Globalization Lessons for Today’s Challenges and Opportunities

USF Fromm Institute – Spring Term Summary Notes – June 2006

Relations and roles of political and commercial entities

Political framework to:

• Facilitate cross border commerce, trade and investment – peaceful relations through history
1. Phoenician traders in Egyptian Mesopotamia empires, Greeks in Rome, Hanseatic as Europe moves N
2. Colonies and empires superseded by disasters of World War and Protectionism where wealth declines
• Assess and influence inequities and common good – labor standards and environment treatment
1. Slavery and exploitation of past, low wage and no wage options in developed world today
2. Rape of land for resources in past, industry brings air, water pollution, carbon fuels bring climate change
• Enhance benefit and welfare of constituency – protect property, jobs
1. Protection for development, breakdown finally after iron curtain fall, technology transfer

Commercial framework which:

• Grows, evolves and changes – companies short term and mostly small, large is slow, Fortune 500

1945-70 US boom, 80% Fortune 500 change, Oil, autos, WalMart become less powerful, JapanUS ROI

• Applies economic and technological innovations – India textiles and industrial revolution

Manufacturing, petrochemicals in US, Computers and telecom add stages and value for lower cost

• Thrives of incentives and comparative advantage – Adam Smith, ROI, cost competitive, scale

Comparative advantage reins supreme, open markets trump democracy

Globalization in our time

1945 to 2006 in contrast to 1914-1945

• Trade, Investment, Independence – US, Marshall Plan, Cold War, Asia, Africa Freedom

Revive Europe, Japan; compete with USSR in 3 rd World, too early independence

• Communism superseded by market economies – Central Planning fails in Soviet bloc, 3rd World

McCarthyism and nuclear threat minor compared to economic proving ground: USSR, China, OECD

• Container, computer, Internet as facilitators – China-factories-containers, India-services-telecom

Factories investment, Telecom job flexibility without investment

Challenges ahead

• Focus on safety or progress – Fear and trust, swat fleas behind or move faster ahead

Lesson of 9/11 and everything since in US

• Challenge of energy wealth – Shatter cost plus economics, inability to add value
1. 10MM SA, Russia, 8US, 3-4Iran,Mex,China,Ven,Norway,Cd, 2ME3,UK,Nig, UK/SA 10/1 cost
2. Cost added SA vacuum, US public works waste, delays
• Transformation of wealth to individual opportunity – Distribution, helping hand, trickle down

$2MMM US debt, $700 SA oil, Wealth gap, US 25 yr 1 vs10%/yr growth, 2% own over 80%wealth, tax

• Commercial openness and common good – risk losses, enhance community, save world

1968 end of closing gap, China and India for education, industry, growth, openness, US immigration, education, Head Start

Conclusions on Globalization and Nation States:

1. May facilitate or defer globalization, but never stop or reverse progress and benefits
2. Young and impermanent: Only modern era, vast changes after World Wars, 50 to 200 since 1945

Conclusions on Globalization Challenges and Choices:

1. Continuing Progress vs. Looking Back
2. Wealth for Greed vs. New Opportunities
3. Fear and Terror Preoccupation vs. Increased Trust and Technology
4. Laissez faire vs. Controls for community, labor, environment, health and welfare

Rise of India and China in Globalization Today

USF Fromm Institute – Spring Term Summary Notes – May 2006

 Globalization roots and branches could have started with either India or China

• Over centuries until age of European Exploration, little contact with West
• Arab traders by sea to India
• From Romans to Marco Polo over silk and salt raod to China
• India imported conquerors, mostly Moslem or Mughals
• China consolidated Han peoples
• India developed and exported religion Hinduism, Buddhism
• China modified religions for practicality Dao, Confucian
• Contrast of East and West religions reflect people concentration

China’s glory set as European renaissance and sea discoveries emerged

• Cheng Ho and voyages
• India rise and fall of empires, but little political expansion beyond subcontinent
• Effects and dominance of Guns, Germs and Steel throughout world give rise to European dominance

China and India since European colonialism

• British dominate India by 1763, inward China never penetrated beyond ports and concessions
• Textile manufactures in India fall to industrial revolution,
• China trade resistance leads to opium smuggling

Dissillusionment with west from 1900

• Japn from 1858 to 1904 Russia defeat
• Colonial troops in European trenches
• Wilson 14 points and self determination principle at end of Word War I
• Japan building coprosperity sphere overwhelms China, SE Asia, threatens India

