 1:57AM

Psychonaut Michael Pollan And Psychedelic Therapy M18 1:47PM

Déstabilisation, infiltration, intoxication M18 1:06AM

The Shortwave Report 05/18/18 Listen Globally! M17 4:40PM

Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi M17 3:22PM

Trump is Old King Coal.. Multiplying Harm M17 11:46AM

Schutzstaffel le monde nazifié M17 1:42AM

Pentobarbital de sodium M14 8:43AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy