Reconstructing the Definition of Peace and what Globalization can contribute

http://www.polity.co.uk/up2/pdf/sample_chapter.pdf

Worldwide globalization can cause a new definition of what peace means especially to a state's citizens’ which will eventually democratize other nations as well following on the track of peace and globalization. In “Peace Operations in Global Politics,” the article discusses the importance of how globalization has affected the way peace is portrayed amongst states. With states being interconnected because of globalization it brings new issues to all states as well. Peace is difficult to conceptualize because it can mean a number of different things such as peace meaning no war, but then is a nation who has its citizens socially enslaved in peace? This is the difficulty that globalization introduces because if states are interdependent on one another, the other has the responsibility to create peace for that nation. Competition amongst states has caused a great deal of disadvantage towards citizens of a particular state. If democratic states are unlikely to result to war then that means states take on more responsibility. If a state doesn’t take care of its citizens then it becomes another state's responsibility. These responsibilities in return can cause more hardships for a particular actor in the world economy. For some states peace isn’t the best solution where war can be which represents the difficulty in maintaining peace in today’s collectivity of globalization.  

In class we had talked about how war today is not a common event in world politics and how this can be from globalization. Without war means there is peace, but is peace desirable in today’s world? Peace can equal domination such as North Korea or any authoritarian state. The argument is whether globalization can change the meaning of peace, causing countries to democratize and unite together. A decrease in war globally in today’s world means there are other issues states have to deal with. In Peace Operations in Global Politics, “Peace operations need to be in the business of protecting human rights where host states prove unwilling or unable to do so, and of helping to build states capable of fulfilling their responsibilities in the long term.” If more responsibility is what creates peace then globalization should be effective since it is what liberal and democratic states have created. Therefore, globalization has been the factor for peace and the decrease of war. Even though there are difficulties with how globalization is conducted, there are still benefits rather than resorting to war. States should be able to take on more responsibility, and focus on uniting together instead of going against each other.

Brexit and the WTO

http://www.reuters.com/article/us-britain-eu-trade-idUSKCN1220GF

The above article discusses the need for Britain to negotiated a new deal with the WTO. Because they were part of the EU, they themselves did not have a deal with the WTO. So they must negotiate new deals with the other nations and have them approved. Trade Minister Liam Fox said that " terms with the World Trade Organization will not be simple but should be done in a way that causes minimal disruption to global trade". He also believes that because Britain was a founding member and is in good standing they will not need to re-apply for membership.

This is one thing that I had not thought about with the Brexit vote. I knew that Britain would have to re-negotiate trade deals and certain things with each EU member. But I did realize that they would have to do the same thing for the WTO, because the EU is just one body. I think this will be a lot on their plate having to negotiate deals with both the EU and every country in the WTO. What also makes this a difficult task for them is that the WTO is not necessarily a place where things get done fast. As we talked about last class, the WTO has had the DOHA round waiting for approval for almost 20 years. This is not a very speedy process, which is something that Britain is hoping for. While I believe this will not be an easy task for them to complete, I think that it is completely doable. 

Why Are Some Countries Rich And Others Poor?

http://www.forbes.com/sites/johngoodman/2015/05/21/why-are-some-countries-rich-and-others-poor/#1be2eca1272b

This Forbes article discusses a question asked by Adam Smith in his book The Wealth of Nations as well as discussed extensively in our class about a week and a half ago: why are some countries rich and others poor? In an article we read, links of poverty included poverty, fiscal, and demographic traps, cultural barriers, lack of innovation, and (what I felt was most prominent) governance failures. The Forbes article simplified the problem by reflecting three fundamental factors - capital, labor, and the "efficiency factor" - and asked which one of these was responsible for differences in GDP per person in countries around the world. A study concluded that it was the "efficiency factor," mainly due to misallocation of resources because of the system in which the economy runs. Capital, as valuable as it is, has an output ratio - how much extra output one gets from an extra dollar of capital - that is even across countries. Moreover, input contributions - education and skills - is modest when differentiating the level of human capital per worker. The study found that the largest difference in GDP per workers was the difference in economic institutions and misallocation of resources. Adam Smith discovered this two hundred years ago, when Britain's government established labor monopolies, currency controls, tariffs and quotas, and controlled outputs and prices for industries. Stable government and the rule of common law was taken for granted, and the economy suffered greatly because of it.

This article jumped off the page for me because it reflected what I thought was the largest factor as to why countries were poor: government failure and incompetence. Physical landscape can be manipulated, families can have less children and save the minimal income they have, people in poorer countries are capable of innovation, and cultural barriers and be broken at a microeconomic level. But if a government can't provide basic functions, provide access to a system of courts that enforce contracts, protect property rights, be free from instability and corruption and most importantly, open up the market to private investors then none of that matters. Capital and labor are valuable in every market on Earth, but it's the institution in which they reside and the efficiency in which they operate that determine how well an economy grows. An incompetent institution will inevitably lead to an incompetent economy.

The 2016 Financial Crisis

https://www.theguardian.com/business/2016/jan/12/beware-great-2016-financial-crisis-warns-city-pessimist

This article above explains the scare of a 2016 financial crisis, and that it can be just as bad as the financial crisis of 2008. There recently has been deflation in emerging market economies that central banks are not aware of since the beginning of the year. The article makes a point to say that with the recent conflict in markets share prices have fallen, “along with the decrease in cost for oil which has left Brent Crude Oil trading at barely thirty dollars per barrel.” Credit expansion has also given a false representation of where the U.S. economy is due to how successful the central banks are doing. The banks are “borrowing to finance share buybacks.” The article says that bankers haven’t learned their lesson from the 2008 financial crisis, it is mostly because they didn’t understand the system, and they don’t understand it now.

This relates to the video we watched in class on the 2008 financial crisis. The problem comes back to that there is not enough capital being put aside for loans given out. As we had learned from class, credit default swaps don’t work, and don’t reduce trade loan risks. Making more credit swaps might make the market grow for the time being, but will eventually come around to bite you as it did in 2008. With deflation being a problem now, banks need to see that a crisis can be upon us again. Bankers weren’t aware that a crisis could have been as bad as the 2008 financial crisis until it happened. They need to stop avoiding that it could be a possible threat again, and to examine the decisions being made. Thinking that oil prices would never fail is an assumption or gamble that central banks have made that shouldn’t have been made. This was the same reason for the collapse of 2008 because central bankers thought that real estate prices would never raise and always stay at a low rate. I imagine also that derivatives will play a role in a collapse of many other industries because of the amount of investments in oil. Central bankers have to get a better understanding of how the system works in order to prevent these issues, and have to stress the importance of education on the economy before being allowed to carry out their job.