Post World War II

• Freedom at Midnight in India 1947, Fabian socialism, central planning, neutral, USSR leaning
• Mao triumphs in China 1949, 25 yrs in shadows

Apparent legacy for post Iron Curtain fall globalization

India

• English
• Rails, civil service, democracy, government continuity to unite country

China

• Capitalists flee to Rim of Asia, empower Asian tigers and counter Japan economic success
• Cultural revolution 1966-76, no education

End of Cold War

China

• Chinese capital returns to homeland
• Cynic family values offsets decade of lost education
• Tight political control facilitates economic explosion, mostly in manufactured exports

India

• Continues to muddle through but by 1991 with market and capitalist imperative
• Decades of exporting educated elites, mainly ITT technology builds international network, skills
• English combined with telecom bust facilitates explosive service job rise

What next?

• 90% of engineers, science, life science and technical graduates at all levels will come from India and China in a decade.
• How will wealth be distributed?

Globalization Notes for March 6 Asia, China and India

USF Fromm Summary Notes March 6, 2006

Western Empires Road to Asia

• Portugal first to Asia after 1500 with Goa, Ceylon, Indies, China, Japan
• Dutch build base in Cape Province, continue to Ceylon, dominate Indonesia
• Britain and France spar over India influence, Britain wins in 1763, dominates for nearly 200 years
• British, Portuguese, German concessions on China coast, mainly Hong Kong, Macao, Shanghai
• US opens Japan with Perry fleet in 1854, take Philippines in 1898, send missionaries to China
• Russia fights Britain in Afghanistan’s roof of Asia and continues expansion to Pacific through 1800’s
• French colonize Indochina in 1800’s after losing India

Asia’s Road to Independence and Power in 1900-1940

• Japanese defeat Russian’s at Port Arthur in 1904, China Boxer Rebellion, Last Emperor
• Japanese development of co-prosperity sphere in Asia during 1930’s and mainland invasion
• Mao and Communists in China fight and work with Nationalists through World War II
• Gandhi leads passive resistance movement to British rule in India

Cataclysms, Upheavals, Overthrows, Miscalculations Since 1940’s

• Japan - Atrocities in China, atomic bombs, Macarthur as chief, zaibutsu
• China – Japanese atrocities, Mao’s long march, Nationalists flee to Taiwan as Mao triumphs
• Korea – Divided after Japanese evacuation, Korean War in 1950, armistice and division ongoing
• India – Freedom at Midnight from Britain in August 1947, Gandhi killed, Nehru’s dominate
• Southeast Asia – Dutch give up Indonesia, French lose Indochina, US defends S. Vietnam
• USSR – Breaks with China in 1960, invades Afghanistan in 1979

From Cold War to Globalization in Asia

Cold War Influences and Initiatives until 1980’s

• Japan rebuilds under Marshall Plan aid, manufactured exports grow in 1960’s
• Mao’s China isolated with great leap forward and cultural revolution initiatives
• India preserves British democracy, rails, civil service, looks to USSR for economic model
• Rim of Asia prospers as US and Indochina are mired in war.

Internal forces explain fast globalization rise of China and now India since 1990’s

• India always the most overeducated country in developing world
• Japan never realized competition was Rim of Asia, not US
• Overseas Chinese dominated Rim and Southeast Asia and were ready to invest in homeland
• Education, innovation, ingenuity has always outshone resource riches

Asian strengths enhanced by adaptation to best of world

• Containerized shipping to move the manufactured goods of Japan, Rim of Asia, China
• Rim of Asia success and Japan failure in understanding technology time and life spans
• Dot.com and telecom collapse provide cheap fiber for telecom to move service jobs anywhere in world
• Limited pressure to spend on external threats or distractions, similar to US in 1800’s

Future of Globalization: Asia, China, India, US and Beyond

• What have we learned of success, failure, continuity of globalization
1. New technologies – Sea, agriculture, crafts, industrialization, automation, information
2. Effects of attempts to control trade – Smoot Hawley, Import substitution, GATT to WTO
3. Sanctions or controls on money flows, acquisitions, jobs – S. Africa, USSR, Mid East
4. Wars, isolation, religious fundamentalism – World Wars, Civil Wars, Terrorism
• Future of life sciences as they relate to
1. Enhancement of food resources in Asia and Africa – Overwhelming needs
2. Blockbuster drugs in industrialized countries – Cost vs. benefits vs. number helped
3. Orphan diseases of developing world – Gates and Good Samaritans
4. Religious beliefs of varying faiths – Stem Cell research
5. Economic tradeoffs between costs and benefits of extending average lifespan - rationing

