THE DISADVANTAGES AND EVILS OF NATIONALISM

It is my opiion that nationalism is wrong and harmful.  I predicate this opinion upon the fact that it is the direct opposite of the world unity which I fervently believe is our only hope for survival and advancement.  I consider nationalism to be unsensible and illogical as well, because in serving as justification for the division of mankind into a multitude of groups, it is also the basis for the assortment of redundancies,  confusions, and needless conflicts that prevail worldwide.  It prevents people in various places from appreciating the similarities among them; and instead identifies, discredits, and exploits the differences.  Moreover, in a single borderless world, these differences as well would probably shortly fade, as peole come to realize that the differences between them are farless important or meaningful than the similarities among them.

There is a commonplace concept which we refer to as "cultures"--which constitute one aspect of the differences between groups of people.  These are not the differences that I speak about here.  For variations in the things we eat, our manner of dress, or the music we listen to, have never been a cause for war.  On the other hand, differences in political or economic issues have--and these are the differences that a single world order would obviate.

The first and most basic problem with nationalism is that its roots extend back to an ancient age, when it was necessary for groups of humans to band together in tribes for the sake of survival, regarding wild animals and other groups of similarly semi-civilized human beings.  We have, of course, by this time progressed to a point where this is no longer necessary.  We can control the wild creatures who still exist within our environment; and we are able to communicate, negotiate, and do business with one another, as a substitute for resort to brute force as a means of obtaining our safety, needs, and comfort. 

Nationalism perpetuates these early feelings and attitudes, causing us to continue to favor and support the group that we consider "our own"--which "group" may have happened to agglomerate via proximity, happenstance, habit, or conquest.  It also causes us to regard the members of other such groups as strangers, different from us, and potential enemies--when in fact many of these others may be more closely related to us, via earlier ties or genetics, than many of "our own" group.

Nationalism carried to its extreme can be observed when we study Germany during its formative years.  Friedrich Schlegel and Johann Fichte, early voices of German nationalism, considered the nation to be more important than the individual person.  To Schlegel, "the concept of nation requires that all its members should form as if it were only one indiviedual"; and Fichte declared that the citizenry of a country "must be ready even to die that it [the nation] may live." 

                                                      * * * * *

Nationalism is similar to "team spirit," whereby we consider our group to be superior to, or more deserving of victory or success than, other groups.  This has sometimes led to nations seeking to conquer and/or occupy the lands of neighboring nations.  An instance of this sort was a precursor to World War II, when the Japanese voiced and acted out an opinion of superiority to the Chinese and people of other parts of Southeast Asia.  Were there no borders, the events that precipitated this aspect of World War II could not have occurred.  For people from the place we call Japan would not have been prevented from simply pursuing business and habitation in the place we call China--and vice-versa.  Terms like "conquering" and "annexing" and "reclaiming" of one part of our world by people from another place would not be necessary, nor indeed possible.  (Of course, simply trespassing upon, or attempting to "steal," someone else's real estate would nevertheless be merely considered a crime--and dealt with as such by the world's law enforcement authorities.)

Nationalism also impels the people, or leaders, of a nation, as a corollary of the opinion that theirs is a superior nation, to attempt to dominate or colonize the people and lands of other nations or places.  And subsequently, if and when "independence" is eventually attained by a former colony, it often suffers through nationalistic "growing pains" of its own--including revolutions and insurgencies, on the part of one or more groups of persons living within this new country for control thereof; as well as occasional "splitting" of the new country into two or more yet newer separate countries, resulting from similar motivations which are based upon the selfsame "nationalism" as described above.

Nationalistic superiority complex has been carried to ridiculous extremes in the past.  For example, in 1914, following a brief dispute with Mexico, President Wilson demanded that Mexican President Huerta salute the American flag.  When he refused to do so (indicating similar nationalistic pride), the United States' Atlantic fleet was mobilized and sent to Mexican waters.  Thereupon, President Huerta saluted the American flag--and the near-war was over.  This silly scenario could have taken place between two teen-age gangs in the slums of a city.

The era preceding World War I has been described as being rife with "ingredients for war."  Among these ingrediants were the strong desires on the part of various ethnic groups to have their own countries; a race among the European countries to snatch up colonies; and alliances between these European countries--which kept changing and shifting for self-centered strategic reasons.  All of these episodes had nationalistic bases.  Of particular note was the agitationon the part of many among the Bosnians, Croats, Serbs, and Slovenes to have separate countries of their own.  Man's minds were said to be "poisoned" by "paroxysms of nationalism" (Garaty and Gay, The Columbia History of the World); and among the audience of that time was then-Corporal Adolf Hitler.

The next period, between World War I and World War II, has been described as being one which witnessed a rise of totalarianism with a further increase of nationalism.  It is implied that these phenomena caused the post-World War I era to be unfruitful as regards future world peace, and that they were in fact the causes which led to World War II.

In the years following this great catastrophe, the stakes grew larger and potentially more deadly.  During the Cold War period, two super-nationalist powers, the United States and the Soviet Union, confronted each other a number of times.  It has been estimated that the risk of breakout of thermonuclear warfare during that period rose on occasion to as high as fifty percent.  And when the Cold War ended, one of its points of contention--Germany--ceased to be a divided pawn in the chess game.  She was rapidly restored to unity and admitted into the process of a unifying Europe, perhaps in order to thwart the possibility of a resurrection of German nationalism.

                                                      * * * * *

A sysnonym that has been used for nationalism is "tribalism."  Nationalistic feeling transports us back  to a "golden age" of national myths and national heroes.  The Latin word "patria," meaning "fatherland," comes to mind--from which evolved the term "patriotism," which refers to loyalty to and pride in one's nation.

"National sentiment" is said to have arisen in England during the early part of the sixteenth century.  It is described as a set of common religious and political values held by the people of that place. 

Nationalism came to France during the eighteenth century, where it derived from dependence upon, and loyalty to, the King.  But it is said that its precursor, which was a "consciousness of being French," had existed for some centuries beforehand. 

Nationalism also arose in Russia in the eighteenth century, during the reigns of Peter I and Catherine II.  Being "Russian" was viewed as a badge of honor, of which one could never be stripped.  Stalin later expressed contempt for the divisions of mankind that nationalism created as belonging to an outdated mode of bourgeois society.

At its most fundamental basis, nationalism springs from identity.  Our identity is a product of our view of ourselves.  Thus, the identity that is nationalism arises out of what has been described as an "invisible force."  German nobleman Wilhelm von Humboldt expressed it for Germany as "German feeling and German spirit."

Viewed thusly, nationalism seems to consist of love, loyalty, and devotion for an entity or a community that does not exist independently--but is, rather, a community that we the citizens thereof imagine ourselves to be the ingredients of.  From this flows the conclusion, as stated by Peter Singer, that man possesses the ability to, and actually should, transport himself from living in the "imagined communities we know as nation-states," to residing within an "imagined community of the world." (Peter Singer, One World)

United Nations Secretary-General Kofi Annan has cirrectly pointed out that the concept of state sovereignty, which has prevailed in Europe since the Treaty of Westphalia in 1648, should not be honored, when it constitutes a shield for the carrying on of human rights abuses within a country--and that such abuses should be regarded and treated from a universal standpoint, as wrongs being committed upon mankind.  In his One World, Professor Singer concludes that mankind's problems are now "too intertwined" to be properly dealt with in a world of nation-states--wherein people's loyalties are primarily and near-exclusively devoted to their respective countries, when they should be directed to "the global Community." 

                                                   * * * * *

PLEASE LEAVE A COMMENT--HERE, OR VIA E-MAIL, AT oneworld@tampabay.rr.com







 










 

THE DISADVANTAGES AND EVILS OF NATIONALISM

Nationalism has been credited with--or blamed for--making our world what it is today.  Indeed, the two most potent influences in modern history have been said to be industrialization and nationalism. 

Nationalism has been awarded the further distinction of being "the most emotionally powerful force in world politics." (Clark and Sohn, Introduction to World Peace through World Law).  And it has been criticized as being a force that "ties people to states...[instead of] international or global instutions."  It is the motive force behind the political aganda of just about every nation on earth; and it has been able to generate more allegiance among citizens than any other political concept to date.  It has been said to have often arisen out of hatred, on the part of a people for neighbors; and/or from envy, by less successful peoples, directed toward foreigners who remind them of their own inadequacies.  It has at times been perceived as a "new religion," by reason of its capability of fostering such strong feelings and sentimants; sentiments often culminating in people's willingness to sacrifice life and property on its behalf.

