Globalization is not a new concept – trade, migration, market integration and capital flows have been practiced in various forms dating back centuries. China is at the epicenter of our globalized world and their success is attributed to the tenets of Adam Smith’s Wealth of Nations. However, opponents of the globalization believe if Smith were alive today, he would be repulsed by our modern day international business strategies. The general consensus among dissenters of globalization is the misguided belief that capitalism at any level is missing the moral sentiment espoused by Smith’s philosophical viewpoints. Even though Adam Smith would acknowledge that some Chinese citizens are casualties of globalization, he would conclude the economic development of China’s poverty stricken society unequivocally raised their standard of living. Adam Smith's Wealth of Nations, published coincidentally the same year as the Declaration of Independence, is considered by many economic scholars to be the early framework of capitalism. Capitalism is an economic system based on the exchange of goods and services in the marketplace. Supporters of capitalism are convinced that the economic integration of globalization is rooted in the Wealth of Nations. Adam Smith’s “invisible hand” metaphor explains how the entrepreneurial motivation of the individual, a strong workforce and a decentralized market are the driving forces for economic prosperity. For over a decade, China’s economy has experienced some dynamic changes, especially with the transformation of their labor market. China’s entry into the World Trade Organization (WTO) in 2001 was a significant event because it symbolized to the global community their country was a competitive trading par... ... middle of paper ... ...eries Adam Smith page. Retrieved March 19, 2014, from http://www2.hn.psu.edu/faculty/jmanis/adamsmith.htm U.S. Bureau of Labor Statistics (2013, January 7). Manufacturing in China. Retrieved March 10, 2014, from http://www.bls.gov/fls/china.htm The World Bank Group (2014, April 17). Remarkable Declines in Global Poverty, But Major Challenges Remain. Retrieved March 17, 2014, from http://www.worldbank.org/en/news/press-release/2013/04/17/remarkable-declines-in-global-poverty-but-major-challenges-remain Wright, N. (2009). China’s Emerging Role in Global Outsourcing | China Business Review. Retrieved March 11, 2014, from http://www.chinabusinessreview.com/chinas-emerging-role-in-global-outsourcing/ Zupan, M. A. (2011). Cato Journal - Cato Institute. Retrieved March 10, 2014, from http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2011/5/cj31n2-1.pdf
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, (London: 1776), 190-91, 235-37.
The power of reasoning allows limitless inquiry into the nature of all things. Adam Smith an “enlightened” thinker utilizes reasoning to examine the wealth of nations, but in acting on this reasoning is he forcing his own sentiments into his argument, or is the reasoning creating the sentiments? Smith offers an exposition for his vision of a laissez faire economy, that is, capitalism in the modern sense. In a wider scope, Smith's account reveals his views on the nature of the human condition, and not a single theme is surveyed without an observation being made upon human tendencies and decisions. Arguably, these observations are shaped by his own sentiments.
State Statistical Bureau of China. (1999). Statistical Report of National Economy and Social Development in 1998. Beijing and New York: China Statistical Publishing House.
China Enters The World Trade Organisation China has swiftly turned into a world organizer in trade and will merely develop in significance to the global economy. These particulars are established with China's up to date economic statistics raising more than 9% per year and economists' projections of the nation's upcoming China will double its gross domestic product of the year 2000 in the year 2010. The way the Chinese government attained these remarkable economic statistics are during a restoration of Chinese trade strategies. Alteration measures in the country series from concentrated trade barriers along with technical contracts intended for agriculture, to infrastructure investment strategies and enhanced values for pharmaceutical products. On the other hand, stemming from China's economic development are dilemmas for instance inflation as well as irregular progress of the country. Moreover, after fifteen years of conferences and negotiations, on November 10, 2001 at the World Trade Organisation (WTO) Ministerial Conference in Doha, Qatar, WTO members officially permitted the consent package for the People's Republic of China. China became a full member, the WTO's 143rd, on December 11, 2001. “International economic cooperation has brought about this defining moment in the history of the multilateral trading system,” said Mike Moore, WTO Director-General, at the conclusion of the meeting of the Working Party on China's Accession. “With China's membership, the WTO will take a major step towards becoming a truly world organization. The near-universal acceptance of its rules-based system will serve a pivotal role in underpinning global economic cooperation.” http://www.wto.org/english/news_e/pres01_e/pr243_e.htm To enhan...
Trade liberalisation and the reduction in bureaucracy has enabled overseas firms to enter the Chinese market to take advantage of cheap and vast labour, creating millions of jobs. However, the privatisation of state-owned enterprises in the face of international competition as well as economic restructuring has also simultaneously led to mass job losses, especially in rural areas, posing a challenge to the Chinese economy and the government. During the period 2009 to 2015, China’s urban unemployment rate averaged 4.8% which is lower than the world average of around 7%. However, the real unemployment situation is likely to be more serious as migrant workers and newly graduated students are not included in government statistics on unemployment. As well as this, China has had historically low levels of unemployment, thus, a trend of increasing unemployment levels indicates a worsening situation. We can see the extent to which the impacts of globalisation have had on China, through historical unemployment statistics. In 2009, unemployment reached a 30 year high of 5.4% reflecting the impacts of the Global Financial Crisis and highlighting that China is now increasingly exposed to external shocks. The movement away from labour intensive industries (i.e. manufacturing and agriculture) and the effort towards service based industries, due to the process of
In States vs. Markets, Herman Schwartz presents two economic development strategies that have been employed by late industrial developers in order to either take advantage of existing comparative advantages or facilitate rapid industrial growth through state intervention and provision in order to gain a competitive foothold in world markets. Schwartz demonstrates how China was able to employ elements of these development strategies to generate capital from an abundant rural labour supply in order to pursue industrial development and attract foreign investment through economic reform starting in the late 1970's.
