How Best To Ensure US-Style Global Capitalism

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Table of Contents

Introduction
Economic Perspective
Ethical and Political Perspective
Environmental Problems
The Protection of Human Rights
Alter-globalization
Application of the argument: The World Economic Crisis
Conclusion
Bibliography

Introduction

This research work aims to analyze the peculiarities of global capitalism and the impact that the United States has on other nations. In particular, it is necessary to discuss possible strategies ensuring US style global capitalism. Overall, we may single out several aspects, namely economic, ethical and political. According to rather conventional and obsolete wisdom, these concepts have no connection with each other; some politicians claim that the promotion of the state’s interests belongs entirely to the domain of finance and economics whereas moral perspective is hardly relevant to this issue. As a result, foreign policy of the US has experienced so many downfalls. At this moment, our government is involved only with one facet of this task; they act on the principle “the end justifies the means”; subsequently, other counties resist to American influence, considering our country an empire, attempting to absorb the rest of the world. Thus, it is necessary to change the international image of the United States.

The first question we need to answer is whether American style of global capitalism is morally permissible at all. Does the United States have right to impose its standards on other nations? In this regard, we may argue that everything depends upon the methods the government would employ. The thing is that at the present moment, the America is struggling to thrust its principles on other countries, which increases the tension between them. It seems that there are some other means of promoting the country’s interests; the special emphasis should be paid to persuasion but not to compulsion as it is often done now.

In order to organize the process of globalization and capitalization in accordance with the US policy, it is of crucial importance to surmount the obstacles, which arouse during its course, such as for instance, unfair competition, or inadequate distribution of wealth. In this particular case, the government should prove that US approach to global capitalism is the most effective but one can hardly do that without alleviating the negative effects of global capitalism. With reference to this issue, we may argue that American capitalism also underwent some changes; it is believed that the United States is the mixture of market based and social-demographic capitalism, yet over the last half the twentieth century it has become a corporate one and this is the main reason why so many states look at US economic and political system with some apprehension, because according to such model, small business is virtually unprotected. In turn, this gives rise to many adverse consequences. For a considerable amount of time, the US government pursued a policy of non-interference toward the development of global capitalism. To some extent, it became a passive observer of this process, but not an active participant, the economic crisis of 2008 proved that this approach was no longer acceptable.

Now, everyone has realized that the neglect of international ethics is very likely to resonate in such spheres as economic and finance, that new strategies should be designed, because the existing ones do not reflect all the complexity of international politics. Other countries will adhere to the rules of the United States on one indispensable condition: they must know that these rules are beneficial and prudent. Otherwise, we may hardly speak of any US style global capitalism. This paper will address such aspects as 1) the peculiarities of American capitalism along with its advantages and disadvantages; 2) the ethical considerations in promoting US models of development. The third part of this paper will include the implication of the above argument for the stressing issues that the international community has to resolve.

Economic Perspective

Prior to analyzing these questions we should pay extra attention to such concept as capitalism and its constituent parts. Overall, it can be defined as an economic system, which is primarily based on private ownership. This model has several peculiar features, namely the absence of trade barriers, free movement of labor and assets, high competence, what is more important non-interference of the state or government. As a rule, these two sectors are strictly separated from one another. We may single out various types of this model: 1) market-based, corporate, state-driven and social-demographic (Bowles, 2007, p 59). As it has been noted before, American variant has often been characterized as a blend market-based and social-demographic economy. This approach implies the increasing role of small business, and entrepreneurship, the flexibility of labor and financial markets, and the most crucial aspect is that government prevents the industry from being monopolized (Galbraith, 1993, p 16). But over the last, over the last fifty years, US capitalism has turned into a corporate one, which means that an industry be virtually absorbed by several corporations. In the long run, this may lead to complete to monopolization, where a small entrepreneurs have practically no chance for growth.

If we try to look at capitalism from international perspective we should first speak about globalization, which involves the merging of financial and investment markets, so that they can operate on the international level. Despite the benefits and positive sides of this phenomenon, we may point out certain stumbling blocks and downsides, which are primarily caused by the dominance of corporate power. In case, these problems are not resolved, it is very unlikely that the United States will be able to further increase its presence in the regions or states that are still very reluctant to cooperate with America; furthermore they even resent any attempt of the US government to establish steady relationships.

The growing globalization sets new standards of cooperation, and under such circumstances, the role of international laws and international agreements becomes immense. Global capitalism has come under heavy criticism due to its adverse economic consequences such unemployment, income inequality and unregulated financial flows. This is due to the fact that economies are subjected to external forces that are outside their control. According to statistical data, it is only a small percentage that enjoys the benefits of global capitalism since its negative effects are felt by a large part of the world population, characterized by insecurity, poverty, degradation of the environment and economic oppression. Some people in the United States are quite content with the current state of affairs but they forget that global poverty is very likely to tell upon American economy, and this is exactly what happened in 2008. The international community and the United States in particular, must develop strategies, enabling to curb or at least to diminish the negative impacts of global capitalism.

Global capitalism has a negative effect not only on the developing countries only but on advanced nations as well. The flow of knowledge either technological or economical weakens the economy of such highly-developed states as the US or the United Kingdom. It leads to the increased insecurity and income decline. At this point, the question arises, how America can impart its views on other countries, if it, itself, is suffering from economic crisis. The governments of other states may harbor strong doubts as to whether United States has a right teach the rest of the world, if it cannot cope with its own problems.

Robert Gilpin argues that “the developed countries wish to change the system so that they can benefit themselves at the expense of others. The only solution is the adoption of good leadership policies considering the fact that globalization has become irresistible” (Gilpin, 2008, p 18). At this moment we should discuss the internal problems of the US economy. For a considerable amount of time, the government assumed laisser-faire attitude toward the actions of the leading companies. It did not interfere into their practices, such as for example hiring illegal immigrants, outsourcing or off shoring US-based jobs. This gave led to the emergence many corporations, such as Starbucks, Nike, Ford Motor Company and so forth that took control of entire industries. As a result, we now have high unemployment rates and the decrease in productivity. Probably, it is necessary to introduce some legislative acts, ensuring that the well-being of American workers is not imperiled. The crisis of 2008 eloquently demonstrates that now US capitalism is not the best example to follow.

But this is just one side of this problem; we have to take a closer look at the situation in the world economy. Global capitalism virtually excludes some countries and they receive practically no benefit from the process of globalization. However, it has to be admitted that there is still a glaring discrepancy between advanced countries and the third world. The major problem is that the developing nations are practically expelled from the international economy, in the vast majority of cases; they are not producing any consumer goods. Naturally, there are some exceptions such as China or Taiwan, but these cases are very few (Stiglitz, 2006, p 37).

The international community and the United States in particular must assist these countries. Americans still regard developing nations as something that has nothing to do with them. It seems that such position should undergo some change. It would not be an exaggeration to say that economic processes promote only the interests of the world superpowers such the United States, Canada or England, whereas the interests of other states are neglected. This leads to discrimination and exploitation of the less developed countries since they have no influence during the process of policy-making. In order to substantiate this question we should refer to some facts: for instance, the International Monetary Fond is governed by the representatives of well-to-do nations and is not genuinely concerned with the needs of those who are less successful. Furthermore, the decisions of this organization are strongly influenced by the US government and its policy (Sen, 1982, p 51). Consequently, many people all over the world perceive our country as some kind of bully, who constantly threatens others. It is the duty of international community to make IMF more universal.

The role of IMF is to offer financial aids to countries that are experiencing a deficit in their balance of payment. Its policies are greatly influenced by countries that are wealthier making US to have influence. Most of the developing countries have amassed huge debts from the IMF leading to decline in the welfare of the citizens due to bad leadership. Their leadership was dictatorial and had strong association with the US enabling them to access the debt funds easily which they plundered. For a long time US had a foreign policy that the leaders used in abetting such unethical practices, for instance in the case of Mobutu, the former dictator of Zaire who acquired huge loans from IMF and plundered it leaving the country heavily indebted. Through ethical considerations the US, with its capacity to influence decisions in the IMF has decided to cancel the debts for social welfare purposes. In its effort to enhance social welfare, “the US is considering writing off debts that have a proof of being misappropriated by the dictators,” (Kevane, 2001, p 7).