Nationalism divides people into a number of groups, or "nations."  A "nation," being a political term, is not the same as religious, or class, or linguistic identity.  There are of course numerous instances where people sharing a common religion, class status, or language, nevertheless belong to separate nation-states.  The citizens of a nation generally possess a sense of national identity, which springs from a self-perception of uniqueness within the community of man. 

Nationalism has been described as a combination of love for one's country together with suspicion of foreigners.  The love arises from familiarity with local surroundings, a sense of shared values, and an assumption of shared ancestry.  The suspicion results from a belief that the "foreigners" are "different," and thus do not share their values or lineage.  The citizens of each nation-state, and their leaders in particular, ordinarily favor their own interests, and those of their particular nation, over the interests of humanity or the world in general.

The principle of the "separate nation" arose in the early years of the sixteenth century among the people of what would be England; somewhat later among the French; but not until the early nineteenth century in Germany.  Today, it is a principle shared the world over. 



 

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL CURRENCY

As long as the elenents of our monetary system rest upon foundations governed by national political interests; and as long as there are disagreements among the major economic powers; the chances for the emergence of a stable and sensible international economic system are not very likely of accomplishment.  Disagreements among the economists entrusted with the tasks concerning the determination of exchange rates; coupled with the enormous degree of pure speculation indulged in by the private holders of vast amounts of financial assets; combine to create an illogical world economy that is creating wealth for a few, and spinning out of control for the rest of us.

Recent years have witnessed extreme fluctuations in currency values, together with giant imbalances between surplus and deficit countries.  Furthermore, we are told that currencies have at times been intentionally manipulated by national governments in order to give certain industries within that nation an advantage over their foreign competitors.  During these years, erratic swings have frequently occurred among the world's three major currencies:  the Dollar, the Euro, and the Yen.  Their comparative values have at times varied by as much as forty percent.  The consequent opportunities for profit that such unnatural conditions as these can create have caused ordinary building of income via simple industry, or earning of traditional interest income in traditional manners, to be viewed as too unrewarding, too slow, or just plain "boring."  These dangerous fluctuations and imbalances have consequently convinced a number of economics professionals to recommend the merging of our banking systems into a single world central bank, and the simultaneous establishment of a single world currency.

                                                                    * * * * *

Another consideration lies in the fact that the right of a nation-state to coin its own currency is a fundamental element of sovereignty.  It was, for example, set forth as an original precept in the United States' national constitution, as one of the basic rights of our federal government.  This traditional privilege leads to further reluctance on the part of national governments to cede control over the valuation of their currency to other entities or authorities; and contributes further to the economic hodgepodge that we see about us today.  Nevertheless, mankind must one day confront this confounded heap of monetary chaos, and take steps to restore order to our world's economy.

In a world without borders, there would be no "deficit countries" or "surplus countries."  Economies would not be contained within, nor defined by, geographic areas having separate national identities.  True, individuals persons, families, businesses, corporations, and other entities could and would continue to function below, within, or beyond their respective means; but this would not impinge upon the economic interests of their respective neighbors--nor of those who live many miles away, but who yet happen to live within the same nation-state. 

Distresses associated with devaluations or appreciations of currencies in regard to other currencies would no longer occur, because there would be but a single currency for all people in all places.  And, likely, the only complaints that would be heard would come from those former aforedescribed traders and speculators in currency, whose attempts to reap profit from these very defects of which I have been heretofore speaking will be no longer possible, and therefore but a scourge of the past.

How would conversion to a single world currency be executed?  It seems to require but a setting of a particular date (in the very recent past, as opposed to a future date--so as to avoid last-minute maneuvering by holders of different denominations in efforts to maximize the comparative values of their particulat currencies) as the date upon which whe values of all currencies would (have) become fixed and immutable.  (Perhaps said date would need to be somehow kept in secrecy--or unknown to all, via selection by a random instrumentality.)  Any "innocent" changes between said date and the said effective date would hopefully be insignificant.  Subsequently, all would be expected and required to exchange their respective currency holdings for the equivalent in new money.  Of course, as regards sums not actually held in physical possession--being most of the world's wealth anyway--the conversion would constitute a simple recalculation of the sums of all accounts from their respective former figures into the new universal denomination.  All forms of fluctuating value (.e.g., of stocks, bonds, interest, commodities, real estate values, etc.) could and would continue to so fluctuate as they had in the past; for these would be functions of ordinary non-political market conditions, and not a result of the aforedescribed political, economic, and/or currency-related divisions of our world.

(In regard to the above, it is respectfully suggested that:
1.  The aforesaid suggestions do not constitute a change in values of these various currencies from what they were on the day before the "changeover" date.  "Changeover" would simply amount to a conversion from what said value was on the day before--to its (same) value on said day of conversion, in the new universal currency.
2.  It would be hoped that skilled professionals in the fields of economics and currency management might come together and agree regarding a method for this--basically mechanical [significant though it be]--conversion procedure.

                                                              * * * * *
 

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL CURRENCY

As long as the present system persists, the economies of the world will be plagued by volatile exchange rates, and the consequent need for defensive measures such as trade protectionism that result therefrom.  These burdens have convinced a number of economists that return to a fixed rate system would be the best solution.  Even when the present system is functioning "properly," the fact that said system is but one more expression of our mixed up world of numerous nation-states is reflected in the circumstance that such "proper" functioning requires strong leadership by several economically and/or militarily powerful nations who desire, and therefore strive to maintain and preserve, the integrity of the system.  Parenthetically, such leadership generally results, as well, in the rules of the system being tilted advantageously toward the interests of these stronger leading nations.

"Seigniorage" is the term used to denote the privilege possessed by a particular nation as a result of its being in the position of providing the world's primary currency during that period.  Seigniorage is a key factor in the determination of economic freedoms as well as economic restraints among nations.  It is necessary for a nation having seigniorage (i.e., the nation whose currency is considered the world's key currency) to instill confidence in the rest of the world that it will not resort to inflationary policies in regard to its own economy--policies which would lead to devaluation of its own currency and its reserves thereof.  This position of seigniorage used to belong to the United States.  But, unfortunately, we have permitted the Dollar's position as the world's key currency to enable us to become the world's foremost debtor state.

As a nation, the United States has in fact lived excessively beyond its means.  A result has been the growth of its international debt to an astronomical One Trillion Dollars  (Its public debt has reached Fifteen Trillion Dollars).  A result has been a weakening of confidence in the Dollar as a reserve currency--which has led to a situation wherein the world's economic stage is no longer dominated by said Dollar; but has instead been shared of late with the Euro and the Yen.

Chins has in fact lately called for the creation of an international reserve currency, "anchored to a stable benchmark," and not connected in any way to economic conditions within, nor the national interests of, any single nation.  According to this proposal, such a currency would be expressed via "Special Drawing Rights" as issued by the International Monetary Fund.  The concept has met with suspicion in the United States, however, as a potential means for countries such as China to mainly improve their positions and consequent stability regarding their investments in items that are connected with the U.S. Dollar's status as a world reserve currency--such as U.S. Treasury Bonds.

The plain and simple rationale regarding this seems to lie in the fact that, just like it exists among people and families, so too are there countries that live beyond their means (and others that do so beneath their means).  When a country lives beyond its means, it becomes a "deficit country," and is said to be pursuing inflationary policy.  The medication for such a condition, as prescribed by economists, is currency devaluation, as well as a deflation of that nation's basic economy, or standard of living.  Such measures are called "adjustments."  They cause considerable economic pain to the residents of such places; as the reduction in income caused by the first remedy (devaluation), and the rise in unemployment brought about by the latter (deflation), take their toll.  These forms of remediation likewise impose terrible costs upon countries to whom monetary debt is owed by the aforesaid spendthrift nation--because the unpaid balance, defined in the newly established reduced monetary terms, has thereby become a debt of a relatively lesser sum.

Avoidance of economic pain likewise causes "surplus countries" (i.e., those that live within or below their means) to attempt to avoid the steps that would constitute "adjustment" on their own part.  Such opposite measures, such as currency appreciation, produce detriment to such nations' export industries--as the prices that their products will command abroad consequently drop.