 

• Relations and interdependencies of free markets, capitalism, democracy in globalization
1. Contrast of democratic India and communist China
2. Policies of US on immigration, income tax, social safety net, deficits
3. Globalization strategies for developed countries of Europe, former USSR, Latin America
4. Globalization strategies for developing worlds resource rich and poor countries

Globalization Notes for - World War I to Present

US Fromm Summary Notes February 27, 2006

Identified and built on globalization factors of past that apply today

• Transport of goods and people as far back as Phoenicians and sea going commerce
• Wide spread of common culture as seen with Alexander and Roman empires
• Storehouse , advances, bridge to other civilizations as with Arabs in Spain and Mideast
• Europe reawakening through Crusades, Renaissance, Reformation
• Constantinople fall as catalyst for, sea discoveries, new spice route, colonies
• European power from Mediterranean to North capped by English Industrial Revolution
• Importance of small groups of people from Phoenicians to Hanseatic League and Dutch

Last week focused on aspects of US development that related to globalization today

• Framework of US constitution, democracy, government, freedom
• Limitless land and resources to develop in move west with little European interference
• US transport innovations 1800-1860s, industrial might develops from 1865-1915

Focus today on Europe to World War I and world since to globalization today

After Napoleon, century of relative European Peace from 1815-1914

• Tests of social revolution in 1830 and 1848 without lasting government change
• Social response to industrial revolution from Wealth of Nations to Das Capital
• US power and industrial might grows but Europe leads in colonies and chemicals
• Declining Ottoman and Austro-Hungarian power and German unification

Two remaining transport innovations before Great War, air and auto

• Autos from Evans in US to Otto, Benz and Daimler in Germany
• Selden, Duryea, Olds as early US inventors, focus on wealth
• Ford Model T mass production, Durant to Sloan at GM, Dodge brothers and Chrysler
• Independence of auto transport in contrast to railroads and city mass transit

• Air transport slower and less certain application
• French and balloon flights viewed as novelty
• Lilienthal and Langley lead to Wright Brothers
• Mass air travel spurred by Douglas DC3, PanAm’s Trippe and Boeing jets

Still difficult to fathom reasons and disastrous consequences of World War I

• Unlike next War, limits of technology couldn’t overcome killing fields of trenches
• Limits of autos as tanks, aircraft as weapons, artillery machine gun stalemate
• Petersburg in US Civil War as prototype of Western Front in Europe
• Loss of generation in trenches of Europe, US limited decisive role in 1917-18

Social consequences of World War I as seeds of World War II, collapse of old order

• Ottoman, Austro Hungarian, Russian empires swept away.
• Colonial Great War participation as prelude to independence after World War II
• New borders and colonial masters in Africa, Mideast, nation state lines in sand
• Untested governments based on new theories: communism, socialism; fascism

Missed opportunities of interwar period feed spiral down rather than recovery and progress

• League of Nations defeat, isolation, Smoot Hawley tariff in US
• Economic naiveté despite Keynes theories exacerbate decade of depression
• Rise of Japan after Port Arthur signals more disillusionment about European omnipotence

World War II as battleground of technologies that will shape postwar world

• Tanks, airpower and blitzkrieg overwhelm old trench warfare stalemates of past
• Interwar advances in wireless, microwaves, radio lead to radar and foretell telecommunications
• Plastics, nylon rubber foretell of world of synthetics based on petrochemicals
• Petroleum precipitates and defines war Germans to Caucus, Rommel in Africa, Japan co prosperity
• Industrial mobilization in US as arsenal of democracy: factories women, soldiers, rationing
• From Einstein relativity to German nuclear fear to rockets, to Manhattan project to Hiroshima

Most of last half of 1900’s spent trying to get back to as advance or stable a base as in 1915

• Unresolved government philosophy visible in Cold War confrontations
• Marshall Plan for Europe, Comcon, Japan, Mao’s China, Independence for Africa and Asia
• Confrontation of central planning with capitalism and free markets under nuclear threat
• US economic might goes global in ashes of destruction around the world

