Beruflich Dokumente
Kultur Dokumente
was subtle and nuanced, and in many regards favorable, he believed that broader markets for
cultural goods lowered their quality.
Cowen answers by stating that we must question whether the market does in fact expand our
positive liberties and increase the menu of choice. If not, the freedom to engage in marketplace
exchange will stand in conflict with other notions of freedom, such as an individual's ability to
choose or maintain a particular cultural identity. More generally, the question at stake is what
kinds of freedom are possible in the modern world.
To pursue this issue, I ask some fundamental questions about culture in a market
economy. Does trade in cultural products support the artistic diversity of the world,
or destroy it? Will the future bring artistic quality and innovation, or a homogeneous
culture of the least common denominator? What will happen to cultural creativity as
freedom of economic choice extends across the globe?
Focus on how trade shapes artistic creativity in the marketplace.
I focus on markets, rather than on peoples or communities per se. I consider what kinds of
freedom are available in the marketplace, rather than what kinds of freedom we have to remain
outside the marketplace. I do not, for instance, examine whether we should attach intrinsic value
to preventing the commodification of global creativity.
Summarize the "Wal-Mart effect" along with the arguments of people who
argue that its benefits/hurts consumers.
The Walmart effect occurs when a superstore moves in a community and within a
few years, mom-and-pop stores, and other main street retailers are put out of
business
- this benefits consumers because the superstore provides a bigger selection of
goods at low prices
- also consumers can do all their shopping at one place and save money in the
process
- however this also hurts consumers because they actually get less choice because
stores like Wal-Mart are national chains, they buy goods at a national level, and
local producers suffer as well and entire communities lose their identities to mega
corporations
Which book has been described as the anti-globalization Bible?
Kleins book No Logo has become the anti-globalization movements bible
- the main message is that logos and corporate trademarks have become a kind of
international language and their omnipresence in the third world has robbed many
people of the chance to develop a distinctive culture
23. What does Stephen Spruiell mean when he refers to the large
bureaucratic institutions mission creep that has led the International
Monetary Fund and the World Bank to take actions outside of their original
missions?
- mission creep actions that are created to solve a problem, but once the problem
they are created to solve comes under control they are forced to come up with
additional reasons to exist in order to maintain their funding.
Why does Jospeph Stiglitz are that IMP and the World Banks mission
become increasingly intertwined in the 1970s?
- the IMF redefined its mission from rebuilding the infrastructure of war-torn nations
to the goal of createing a world without poverty
- IMF focused on preventing economic crises in nations that constantly seemed to
be having them (developing nation)
- also since these countries were also the poorest the World Bank focused most of
its attention on them as well
How does Brink Lindsey describe these institutions evolution?
- they were transformed from temporary global stabilizers and rebuilders into
permanent crusaders against poverty and chaos
- today IMF and the world bank are primarily concerned with lending money to
developing nations to help them through debt crises
- real change came in the early 1980s with new economists at the IMF who believed
in using the lending power of the bank to force developing countries into making
free-market reforms
- Lindsey says that the institutions have changed for the worse
24. Provide a concise description of the WTOs dispute resolution
mechanism.
- Countries bring disputes to the WTO if they think their rights under the
agreements are being infringed
- judgments by specially appointed independent experts are based on
interpretations of the agreements and individual countries commitments
- settling disputes is the responsibility of the Dispute Settlement Body consists of
all WTO members
- First stage (60 days) consultation: countries in dispute talk to each other to see if
they can settle differences by themselves, if that fails they can ask WTO directorgeneral to mediate or try to help
Second stage (45 days for panel to be appointed, 6 months for panel to be
appointed) if consultations fail, complaining country can ask for a panel to be
appointed. The country in the dock can block the creation of a panel once, but
when Dispute settlement body meets for a second time, the appointment can no
longer be blocked.
- the panel must make findings based on the agreements cited
Main stages of the agreement:
- before hearing: each side in dispute presents its case in writing to pane
- First hearing: the case for the complaining country and defence
- Rebuttals
- Experts: if a side raises scientific or other technical matters the panel may consult
experts
- First draft: panel submits sections its report and gives sides two weeks to
comment
- Intermin report: panel submits its finding and conclusions and gives one week to
ask for a review
- Review: review period must not exceed two weeks
- Final report: final report is circulated to WTO members
- the report becomes a ruling : report becomes the Dispute Settlement Bodys ruling
or recommendation within 60 days unless consensus rejects
25. Why do some WTO critics accuse the organization of being
undemocratic? How do WTO defenders usually answer this charge?
