“What is robbing a bank compared to founding one?”

Last summer, Joseph Stiglitz wrote an article concerning the state of the European Union and what needs to be done to get it out of stagnation. “Much of the euro’s design reflects the neoliberal economic doctrines that prevailed when the single currency was conceived.”  Namely, that low inflation leads to growth and stability, that independent central banks make investors confident, that budgetary abstemiousness makes economies converge, and that capital and work mobility would, if any crisis, ensure stability. Stiglitz then reminds us no empirical evidence supports such beliefs, and therefore proposes banking union, debt mutualisation, leveling industrial policies, new objectives for the ECB, etc., to solve the problem. But he hardly mentions the crux of the matter: how can we come back to pre-crisis levels of growth without creating a new bubble? We would need a smart new deal of regulation to have this cake and eat it! On the opposite, a poor regulation would only aim to enhance the management of bubbles, ingenuously assuming that it will be able to tame the animal spirits should they ever be on the verge of running amok again.

AnimalSpirits
Move along, nothing to see here

Most of what our leaders enacted so far is not smart. It really is about dumping money on problems. First, governments show they are ready to save banks without compensations to keep business running as usual, and then, they create international institutions to bail out indebted governments in exchange of austerity. Their ‘reforms’ always make sure nothing changes. But it should. There is something rotten in the actual international financial system which was already there before 2008. The most spectacular flaw is its structural moral hazard. Most orthodox economists will only focus on this aspect because it may appear as the result of poor state intervention on an otherwise self-regulating market, if there ever was one. But they fail to realize the fact that these failures were precisely demanded by markets as a way to maintain their profit, by achieving complete disconnection between fictitious and productive capital (Burnham, 2010). When deregulation grants private interests the safety of the monetary balances of millions of citizens with no responsibility but to generate profit with it, how come anyone can be surprised if they engage in a credit binge to postpone its fall? The banks really were too big to fail: their collapse would have dragged the entire economy down!

Crisis management for dummies
Crisis management for dummies

When you add other factors such as the technical opacity of derivatives that allows you to get rid of any suspicious financial item as fast as you wish, one may easily understand that market does not need intervention to fail (Crouch, 2011).  Any international stimulus must make sure it will generate a material rather than financial reconstruction, as for a devastated economy. But what if northern Europe only wants to save its capital? Stigilitz ominously concludes that “[…] – if there is not enough solidarity to make politics work – then the euro may have to be abandoned for the sake of salvaging the European project.”  Well, maybe not. Apart from über-indebted Greece, austerity is likely to make the southern labor-force so competitive an export-led recovery may eventually occur thanks to newly profitable eurozone corporations, whatever the social price is (Roberts, 2014). You know what this would mean. See you next bubble!

By: Aymeric Vassas

  • Stiglitz, J., 2014. ‘How to save a broken euro’, on euractiv.com [Accessed 30/11/14]
  • Burnham, P., 2010. ‘Class, Capital and Crisis: A Return to Fundamentals’ in Political Studies Review, Vol. 8, pp. 27-39.
  • Crouch, C., 2011. ‘The Market and its Limitations’ in The Strange Non-Death of Neoliberalism, Polity Press, pp. 24-48.
  • Roberts, M., 2014. ‘Greece cannot escape’, on thenextrecession.wordpress.com [Accessed 30/11/14]

The Growing Distance of Labour Inequality

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Can you imagine a world where a quarter of young people are not working or studying? Where only 1 in 20 executive board members are women? Where 1% of a population earns more in a day than 90% earn in a year? Unfortunately, you don’t need to imagine. We live here already.

The Economist (2013) showed that a quarter young people aged from 15-24 are not working or studying, Gov.uk reported that only 5.5% of executive directors in the FTSE 100 index (Financial Times Stock Exchange, the index of the top 100 earning companies on the London Stock Exchange) are female, and Stiglitz (2012) found that the top 0.1% earners in America receive in only 12 hours what the bottom 90% receive in an entire year.

The global division of labour is incredibly skewed against many different groups of people. O’Brien (2013) noted that speaking on a global scale, women have “a much greater chance of being poorer, working harder and under worse conditions than a man”.

While studies show that women in the same job as a man receive less money (The Independent, 2013), there is also a division on the type of work that women populate. “Women’s work” primarily consists of caring, leisure and secretarial duties, where they dominate more than three quarters of the total employed (The Guardian, 2013). Watson (2005) said that the simple fact that women also have a reproductive role in society constrains their ability to participate fully in the economy – although it is controversial to assume this is the only reason why they are discriminated against.