Return to technology, commerce, small groups to facilitate growth and progress

Post war United States at home

• Abundances of cars, consumer goods, home appliances, suburbs, nuclear families
• Computers evolve with transistors, semiconductors, microprocessors, miniaturization
• Microwaves and wireless transmission lead to TV, masers, lasers, CD’s, telecommunications
• Vietnam social inequities test progress in 1960’s like Europe in 1848

Post war World beyond United States

• Europe and Japan recovery, US business expansion, American Challenge Common Market
• Alignment battles over political systems, economics, capitalism, democracy
• Role of resources in developing countries, particularly petroleum
• Japan begins rise from cheap copies to industrial superpower

New world of business to foretell globalization

• Jet travel and mass air transport, death of passenger rail except commute in US
• Containerization to sweep away port inefficiency spur manufactured goods trade
• Computer and telecommunications progress and integration: Apollo, Arpanet, AT&T, IBM
• Japan stumbles due to market share and US focus rather than ROI and Rim of Asia
• Speed of change accelerated with PC’s, software, telecom competition, fiber optics

Fall of Communism, rise of market economies around the world

• Emergence of Gorbachev and Deng, glasnost, perestroika and contrast of liberalization
• Rise of OPEC, dominance of financial flows
• Accelerating wealth gaps in industrialized and developing world
• Terrorist fear supplants nuclear threat , role of faith in modern world

From Mediterranean globalization to China and India

• Japan as model for rise of Asia with US as catalyst
• Rim of Asia and speed of technology application and evolution blunt Japan progress
• Rim of Asia with Chinese values to overcome Mao and Cultural Revolution gaps in China
• Containers and telecommunications to expedite Chinese progress as it migrates inland
• Optical fiber cables and telecom crash to explain rise of India and service job transfer
• Unknown wild card effect of life sciences revolution as next brave new world

Next week concluding focus on governments, countries, political pressures in globalization

• China political control in comparison to capitalism, democracy, free markets, globalization
• Technology and business evolution potential to outpace political regulation and control
• Durability of free market economic model and reconciliation to society values and jobs

Shift to Iindividuals as Focus for Advance of Globalization

USF Fromm Summary Notes January 30, 2006

In past sessions individuals weren’t prominent or known

• Egypt and Fertile crescent
• Agriculture
• Surplus
• Cities
• Laws
• Public works – infrastructure

Phoenicians

• Sea transport
• Trading families and colonies
• Democracy in City States
• Alphabet and accounting
• Textile, glass, dyes cedars

Alexander

• Spread of culture commonality, despite brevity
• Storehouse of learning Alexandria

Rome

• Political stability Peace of Augustus
• Infrastructure i.e. roads, aqueducts, legions
• Evolution – Greek spread, Christians, Byzantine

Byzantine, Islam Empires

• Storehouse of learning and advances of past
• Some science and technology extension
• Bridge to East – Byzantine via silk road, Arabs by sea

Today and from now on focus on individuals who contributed to globalization as we know it

• Exploration – Henry, Dias, de Gama, Columbus, Cabot, Cartier after Cheng Ho and Battula
• Religion – Luther, Calvin, Knox
• Commerce – Medici, Chartered Companies, Banking
• Thinkers – Hobbes, Locke, Descartes, Machiavelli
• Inventors – Gutenberg, Leonardo da Vinci, Bacon

Strengthening of Europe to Begin Discovery and Renaissance

• Crusades saw wealth of East and learning dating to Greeks
• 1200 Crusaders pillage of Constantinople, weakening of Byzantium
• 1260 Genghis Khan turns south to Mid East rather than continuing West to Europe
• Turks into Mid East from Central Asia revive and expand Seljuk to Ottoman
• 1220 Marco Polo awakens Italian city states
• Renaissance catalyst of banking for Florence Medici and other Italian cities to finance Bruges Textiles

Shift from south to north, innovation and specialized skills of weavers

• Trade and colonialism
• Triangular trade develops – Slaves, Sugar, Rum, Resources trees, factories
• Contrast of puritan New England and Anglican Virginia, Tolerant Quakers in middle

US government separation of church and state

• Contrast with French Revolution idealism, explosion
• Irony of England evicting France from N.America and gaining India
• India becomes jewel of crown as American colonies are lost and industrial revolution begins