- 1. critics state that WTO only serves the interests of multinational corporations and
is not democratic
- 2. the accuse the WTO rules to be written by and for corporations with inside
access to the negotiations
- 3. they state that even requests for information are denied and the proceedings
are held in secret
WTO defenders answer this charge by stating that:
1. The WTO is as democratic as its member governments; and between the
members it is ultra-democratic because decisions are taken by consensus all
members have to be persuaded
2. the rules are written by member governments, no one else has access to the
negotions
3. an immense amount of information is available to the public
- they also accuse the US adoption of the WTO as being undemocratic
- WTO responded to this by stating that how countries ratify the WTO agreement is
an internal issue The WTO cannot comment on the process for each country, and
it cannot speculate on the result of a vote in different circumstances
26. How was foreign aid defined in this class and what kind of monetary
arrangements does it entail?
Foreign aid occurs when the recipient country receives additional resources in
foreign currency over and above the capacity to import generated by exports.
- foreign aid means those additional resources which are used to raise the
performance of the recipient country above the exisiting level
- it can be defined as the debt which is given by a country to another country on the
monetary arrangements
The monetary arrangments may be:
(a) Lower rates of interest than the prevailing rate of interest in the international
commercial money market.
(b) Longer period for repayments.
(c) Grants which does not entail the payment of other principal or interest, i.e., a
free gift.
Summarize the two gap model along with the role it entails for experts
and foreign donors.
The two-gap model is an approach to economic development. According to the
model, most of the developing countries faced either: a shortage of domestic
savings to match investment opportunities (i.e. the saving gap or constraint), or a
shortage of foreign exchange to finance needed imports of capital and intermediate
goods (i.e. foreign exchange gap or constraint).
It also further assume that the savings and foreign exchange gaps are unequal in
magnitude and that they are mutually independent. In other words, there is no
substitutability between savings and foreign exchange, which is an unreal
assumption.
In an economy where the demand of investment cannot be met entirely by
domestically generated savings nor through imports financed by the countrys own
export earnings, resources are transferred from abroad in the form of either loans,
credits, grants, remittances, or direct private foreign investment. This is the
traditional two-gap approach to the analysis of the role of foreign aid in economic
development where foreign resources are assumed to fill both a saving-investment
gap as well as a foreign exchange gap in the recipient country. According to the
assumptions of the two gap model, foreign aid, given an MPS, raises the level of
domestic savings by raising the level of income and exports with the result that at
some terminal date, foreign inflows are reduced to zero.
According to this model, a country passes through three stages on its way to selfsustained growth:
(a) In the first stage, the dominant constraint is that of absorptive capacity, i.e. the
economy is so primitive and backward that it cannot invest beneficially the
minimum amount. The purpose of foreign aid at this stage is to increase the
absorptive capacity of the country by providing technical assistance, training,
education, managerial ability, entrepreneurial talent and so on. Once the
absorptive capacity of the economy has increase sufficiently, the constraint on
growth is that of domestic savings.
(b) The second stage is the stage where there is a saving constraint on the
economy. A country, with a low level of income and a large proportion of its
population at subsistence level can hardly be expected to save 15-20% of its
national income. The suggested way out is that foreign aid may be used to
supplement domestic savings and fill the gap between domestic savings and the
investment required for a reasonable level of growth. During this stage, the saving
gap will be greater than trade gap, and there may be high inflation as well.
(c) The third stage is the stage of trade constraint. As the economy grows, more
and more inputs are required in the form of capital goods, industrial raw materials,
etc. Exports cannot keep pace with increasing imports and the resultant difference
between the two becomes larger and larger until it exceeds the difference between
domestic savings and the required savings. Therefore, at this stage, the trade gap
is said to be dominant and the foreign aid is now required to bridge this
gap. However, at this stage, there is less need of foreign aid and assistance,
because as the economy develops further rising levels of income result in an
increase in savings as a proportion of national income until the required level is
attained and the saving gap is closed. Also as development proceeds, first import
substitution of consumer goods, then their export and import substitution of capital
goods takes place with the result that exports grow faster than the imports and
ultimately catch up with them and hence the trade gap is also filled. With the filling
of this gap, the need for foreign aid and assistance is now closed.
27. Who was sometimes labeled the Conscience of the West? Describe
the outcome of foreign aid policy he ended up supporting in Tanzania.
- Julius Nyerere
- instituted the ujamaa program involved foreign assistance in order help with
the policies to help progress the process of nationalization after Tanzania gained
independence from Britain in 1961.
