Globalization: What Does It Mean, and Is It a Blessing for the World?

Attali ¢ We have to distinguish if globalization is Americanization. The answer to that is to be more parochial. For example, in France we protect our cinema industry, and it has continued to thrive. The Germans, British, and Italians did not protect their film industries and they are dead.

But the protection cannot be to close the borders. The answer there is not less globalization, but more globalization. We have seen that closing of national borders is not an answer. But rather for us, to create Europe as an entity is the answer. In this way we not only create a single European market. Europe would be a sample of a case where globalization, if it is only linked to a market, is creating anarchy .

You can have globalization if it is not only globalization of the market, but globalization of the institutions.

You can have globalization if it is not only globalization of the market, but globalization of the institutions. Markets never exist without a state. Markets need institutional mechanisms for rules under law: property rights and protection. There are two kinds of places in the world where you have free markets without institutions. The first is the world itself. The second is Somalia: A free market without a government. Somalia becomes a metaphor for the world if globalization is not going to be tamed by institutions.

Thurow ¢ In globalization there is job sharing, which is egalitarian. For the first time, through the Internet, people from different regions can work on a technology project together. For example, in chip design this is an advantage not because of cost, but because you can work on a project nonstop and get a speed to market advantage. Most high-tech companies will say that speed is more important than cost. Wages have gone up remarkably fast in places like Taiwan and Bangalore. So the wage differential gap has narrowed.

One of the reasons that some people are concerned about globalization is that there is the emergence of high-tech global citizens , who can move from country to country all within the same company. The tech clusters of the world are linked. Taiwan is part of Silicon Valley. They do contract manufacturing based on the technology developed in the U.S. Bangalore writes software for the wealthy industrial world. When it started it was low-level software, now it is more sophisticated. Look at Ireland! Basically, Ireland is a good place in Europe for off-shore manufacturing. Most of the development is not from Irish companies; it is from international companies locating operations in Ireland.

But remember, a capitalist is a coward. In the U.S. Navy, the brave captain is supposed to go down with his ship. But a CEO or a venture capitalist wants to get out of a business before it fails. Physical insecurity can hinder economic development. Israel is an example. It has an advantage in that its high-tech firms are connected to the U.S., and so they can get the capitalization and scale of a large international company through their U.S. counterparts.

One thing to be tested is whether the venture capitalists (most of whom are not Israelis), who are financing Israeli operations, will demand that the people and operations be moved from that environment, if physical insecurity remains unresolved .