This gap in fairness also applies beyond women – there is ethnic discrimination, which varies between countries. In 2013 in the UK, there was a total unemployment rate of 8% from the ages of 16 and over who are economically active. The table below from the House of Commons (2014) breaks down that figure by ethnicity.

House of Commons - 2014
House of Commons – 2014

As the table shows, if you are not white and live in the UK, you are almost twice as likely to be unemployed. This huge disparity is a product of treating people differently simply due to ethnic background, but is not limited to just inequality toward employment.

Adams (2014) reported on a study which found that undergraduates who entered university with similar grades left with different classed degrees – in favour of white people. It was found that 72% of white students who had the grades of BBB at A-level attained a first or upper-second class degree, compared with 56% for Asian students and 53% of black students.

In addition, a report by the London School of Economics (2014) found that most ethnic groups were significantly less likely to receive an offer from a university when compared with white applicants. This shows that not only are ethnic groups less likely to receive a degree, they are also more likely to have a lower class degree. This divide only widens the gap in equality concerning labour.

Faced with the facts, it is simple to see that there are many groups from both developed and developing countries which struggle to find employment due to negative perceptions of their race, gender, or many other factors. This discrimination may or may not be intentional, but in any case, the only true way to eradicate this gap is to educate people globally that everyone deserves a fair chance regardless of their differences. Otherwise, the distance will only grow.

Maria Homolova

References:

Adams, R., 2013. ‘White students get better degrees than minority peers with same entry grades’. The Guardian, [online] Available at: http://www.theguardian.com/education/2014/mar/28/white-students-better-degrees-minorities-same-grades-universities [Accessed 29 November 2014]

Brown, J., 2013. ‘Graduate pay gap: Same degrees. Same jobs. But, for women, still not the same pay’. The Independent, [online] Available at: http://www.independent.co.uk/news/education/education-news/graduate-pay-gap-same-degrees-same-jobs-but-for-women-still-not-the-same-pay-8523471.html [Accessed 29 November 2014]

Davies, E., 2011. Women on Boards. [pdf] London: Gov.uk. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31480/11-745-women-on-boards.pdf [Accessed 29 November 2014].

House of Commons, 2014. Unemployment by ethnic background. [pdf] London: House of Commons. Available at: http://www.parliament.uk/business/publications/research/briefing-papers/SN06385/unemployment-by-ethnic-background [Accessed 29 November 2014].

Noden, P., Shiner, M. and Modood T., 2014. ‘Black and Minority Ethnic Access to Higher Education A Reassessment’. The London School of Economics, [online] Available at: http://www.lse.ac.uk/newsAndMedia/PDF/NuffieldBriefing.pdf [Accessed 29 November 2014]

O’Brien, R., 2013. ‘Global Political Economy: Evolution and Dynamics’. Palgrave Macmillan: London.

Stiglitz, J., 2012. ‘The Price of Inequality: How Today’s Divided Society Endangers Our Future’. Norton & Company: New York.

Stewart, H., 2013. ‘UK women remain concentrated in lower-paid work, figures show’. The Guardian, [online] Available at: http://www.theguardian.com/money/2013/sep/25/uk-women-lower-paid-work-figures [Accessed 29 November 2014]

The Economist, 2013.  ‘Generation jobless’. The Economist, [online] Available at: http://www.economist.com/news/international/21576657-around-world-almost-300m-15-24-year-olds-are-not-working-what-has-caused [Accessed 29 November 2014].

Watson, M., 2005. ‘Foundations of International Political Economy’. Palgrave Macmillan: London.

Black Pete, the child friend for everyone in Holland?

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Every year people disagree with the Dutch tradition of an organised childrens party where people are painted black, called as Black Petes. The “Black Pete” in Hollandalso known as Zwarte Piet is serving the old man St. Nicholas with distributing sweets and presents. Is this tradition old-fashioned and too much related to 18th century Holland? And does that mean that this tradition in Holland is only for white people? The whole world has an opinion about this curious tradition.

