How Capitalism Explains the World

Globalization is the phenomena seen when different countries around the world interact with each other more and more. It involves the spread of cultures, ideas, and languages. Capitalism has been one of the ideas that has been spread largely because of globalization and while other ideas are also being spread, capitalism has most been impacted by globalization. I believe that modern 20^th/21^st century globalization can almost be seen as a way of furthering capitalism.

Capitalism has benefited the most from globalization and has spread the most under globalization. With modern globalization, capitalism has been spread further and the number of countries with other economic systems has declined. China has a largely capitalist economy and the Soviet Union was unable to maintain its socialist system. Modern globalization has most helped capitalism and has challenged all the other economic systems. Modern globalization and globalization in general has provided a way to lower prices on products and has tried to get cheap resources to make cheap products. When a country like Bangladesh can produce textiles at a cheaper rate than the United States, this type of globalization most benefits the capitalist system. While globalization in the past has benefited other systems such as mercantilism, this modern globalization has mostly spread capitalism further. I believe that in this modern global economy, it is beneficial to have a free-market capitalist system and that if globalization were to continue at this rate, much like China, every rational nation would set up a free-market economy.

Capitalism and capitalist countries have benefited the most from modern globalization. Countries like the U.S.A., Japan, or Germany have been able to spread their culture further through their companies and products such as Microsoft, Toyota, or Adidas. Countries without major companies and products did not benefit as much from modern globalization. The U.S.S.R. although a powerful state, did not have any company that could rival U.S. companies in the global market. For this reason, the Soviet Economy lagged behind the U.S. economy, which led to the decline of the Soviet Union. Globalization, in general has always given certain countries more power than others. Modern globalization benefits the capitalist countries and allows countries such as the U.S., China, and Japan to gain more soft power and in the long run, hard power.

Franklin Foer in his book, How Soccer Explains the World, discusses how the globalization has affected the world’s largest sport, soccer.  In one of the sections, he discusses how soccer how globalization has driven Brazil’s soccer structure to a more capitalist system. In order to compete with European leagues, Brazil’s league has adopted a more capitalist system. Many people believe that globalization has brought a more capitalist approach to football, which will benefit Brazil in the long run. Whether this has benefited Brazil’s league or not, it has created a new system and shows that modern globalization has most benefited the spread of capitalism. It will end rule of the cartolas in Brazil’s most popular sport. Brazilian star Pele went to New York and began to embrace the capitalist system of the MLS and became the embodiment of modern capitalism in Brazilian soccer.

Modern globalization revolves around capitalism. It had spread mostly capitalist ideas and has most benefited countries with a capitalist economy. It has been evident in the world economy and the world political situation and is even seen in the most popular sport in the world. Today’s globalization goes hand in hand with capitalist ideas.

How Bad is Bad?

     At a glance, the idea of free trade is appealing. It’s trade without restrictions like tariffs and taxes, and ultimately enhances the comparative advantage. The bad definitely outweighs the good in this case. The negative impact leaves less affluent countries “losing” more than “winning” when compared to more established countries. The international organization such as the World Trade Organization (WTO) and agreements like the North American Free Trade Agreement (NAFTA) had beneficial intentions, but have yet to prove useful.

     Referring to the political cartoon, one can see how bad the bad can get. Past president Bill Clinton intended that NAFTA would create a million jobs in the first five years of its existence. Later in his acknowledgement, Clinton said that is more jobs than the jobs that would be lost. He clearly was wrong. It is easily said that the rise in the US trade deficit with Canada and Mexico has led to almost a million US jobs lost. The US worker is whipped to the ground by NAFTA because of the impact on the US economy. Most of the jobs lost were high-wage positions in the manufacturing industries. The free trade agreement is obviously a deal gone awry. It not only affected the US economy, but contributed to rising income inequality, suppressed production works wages, weakened workers power to collective bargain, organize unions, and even reduced fringe benefits. The Corporate America’s power had the wrong interests in mind.