It is the "deficit nations" that are thus traditionally expected to bear the pangs of adjustment.  For, since the problems implicit in such adjustments touch and affect the political interests of the particular nation-state involved, the adjustment mechanisms, or "medications," are frequently modified, or "tilted," in favor of the interests of the stronger leading nations as referred to earlier.

                                                                    * * * * *

 

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL CURRENCY

In a borderless world, there would be no "current account" or "capital account" as between countries, because there would be no countries to maintain such accounts.  Goods might continue to be produced in places and shipped to other places, at times quite distant, just like before; but there would be no need to "keep score" regrding relative amounts of shipments to and fro, or comparisons of quantities of assets from one place that are purchased by individuals or entities of other places. 

To restate an oft-cited theme of mine once again, it appears that if there were no myriad of separate nations--which would obviate the existence of a variety of separate national currencies--these difficulties and concerns would automatically evaporate.  Wages could become similar all over the world; and so too would costs and prices.  Similar to the reasonable bases for the few differences set forth by me in earlier posts regarding wages for the same occupation (such as scarcity of personnel, or more difficult working conditions in certain places), variations in cost and/or price would be based simply and primarily upon expenses connected with transportation of goods from the place of production to the place of sale; and possibly with storage at the aforesaid place of sale or consumption. 

The only group who might not favor such a simple, but seemingly ideal, solution are currency speculators--who seem, by their efforts, to add no value to the world or its economy; and in deriving profit from their activities, appear to thus detract therefrom.  Currency speculation has been described as actually nothing more than betting on exchange rate movements.  The existence of numerous countries, each with its own ever-varying exchange rates as regards the currencies of all the other countries, has caused our world to become a game-board for currency traders and international financial speculators.  The currency exchange market has become a financial trading institution of its own, frequently performing more markedly, and consequently more profitably for the winners within its arena than could be had from other forms of financial speculation.  Its players are described as incessantly monitoring Reuters and similar reporting agencies, so as to divine and respond to their fellow-traders' interpretations of the financial news there displayed.  In that these reporting services are primarily broadcast in English, their news is said to be overreflective of the American point of view.  When it becomes apparent that a currency devaluation is imminent, speculators crowd in, like fish in a feeding frenzy, to reap profits for themselves, but producing benefit to no one else.

A dramatic example of the harms thereby caused is demonstrated in occurrences such as those which took place in Southeast Asia during the late 1990s.  In that instance, excessive economic excitement in Thailand's stock and real estate markets caused a sudden surge of speculative funds into the country, creating what could only be described as a "bubble."  An abrupt panicky reversal in the flow of speculators' currency brought about the collapse of the Thai baht, and a consequent flight of capital out of Thailand, as well as most of the other newly emerging Southeast Asian markets.  The value of the currencies of Indonesia, Malaysia, South Korea, and Thailand were quickly deflated like so many punctured baloons.  This produced an economic crisis having a ripple errect throughout the world; and brought the entire planet to the brink of a collapse similar in gravity to that which took place in 1929.

In his Globalization and its Discontents, economist Joseph Stiglitz laments that if currency cpeculators only gained profit from each other, their activities would have no positive or negative effect upon the rest of the rest of the world.  However, problems for the rest of us do indeed arise:  for example, when governments, at times supported by such institutions as the International Monetary Fund, overexpend or squander, in efforts to maintain an unrealistically excessive exchange rate.  The profits therefrom go tto the speculators--while the losses that constitute the other side of this balance are borne by the "ordinary people." 

In any event, the paradigms and guidelines that influence currency exchange rates, and hence the choreography of the currency market, are said to be inexact at best; and possibly untrue at worst.  Their main purpose is said to be the provision of opportunities for currency dealers to "make money"--a desire which is described as seemingly endless.

                                                            * * * * *

Today's financial collapse is not connected to variations in the values of the world's various currencies.  But it can be attributed, at least in many aspects, to greed on the part of mortgage security traffickers, would-be real estate "flippers," and other unreasistic opportunists, who sought to create wealth via escalating value in ordinary assets and nebulous financial instrumentalities, without adding or otherwise contributing anything thereto, besides baseless hoopla and undue optimism.  Such attitudes and activities reflect one more instance of seeking financial advantage from nothing more than tomorrow's prices growing higher than today's due to no positive input by the hopeful beneficiary aside from theoretical recognition of a likely upward advance of present value--much akin to the traditional mindset of currency speculators.  In short, the chaos appears to be but another tragic consequence of reckless attempts by a few to make "something" out of "nothing."

                                                                   * * * * *



 

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL CURRENCY

Attempts to deal with faults in the international monetary system were undertaken in Europe commencing in the 1960s.  It was during this time that West Europeans began to consider a single currency for the continent.  By 1978, this had progressed to the formation of the European Economic Community; and the establishment of a European Monetary System.  The system promoted and maintained an arrangement of somewhat fixed exchange rates within the region, via an Exchange Rate Mechanism governing Western European currencies.  An official standard for European currency came into being, which led to the beginnings of currency stability across the continent.  One of the primary purposes or motivations behind this was protection of the continent from the effects of the wild swings that were befalling the American dollar during that period.
By the late '80s, pursuant to a plan propounded by French Finance Minister Jacques Delors, further steps were taken toward the establishment of a European monetary union and a common European currency.  And by 1991, the European community further cemented their common commitment to a unified monetary system by approval of the Maastricht Treaty.  This final step led the way to the birth of the Euro as the official currency of Euroland.

Among the benefits of such a unified system are an end to foreign exchange transactions--for no purpose other than profit; as well as monetary stability, which produces price stability, and is hence a defense against inflation.    The success and consequent expansion of this phenomenon within Europe is evidence that such a procedure could and should be replicated on a worldwide basis.

Today, unfortunately, some economic troubles have erupted in the Mediterranean nation-states, which seem to have resulted from varying degrees of excess and other profligacies regarding certain of their respective monetary and financial policies.  I attribute this to the fact that--while united under the aegis of a single currency, they remain separate and independent as regards their respective governments, and said governments' respective handling of national monetary policies.  Had the European Union adopted as well a form of unity regarding planning, determination, and direction of economic policy, concerning all of its membership, the application and utilization of this wise and practical currency system would have reaped benefit and improvement within all component nation-states--including those on the Mediterranean--instead of the disorder, protest, and desparate measures which have recently transpired.

                                                                * * * * *

PLEASE LEAVE A COMMENT--HERE--OR VIA E-MAIL AT oneworld@tampabay.rr.com

                                          

                                                         

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL CURRENCY

The monetary states of affairs that exist in many parts of today's world--being a major component of world affairs--are further cause for worry and concern.  One need not be an economics professional to conclude that profound problems concerning our world's financial system presently exist.  This is additionally borne out by the fact that, worldwide, a number of economic experts and officials have called for fundamental reform of our international monetary system.  Across the globe, we learn that economists are burdened with concerns about the status of their particular nation's current account and its capital account.

A nation's "current account" basically consists of a comparison of its imports to its exports of goods and services to other nations.  We hear this more commonly referred to as an expression of that nation's "balance of trade."  At the same time, that nation's "capital account" traces the status of the difference between foreign purchases of that particular nation's assets (such as realty, stocks, and bonds) as against that nation's own citizens' purchases of like assets of other nations.  When current account and/or capital account deficits occur (i.e., when the value of nation A's imports exceeds that of its exports; or when the purchases of foreign assets by the citizens of nation A exceed the value of purchases by foreign persons or entities of nation A's assets), there is worry and concern; and occasionally implementation of hostile or retaliatory demands or strategies.

These aforedescribed imbalances are sometimes made to happen, when nation-state A, seeking to move ahead commercially and industrially, begins to "flood" the rest of the world with its products; and simultaneously discourages or prevents the purchase by individuals and entities of its own nation from importing and purchasing products from many of the very countries that are the recipients of its strongly active marketing efforts.  (It is fair to state in addition that these imbalances can also be prompted by more innocent factors as a current trend in taste within nation B for the products of nation A; and/or the relative income levels within nations A and B.)