History teaches us that Zwarte Piet is not racist but stems from a Germanic old “fairy tale”. Those German citizens came during the winter in order to pick up the spring and bring the winter. According to the fairy tale, Zwarte Piet is coverd in soot from the chimmey, causing him to appear black. Unfortunately, Holland has an enormous slavery past what brings different emotions by the citizens in combination with the Zwarte Piet story. A lot of people argue that this fairytale story does not fit in our society anymore. To celebrate, we are forcing (black) people to teach their children the story and to celebrate something against their own feelings, what is quite common with the slavery 100 years ago on production level. (Silver2003)

Does that mean that this tradition in Holland is only for white people?
 When I was young and believed in this story I never noticed that children with a different skin colour did not enjoy this party. It is not allowed to accept in 21st century the inequality of colour by people. Are we all being pushed lemming-like in the thought of a “traditional child party” or is this modern inequality and thus only a tradition for the “white” people?  Verene Shepherd from the VN Shepherd stated: “Black Pete is not an old traditional child celebrating party but modern slavery. It is a return of the slavery and I am surprised at the lack of knowledge and realisation of this by the people in Holland“.

However, new liberalism provides the common interest justification for public policies aimed at these objectives, and a much safer justification because it is “ a political”. According to the common interest the government should not decide whether or not the party continues, but the people. (Ravenhill, 2011) It is important to known that sometimes it is not a bad thing to disagree with each other. This discussion, “if Zwarte Piet the child friend is for everyone”, is not a matter of teasing each other but a matter of giving opinions. Every year I am surprised about the fact that a nuance in how we dress children is the most important debate is of our time. This says something positive about our time and something negative about our priorities. Let’s meet each other in the middle so that at the very least so every child has their celebration.

Liza Rietvelt

Reference:

Fontein, J., 2013 Hoofd VN-onderzoek: zwarte piet is terugkeer slavernij. De Volkskrant [online] October 22, 2013. Available at Accessed 22 October, 2014]

Raboteau, E., 2014 Who is Zwarte Piet?: A holiday tradition in the Netherlands? Viginia Quarterly Review. Vol. 90 Issue 1, p142-155. 14p. Available at:  [Accessed 23 October, 2014]

Ravenhill, J, Global Political Economy, third edition, p402-408, [Accessed on 11 December 2014]

Silver, J.B, Forces of labor, Workers’ movements and globalization since 1870, p.41-43, [Accessed on 11 December 2014]

 

Are US and EU sanctions on Russia having a ripple effect?

Turmoil in the Ukraine has been causing a clear revival of the World division found in the Cold War. With Russia backing pro-russian rebels in eastern Ukraine and the European Union and United States attempting to support and legitimise the new pro-western government. With both sides not backing down the US and the EU have decided to impose sanctions against Russia in an attempt to remove their presence and influence in eastern Ukraine. The estimated damage these sanctions are expected to cause on the Russian economy is quite drastic. An article in Opendemocracy has shown that the value of the Ruble has dropped over 20% to that of the dollar and that Foreign Direct Investment is estimated to decrease by 50% (2014). These sanctions now include not allowing Russia’s largest banks, oil companies and defense companies to access international finance and technology (Roberts, 2014).

However, in a world as globalised as ours where financial markets are increasingly integrated and complex, is it really possible to impose such hard sanctions without the West feeling the backlash of its actions?

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As expressed by Ravenhill, following World War II the new world economy grew in transnational corporations and ‘private economic enterprises with international operations’ became a key characteristic in the modern economy (2005). This is an example of how the integration of national economies into the global economy has left countries extremely interlinked. As said by Stiglitz: ‘globalization has meant that the world economy has become integrated’, emphasizing the idea that if one major country is in crisis there will be an impact on all other countries (2009).  Russia possesses almost a fifth of the world’s natural gas reserves and exports through the Ukraine to the rest of Europe (Henley, 2014). An article in the Financial Times reported that in  2013 alone, Russia supplied 30% of gas to Europe (2014). This means that come winter the demand of gas will increase in Europe and the reliance on Russian gas will come into play, surely Putin will choose this time to make an impact. Aside from the gas industry, the technological sanctions will have repercussions in the German economy as it is the main EU exporter of technological goods to Russia (Monaghan & Rankin, 2014). European countries will definitely feel the immediate consequences of their actions, whereas, the US will most likely be hit by the ripple effect coming from Europe.

As stated by The Guardian the countries getting the short end of the stick are ones such as Slovakia, Ukraine and Moldova (2014). Each of these countries rely excessively on Russian gas reserves and the pipelines that run through the Ukraine to receive it. Because of globalisation the crisis in the Ukraine is now effecting countries that are not directly involved. This also applies to the sanctions being applied to Russia. Less economically developed countries will be harmed because of the increased prices of gas. The market price of gas has already gone up by 10 percentage points as opposed to last year at this time (Henley, 2014). Whether this be because of market instability or a so-called “gas war”, smaller LEDCs are suffering the consequences. Whereas Western countries may be able to afford such a hit the lack of consideration for the others is once again exemplified.