- the west showered billions of dollars on Tanzania
- The World Bank, demonstrating in lacked both conscience and common sense,
directly underwrote the ujamaa scheme
- the results of a powerful elite forcibly organizing the lives of millions of people was
a disaster
- peasants resisted being uprooted from their ancestral homes and refused to
produce food at confiscatory prices for Nyereres bureaucrats
How does Mark Karlin summarize Naomi Kleins main argument in her
book The Shock Doctrine?
What role do the IMF and the World Bank play in respect according to
Klein?
Klein makes the argument that the Milton Friedman school of economics
(characterized American and European global economic policy for years) thrives on
national economies that are in melt down or in the midst of crises
- many of the latter created as a result of IMF and World Bank policies
- She believes in a mixed economy, but one that allows people to choose the
economic destiny of their nation, not have one imposed on them by essentially the
neo-colonial powers of the US and the developed Western nations who run the IMF
and World Bank
28. What is Roger Bate and Benjamin Schwabs position on the World
Banks generic claim that people living under dictatorship would be worse
off without World Bank loans since social and health programs would fail?
- their position is that this may be true but its a highly risky strategy
- supporting democratic regimes makes more sense, and is politically easier to
defend
- For example development loans to democratic countries have a greater chance of
actually reaching their intended recipients
- continued efforts by the Bank to ensure that its loans build infrastructure and
productive capacity, not tanks, will surely be more successful in countries with at
least some degree of transparency
What insight from Hayek does Peter Foster was missing in Jeffrey Sachs'
schemes?
Peter Foster says that Sachs is an embodiment of what Friedrich Hayek called the
fatal conceit, the leftist conviction that the world can be remade holus bolus by
people with large enough brains.
- Hayek pointed out that one of the reasons why markets work is that they utilize
the particular knowledge of time and place possessed only by individuals. Mr
Sachs schemes went wrong because they neglected the locals knowledge, and
their culture.
30. How did your professor distinguish 'free' and 'fair' trade? List five (5)
principles of fair trade according to Global Exchange.
1.
2.
3.
4.
5.
31. Summarize the standard economic argument against fair trade using
coffee as an illustration. According to Paul Collier, what does fair trade
ensure (cite the direct quote)?
By guaranteeing a minimum price, Fairtrade also encourages market oversupply, which depresses global
commodity prices. This locks Fairtrade farmers into greater Fairtrade dependency and further
impoverishes farmers outside the Fairtrade umbrella.
Coffee farms must not be more than 12 acres in size and they are not allowed to employ any full-time
workers. This means that during harvest season migrant workers must be employed on short-term
contracts. These rural poor are therefore expressly excluded from the stability of long-term employment
by Fairtrade rules. Indeed, The International Development Committee declared in 2007 that "Fairtrade
could have a deeper impact if it were to target more consciously the poorest of the poor".
We might think of sub-Saharan subsistence economies when we think of Fairtrade, but the biggest
recipient of Fairtrade subsidy is actually Mexico. Mexico is the biggest producer of Fairtrade coffee with
about 23% market share. Indeed, as of 2002, 181 of the 300 Fairtrade coffee producers were located in
South America and the Caribbean. As Marc Sidwell points out, while Mexico has 51 Fairtrade producers,
Burundi has none, Ethiopia four and Rwanda just 10 meaning that "Fairtrade pays to support relatively
wealthy Mexican coffee farmers at the expense of poorer nations".
Paul Collier argues that Fairtrade effectively ensures that people "get charity as long
as they stay producing the crops that have locked them into poverty".
32. What are the main differences between Arabica and Robusta coffee
discussed in class?
33. What is Brink Lindsey's take on the false and true reason behind the
fall in coffee prices? What should we do to assist coffee growers in his
opinion?
He says that most people blame multinational coffee roasters and retailers for
profiting at poor farmers expense, and they propose a number of schemes including fair trade coffee, the use of new quality standards to restrict imports,
and the return to political management of coffee exports - to help coffee farmers by
propping up coffee-bean prices. However well-intentioned, interventionist
schemes to lift prices above market levels ignore those market realities.
However he states that the reality is that coffee prices dropped so low because of
dramatically expanded production by low-cost suppliers in Brazil and
Vietnam. And those low prices are a signal to high-cost producers - for
example, in Central America - to supply a higher-value product or exit the
market. There are constructive measures that can help to ease the plight of
struggling coffee farmers, but they consist of efforts to improve the markets
performance - not block it or demonize it.
He suggests that low coffee prices is a market signal that coffee supply is
excessive relative to demand. A reduction in supply is a way out, even
though this may cause hardships such as job losses. Or alternatively is to try
and boost demand, in particular the coffee industries in producing countries
can try to do more to promote their products at home.
What is Max Havelaar? Where does the name come from?