     WTO also had good intentions by ensuring that trade among the nations flowed smoothly and freely as possible. Depending on whom you ask on their opinion on WTO would reflect either a glimmering light or a bleakness. More than likely if you’re wealthier, WTO would lead to more riches. The bias favors the wealthier nations and the multinational corporations. Because the financial situation of the affluent already benefits their economic state, it leads to these countries’ success in maintaining quotas and the production of products. However, it’s like taking a sledgehammer between the rich and poor. There’s a stronger divide between the groups because the developing countries are forced to open their markets. Many other aspects are overlooked because there is such a focus on free trade. The rights of workers, democracy, the environments, and issues with labor are major issues being neglected. The assurance for swift trade among the countries hold priority over the interests of those not related to the rich – working families, smaller communities, and even the environment. It’s just altogether a bad idea when all the focus is directed into a monetary state that neglects and continuously impacts those who already have a smaller, weaker voice.

     To even give NAFTA the benefit of the doubt for a few moments is overwhelming. The slightest of benefits included that NAFTA did decrease the tariffs in the countries participating and the trade among the US, Mexico, and Canada increased. WTO’s benefits without a doubt more free trade around the world and creates standards to have effective and efficient trade. Regardless of these positive outcomes from the agreements and the international organizations, the history of each ultimately proves that free trade is not a win-win situation.

     Reflecting on the political cartoon above simply depicts that free trade mocks democracy. It does not help the people, give them a voice or even give them a decent wage. It taunts workers and possibly leaves them without a job. All ideas definitely have the potential to go awry, but free trade proves to be biased. The losers really lose and the poor get poorer. (That’s worse than bad; it’s terrible!)

Deterrence Strategies that correlate with MAD theory

        Mutually Assured Destruction theory (MAD) is a military strategy that states that two countries with strong enough nuclear powers could destroy each other if one side ever launched a nuke. The theory is perfectly feasible and should be a theory considered when planning a deterrence strategy for any state. I will discuss what MAD leads us to believe are the most effective deterrence strategies.

        MAD suggests that two countries of similar nuclear powers would draw a stalemate with each other if the countries went to war and launch a nuclear weapon. Therefore, flexing muscle is an important factor in avoiding conflict. In order to deter potential attacks it is important for states to show their powers. The greatest power of nuclear weapons is the threat they establish which acts as a defense mechanism. Countries with nuclear weapons enforce potential consequences to any country who attacks or wrongs them. As MAD suggests if nuclear weapons are launched, chaos would ensue and countries would be obliterated. Countries who have nuclear weapons should not hide it. If other countries do not believe they have nuclear powers, given MAD it makes the country more susceptible to nuclear attacks and weaker. Countries with known nuclear weapons are super-powers. Having nuclear powers automatically puts states on the top of the latter in terms of power because of the destruction they can cause. So few countries possess nuclear weapons and even fewer are allowed to possess them. MAD explains what could happen if every country had nuclear powers. Although it suggests that any leader would be reluctant to launch the weapons it also suggest that nuclear war and world destruction are plausible. Restrictions on nuclear weapons should continue to be tight and any country developing unlawful nuclear powers should be stopped. All the countries who hold nuclear weapons through treaties are allies and are in cooperation with one another. Nuclear weapons automatically puts a country at the top of the totem poll in terms of power; so it makes for the best deterrence in protection against foreign enemies because of the threat it creates. 

        Another deterrence strategy that can be considered given the idea of MAD, is creating foreign allegiances. Having foreign allies causes a secondary defense against foreign enemies. Firstly, countries who cooperate are less likely to go to war. Countries who are selfish and do only what they believe is in their best interest are naturally more prone to foreign conflict. By having many allies it establishes a diplomatic nature and that makes the country less prone to conflict, attack and war. Secondly, countries with allies provide an additional threat. It gives potential opponents the thought that if they mess with one country they might be messing with a host of other countries. It makes a country significantly more powerful because of the threat that allied countries can aid in any warfare. When less powerful countries create allegiances with world powers it significantly increases the strength of the country because of the allied countries power. Given MAD, a country with more allies will be able to end conflict sooner. If it is two or three countries firing nuclear attacks against only one country the group of allied countries will be able to destroy the other country quicker. 

       Good and bad reputations is a deterrence strategy that is beneficial and detrimental to countries given MAD. A country with a bad reputation specifically a reputation known to be unpredictable creates a predicament. Rational leaders resort to nuclear weapons as a last line of defense. Irrational leaders might use nuclear weapons as offense or more sparingly than rational ones. This unknown and unpredictable nature of irrational leaders imposes a giant threat to all unfriendly countries. It establishes the thought that rational countries need to have nuclear weapons pointed in the direction (not literally) of potential irrational opponents as defense . Irrational leaders can develop nuclear powers without the consultation and approval of other countries. Because of this it makes countries who do not have nuclear powers to want to defend from the unknown threat of attack. In turn countries with bad reputations leads to more countries producing nuclear weapons to defend against them.  A good, diplomatic reputation shows reliability and rationality. Even with conflict, countries with good reputations do not impose a giant risk for nuclear attack because their leaders act rationally and therefore pose a small risk of nuclear warfare because they use it as a last resort. 