Luísa H Castro

Bibliography

Foy, H., Oliver, C. (2014). Can Europe wean itself off Russian gas?.Available at: http://www.ft.com/cms/s/0/0078c61c-52d5-11e4-a236-00144feab7de.html#axzz3KBoewQnx. [Accessed 26 November 2014].

Henley, J. (2014). Is Europe’s gas supply threatened by the Ukraine crisis?. Available at: http://www.theguardian.com/world/2014/mar/03/europes-gas-supply-ukraine-crisis-russsia-pipelines. [Accessed on: 27 November 2014].

Jaiani, V. (2014). Russian’s are not bothered by Western sanctions. Available at: https://www.opendemocracy.net/od-russia/vasil-jaiani/russians-are-not-bothered-by-western-sanctions. [Accessed on: 26 November 2014].

Monaghan, A., Rankin, J. (2014). EU and US sanctions against Russia: which will they hurt more?. Available at: http://www.theguardian.com/business/2014/jul/30/eu-us-sanctions-against-russia-hurt. [Accessed 25 November 2014].

Ravenhil, J (2005). Global Political Economy. Oxford: Oxford University Press. 4-15.

Roberts, D. (2014). Sweeping new US and EU sanctions target Russia’s banks an oil companies. Available at: http://www.theguardian.com/world/2014/sep/12/russia-sanctions-us-eu-banks-sberbank-oil-gazprom. [Accessed on: 26 November 2014].

Stiglitz, J (2009)  ‘The global crisis, social protection and jobs’ International Labour Review 148(1-2) pp. 1 – 13.

An illusion of gender empowerment: Female workers of garment industry in Bangladesh

The general problem of garment industry has been discussed in the last blog, this one will continue to focus on the garment industry in Bangladesh. Women workers are the backbone of the garment industry in Bangladesh, but they are also’ at the bottom of the supply chain’. (War on Want P.3)The female workers are facing a contradictory condition (Saxena, 2014). On one hand, they are being empowered because they are now able to work and be more independent, which is quite impossible to happen in a country where traditionally not allowing women to work. On the other hand, women workers are highly exploited and do not have a chance to compete with the male counterparts equally,making them unable to have upward mobility in the industry.

bangladesh women

Women can never get a place in managerial position. According to the report published by War on Want in 2010( a movement to fight for global justice), there are over 3 million people working in the garment industry in Bangladesh, almost 85% workers are women. The large amount of female workers doesn’t make them gain a better position in the industry. They have to work overtime(unpaid) in order to achieve the ‘unrealistic production targets set by factory owners’(War on Want P.6).What’s more,only women are employed as ‘helpers’, which is the lowest position in the industry with the lowest income. However, the 15% male workforce is usually managers and supervisors.

There are also many mistreatment on female workers in the industry.The report shows that female workers receive sexual harassment during work. They also are threatened to being undress as punishment or to lose their jobs. The gender division of labor shows gender inequality in the garment industry. Women workers need to obey and be submissive to the male senior in order to work in the industry. Though the industry provides job opportunities to Bangladesh women and make them able to be independent financially, the position of women workers can hardly compare to their male counterpart.

 gender_inequality

The World Bank has carry out the project “Northern Areas Reduction-of-Poverty Initiative” or NARI to linked the rural women in Bangladesh to the expanding garment industry (The World Bank, 2012). Aiming to assist rural women to find jobs in the city to save them from poverty. Although Bangladesh women can earn a living via the access to the garment work, they are still living in impoverishment and suffering from malnutrition(Rozario and Uttom, 2014). Moreover, Living in a patriarchal society, the position of Bangladesh women are low. They are also no rights to grain a maternity leave under the labor law within the country(War on Want, 2010). Majority of pregnant workers are fired, or sent on leave without any salary. Pregnant workers are forced to work until the final stages of pregnancy which pose a threat to the health of both mother and child(War on Want, 2010).

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Thanks to the global commodity chain(William,2004), to provide job opportunities for Bangladesh women. They are now able to earn a living to improve their hard lives. But when it comes to the issue of gender empowerment, this is still not the case!

BY: Hilary Chan

Reference:

Rozario, R. and Uttom, S. (2014). Bangladeshi garment workers grapple with hunger, malnutrition. [online] UCANEWS.com. Available at: http://www.ucanews.com/news/bangladeshi-garment-workers-grapple-with-hunger-malnutrition/72377 [Accessed 15 Nov. 2014].