But a factor which has much greater influence upon the aforesaid balance of trade is the current "exchange rate" of a nation's currency against that of one or more of its trading partners.  When a country's currency appreciates (i.e., when it is valued at a higher rate as against the currencies of other nations than it used to be), that country's situation will usually follow a natural path which includes a greater quantity of imports, marked by a corresponding reduction in the amount or value of its exports.

The methods via which exchange rates are determined include:
a.  the Gold Standard, wherein all currencies are denominated in ounces of gold;
b.  "Pegged" Exchange Rates, wherein currencies are valued in regard to one another; and
c.  "Free-Floating" Exchange Rates, wherein the rate is determined by "market forces" (i.e., as in any other open market, by buyers and sellers of currency).
To avoid undesirable extreme fluctuations, the amount by which a currency value might vary (or "float") may be limited, or "managed."

Aristotle once asked, several thousand years ago:  How can one find the number of sandals equivalent to the value of someone's dinner?  The only feasible universal answer to such a question was devised by man via the development of a common denominator having the properties of a worldwide standard of value; in a word:  currency.

The world's economy is international in nature; and thereby rests upon an international monetary system.  The aforesaid common denominator that constitutes the "backbone" of this system used to be based upon the traditional acceptance of gold by most people in the world as a token of value.  Under the Gold Standard, One Thousand Dollars used to be able to be readily converted into "X" ounces of gold; which could, in turn, be readily converted into "Y" Francs, or "Z" Marks.  Until 1914, these relative values were all fixed and unchanging.  Exchange rates between the world's currencies remained stable; and countries' respective currencies did not "appreciate" or "fall."  British Pounds Sterling, French Francs, German Marks, and American Dollars thus maintained the same relative values, one as to the other, year in and year out.  Until then, currency was synonymous with the words "universal standard" regarding mankind's activities in business and trade.

However, shortly thereafter, and specifically during the years between World Wars I and II, most nation-states abandoned the Gold Standard, and took part in a devaluation of their currencies for the sake of advantage in international trade.  Controlling factors were abandoned; and currencies werer permitted to "float' in relation to each other.  The result has been a situation in which the myriad of currencies of our world are in a state of constantly fluctuating values in relation to one another.

As the currency of nation A appreciates in value as against that of nation B, imports into nation A from nation B--paid for with the now more valuable units of nation A's currency--thereby become cheaper--and, for this reason, more accessible to more of the people of nation A.  Imports into nation A of goods from nation B consequently increase.  At the same time, exports from nation A to nation B--priced by the exporters in the aforesaid more valuable units of currency of nation A--become more espensive to the pepople of nation B, and therefore less accessible to them.  Consequently as well, exports from nation A to nation B begin to decrease.  A solution that the exporters of nation A can resort to--in order to maintain the same export level, or quantity, as prior to the said appreciation--is to reduce the prices they set for their exported goods.  This, of course, is less than desirable to the manufacturers and/or sellers of such exported products. 

Such changes in exchange rates, or of the relative value of the currency of nation A as against that of nation B, also produce consequent effect upon the value of foreign investments.  The value of an investment belonging to an investor from nation A, in a stock or enterprise within nation B, becomes reduced, when an appreciation in the value of nation A's currency causes a consequent relative decline in the value of the currency of--and thus of the value of the investment within--nation B.

Appreciation in the value of the currency of a nation can result from the inflow of large quantities of foreign capital.  That is to say, a surge into nation A, of capital from investors within nation B, can cause the relative value of nation A's currency to rise, as against that of nation B.  This is a simple application of the concept of supply and demand.

Since there is no longer a system of fixed exchange rates in place concerning the numerous currencies of the world, our monetary system has thus become quite unstable.  Such instability serves to breed financial disturbances--which, in turn, cause disruptive impact upon the economic lives of individuals within various "nation As" as well as "nation Bs."

                                                          * * * * *

In 1944, as World War II was winding down, the brilliant cognizance of John Maynard Keynes led him to propose the creation of a single world currency (the "Bancor"), and an associated "International Clearing Union," for use in worldwide trade within the postwar economy.  But, like so many other logical and sensible suggestions, Keynes' concept was never implemented.

Following World War II, the famous Bretton Woods Conference sought to re-establish the equivalent of Gold Standard conditions, including fixed exchange rates, and ready convertibility of various currencies.  The International Monetary Fund (IMF) was established to thus fix and regulate said exchange rates.  Each nation-state who was a member of this consortium was permitted to modify its exchange rate only with IMF consent.  Moreover, a country could borrow from the IMF (whose resources consisted of funds furnished thereto by member nations in accordance with their relative wealth), where necessary, in order to compensate for a temporary trade imbalance. 

In the 1970s, this "Bretton Woods System" came to a halt, and currencies began to "float" against each other once more.  So too did the value of gold--which had once been the fixed standard against which all currency values rested.  Now, gold values began to "float" and to once again vary upward and downward from day to day.  Loans made by the International Monetary Fund to nation-states were employed to maintain sustainably high exchange rates for short periods.  During these intermezzos, wealthy natives and foreigners were able to transfer their private funds to other countries at favorable terms.  Subsequently, the exchange rate would inevitably tumble, leaving the local workers and taxpayers hard-pressed to repay their IMF creditors.

The within paragraphs obviously do not constitute the first suggestion that currency throughout the world ought be strictly and immutably coordinated.  A primary reason behind such suggestions consists of the fact that, under the present state of affairs, national monetary systems are subject to numerous opportunities for abuse of many sorts.

                                                                * * * * *

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL ECONOMY

In actuality, global collective action on the part of the various governments who are today working together via international institutions has already been identified as a reliable method of improving the world's economic status.  But even more benefit will be derived from a system tnhat is completely free of any and all positical influence as regards economic decision-makimng.

In a sense, the aforesaid can be referred to as "apples and oranges."  In our world today, political issues are the apples, and economic concerns the oranges.  Neither should be a part of, assist, or function as a detriment to, the other, if benefit to mankind is to be the ultimate objective.  Efforts have in the past been undertaken to promote international economic cooperation with a minimum of needless interference on a political level.  Institutions such as the General Agreement on Tariffs and Trade, International Monetary Fund, and the World Bank, are examples of entities founded to fulfill such functions.  To their favor, statistics can be cited such as the reduction in tariff levels from an average of forty percent to five percent between 1945 and the 1980s.  But further progress appears to be required--upon considering, for example, that the International Monetary Fund and World Bank are regarded in many places as mere instrumentalitiews of the United Stsates Treasury and Wall Street.

Conmingling of economics with politics can furthermore produce troublesome leagues of political entities that are joined together on account of a common economic attribute or interest.  A famous league of this nature is the Organization of Petroleum Exporting Countries (or "OPEC"), whose members are said to possess a major proportion of the world's oil reserves.  This organization consists of a number of nation-states, who are themselves separate and independent, and occasionally at odds with one another.  They have banded together for the primary purpose of using their common possession of a resource which happens to be presently needed by most of mankind, as a means of deriving defense against, and advantage in their dealings with, nation-states who do not have natural access to oil.  The result is frequently hostility, of the "us and them" variety--which is counter to a peacefully functioning world and a productive society.

If there were no separate nations, there would be no joining together of peoples on this basis.  There would be no sense of suspicion or hostility toward "outsider" nations; nor would there be a need to utilize the possession of a universally necessary resource as a means of maintaining mutual protection from nations vieweed as potential aggressors.  Instead, there would simply be areas of our earth where petroleum is plentiful--and areas where it is not.  Oil would no longer be a pawn in a chess game between nation-states--but rather a part of the global economy--fueled, governed, and regulated by a global investment regime.  Oil prices would be basically uniform worldwide--except for modifications based upon logistical costs, such as shipping from the places of production to the places of purchase, refinery, storage, consumption, and similar considerations.  There would be no nationally oriented industries or entities to protect--and no individual nation-states to ptrotect or favor them.

In my opinion, the economically needless constraints of national boundaries have actually become a hindrance to further economic progress.  Were there no borders, a single worldwide economy would promptly and fully emerge; and differences based upon national existence would fade.  The overall result would seem to likely consist of a worldwide set of basic costs, wages, and prices; with variations occasioned only by miscellaneous immutable factors such as heretofore set forth.  No longer would there be protests by American union workers over the loss of jobs to cheaper foreign labor--because wages would be uniformly appropriate both here and abroad.  And no longer would one set of wages for one sort of worker in a particular industry purchase more, or less, depending upon his or her location--because, subject only to the aforesaid (probably few and minor) miscellaneous considerations, costs and prices would become similar worldwide.  Moreover, it is poossible that even these variations--minor and short-lived as they would probably be--could be equalized for the time being via public funding.

