What is the relation between economy and globalization?- LEE JUNGHU

Summary

This week's text by lead, Peter Dicken, starts by pointing out a huge illusion that we often have about economic globalization. It is the conventional wisdom that "TNCs cross borders at will, neutralize the country and dominate the world." Although it is often said that companies have become stronger than countries, the author points out that this is a very misleading simplification. Dicken explains that economic globalization is not just a process for companies to flatten the whole world. Rather, the concept of "geographic rootedness" is important, and no matter how huge a global company is, it cannot completely erase the "origin component" because it was born and grown on the culture, institution, and political soil of a particular country. Also, companies' production networks are not uniformly spread around the world, but tend to be united around certain regions, such as the European Union or North America. Finally, the power relationship between companies and the state is also not one-sided. Companies use investment as bait to pressure the government, but the state still has strong bargaining power because it has access to the territory. In conclusion, it can be seen that economic globalization is a complex and intense negotiation process between companies and the state, not a company's dominance.






Interesting points

The sentence that made me most dizzy while reading this text was "unlike other goods, the labor force has to go home every night," quoting David Harvey. The sentence showed the fundamental inequality of economic globalization more starkly than any other economic theory. While TNCs have the spatial flexibility to move factories at any time in search of low labor costs or loose regulations, it is shocking that workers are bound to be at a disadvantage in negotiations because they are tied to the region. It was also interesting to see the "Chagall metaphor" in the economics text. It was impressive to explain the nature of a company by saying, "A painter is born somewhere, and even if he reacts to other environments later, the scent of his hometown remains in the work forever." We often think of global companies as being without nationality, but the author emphasizes that they are still the products of their own systems. This was very fresh because it was a view that reversed the premature expectation that all corporate management methods would be unified when globalization progressed.






Question and Discussion

After reading this article, the most deeply thoughtful point is the question of whether what the author calls "negotiations between countries and companies" can be applied equally to all countries. The author emphasized that countries are not lethargic, citing that countries with huge markets like China can rather shout out loud against global companies. However, in reality, I am skeptical that most developing countries, except for powerful countries such as China and the United States, can have such bargaining power. Companies cross borders in search of tax benefits or deregulation, but powerless countries that have to attract them eventually have no choice but to compete to the bottom, which lowers labor rights or environmental standards to suit the taste of companies. In the end, as economic globalization progresses, the existence of a state itself does not disappear, but I would like to talk about whether political inequality between a "super state" that can control companies and a "small state" that is at the mercy of companies will intensify and how to close this gap together in class

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