Saxena, S. (2014). A Glimmer of Hope: Women Leading Change in Bangladesh’s Garment Industry. [online] In Asia. Available at: http://asiafoundation.org/in-asia/2014/09/24/a-glimmer-of-hope-women-leading-change-in-bangladeshs-garment-industry/ [Accessed 13 Nov. 2014].

The World Bank, (2012). Women’s Day 2012: Empowering Women in Bangladesh. [online] Available at: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTGENDER/0,,contentMDK:23136765~menuPK:336906~pagePK:64020865~piPK:149114~theSitePK:336868,00.html [Accessed 14 Nov. 2014].

War on Want, (2010).Women workers in the Bangladesh garment sector. [online] London: War on want, pp.1-16. Available at: http://www.waronwant.org/attachments/Stitched%20Up.pdf [Accessed 10 Nov. 2014].

William I. Robinson (2004) ‘Globalization as Epochal Change in World Capitalism’, A Theory of Global Capitalism: Production, Class and State in a Transnational World, Johns Hopkins), pp. 1 – 32.

Cruel stories behind your clothing

If you have ever purchased clothing in H&M, GAP, Wal-mart or Primark, it is not hard to find something in your wardrobe which was made in Bangladesh. Bangladesh, the world second largest garment exporter,is supplying clothes for international brand chain stores, where the shops are popular for majority people to buy their clothes. The reason why it is common to consume in chain stores is because chain stores always provide great accessibility with reasonable(or even cheap) price which favored consumers.

Looking at the word ‘made in Bangladesh’ on the clothing tag, how much do you know about the country? Garment export is the largest industrial sector in Bangladesh, due to its favorable condition(cheap labor, low taxes), attracts foreign investors, mainly from the United Stated and Europe. In 2013-14 fiscal year, the export set a new record, reached over 30 billion U.S. dollar(Naim, 2014). However, there are about 4 million garment factory workers(Tauscher, 2014)suffering from poor working condition in the industry.

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Workers are underpaid and suffer from inhumane treatment in Bangladesh. They have to work 10-14 hours each day and 6 days per week to earn around £23 a month. (HILLS, 2012) Clean drinking water is not provided for workers and they are even restricted to go to toilet during working time.(Rozario and Uttom, 2014)Low income contributes to the high rate of undernourishment because workers cannot afford nutritious food. Fish and meat become luxuries to them.

What’s more, many of the buildings are not built for factory-use. There is no fire exit in some of the factories. Hence the working environment is unsafe and cause to horrible tragedies. On 24 April, 2013,a factory building in Bangladesh capital city collapsed, due to unauthorized reconstruction of the factory building and overloading of heavy machines. More than one thousand people hurt and two hundred fifty people died in the injury.

Who put the workers’ lives in risk? The employers solely keep eyes on profits. Profit seems to be the only driving force of employers. They never take note on any safety regulation of the garment industry. The more products the workers manufacture, the more profits the employers gain. The government is also insufficient to(or maybe unwilling) to draw up well-knit regulatory conditions(for example, supervise the fire service installations and equipment.) (William,2004) to protect workers’ right is because it may in fact hinder the enormous clothing export income of the government.Until the tragedy happened, international labor groups pushed European and American buyers to invest fire safety checks for the factories in order to protect the safety of the workers.(Rozario and Uttom, 2014)Workers may at least survive.

To conclude, ‘Made in Bangladesh’ entails the poor stories and cruel lives of Bangladeshi workers. Employers keep making great profits because of the exploitation of the garment workers while workers are churning out low-priced products in deadly factories. After knowing the stories behind, when you see a clothing tag which has ‘Made in Bangladesh’ printed on it, will you still fascinate by the cheap price?

BY: Hilary Chan

Reference:

CNN, (2013).Trade rules and cheap Bangladeshi clothes. [online] Available at: https://www.youtube.com/watch?v=RKXdLIr4GtE [Accessed 5 Nov. 2014].

HILLS, S. (2012). Bangladesh asked to raise its $36-a-month minimum wage… by clothes retail giant H&M. [online] Mail Online. Available at: http://www.dailymail.co.uk/news/article-2199208/Bangladesh-asked-raise-36-month-minimum-wage–clothes-retail-giant-H-M.html [Accessed 28 Oct. 2014].

Naim, U. (2014). Bangladesh’s 2013-14 fiscal exports hit all-time yearly high. [online] Shanghai Daily.com. Available at: http://www.shanghaidaily.com/article/article_xinhua.aspx?id=229001 [Accessed 10 Nov. 2014].