I envision a world subject to but a single economic order, defined by a single currency, free of tariffs and international regulations, governed by a single set of laws and rules pertaining to industry, commerce, labor, and the marketplace, and regulated by a global central bank.  In such an atmosphere, economic conditions would become equalized everywhere; and economically advantaged and disadvantaged persons, places, and things would naturally come to arrive at a single universally satisfactory level.

It is assumed that there would be need for a single worldwide regulatory and monitoring agency, whose function would be to promote and preserve this single worldwide economic order.  But that is all that would be required in such an era of universal economy.

Such a worldwide economy would obviously intrude upon concepts such as sovereignty and national autonomy.  It would intrude upon what are until now known and referred to as "domestic economic and political affairs."  For this reason it is apparent that a single worldwide economy would more logically exist--in fact, could probably only exist--in a world governed by a single world governing body.  It is predicted that such a new world order would thereupon naturally foster global prosperity as well as world peace.

                                                                  * * * * *

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL ECONOMY

Economic considerations have also been the motivation behind international migration for many centuries as well.  A flow of undocumented migrants usually results from and denotes a state of economic disparity between the sending and receiving countries.  However, today, another form of movement, similar in nature, but legally proper, is also taking place on a widespread basis.  This movement constitutes the flow of goods from countries where wages are lower and production costs consequently cheaper, to countries where the product is destined to be ultimately marketed or utilized, at a more favorable economic return.  This latter form of movement constitutes one aspect of that which is referred to above as "outsourcing."  Another form of outsourcing comprises the practice wherein companies in countries where wages are relatively higher transfer a number of "back office" functions, such as accounting and customer relations, to employees halfway across the world who command wages that are a fraction of those in the originating country.

Many in the United States and Europe also presently blame competition from undocumented migrants working within their countries for more scarcity of domestic jobs, lower wages for said jobs, as well as various other economic and social ills.  But the true solution to many of these problems appears to likewise prospectively lie in the establishment of a single worldwide economy.  For in a borderless world, having a single currency, a single worldwide pricing system, and a consequent worldwide system for a natural determination of wages for the various professions, trades, and other employments for which wages are normally the form of recompense, there would be no further need for outsourcing, nor for migrants illegally crossing borders.  There would, first of all, be no borders for a person in search of employment to cross.  Moreover, he or she would not need to travel far from home for the purpose of earning higher wages for the same work, because a single worldwide economy would naturally dictate, and/or result in, a more or less single worldwide rate of pay for his or her job title.

Of course wages, like prices, would vary somewhat due to logistical and other such considerations, such as unavoidable travel requirements, or premiums demanded in place A by people in place B due to the scarcity of their particular services in place A.  But it is expected that, re most forms of employment, a natural "filling in" would eventually take place, causing travel as well as scarcity to become a thing of the past.  Moreover, it would not be worthwhile, nor in fact necessary, for a company in place A to have its products made in place B in order to trim costs--because the cost of materials, as well as wages, would be basically the same in both places.  (Of course, in this regard as well, scarcity of something in place A would require transportation of it from place B, and thus justify an addition to its cost in place A.

                                                            * * * * *

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL ECONOMY

The birth of a global marketplace has led to the emergence of that which is now termed the "multinational" company.  Such companies are capable of, and by now usually obligated to, obtain their materials in one place, produce their goods somewhere else, and sell their products in a market consisting of a third group of places, all for the sake of financial advantage.  These circumstances have simultaneously created and resulted in an extremely competitive marketplace, wherein the outsourcing referred to in the words "producing goods somewhere else" has become essential to many producers in their efforts to remain in business. 

Globalization has been additionally promoted by the fact that, in many industries, the scale of technology has today grown to the point that research and development of new products requires so great an amount of resources that it is necessary for a group of firms within an industry to join together to conduct it.  Furthermore, once so developed, it is necessary to market the resultant product in a worldwide marketplace in order to recover the enormous costs that were involved in their creation. 

Many, if not most, economists, businessmen, and political leaders, recognizing the desirability and inevitability of a worldwide marketplace, now favor a "free market"; that is, a world economy, devoid of strict regulation.  However, opposition, sometimes fierce, continues to rage, waged by organized labor, companies who have declined in the wake of imports and outsourcing by competitors, and plain simple "economic nationalists."  And as long as our economic world is divided into non-corresponding political entities, each with its own separate economic policies, trade restrictions, and currencies, such opposition will continue to attract support.  This is partly due to the fact that political divisions give rise to the existence of more advantageous conditions in some places, and correspondingly less advantageous circumstances in others--which in turn causes the "haves" to wish to bar and exclude the "have nots"; and the "have nots" to cast blame for all of their troubles upon the "haves."

                                                                   * * * * *

The term "global economy" was first heard with some frequency during the 1960s; and has been repeated increasingly ever since.  The concept of the multinational corporation also began to be referred to during this period.  At this time, many of these were American corporations, who built factories abroad for the purpose of taking advantage of the lower labor costs that existed in these foreign places.  This trend was further reinforced for companies of numerous nations by the fact that physical distance was no longer a major consideration in calculation of the costs of commerce, in that the cost of moving products around the world had become a lessor factor in their merchandising equations (but note that our current energy difficulties have cast a different light upon this concept). 

Subsequently, investment of American money in foreign countries became increasingly commonplace.  For example, by 1995, close to ten percent of U.S. pension funds were invested in Asian enterprise.  Lower interest rates in nation A will often be a cause for investors in that country to send their capital abroad, where the likelihood of more lucrative returns happen at the moment to be available.  Furthermore, the present state of information technology, and its accompanying capabilities, has led to a vastly shrunken and modified economic world.  It has been agreed by most economists that such foreign investment activity is an absolute benefit to the world economy in general.

Today, capital can be instantaneously shifted to anyplace on earth with the stroke of a computer key.  Companies can act and react in response to conditions and changes in the marketplace moments after they occur.  And consumers as well today become quickly aware of products, services, trends, and prices as they emerge; being thereby motivated and enabled to demand immediate gratification of their needs and desires.

As a result of all of this, that which has been referred to as "economic nationalism" has become less and less a force in worldwide commercial affairs.  On the other hand, our economic world is today experiencing an era of increasing regionalization.  Kenicki Ohmae refers to such emerging economically linked regionhs as "region states."  He describes these places as being truly "global" in orientation and outlook, welcoming foreign investment, foreign ownership, and foreign products; and maintaining as a criterion only a desire for "the best and cheapest products from anywhere in the world." (K. Ohmae, The End of the Nation State)

Commercial enterprises no longer look so much upon specific countries as places toward which to direct their marketing efforts; but, rather, to regions, which might consist of part of a nation-state, all of a nation-state, or an area consisting of all and/or parts of a number of such nation-states.

The United States has been aptly described as an early example of progress by a group of somewhat separate state economies into an integrated economy under the aegis of a federal government.  This arrangement gave rise to the eventual establishment of various federal regulatory agencies, such as the Securities Exchange Commission, Federal Communications Commission, and Federal Reserve Bank.  It is expected that the development of a single world economy would proceed along, and has in fact been following, such a track to a certain extent--as a number of semiautonomous national economies are progressing into membership in groups of more integrated regional economies.

However, opinions have varied over whether regional economies constitute "stepping stones" toward, or "stumbling blocks" along the path to, an all-inclusive world economy.  For groupings of national economies into separate regional arrangements--such as the European Union and NAFTA--could encourage individual group identities on the part of the membership of each group; and thus comprise a setback in the world's progress toward a true global economy.  Furthermore, developing countries who are not members of one or another of these regional groups would be left out altogether; and thereby encounter delay in, or even cessation of, their own economic development.  Moreover, individual regional entities could become as hostile to global free trade as any nation-state has ever been--possibly even more so.  In addition, establishment and maintenance of a regionalized economic world could lead as well to a situation wherein the world will have assumed an arrangement into several regional political entities.  (Witness, for example, the plight of the imagined future world consisting of three ever-hostile, ever-battling, political entities as portrayed in George Orwell's 1984.)  Such might turn out to be as undesirable as, or perhaps even more so than, the current nation-state condition that prevails in our political world today.