endorsed in the Wealth of Nations that epoch-making publication remains as perhaps the most famous economics book of all time. Governments in search of a strengthening of their states through economic policy, and many individuals in search of personal gain, have all drawn lessons from its pages. Powerful movements that led to the emergence of Modern Capitalism were substantially based on Smith's work and hence he deserves to be
First and foremost, Adam Smith was very conscious of how the wealth was unequally distributed amongst the poor versus the wealthy, and how and if this distribution continued it would leave the poor at a disadvantage, in the sense they will never have the opportunity to move ahead and will always be at the mercy of those who possessed more wealth. Mr. Smith viewed economics contrarily than the mercantilist. Compared to the days of old, the views of economics and mercantilism based wealth on the amount of gold and silver the nation provided, and how the import of goods from other countries would adversely affect the wealth of a country, as the reality was, trade was notably one-sided, it only benefited the seller and not the buyer, and it was believed that countries can only become wealthy by making other nations or countries poorer. However Mr. Smiths’ views were in contrast, believing the wealth of a nation was centered around production and commerce and not gold and silver, his belief also viewed trade as a positive, as it could only increase productivity, and both parties would benefit from the exchange the seller as well as the buyer. (Smith, 1776)
In Adam Smiths paper “The Wealth Of Nations” paper by Adam Smiths projects the view on international trade as not a zero sum equation resulting in being beneficial to all parties involved eventually. By e...
The unregulated ways of capitalism has the world questioning what it is that we really know about capitalism and how it can bring upon us the complete final destruction of our planet; the apocalypse as we know it. The evils of capitalism are blindingly obvious capitalism has brought our world inequality, environmental exploitation, universal suffering, and alienation. In Adam Smith's foundational "Wealth of Nations," Quill notes, "is recognition that capitalism is going to make the lives of a good majority of the population miserable”. This comes to demonstrate that Through films, literary works, as well as other forms of art, we are able to understand what it is to be human and how can we make the world
Adam Smith is considered as one of the most influential economists in the 18th century. Although his theories have been criticized by several socialist economists, however, his idea of capitalism still has great impact to the rest of the economists during classical, neo classical periods and the structure of today’s economy. Even the former Prime Minister of Britain, Margaret Thatcher had praised on Smith’s contribution on today’s capitalism market. She commented “Adam Smith, in fact, heralded the end of the strait-jacket of feudalism and released all the innate energy of private initiative and enterprise which enable wealth to be created on a scale never before contemplated” (Copley and Sutherland 1995, 2). Smith is also being recognized as the father of classical political economy and he has two famous published works that laid out the reasons to support his ultimate idea of capitalism.
Quinlan, Joseph. “Coming of Age in New China.” The Globalist, 2013. Web. 16 January 2014.
The pivotal second chapter of Adam Smith's Wealth of Nations, "Of the Principle which gives occasion to the Division of Labour," opens with the oft-cited claim that the foundation of modern political economy is the human "propensity to truck, barter, and exchange one thing for another."1 This formulation plays both an analytical and normative role. It offers an anthropological microfoundation for Smith's understanding of how modern commercial societies function as social organizations, which, in turn, provide a venue for the expression and operation of these human proclivities. Together with the equally famous concept of the invisible hand, this sentence defines the central axis of a new science of political economy designed to come to terms with the emergence of a novel object of investigation: economic production and exchange as a distinct, separate, independent sphere of human action. Moreover, it is this domain, the source of wealth, which had become the main organizational principle of modern societies, displacing the once-ascendant positions of theology, morality, and political philosophy.
Zhu, Y. & Warner, M. (2000). “An Emerging model of employment relations in China: a divergent path from the Japanese?” International Business Review, 2000, Vol.9 (3), pp.345-361. [03 April 2014]
What is the Global Political Economy? According to O’Brien & Williams (2010) this is a term used to describe the interrelationship between national and international, politics and economics. It basically shows the interplay of powerful states, regions, and global institutions which fall under the realm of politics with global trade, global finance, investing and capital movements comprising economics. This ideology does not look at politics and economics in isolation but it draws from other fields such as geography, sociology, women studies and history as these disciplines play an important role in explaining how politics and economics interrelate (O'Brien & Wlilliams, 2010). Nevertheless, the question is where China stands within this global political economy. Hobden (2008) stated that “China is awakening from a slumber that has lasted half a millennium” he believed that in the past China was not considered as one of those countries that actively played a role in global affairs, however; over the last two decades this has all changed. Although this essay will be drawing from examples of China, showcasing its emergence as one of the fastest growing economies in this global atmosphere; its main aim is to evaluate the merits and demerits of two important ideologies in the study of the international political economy, that of Economic Nationalism and Liberalism.