Introduction To International Political Economy Essay - 2,385 words

Introduction to International Political Economy Within the last decade, International Political Economy emerged as a distinctive branch of International Relations and there are a lot of factors that contributed to this. However, as we analyze those factors closer, it is evident that they all constitute one distinctive factor that is solely responsible for the increase of International Political Economys importance, and that factor is globalization. Globalization is a process in which economic, political, and socio-cultural relations are established across a long geographic distance. Globalization gains its strength from the possibilities opened up by technologies, strategies and policies. The reality takes effect when the fears, ideas, actions and reactions occur due to globalization. In a fully globalize society, borders no longer protect people, goods, and symbols.


The world becomes this worldwide network where the borders fade away, and International Political Economy definitely becomes more important under those circumstances. A factor within globalization is consolidation. This is when globalization is forcing companies that used to enjoy protected home markets to compete with foreign rivals. Globalization is something that is acknowledged and then acted upon. When globalization is properly acted upon, political policies begin to affect economic strategies, which then affect social reactions and so on. This process occurs at many different interconnected geographic levels.


Globalization is a journey, a process, and it is on-going. Globalization is a reality that touches our lives in ways most people never stop to think about. Certainly, globalization of international business is the key aspect of globalization; there are a lot of solid reasons that undoubtedly prove that point. The globalization of international business has its advantages and disadvantages, and by analyzing them, we will see that this globalization is inevitable. Globalization has become one of the biggest issues in the economic world today, and that is also a factor that contributed to the emergence of International Political Economy as a distinctive branch of International Relations. Many people believe globalization is a good thing, and there are also many people who think it is bad. Some of the comparative advantages of globalization of international business are that the allocation of the worlds resources are more efficient, it will lead to lower prices for consumers, and it will also provide more choice for the consumers. Even though there are these noticeable advantages of free trade, there are still people who believe globalization is a bad thing. On January 13, 1998, Stephen Golub, professor of economics at Swarthmore College, led the sixteenth seminar in AEIs series, Understanding Economic Inequality.


His presentations sought to dispel fallacious but widespread views concerning the effects of competition from low-wage countries in international trade, including the view that such competition has significantly increased wages inequality in the U.S. The argument that low foreign wages has provided an unfair competitive advantage has been widely believed in the United States for at least 150 years. On the question of whether competition from low-wage countries is the cause of the widening income gap in the U.S., many agree that wage inequality reflects greater demand for skilled labor, as evidenced by the growing wage premium earned by college students. There are two possible causes of the increasing demand for more sophisticated skills: economic globalization and skill-biased technological change. Economic globalization does not increase the demand for relatively higher skilled labor, as would be expected from the theory of comparative advantage. But many studies of this issue conclude that trade with low-wage countries has played, at most, a secondary role in income inequality. The studies show that technological change is the main reason for the shift in demand for labor. As a result, this article points out that globalization does not affect income inequality, therefore it is inevitable. Trade with low-wage countries is very small relative to the U.S.


GDP. Globalization with these countries does not do what most economist report. In the next article, Globalization: Benefits and Responsibilities, U.S. Ambassador Richard Hecklinger reports his views on globalization of international business. In his introduction, he states globalization is a phenomenon that touches every one of us. This statement is true because economic globalization causes many things to be better for consumers. Later in the introduction, Hecklinger says that the entire society has a responsibility to work together to take full advantage of globalization and to minimize any negative impacts it might have. In the first section -- Markets, Poverty, and Globalization -- he starts off by saying that open markets and rules-based trade are the best means we know of to lift the standard of living. He points out that international trade and investment are essential to the prosperity and well being of our citizens. He showed a statistic of among developing nation that showed that from 1970-1990, economic growth rates were 4.5% for those who were opened to economic globalization, and less than one percent for those who blocked trade and investment.


The second point he makes is that economic growth is the best and probably the only cure for poverty. In studies done, out of 125 countries with relatively close relationships in overall income, 108 of them had increased income among there poor. The global economy offers countries markets for the products, lowers prices and expands choice for consumers and domestic industries alike, creates jobs, and ultimately reduces poverty despite disruption to some sectors. Of course, open markets and competition will always allow some people to become rich, but disparity in income levels is less important than whether people are moving out of poverty, and whether they are given the opportunity to benefit from economic growth. The third point he makes is that globalization does not mean the end of local business, ethnic identities, or national culture. In fact, revolutionary changes in transportation and communications obliterate many barriers to global market entry, creating countless opportunities for micro-entrepreneurs. These three points are the main reasons Mr. Hecklinger believes globalization of international business is a vital part of international economics and it is inevitable. Next, an article by Andrew Kohut shows the varying views people hold on globalization. In a Pew Research Center nationwide survey in April, 43% of the respondents said that the future of global economics would help the average person while 52% said it would hurt. The survey shows that as the earnings of the families decreased, so did their belief that globalization would be beneficial.


Another survey showed that, on the average, most American families are better financially now than they were a few years ago. But once again, they found that financial satisfaction is also decreasing as the familys income levels decrease. Wages also continue to be a source of concern. Only 39% of people in developed countries say they earn enough money to lead the life they want. With the expansion of globalization, 67% of those people worry that good jobs will begin to move oversees, and that they will be left with jobs that do not pay enough. Although most people favor economic globalization, they also criticize the specific policies and agreements.


To conclude his article, Mr. Kohut states that the dissatisfaction showed is less important than a more widespread public optimism about future economic gains. This seems to be one of ...................................................................................................................................................................................................................................................................................................................................................................

...................You are reading a preview................... Visit our Blog and Unlock Full Access to this essay

Continue READING the FULL Essay by clicking HERE

Essay Tags: globalization, political economy, international political, international business, international political economy

This is an Essay sample / Research paper, you can use it for your research of: Introduction To International Political Economy