Rozario, R. and Uttom, S. (2014). Bangladeshi garment workers grapple with hunger, malnutrition. [online] UCANEWS.com. Available at: http://www.ucanews.com/news/bangladeshi-garment-workers-grapple-with-hunger-malnutrition/72377 [Accessed 15 Nov. 2014].

Tauscher, E. (2014). Improving garment factory conditions helps workers and retailers. [online] the Washington Post. Available at: http://www.washingtonpost.com/opinions/improving-garment-factory-conditions-helps-workers-and-retailers/2014/10/29/5f14aeb6-5f78-11e4-827b-2d813561bdfd_story.html [Accessed 30 Oct. 2014].

William I. Robinson (2004) ‘Globalization as Epochal Change in World Capitalism’, A Theory of Global Capitalism: Production, Class and State in a Transnational World, Johns Hopkins), pp. 1 – 32.

Global Economy – who are you?

There are world events, for which it is difficult not to hear and even harder to not follow their course, as shed light on the problems with which humanity fights. Conference in Davos is a place where they meet representatives of major economic organizations, the most influential political organizations and intellectuals, who together discuss the major social and economic problems of the planet.

World Economic Forum presented the annual report – prepared by 700 world experts. The document says that reflect social inequalities in income and the lack of jobs for young people are the factors that probably the greatest – to take a toll on the global economy in the coming decade. Prepared the report warns that the risk posed by deepening social inequalities, despite signs of recovery of the global economy. Lost generation of people who enter adult life in the early twenty-first century, could lead to the outbreak of social unrest, as it awaits a very bad situation in the labor market.

Global Political Economy refers to those approaches to analysing world society which seek to overcome the disciplinary divisions of social science (Van der Pijl K., 2009). Globalization represents a new, transnational phase in the development of the world capitalist system. A Defining feature of the globalization epoch is the rise of transnational capital (Robinson W., 2004). Nevertheless, in many countries, public finances is so bad that the next few years should be expected budget cuts there, which is not conducive to the creation of jobs. Time to realize what will be the main effect of the financial crisis in developed countries? Most, of course, young people will suffer because the market will be even less jobs.

The process of globalization in its positive dimension had to contribute to increase the global reach and open the borders, not only transnational, but mostly mental. The world economy has evolved into a global basis. Do covering the whole world and changing the global economy is the key to prosperity? Robinson wrote: I argue that in the new, transnational phase of the capitalist system we are moving from a world economy to a global economy (Robinson W., 2004).

The biggest problems that await us in the capitalist world is a fiscal crisis that may occur in key economies around the world. The next are the high rate of general unemployment, large disparities in income, food crisis, deep political and social instability. Perhaps the solution to the problem would be to use the Constructive approach which pay more attention how governments, states and other actors construct their preferences, highlighting the role of identifies, beliefs, traditions, and values (Woods N., 2011). The global economy is undoubtedly a great opportunity to improve economic situation on the world, because so much easier and more efficient to work together than separately. Risks will always appear, but the key is the use of appropriate tools which the process of globalization has allowed man to develop in our capitalist world.

By: Ewelina Gargala

References:

William I. Robinson (2004). Globalisation as Epochal Change in World Capitalism in: A Theory of Global Capitalism: Production, Class and State in a Transnational World, Johns Hopkins University Press, pp. 1-32.

Van der Pijl K. (2009) From Classical to Global Political Economy: A Survey of Global Political Economy [online]. University of Sussex: Centre for Global Political Economy. Available at: http://www.sussex.ac.uk/ir/documents/091theories.pdf. [Accessed 16 October 2014].

Woods N., (2011). International political economy in an age of globalization in: The Globalization of World Politics, Oxford Univeristy Press, pp. 248-260.

Global Risks 2014, World Economic Forum, Available at:  http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2014.pdf [Accessed 26 November 2014].

The mirage from the north.

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All over the world there are walls; stone walls, steel walls, barbed wire walls, etcetera, who creates friends and enemies. Twenty years ago, there is a wall between the prosperous America and the exhausted Mexico. The wall is an almost 1.100 kilometre economic wall, to block the dream of many Mexicans to a better life in the US. In the United States, the numbers of migrant workers have increased from 1 to 7 million in the period 1996-2001. (Bakker & Gill) Every year, despite the wall, 500.000 illegal immigrants arrive in America. Fifty-six percent of the American citizens agrees with the main thought of the wall. However, between 1998 and 2004, 1.954 people have died by trying to cross the border.

