Though economists and management thinkers extolled the virtues of innovation repeatedly, firms were just mastering low-level product, service, and technological innovation. Ironically, it was the most powerful kind of innovation that was left ignored, and so simply stopped happening: institutional innovation.so how to overcome entrenched interests, political sclerosis, cultural biases and relentless demographics? haque posits new measures of national income, well-being and returns and developing new currencies to use "that are independent of countries and regions; people will [have] the choice to escape..."
According to Canadian philosopher John Ralston Saul, grand economic theories seldom last more than a few decades. He cites unbridled capitalism that died in 1929 after a run of about 30 years, Communism, a blend of antireligious, economic, and global theories that lasted 45–70 years, depending on geographical regions, Keynesian economic policies that ran for about 45 years, and today’s globalization which has been on center stage for roughly 30 years. In Saul’s view it’s just about time for globalization to start singing its own swan song. Perhaps the situation in the EU is the opening stanza of a very long medley of songs, since grand ideologies seldom leave center stage voluntarily, generally having to be dragged off, kicking and screaming. But the signs of decline are clear and they are turning a muddled and confused situation into a landslide victory for the anti-globalization forcesposted by stbalbach at 9:14 PM on July 13, 2010 [3 favorites]
To understand what’s happening, here is a brief summary of the arguments presented in Saul’s immensely illuminating article “The End of Globalism,” which every reader of this book should ponder.
First of all, globalism is based on the notion that the nation-state as a power is passé and can be replaced by the power of the global markets. So economics, not politics, would determine the course of human events. Such global economic forces would protect the populace from the mistakes of prideful, local leaders, and give the individual a better life through enlightened self-interest. Or so goes the theory, anyway.
Historically, one can trace the birth of globalization to 1971, where in the Swiss mountain village of Davos, a club of corporate leaders was founded to look at civilization through the eyes of business. Soon the business people were joined by feckless government leaders and greedy academics looking for sponsors for their very definite, but almost totally meaningless, projects. The ideology that bound this group together was the notion that the public good could be regarded as a by-product of trade, competition, and self-interest. Four years later, the G8 was founded to mimic the Davos ideology that the world should be seen as one great corporation, ignoring social standards, human rights, organized religions, and anything else not overtly aimed at commercial self-interest.
Of special interest is that what really opened the door to globalization was the economic crisis that began with the oil-price shock of 1973. The new ideology that came forth to fill the vacuum left by the leaders who had lost the ability to deal with the situation was called globalization. As with all successful religions, globalization promised to solve every problem. Simple, broad-sweeping solutions with responsibility ultimately lodged in the hard-to-pin-down, invisible hands of corporate moguls. No one had to take responsibility for anything; the markets would miraculously solve all.
For two decades, government after government simply shifted most of their economic power onto the global markets by passing legislation favorable to global corporations, entering into alliances like the EU, enabling floating currency exchange rates, and the like. As the unregulated debt and currency systems allowed transnational corporations to accumulate assets greater than most countries, it was a logical step to regard these firms as new nations themselves, a kind of virtual nation devoid of geographic boundaries, citizens, obligations. Finally, in 1995 the system peaked with the GATT agreement leading to the founding of the World Trade Organization, a central body created to deal with matters of trade. So the reconceptualization of civilization through the looking glass of economics reached its critical point.
Following the breakaway policies of many governments in Central and South America to re-take control of their own destiny from the global corporations, in 1998 Malaysia refused to follow the global rules and pulled its currency off the market in response to the economic crisis in Asia at the time. The Malaysians made their currency nonconvertible, and fixed its value at a level just low enough to benefit exports. They also blocked the export of foreign capital and imposed tarifs on imported goods—all to the horror and condemnation of western governments and corporations, who one and all predicted an imminent collapse of the Malaysian economy. But no such thing took place.
Just one year later, in 1999, bankers and other leaders began to praise the Malaysian “experiment.” And at the very same time, the citizens of New Zealand, a country that had become almost a poster child for globalization 15 years earlier, voted to change direction by endorsing a strong government hand in regulating both the national economy and the private sector.
As an epitaph to the entire notion of globalization, in January 2003 the “visionaries” of Davos invited Malaysian prime minister Mahathir Mohamad to address them on the opening day of their annual meeting, heaping praise upon him for his country’s economic success. All of a sudden the reconstructed globalists realized that the Malaysian success stemmed from leadership at the nation-state level and was based upon a total rejection of globalist economics. The frosting on this particular cake—or the last nail in the coffin, depending on your choice of metaphor—came just a few days later when newly-elected Brazilian president, Luiz Inacio Lula da Silva, laid out a vision of responsible nation-state populism to the same audience. So in a span of just a few days, in the very birthplace of globalization, several governments of very different types all turned away from the concept and painted a picture of the world as if the nation-state were again the pillar upon which power and influence rest.
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posted by l33tpolicywonk at 12:17 PM on July 13, 2010