The Dark Side of an Advantage

A 2014 article published in Forbes magazine discusses the recent decline in Chinese manufacturing, a market in which the United States had been losing out on for quite some time. The reason these manufacturing jobs moved from the US to China, and now to countries such as Indonesia and the Philippines is because they have the advantage. If all of our tech items and clothing items were manufactured in the US they would cost an astronomical amount more. In order to have cohesive global trade, countries must accept what they do and do not have the comparative advantage over, and sometimes this can show the overall dark side of an advantage.

We see the impact of comparative advantage everyday even if we do not realize it. Often it effects are condemned, but nothing is really done to drastically change it. Mainly because if a shirt made in Taiwan costs $5, but if it were made here would put a $30 dent in our wallets, we could choose the Taiwanese shirt, every time. This is because we are rational consumers, and not every product should be made on our shores.

American Apparel is a clothing company that manufactures all of its items in the United States. That means they pay their workers fair wages, they work reasonable hours, and receive healthcare benefits if they qualify. Because of this, their clothes are substantially more expensive, than something I could easily purchase at Forever21, a retailer that relies on manufactures Asian countries where labor laws are less strict. Because of this, Forever21 has a higher profit margin because they rely on unethical labor, whereas American Apparel suffers because they have to hike up their prices in order to cover labor costs. What I am mainly asking is one retailer taking the benefits of comparative advantage too far?

We produce clothing and technology in other countries for a reason, as Americans we would not like to pay the price of fair labor. This is a hard truth to accept, but it is the harsh reality of what comparative advantage can also do. Yes, in some cases one country really does find news ways to manufacture a product that is far superior than another country, but in terms of auto-manufacturing and clothing, are there really Americans who could not perform? Overtime we have moved these jobs overseas because it is simply more cost-effective. The next iPhone will be born in Silicon Valley, but it will be manufactured across the Pacific.

The United States actually invented the concept of sweatshops, something that gives countries such the Philippines and Indonesia the advantage because they did not have the safe-labor revolutions that we had in this country. Ford also revolutionized the auto industry by implementing the assembly line in his car manufacturing plants. But, auto and clothing manufacturing has not changed in modern times, just changed locations.  The United States simply lost it’s advantage in manufacturing. This has not hurt our country overall, but has actually harbored healthy trade relations with other countries.

Comparative Advantage overall harbors a healthier global trade economy This, however, does not detract from the dark side that sometimes sees the light of the media, but we are too busy reaping the benefits to really change the system and subsequently lose out on an obvious manufacturing advantage.

Forbes-Manufacturing Beyond China

Forever21 Cheap Manufacturing

Toughen Up on Iran

Negotiations between the U.S. and Iran are underway in Oman to reach a deal on Iran’s nuclear program. I believe that the U.S. should only accept a deal with Iran if it ensures that they will have no capability of obtaining any sort of nuclear weapon. There should also be some Congressional oversight on the deal in order to ensure that the agreement we have reached is analyzed and reviewed properly. I believe it is essential to take a tough stance on Iran, especially after recent flops in foreign policy promises made by the Obama administration i.e.” red line” in Syria and the so-called “reset” in relations with Russia. If the U.S. does not show any kind of strength in these negotiations, Iran can very well take advantage of America’s appeasement.

            The reason the U.S. must ensure success in these negotiations with Iran is because of the destined power shift that would take place if Iran were to obtain a nuclear weapon. Iran would suddenly become an even more dangerous force than they already are. Personally, I would not want them to become a nuclear threat because of their past history. A history that includes the Supreme Leader Ayatollah Khomeini repeatedly claiming that “Israel must be destroyed.” It is a history that includes a recent UN report that states that 687 people were executed in Iran in 2013 and 411 this year for almost meaningless crimes such as adultery and alcohol use.[1] It is also a history which includes funding terrorist organizations such as Hamas and Hezbollah. A shift in power to a country such as this would have frightful implications.