The export of capital to non-capitalist, under-developed or cheap labour peripheries and colonies has long been seen as one possible ‘external solution’ or spatial fix for crisis in the core regions of the world economy (Harvey, 2001 p. 146) In the beginning America thought it works to use the immigrants for serving during the war to function as a construction worker and in other defaulting labour. However throughout the years there arose a global regulation and America decide to build a wall from west to east to stop the immigration run. The controversial wall created divisions by the citizens in America.

Any person who is disabled by America has a personal story. However, all of them have only one wish: going back to their families. At the border hundreds of illegal immigrants are waiting every day until they have the opportunity to cross the border. The newspaper ‘Frontiera’; which is the border newspaper, writes articles about what is the best way to cross the border. The internationalization of economy and society creates flows of exchange or people between two or more nation-states. (Boyer and Drache, 1997) The success of this story is ninety percent. Unfortunately the figures do not lie, 1.954 immigrants die between Mexico and America last twenty years.

People who cannot reveal themselves in their native country, such as Mexico prefer to go to the neighbour, which is the land of opportunity. They all saw the “American dream”. Unfortunately, your personal background and character qualities determines who will have a successful ‘Dream’ said Lawrence Raw. The separations of families, pain and suffering is a testimony that this wall violates the humanity but in addition the inequality of the thoughts and privilege to have the “American Dream”, creating , inequality and costs life.

However, this inequality from the last 20 years is changing. According to Lucas (1998) and Firebaugh (2003) the ‘inequality transition’ and that global inequality has peaked so we can actually expect a decline. How long the wall will stand and how does the future look like? Obama is probably the only one who knows the answer.

Liza Rietvelt

Reference:
Bakker, I., Gill, S., Power, Production and Social reproduction. Chapter 1, p7. [Accessed 3 December 2014.]

Held, D., Kaya, A.(2003), Global Inequality., Chapter 2 globalization and inequality p. 42.,[Accessed 19 November 2014]

HP de tijd. De muur die twee landen en één natie verdeelt [online] November, 6th, 2009. Available  [Accessed 19 November 2014]

Laan, A.,(2014, November 14) ‘De Muur’ Mexico vs VS[Video file]. Retrieved  [Accessed 17 November, 2014]

Lucas (1998)., Firebaugh (2003)., The Destruction of the ‘American Dream’ in Sam Shepard’s Curse of the Starving Class, Introduction: Whither the “American Dream”? p.6. Available [Accessed 19 November 2014]

Pijl, van der K., Assassi, L., Wigan, D., Global Regulation; Managing Crises after the imperial turn. Chapter 10: A New Spatial Fix for Capitalist Crisis? Immigrant Labour, State Borders and the New Ostracising Imperialism p.146. [Accessed 19 November 2014]

Robert Boyer and Daniel Drache (eds.) (1996) States against Markets:  the limits of globalization (Routledge), p62-63. [Accessed on 11 December 2014]

 

I am a consumer and I live in a capitalistic world.

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At the moment I have an IPhone, IPad and a MacBook. It is good technology that helps me educate and develop myself in the 21th century. I never have problems with it; however, last Friday I went to a conference where Jenny Chan showed a movie. The movie was about the biggest company nobody never heard of namely the company that produces Apple materials with 230 million workers: Foxconn in China. 

In 2008 Foxconn become negative publicities in the newspaper. The death of an employee completed with financial compensation for the family became a too low threshold for the employees. The ‘money for suicide’ was the only solution for their family to escape from the factory but create a better future for their family. Kin who is one of the victims says that the reason why they committed suicide is because the production pressure was too high.

Is there no alternative instead of working for Foxconn? The answer for that question is simple: Foxconn promises a fantastic career with a future! Numbers of jobs offered in China are less. You get an income; so you can support your family. Furthermore, you are lucky if you have a job because there is an enormous offer of immigrants and surplus labour in China.

(Robert W. Cox) The social and political power context of production determines the what and how of production. In each mode there is a dominant and subordinate group of people.
The dominant group controls production; the subordinate works under its control.
The dominant group controls production; the subordinate works under its control. In combined with the competition that acquired the status of a universal credo. (Boyer and Drache 1997) This theory also counts for Foxconn. The demand from the west must be provided by the east. If there is a higher demand the production has to be increased so the demand can be supplied. The production is constantly innovated so he writes ‘Where technical progress occurs, unit costs for a particular firm are lower today than they were yesterday’. (Posner 1961)

We know that these products are made in a factory where the work conditions are below the level. But what does this mean to me, the Apple consumer? I have mixed feelings about the inequality worldwide. On the one hand, there are countries where consumers have needs and thus supply luxurious products. On the other hand, the demand for producing these products for the consumers is necessary for the economy. If there is a new “hot” IPhone, the production will increase and the employees need to work harder without having breaks. It is not fair that people have to live their lives like here in the factory Foxconn. The factory wants to satisfy the demand so the production has to increase, no discussion. The movie from Jenny Chan pulls no punches: it is unfair and definitely not acceptable. At the moment the movie from Jenny Chan ends I feel something vibrating: it is my IPhone… Since that moment my IPhone has a new look.