Another detrimental result of unequal economic relations among nation-states is resort by some of the less advantaged to attempts to "catch up," via overly rapid or improper depletion of their natural resources, as well as other ecological abuses.  One example is the imprudent rate of deforestation that currently takes place among some of the developing countries, in efforts to export timber faster, or create more agricultural land, than regeneration could ever keep pace with.  A second is the excessive pollution created when factories in rapidly developing economies--such as what is today taking place in China, India, and Southeast Asia in general--pay scant heed to the ecological damage attributable to their operations.  A worldwide economy, governed by worldwide regulation, would regard natural resources as existing for the benefit of the world.  Consequently, no single country would be there to recklessly deplete its particular supplies thereof in efforts to "catch up to," or "keep up with," other nations' economies.  The net result would instead be a more efficient and productive utilization of our planet's natural assets; and a consequent economic advantage to all of the world.

                                                            * * * * *

RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL ECONOMY

There was a time, many years ago, before the existence of political boundaries and the burdens they impose, when people traded amongst themselves freely and without concern.  Linked by ties of social and geographic proximity, but not yet encumbered by political and economic hobbles, they regularly exchanged the products of their hunting, fishing, and agriculture.  This elementary commerce transpired freely and easily; and problems were few and inconsequential.

Centuries later, mankind's economic picture has become far more complicated; and a great deal more troubled and troublesome.  With the development of our world into a chessboard of nations, struggling within ourselves as well as with each other, for various objectives, not the least of which being commercial superiority, we have spawned, and have had to endure, perpetual economic struggle, punctuated by occasional economic disaster.

It has been wisely commented that in many of man's affairs, first steps are often motivated by economic considerations.  Thus, the great French economist Jean Monnet was seemingly correct in his observation that mankind's earliest steps to political unity would likely be traceable along economic lines.

In the more recent past, huge economic crises usually took place in the wake of waves of inappropriate economic restrictions on the part of various nation-states.  A primary example would be the condition of economic affairs following World War I.  Large older countries strove to repair their damaged economies via excessive tariffs and exchange rates; while newer recently created states resorted to the same methods in efforts to protect their infant economies.  At that time, the pure and simple basic problem lay in the fact that our world consisted of a large group of individual national economies, each possessing very different economic concepts, together with a wide variety of structures to implement them. 

New York Times columnist Thomas L. Friedman has correctly designated such singular economic activity on the part of various individual countries as an example of "cheap nationalism."  He goes on to condemn such "jingoistic celebration of nationhood" as comprising mere "emotion-grabbing symbols," having little potential for "real, concrete improvements in quality of life."  (The Lexus and the Olive Tree)  Industries within individual nation-states which were experiencing difficulties have often turned, and still do turn, to their national governments for assistance.  When rendered, this help is usually int the form of subsidies and protection.  These forms of ostensible assistance have actually done little good for the producer or the consumer; for they create little or no incentive for real improvement or meaningful change.  In fact, a recent study has revealed that government protection of its domestic markets can actually constitute a serious cause of increasing levels of unemployment--for it serves to reduce, rather than expand, that nation's commerce and trade. 

In more recent years, our world, still consisting of dozens of individual national economies, has come to be subject to, and governed by, forces that are worldwide in nature.  We are reminded of the presence of the current crowd of "faceless stock, bond, and currency traders, sitting behind computer screens all over the globe," (Thomas L. Friedman, op. cit.) constantly transferring their funds from place to place; as well as the many multinational corporations, who regularly open and close factories around the globe, in perpetual pursuit of lower costs and more lucrative markets.  These elements are, in reality, replacing national governments as primary sources of capital and growth.  Another phenomenon of late has been the emergence in many parts of the world of a breed of "merger and acquisition" experts, whose activities result in no improvement to products or services, but are, rather, solely consecrated to the creation of additional personal wealth, for themselves or those for whom they are acting.

The nature of contemporary commercial practices has in fact evolved to a point where national labels are less important, and therefore hardly necessary.  For example, what is the national pedigree of a product turned out in nation A, when most of its component parts have been obtained or produced in nations B, C, and D? 

Reflecting another current trend, economic focus in many parts of  our world has shifted away from agriculture.  Countries with mature economies have moved into the service sector; while a number of developing countries have turned to manufacturing as their principal economic activity.

Further, "horizontal linkages" among people from the same generations across the globe exert stronger economic forces than do traditional, vertical linkages between mixed generations living within a particular locale.  A world-famous brand of jeans or sneakers will thus likely be similarly in the shopping plans of persons of the same age and socioeconomic strata throughout the world.

As economic globalization continues to march forward, national economic systems are becoming more and more similar.  At the same time, as a result of this, the marketplace has become elevated to a rank in the minds of most of us that is higher in importance than our consideration of the concept of the nation-state.  Whether we realize it or not, this recent supremacy of the market over the state, and of economics over politics, has been responsible for the nonoccurrence of a number of political struggles that, in earlier days, could have led to warfare.

The marketplace today is thus becoming more and more a single global market.  Financial successes have been achieved by investment in global stock and bond markets, by companies setting up shop in various countries, and by sale of the goods produced by such companies in a worldwide trading system. 

THE DISADVANTAGES OF NATIONAL TRADE BARRIERS AND RESTRICTIONS

In Japan, a shortage of raw materials, combined with a highly skilled work force and a large amount of capital, created an economy that currently produces and exports many automobiles and electronic goods, while importing comparatively little.  But this state of affairs has nothing to do with the fact that Japan is a separate nation, directed by its own individual government.  Nor should its status and existence as a separate sovereign nation-state be given the credit for Japan's having entertained a trade/payment surplus, or having become an economic competitor with a number of other nation-states, including the United States, during recent years.  That is to say, it is the underlying nature of the people and of the place--not the government or its politics--that created the economic conditions that have come to exist there.

Likewise, cheap exports from China, which have been blamed for having caused unemployment in a number of other countries, are again in no way related to the fact that China happens to be an independent nation-state.  They are instead a consequence of the fact that this region of the world happens to contain an exceedingly great number of people, who comprise a surplus of labor.  This oversuppoy of available workers, coupled with the fact that most of them are unable to escape to other places in order to seek more lucrative conditions, results in pitifully low wages, correspondingly low production costs, and resultant low prices.

                                                              * * * * *

It is, of course, quite easy to realize that a world composed of a large group of nation-states constitutes an antithesis to free trade.  Where nation-states are involved, economic policies are frequently wasteful, inefficient, and fashioned mainly for the purpose of producing an illusion of control.  It is simple for such economic policies to readily become oriented toward the welfare of bureaucrats and special interests within a particular nation, often resulting in needless subsidy and protection.  Decisions favoring the general community, or logical from a global standpoint, are consequently seldom arrived at.  And the final results are tariffs, quotas, and export subsidies, that result in higher prices and more limited consumer choices for the people who live in the very nation wherein such policies are originated.

Even more painful is the effect that protectionism on the part of major industrial countries inflicts upon people in other, developing, parts of the world.  For example, in parts of Africa and Latin America, purchase of as humble, but necessary, an item as a bicycle may require several months' wages, due at least in part to exceedingly high import tariffs in place upon their components.

On the other hand, as if to pour salt into the wound, vested interests in some industrial countries may pretend to assist developing areas by convincing them to open their markets to said industrial nation's products--while continuing to keep their own markets protected via high tariffs.  Under this arrangement, the rich get richer, and the poor more impoverished.

                                                                  * * * * *

As long ago as the latter part of the eighteenth century, the rationalist theory of society emerged in Europe.  Recognizing institutions such as monarchy, the class system, and the established church to be merely results of force of habit and the self-interest of certain groups, thinkers concluded that in commerce, clear and simple business sense and accounting would provide a better way.  It was concluded that free trade and a single tax would be the best road that the ongoing expansion of the world of business should be made to follow.  It came to be realized that taxing successive  steps in the import, manufacture, and export of goods constituted an impediment to the natural flow of the world's products.  Such a system of export bounties and import duties, labeled the "mercantalist system," was condemned as an evil "born of the needs of war and the selfishness of merchant groups," and as comprising a hindrance to peace and wise government.  Moreover, it was simple to perceive that such encumbrances raised prices and diminished the purchasing power and prosperity of all.  However, not much was actually done about it.