            I also believe the final deal with Iran should be reviewed before Congress. The nuclear deal would be such a significant agreement, that it should have a “second pair of eyes” look at it before being approved. The legislative process is essential in determining foreign policy because it provides full consideration and analysis to each part of the agreement. Senator Bob Corker (R-TN) said that “[Congress] should at least have an opportunity to weigh in on the final agreement…after its negotiated.”[2] I believe an opinion put forth by Congress on the deal will either reassure or warn the Obama administration on the implications of accepting the deal.

            There has also been an important, recent development regarding the negotiations with Iran when the Wall Street Journal reported that President Obama wrote a letter to Ayatollah Khomeini regarding mutual interest in defeating ISIL. However, I think this letter is a huge mistake. In regards to the fight with ISIL, the letter has displeased America’s Sunni Arab League partners, according to Rep. Mike Rogers (R-MI) as well as undermining the unifying efforts put forth by the coalition to defeat ISIL.[3] More importantly though, I believe it is a display of weakness by the President to Iran. In a crucial time when all of the focus with Iran should be centered around the nuclear deal, the President is trying to appeal to the Ayatollah by diverting his attention to a common goal: defeating ISIL. I do not want to be mistaken as someone who does not believe in reaching out and making peace. However, there is a time and place for that, and this is not the time nor the place. I believe the President’s intention of the letter was to show Iran that the U.S. can be seen as a supportive ally in the West. During times of intense negotiations that are meant to crack down on Iran, the U.S. should not be reaching out yet another hand.

            The negotiations with Iran right now can have significant effects for years to come. My only hope is that the U.S. does not take too soft of a stance and reaches an agreement that is mutually beneficial. An agreement which would not allow Iran to ever obtain a nuclear weapon.

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[1] http://www.newsmax.com/Newsfront/Mark-Kirk-Marco-Rubio-Human-rights-Iran/2014/11/07/id/606039/

[2] http://www.thedailybeast.com/articles/2014/05/16/key-senator-wants-the-right-to-block-a-deal-with-iran.html

[3] http://www.foxnews.com/politics/2014/11/07/lawmakers-slam-obama-letter-to-iran-ayatollah-ali-khamenei/

U.N. Security Council

               The U.N.'s Security Council makes many important decisions that affect much of the world's security. In the current set-up, there are five permanent members in the Security Council: Russia, U.S., U.K., France, and China. I believe that current system for the U.N. is flawed because the state involved needs to be changed, the veto system needs to be changed, and it needs to be more effective at preventing wars.  

                Since the U.N. Security Council is comprised of 15 nations, with 5 of them being permanent members with veto powers, these five powers have influence on all decisions taken by the Security Council. In order to avoid all decisions being affected by one member, there should be a different system in place to promote more fairness. The veto system should be changed to a system where the majority of Security Council members need to agree without veto power in order to achieve their goals. If that isn't feasible, it should be at least amended so that three of the five permanent members agree to a decision. If this new system isn't implemented, one country has the potential of influencing important decisions. The U.N. was unable to take serious action against Syria because Russia did not want to take action. In order to prevent that, there should be a veto-less system or at least a system where the permanent members 

            The permanent members of the U.N. Security Council were decided after World War II. The four main ones were the winners of the war while China was added on later. The current permanent members need to be reformed to reflect the modern world. Although France and U.K. might be seen as strong powers, they could either be replaced with other states or other states should be added to the permanent members list. Possible countries in the permanent members list could be India, Japan, Germany, or Brazil. There should be more countries from different parts of the world in order to reflect the diverse powers. Four of the five permanent members are in Europe, which is not an accurate reflection of the world. France and U.K. have also lost much of their power and influence in the world and there are other countries that are becoming as strong as them.

            In order for the U.N. Security Council to be effective, it should have military support from all the countries involved. These countries should be able to negotiate with each other and cooperate. In order to effectively   prevent wars, the members need to have a policy of intervening in all major conflicts that need help. This includes places like Bosnia and Herzegovina and Syria. There should be an agreed upon definition of aggression that all permanent members believe and then practice upon. The U.N. should intervene in certain places when it doesn’t normally. China and U.S. should be able to agree with each other when intervening in certain areas. This mutual agreement with each other can prevent war form occurring and increase effectiveness.

            The U.N. Security Council has a very important job in the world and must be effective in controlling wars and in order to do this, the Security Council needs to work together, the members need to change, and the veto system needs to be amended. This will help the U.N. succeed in its ultimate goals.