Liza Rietvelt

Reference:

Chan, J., [sacom2005]. (2011, June 6) ‘The truth of the Apple iPad Behind Foxconn’s Lies’ [Video file]. Retrieved  [Accessed 10 November, 2014]

Chan, J., (2013). A suicide survivor: the life of a Chinese migrant worker at Foxconn. The Asian-Pacific Journal, Japan focus. [online] August 12, 2013. Available [Accessed 1 November, 2014]

Cox, R.W. Production, Power, and world order; social forces in the making of history. Chapter 1, The dimensions of production relations. p 17. [Accessed 21 November]

Posner 1961 (book Transnational corporations and international production) Grazia Letto-Gillies second edition (concepts, theories and effects) Chapter 5: The product life cycle and international production. [Accessed 3 November, 2014]

Robert Boyer and Daniel Drache (eds.) (1996) States against Markets:  the limits of globalization (Routledge). Chapter 2: Globalization and Internationalization p62. [Accessed on 11 December 2014]

Watts, J., (2010). Foxconn plant China deaths suicides. The Guardrian, [online] May 28, 2010. Available [Accessed 1 November, 2014]
 

AFRICAN OUTBREAK: What’s China Doing?

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In the most recent Ebola outbreak which started in March affecting mainly a handful of West African countries, the whole epidemic issue was at the centre of the global spotlight.

Every media outlet, every platform and every corner of the world was concerned about the issue and specially about how an event taking place in a remote latitude could affect the local environment. Due to the peculiarity of the disease and its high rate of infection, every border in the world was shaken by each new headline. European countries have a strong connection with Africa because of their colonial ties and also for its geographical closeness. However, conscious than a worldwide outbreak could have devastating consequences globally, different countries outside Europe have taken seriously the threat by assigning resources to control it (BBC News 2014). The Chinese case is very peculiar do to its interest in the African continent. Its investment have increased considerably in the last decade to the point of reaching more than U$13 Billions when a few years ago was less than 5% of that ((Men, J & Barton, B. 2013). From 2009 the trading between Africa and the Asian giant has overcome the one with the US. Also, the loans and funding in the same year were more than $20 Billions but all that was not reflected when the Ebola crisis took place. A handful of European countries contributed to the campaign to stop the outbreak with more than the U$8.3 millions that China did which was closer to the budget assigned by the Venezuelan government whose GDP is not in the same league. An staggering $200 million were given by the US whose investment in the region is similar to the one of China (Sanchez, R 2014).

In the current times when the BRICS are raising, they all have failed to step up to the challenge but Russia, Brazil and India are not as established in Africa as the Chinese are (Carmody, p. 2013). It goes without saying that every aid given to the campaign has an underlying intention and that if the problem spirals out of control, Ebola would start affecting European soil sooner than the Far East, but what then was the point in investment on shaken states compromised by a pandemic issue which would affect border controls, working conditions and generate general market uncertainty. As the new big global player, the Chinese government does not lived up to the title and acts more like a third world country.

A global superpower takes proactive course of action when facing international crisis, specially if its interests in the scene are being compromised instead of waiting passively for the dust to settle.

Julian Betancur.

BBC News. (2014) Ebola: Mapping the outbreak. Available at:http://www.bbc.co.uk/news/world-africa-28755033 [Accessed on: 10 November 2014]

Carmody, P. (2013)The Rise of BRICS in Africa: The Geopolitics of South-South Relations. Zed Books

Sanchez, R. (2014) What countries have pledged to fight Ebola… and how much they’ve paid into the fund. Available at: http://telegraph.co.uk/news/worldnews/ebola/11179135/What-countries-have-pledged-to-fight-Ebola…-and-how-much-theyve-paid-into-the-fund.html [Accessed on: 10 November 2014]

Schneider, J. (2014) China in Africa: investment or exploitation? Available at: http://www.aljazeera.com/programmes/insidestory/2014/05/china-africa-investment exploitation-201454154158396626.html [Accessed on: 10 November 2014]