Proceeding forward to the present day, the traditional nation-state has continued to be criticized as "unnatural," and even "impossible," as a business unit component or regulator within our twenty-first century global economy.  In today's global market, the hulk that is the nation-state seems to "merely get in the way."  Solutions to economic issues are said to flow naturally to beneficial conclusion without the intervention of nationsal governments; and their "traditional middleman function" is described as largely unnecessary.  In fact, undue attempts on the part of the governments of nations to demand from, or dictate to, the participants in today's global capital markets only induce diversion of the flow of capital to other places--resulting in unfavorable outcomes, such as an impairment of the national currency, and shortages of investment funds, within those countries. (Kenicki Ohmae, The End of the Nation-State)

Most economists agree that free trade is superior to any and all forms of trade restriction or protection; and that if protectionism were abandoned or reversed, benefit to all the world would ensue.  In fact, the foregoing is described as one of the few tenets that virtually all economists agree on.

In a single united world, we would hear no terms such as "production surpluses" or "trade deficits" among nations.  For there would be no nations--only regions of our world, which would produce or manufacture more, or less, than other regions. This would precipitate no specific economic effect upon the residents of that, or any other, particular area.  Instead, an "averaged" effect would ensue, regarding the totality of a single world economy.  Negative effects, if any, would be milder when considered within the context of the entire world; and be more easily remedied or corrected, if worldwide conditions and resources were applied to their relief.

                                                          * * * * *

PLEASE LEAVE A COMMENT--HERE--OR VIA E-NAIL, TO oneworld@tampabay.rr.com

THE DISADVANTAGES OF NATIONAL TRADE BARRIERS AND RESTRICTIONS

Modern economic theory, which came to include the custom of regulation of trade between countries, via tariffs and outright trade barriers, happened to be born at approximately the same time as the actual development of the nation-state as a political entity.  This accidental combination of events went on to evolve into an arrangement that is today taken for granted by mankind: that the government of a nation constitutes the primary organizational form, as well as managing entity, of economic affairs within the state.  Such a right originates from, and is mainly based upon, the fact that the national government possesses control of that nation's military resources; and can thus enforce such economic controls as it should deem meet to immpose upon its citizens, and its trading partners as well.

But there is in fact no logical purpose in each of a hundred separate nations protecting the producers and manufacturers within each of its respective borders from competition by producers and manufacturers within the other ninety-nine--whose governments are performing the same operations as regards their own producers and manufacturers, concerning the potential competition that they might face from the other ninety-nine.  As a result, instead of a worldwide venue for all producers and manufacturers to market their goods, and from which all the world's people might obtain their requirements on an equal basis, we are divided into a hundred separate enclaves, within which only the products and goods of that particular place are freely purchased and sold.  Beyond these border lines, a producer's products and a manufacturer's goods must navigate a morass of ninety-nine different sets of regulation and restriction, which, at the end of the day, bestow no benefit upon buyer or seller.  (I do not here refer to restrictions or regulations as to safety, health hazards, or the like.  I would, in fact, desire to see a single universal set of safety and health-related requirements of the highest caliber imposed upon all products and goods that are cultivated or manufactured, be they utilized or sold locally or across the globe.)

                                                                      * * * * *

Variouys attempts have been undertaken on an international level to rectify this situation; which seems to corroborate the allegation that it does constitute a condition in need of correction.

In the 1860s, prompted by efforts originated by Napoleon III, it appeared that a new era of freedom of trade might be dawning upon Europe.  Unfortunately, opposition by certain industrialists, and subsequent government distractions concerning warfare, caused an early demise to this new and hopeful trend. 

In 1913, American President Woodrow Wilson attempted to ameliorate America's economic plight by reducing tariffs via the Underwood-Simmons Tariff Act.  Quite simply, reduction of our tariffs would serve to reduce the price of goods for the American consumer, in that foreign producers would not need to add a high tariff premium to their products.  At the same time, American producers would be obliged to reduce the prices they charged in order to compete with their foreign competitors.  It was apparently another good idea by this great visionary; but subsequent events reduced its necessity.  The outbreak of World War I not long thereafter caused American products to become widely demanded throughout the world for a time, and the protectionism afforded by tariffs was no  longer a major concern.  Moreover, America's institution of the federal income tax, via the Sixteenth Amendment in 1913, shifted the nation's primary source of income from tariffs to said tax revenues.

Following World War II, multilateral negotiations were undertaken in efforts to liberate the world from import constraints and other economic barriers.  A result was the International Trade Organization, a "compromise agreement" between American and British negotiators at the Bretton Woods conferences.  By 1950, the United States Senate would disapprove its proposed charter.

In the interim, however, during October of 1947, the General Agreement on Tariffs and Trade ("GATT") was signed by the U.S. and a number of its trading partners, in new efforts to promote "freer and fairer" trade, mainly via reduction in tariffs.  Article XXIV of this Agreement, comprising rules governing regional trading arrangements, provides that:
a.  barriers to trade among participants must be completely eliminated regarding substantially all aspects of trade among signers of the Agreement; and
b.  there shall be no increase in duties or other commercial regulations levied upon imports from non-member countries.

Between 1960 and 1989, international trade grew by leaps and bounds.  This was an effect of an increase in incomes throughout the world, as well as numerous technological advances.  But the division of our planet into an array of separate nations, each with its own economy and economic difficulties, resulted in various setbacks referred to by such negative terms as "trade deficit" and "falling currency."  An extreme example of this was the plunge on Wall Street that occurred in October of 1987.  Described as a day "far worse than 1929," its causes were attributed to factors which included the aforementioned terms: "trade deficits...[and] the falling dollar." (Clifton Daniel, Ed. in Chief, Chronicle of the 20th Century) 

In the late 1980s, as expanded world trade produced a more and more interdependent world, the need for freedom in the marketplace made itself ever more apparent.  British Prime Minister Margaret Thatcher expressed the belief that the unhindered flow of world trade would serve as a guarantee of prosperity.  By 1988, the United States and Canada had signed a Free Trade Agreement, designed to end all trade barriers between the two countries by the year 2000.  And in 1992, a pact of a similar nature was entered by the U.S., Canada and Mexico.

Subsequently, following negotiations begun in 1986, called the "Uruguay Round" of the continuing GATT conferences, and upon final accord at Marrakesh, Morocco, in 1994, the World Trade Organization came into existence.  It has been described as an intended "meeting place where willing nations could sit in equality and negotiate rules of trade for their mutual advantage, in the service of sustainable international development." (New York Times Magazine, Aug. 12, 2002)  Instead, however, the organization has been accused by its critics as having become an unbalanced institution, largely controlled by the United States and the nations of Europe, and especially the agribusiness, pharmaceutical, and financial servicxes industries in those countries.

The European Union constitutes another attempt by a number of nations to open themselves to each other in ways which include economics and trade.  (I will attempt to describe it in some detail in a later post.)

                                                              * * * *

PLEASE LEAVE A COMMENT--HERE--OR VIA E-MAIL, AT oneworld@tampabay.rr.com

THE DISADVANTAGES OF NATIONAL TRADE BARRIERS AND RESTRICTIONS

It appears that a worldwide, borderless, capitalist economy, wherein trade, investment, and other commercial activity are able to function unfettered by national borders, would produce benefit to all of mankind.

The world, as we now know it, is a world of borders; and furthermore, by reason thereof, a world of barriers.  We are not only separated and bound by political boundaries; we are also divided by economic "femces," that needlessly separate us, and hinder our progress.

It is a recently oft-cited fact that the twenty-first century is a period during which many economic decisions are founded upon global bases.  Capital markets have become worldwide; and investments flow to the regions that are "transparent" (i.e., open) to the international financial commumnity.

The "wealth-gathering" regions of our world are not neatly confined within certain politically defined boundaries.  They exist because they happen to be "wealth-gathering" by their nature, composition, resources, and personality.  Therefore, they lie at times within, and sometimes across, national boundaries.  Conversely, the typical nation-state is far from uniform in its characteristics and composition.  It is frequently a combination of a number of different regions, having vastly different resources, capabilities, and requirements.