The effort to bring the Fair Trade concept to mainstream commodities and markets
originated in Europe through a Dutch organizationcalled Max Havelaar, the original
fair trade monitoring organization
- The name comes from the title of a book about Dutch colonial exploitation of
Indonesian coffee workers at the turn of the century, whose popularity garnered
Dutch support for labor reforms.
34. According to Colleen Haight, why is it no longer the case that coffee
growers have little access to market information on the value of their
product?
In the past, coffee growers were often isolated in remote regions and had little
access to market information on the value of their product. Unscrupulous buyers
might offer only very low prices, taking advantage of farmers lack of information.
Today, however, growers have access to coffee price fluctuations on their cell
phones and, in many cases, have a keener understanding of how to negotiate with
foreign distributors to get the best price per pound. In addition, the growing demand
for very high quality coffee has led to a tremendous increase in the number of
buyers traveling to more remote regions to ensure the supply they require.
According to Hernando de Soto, how many steps and years would it have
taken to get a title to the land in a shanty town around Lima over a
decade ago?
something like 207 bureaucratic steps. In other words, you had to sign something
like 207 documents before you got the title. And the amount of time it would take
you to pass these documents from one desk to another, working eight hours a day,
was approximately 21 years.
36. Why was the 1980s boycott of handmade Indian carpets eventually
called off?
Reasons why included unintended consequences:
- Children making carpets in India had been fired, but given no other assistance to
help them survive or contribute to their families welfare. The boycott was making
the lives of some child workers worse than when they had been working.
- The boycott had a great impact on one country (India) where carpets were being
made by children but not in others (Pakistan, Nepal, Morocco) where children also
were working.
- Boycotters could not differentiate between manufacturers who employed and
exploited children and manufacturers who did not.
- The boycott tainted handmade rugs generally, although some countries (e.g. Iran)
have virtually eliminated child labour.
37. How does Sarah Bachman distinguish between positive and negative
boycotts? What are the two ways by which success in each type of boycott
should be measured in her opinion?
Boycotts take negative or positive forms. Negative boycotts are instructions not to
buy (e.g. not to buy a class of products, or specific products made by specific
producers).
Positive boycotts seek to persuade consumers to buy (e.g. class of products or
specific products not made by children). The latter include social labelling
campaigns, which exhort consumers to purchase products designated with a label
indicating that they have not been made by labouring children.
Success for either kind of boycott should be measured in two ways. One is a change
in a manufacturers or service providers behaviour that benefits --or at least does
not harm child workers generally. The other measure of success should be the well-
being of children who are working before the boycott is launched. A truly successful
boycott would benefit --or at least not harm those children.
List and discuss briefly three main reasons invoked by Eric Edmonds to
argue that, for children in less developed economies, the return to not
working may be relatively low.
In developing countries, before we take steps to move children out we need to make sure they have
somewhere to go
1. Working children often live in places where the schooling infrastructure is of low quality or schools
are unavailable
2. Suppressing employment opportunities open to children, may perversely cause more children to
work, because many children support the schooling of their siblings.
3. Children could be forced into more dangerous work. For example children were forced out of
garment industry jobs because of international pressure but into stone quarry work or even
prostitution as an alternative.
40. What is the 'race to the bottom' (RTB) or 'pollution haven' hypothesis?
According to Dan Griswold, what should we observe if the RTB hypothesis
was true? List two (2) factors that might trump environmental regulations
in firms' international location decisions. How have some authors linked
the RTB and the 'Dutch disease' hypothesis?
pollution haven hypothesis posits that, when large industrialized nations seek to set
up factories or offices abroad, they will often look for the cheapest option in terms
of resources and labor that offers the land and material access they require.
However, this often comes at the cost of environmentally sound
practices. developing nations with cheap resources and labor tend to have less
stringent environmental regulations, and conversely, nations with stricter
environmental regulations become more expensive for companies as a result of the
costs associated with meeting these standards. Thus, companies that choose to
physically invest in foreign countries tend to (re)locate to the countries with the
lowest environmental standards or weakest enforcement
If the RTB hypothesis was true
1) Capital flowing massively from rich/high-standard -> poor/low-standard countries,
2) Rich countries lowering standards to keep
-> productive capital
->jobs
from fleeing
44. How Does Das define financial globalization? In his opinion, what were
the main components of its enabling framework? List the main prime
movers of financial globalization in his opinion.
Financial globalization: integration of domestic financial system of a country with
the global financial markets and institutions
Whats the role of commercial and financial services:
- mediate
- abbreviate
- exchange processes within economy
Prime movers
- governments
- borrowers
- investors
- financial institutions