Essay: Globalization in Retreat and State Capitalism Comes of Age

Pages: 6 (1935 words)  ·  Style: MLA  ·  Bibliography Sources: 2  ·  Level: College Senior  ·  Topic: Economics  ·  Buy This Paper

Globalization

In order to determine which article is the most convincing, I evaluated them on a few different metrics. The first metric was the strength of the hypothesis. A weak hypothesis will inevitably lead to a weaker argument, even if the argument itself is presented well -- kind of like a lawyer who does a fantastic job of defending someone who is obviously guilty. The second metric is the strength of the argument itself. In a publication such as this, the author is expected to have excellent rhetorical skills, so I was looking deeper. I wanted facts, first and foremost, since facts are the basis for all sound arguments. Since there are innumerable facts that could in theory be presented to support an argument, the use of valuable facts was important, as was the ways in which the author used them to support his hypothesis. I also analyzed the articles in terms of their logical flow. I wanted to examine the leaps and assumptions that were behind the rhetoric and hypothesis. As all authors have bias, I wanted to examine these biases. This speaks to the credibility of the writer, and their ability to support their hypothesis with reasoned arguments. Lastly, I examined the articles from the context what was not there. How many unanswered questions were there? What was omitted from the discussion? A solid argument should have no holes.

Both writers have similar hypotheses. Altman sees globalization as being an ideology in decline, in favor of "state intervention, re-regulation and…protectionism'. Bremmer sees state capitalism as a model now emerging to threaten the free market. Both reach the same conclusion, that the United States needs to take an aggressive leadership role in the promotion of the capitalist system, lest it be pushed to the wayside by governments in the developing world. I find Altman's article to be the more convincing of the two, for a wide variety of reasons.

Altman has the stronger hypothesis of the two. Both writers understand, more or less, the nature of the government intervention in the market system. Bremmer recognizes that state capitalism is not new, but he treats it as such. I find that he fails to make a case for his underlying view that state capitalism in a new, powerful economic model. Altman recognizes with his use of the term "re-regulation" that governments have traditionally held significant influence over critical industries. Bremmer cites many nations -- the UAE, Turkey, India and Russia to name a few -- that have always had strong state involvement in the economy. Bremmer's hypothesis therefore is slightly hyperbolic at best and alarmist at worst. Altman's more measured assessment of recent governmental moves speaks to a more realistic approach to the issue. Furthermore, Altman seems to understand better that governments of all nations are involved heavily in their strategic industries. Even in the freest of markets, governments dictate the size, shape and form of an industry, the amount of wealth in generates and the direction in which that wealth flows.

I find Altman's argument is bolstered by his use of facts; Bremmer by contrast throws a multitude of tidbits onto the page and hopes that some will stick. In doing so, Bremmer sometimes errs, such as claiming that the "young governments of the former Soviet republics and satellites championed the West's political values." This claim may hold for the Baltic States, but the Estonians, Latvians and Lithuanians were always aligned with Western Europe. Freedom from the Great Bear's shackles merely allowed them to express sentiments held since their halcyon independent days in the 1920s. The other ex-USSR states, including Belarus, the Ukraine and all of the Stans, cling more closely to the Soviet economic model than the Motherland itself. Bremmer also pulls random examples of state-owned companies, chosen for diverse geography and industry. It plays to nice effect, but the list of state-owned enterprises is thousands deep; plucking a handful of examples proves nothing and undermines a perfectly valid point for the sake of showmanship. He succumbs to this temptation more than once -- he later invokes Smoot Hawley for shock value. The global trade environment today is so different from that of 1930 that no reasonable analogy can be made here. Smoot Hawley failed because the U.S. traded with Canada and Europe, who could easily retaliate because their economies had sufficient diversity to survive with a reduction in U.S. trade. Today's developing world trade partners have no such luxury -- they need the U.S. more than the U.S. needs them, giving the U.S. powers to apply tariffs far in excess of what it had in 1930.

For his part, Altman relies on uncontestable economic statistics to make his points. He ties those statistics directly to the policies that he is discussing. His facts directly support his hypothesis as well, especially the points about increasing trade barriers, the decline of U.S. leadership and the negative consequences of both the global recession and the decline of globalization. His arguments are more rational, as a result of his use of cold facts to directly support his claims. While I agree with Bremmer, he tries to make too many arguments and too often cites random examples that he never quite ties into his hypothesis, such as his contention that Washington is the new financial capital of the United States. Even if true -- something Bremmer fails to prove -- the implications of such a development are tied discussed in the context of the hypothesis.

Altman's argument is tighter, more cohesive. He limits his points only to those that are directly relevant to his argument. The one glaring exception is the in-depth backgrounder "Anatomy of a Crisis," which is superfluous both in the context of his hypothesis and because his audience already knows this basic information. His hypothesis speaks to the lasting impacts of the recession. These include the slow recovery and its impacts on the actions of Western governments and the trend away from globalization as nations realize that free markets do not exist and that market protections are sometimes both politically and economically expedient. In particular, he raises some concerns about geopolitical instability and lack of leadership that will derive from the decline in globalization, two points that lead directly to his concluding call for increased leadership from the United States. Bremmer by contrast suffers from a lack of focus. He introduces a lot of points, some of which have nothing to do with this thesis. He takes too long to reach his conclusions, filling in every back story and tangent. His work is thorough, but wanders too much.

Both authors appear to have similar biases and assumptions. However, Altman's article presents a stronger argument by omitting more of those biases. On a couple of occasions, Bremmer rests his entire argument on his assumptions. He states, for example, that companies relying on state patronage is a new trend, and a developing market phenomenon. This is a spurious assumption -- the beneficiaries of the Iraq war were surely U.S. defense contractors. Every administration has its pet industries, even in the developed world. Bremmer views such government involvement as inherently bad but only backs this with an opinion: "political bureaucrats…have little experience in efficiently managing commercial operations…their decisions make markets less competitive and…less productive." Bureaucrats are bureaucrats; managers in bloated private companies like General Motors cannot be said to function more effectively or efficiently than civil service managers forced to juggle annual budget cuts and increasing mandates. Bremmer feels that state intervention in key industries is inherently bad. It is reasonable that the state may be less effective at making money than private companies, but the state has other outcomes in mind that may be more important than the profit motive. U.S. protection of the agricultural sector, for example, gives America a long-term strategic competitive advantage over China, which under the Communists has never really been able to feed itself. Food supply is the outcome of U.S. action, not profit; the same holds for foreign governments protecting key industries, especially oil.

With respect to omissions, Altman's argument would have been strengthened by a more incisive analysis of China's role in a post-globalization world. That nation is held up as a virtual paragon of economic virtue for its ability to weather the economic crisis. Yet it should weather the crisis; after all, China's economy is sheltered to the point where it does not reflect any definition of reality. The currency is artificially undervalued and the nation lacks critical resources such as food and water -- China's role is probably overstated by virtue of Altman's focus on the short-term consequences of the recession. Altman's argument would have been stronger had he looked further into the future -- by focusing on the short-term he overstates China's ascendancy by extrapolating present-day trends too far into the future.

Bremmer's piece is overly thorough. What would have strengthened his case is a better analysis of how his arguments lead to his conclusion. The conclusion itself is perhaps too… [END OF PREVIEW]

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