In order to thrive to their fullest, these regions need to possess autonomy to function without the stricture of political constraints.  Such constraints usually take the form of unnecessary or redundant governmental regulation, control, and protectionist imposts.  In fact, for this reason, the knowledge-intensive pioneer companies that are today springing up in our modern world are gravitating toward friendlier environs, as regards regulation, such as offered by countries like Malaysia and Singapore.

In a nutshell, protectionism, and the regulations and prohibitions that it gives rise to, are hostile toward, and destructive of, a global atmosphere, within which the entire world may derive benefit from the fruits that are the product of the ingenuity and accomplishments of all of mankind.

It is strange but apparently true that once the government of a place opens itself up to the global system and sheds needless protectionism, prosperity seems to magically follow.  It is for this reason that globalization has apparently significantly raised standards of living across the globe, in countries from China, Korea, and Malaysia to Argentina and Brazil.

There was a time when production, purchase, and sale of consumer goods were principally carried on "at home"  that is, within a local region.  But, as can be readily recognized, that has all changed; and a sizeable portion of the economies of the United States and most other nations depends upon trade.  For example, foreign trade represented only thirteen percent of the United States' gross domestic product in 1970; but, by the turn of the twenty-first century, it had risen to about thirty percent.

The fact that trade-flows in today's world continue to be determined by, and continue to be a function of, national boundaries constitutes a defect within, and an impediment to, the world's economic well-being.  Trade and economics ought not be--althoughthey continue to be--regarded as spheres and exponents of respective nations' foreign policy.  A result, as well as a proof, of this lies in the fact that, today, disputes over trade barriers are the subject of more international concern than are the many and strenuous disputes over border lines.

As a primary principle, it should be realized that the success of an industry in a particular region is not determineed by the political boundaries within which said industry, or region, happens to be contained.  Rather, it is a result of the resources within that industry or region, and the efforts and activities of certain individuals or groups of people who constitute or populate it.  As Kenichi Ohmae, a well-known and knowledgeable author of numerous works on business and finance, characterizes it in his The End of the Nation-State, "economic activity in today's borderless world follows ...information-driven efforts to participate in the global economy." 

Thus, excellence of an industry, or a group of people within a certain place, should not be able to be resorted to as a sword or a shield in international affairs--to the detrimant of the industries and/or the consumers who depend upon them.

                                                             * * * * *

PLEASE LEAVE A COMMENT--HERE, OR VIA E-MAIL, AT oneworld@tampabay.rr.com

THE DISADVANTAGES OF POLITICAL BOUNDARIES

Jesus' teachings regarded the state as something to be tolerated and obeyed as necessary--but subject, nevertheless, to the universal rule of one God over all people and every state.  And He was eventually executed for agitation and sedition--both crimes against the Roman state, to which His civil--though not His spiritual--loyalty was due.

In his City of God, St. Augustine affirmed (somewhat in keeping with what I have been stating in recent posts) that the earthly city constituted but a painful monument to mankind's fall from grace.  That is to say, the division of man into separate groups or tribes, divided by self-identity, and ever-seeking to preserve and expand their proclaimed boundaries, seemed but another burden that enlightened man bears the task of overcoming.

Disputes concerning boundary lines go back to ancient times; and thus appear to betray the primitive and backward "tribal mindset" from whence they originate.  Barbarian rulers often quarreled over lands touched by their common bounds.  Subsequently, the principle of boundary, and of territory within such being controlled by particular persons and groups, evolved into what would become known as "sovereignty."

We have become so long accustomed to the terms "sovereign" and "sovereignty," and to the ideals which they convey, that we take the concept not only for granted, but consider it a fundamental ingredient of life in the civilized world.  It is a consideration, sometimes guiding, more often binding, in every aspect of diplomacy, public policy, and ethics.

A perpetual danger and potential abuse inplicit in every instance of sovereignty is the theoretical capability of the "sovereign" ruling power to coerce and to abuse its population without fear of outside interference.  Indeed, many wrongs have been committed within nation-states by the governing power upon its people, via resort to the justification of exercise of sovereign right.  These often go unchallenged by the rest of the world, based upon the concept that they constitute exercise of attendance to that nation's private affairs.  But, if the acts of a world government are by their nature viewed upon a worldwide stage, and thereby always evaluated against the measuring rod of universal objective principles of civilized human right, such wrongful acts could never be sanctioned, and therefore ought not occur.

                                                           * * * * *

PLEASE LEAVE A COMMENT--HERE,
OR VIA E-MAIL TO;  oneworld@tampabay.rr.com

THE DISADVANTAGES OF POLITICAL BOUNDARIES

It is my purpose to offer a vision of what our world could become if the residents of nation-states chose to abandon the senseless factional considerations that have driven human against human for generations, mainly on the basis of which side of a line they happen to have been born.  It is a vision of an improved state of society, in which the absence of borders would promote working together to solve common problems--instead of endless generation of new and additional problems caused by this factional conflict and hostility.

History and headlines daily present us with a vast array of happenings and circumstances--some grave, and some downright amusing--which are attributable to the fact that our world is encumbered by borders and separate nations.  In this regard, it can be interesting to consider a random few among thousands of such situations, for the purpose of conjecturing what would not happen should our planet become a world without borders:

In a world without borders, nation A, formerly allied with nations B and C in the prosecution of a war against D through J, would not, once an armistice had been reached, turn around and declare war on nations B and C--as Italy did to its former allies Germany and Japan in 1943 and 1945, respectively.

In a world without borders, nations A and B would not commence occupancy of smaller, more defenseless, countries C and D, staying until they were directed to withdraw their troops by an international body--as was the case when Britain and France commenced occupancy of Lebanon and Syria, until directed to withdraw by the United Nations in 1946.

In a world without borders, nation A would not warn nation B that it risked "all-out war" if it attacked nation C--as Egypt warned Israel, regarding a perceived intent on the part of Israel to attack Syria in 1967.

In a world without borders, ninety two people would not be sentenced to death for treason against their nation--as occurred in 1971.

In a world without borders, agencies of national governments wouldnot need to resort to assassinations in order to accomplish their missions--as a congressional investigation into the United States' own Central Intelligence Agency determined in 1975.

In a world without borders, nation A would not resort to selling arms to nation B, as a "rebuff" to nation C--as was our sale of arms to China in 1980, described in the media as a "rebuff to the Soviet Union."

In a world without bgorders, a general of the army of nation Awould not be sentenced to twelve years imprisonment for "mismanagement" of a war waged by nation A against nation B, over a few tiny islands in the vicinity of nation A--which were claimed to be "owned" by nation B--as happened during the invasion that Argentina undertook against Great Britain over the Falklands and South Georgia in 1982.

In a world without borders, nation A would not need to expel three envoys of nation B, in retaliation for nation B's recent expulsion of theirs--which exchange occurred between Great Britain and Syria in 1986.

And in a world without borders, nations A, B, and C would not refuse to recognize nation D's right to exist--as is the case concerning a number of Arab states' continuing position regarding Israel to this day.

                                                                 * * * * *

If there were no borders, nations would not dominate, annex, attack, wage war against, nor conquer, other nations.  Nations would not seek to expand their respective national territories by taking territory away from other, perhaps smaller or weaker, nations, by means of threat or invasion, as has been customary throughout history.  There would be no larger or stronger nations; nor would there be smaller or weaker nations.  And larger or stronger nations would not fight over, negotiate concerning, grant or disapprove among themselves "spheres of influence," or dominance over, smaller or weaker nations.  There would be no riots, insurgencies, or other acts of violence within the cities and villages of certain nations, in attempts by indigenous peoples to rid themselves of the presence of occupying troops of foreign nations.

Nsation would not take sides in favor of or against other nations.  A nation would not have to resort to threatening a second nation in order to convince that second nation to refrain from attacking a third nation who happened to be a neighbor or ally of that first nation.

Nations would not be able to adopt an official religion, such as Catholicism or Islam; nor an official economic system, such as communism.  And nations would not need to resort to military action on account of threats of infiltration by their neighbor's doctrines across their borders. 

Regions would not be carved up into new national entities following wars or conferences, with little or no regard for the composition of the peoples living within these places.  People related by blood or culture would no longer be rendered "citizens" of one or another among two and even threenations--and thus need passports in order to "go home for the holidays."

                                                                     * * * * *