Currently the IMF and World Bank have a policy called the Highly Indebted Poor Country Procedure that is aimed at imposing debt relief upon countries upon the member countries agreeing to implement policies that are aimed at improving social welfare such as the reduction of inflation rate and carrying out other necessary structural reforms.

As it has been mentioned before, globalization primarily manifests itself in integration of the economic and marketing systems. Sometimes it takes form of take-over and mergers. This has resulted into fierce economic competition due to the fall in the trade barriers. The major problem, which arises in connection with this issue, is that under some circumstances small businesses are deprived of opportunity for further growth. Additionally, small companies are devoured by large corporations and this goal is sometimes achieved by rather unscrupulous means. As regards the long-term consequences of this process, we may primarily speak about complete monopolization of certain industries. If the government of the United States wants other countries to follow their course, it needs to stop these constant merges and unlawful take-overs. American economy relies on the prosperity of small businesses yet now this principle is neglected. The question arises whether other countries would heed to the views of the United States, if they see our finance is in decline. There is a quite different dimension, one should not forget that large companies may not only deprive American employees of their jobs but they also suppress the development of national industries.

Probably, the most distinctive feature of global capitalism is the formation of multinational corporations. Most of the foreign direct investments take place within the industrialized countries. This shows that global capitalism has breeds inequality in the distribution of FDI. The multinational corporations have got a social impact in that they contribute to reduction of poverty by contributing to growth of small scale business. One of the issues that US is concerned with is ensuring accountability of the multinational corporation in order that they can promote fair trade. Through its open economy policy the US is encouraging other countries to create an optimal environment necessary for investment but at this moment these efforts are not sufficient.

Ethical and Political Perspective

Nonetheless, the solution of economic problems is not enough, one should not forget about moral perspectives and political controversies which accompany them. Many scholars attach primary importance to the so-called global ethics, which is supposed to act as guidelines, regulating the interactions among the states. The main difficulty that modern community has recently faced is how to develop these guidelines because this notion is highly subjective and may be interpreted from various standpoints (Klein, 2007, p 45). Perhaps, this is the reason why so many American financiers are firmly convinced that it does not actually exist, and ignore it. The government of the United States should prove to the rest of the world that American understanding of the international ethics is the most adequate and objective.

On the whole, it refers to the standards or principles that individuals or organizations take into consideration when making decisions related to conduction of activities. The expansion of global capitalism brought out into focus the necessity for formulating new principles of international relationships. The US has a paramount role of ensuring that global ethics is not just a meaningless expression. We can mark our several constituent parts, to which international community should attach primary importance.

Due to global capitalism there are various interest parties that have diverse and sometimes unscrupulous objectives leading to the violation of human rights. This placed them at the centre of struggle between social justice and global capitalism. The increased injustice has culminated into the formulation of ethics that address the human rights internationally. “The U.S has been in the forefront in guarding against commitment of injustice and misrule upon the population,” (Rosenthal, 2009, p.40). They have to be protected at all cost. The thing is that now many countries just proclaim human rights to be the main priority but it seems that in the overwhelming majority of cases many advanced countries turn a blind eye to this issue. At first glance, one may suggest that there is no connection between global capitalism and the protection of human rights, however, it should be taken into account that the international of image of any country is mostly shaped by its attitude towards democratic and liberal values. The major problem is that now global capitalism is characterized only by corporate expansion but not by the promotion of liberty and civil rights.

Unfortunately, our country’s reputation has suffered a severe blow, especially if we are speaking about the treatment of war prisoners. It is very unlikely that other states will emulate US development models if they know that America is no longer an example to follow. Naturally, economists may disagree with this argument, claiming that free trade and capitalism have nothing to do with international politics, but it should be borne in mind that every sphere of human activity is governed by certain rules or principles. If all of them are broken, the world will collapse into chaos. The economic recession of 2008 is the most eloquent example. The main priority for many American companies was just the pursuit of profit and the government did not object to this practice. The obstacles we have recently encountered are just logical outcome and a shift in public is needed in order to take control over the situation.

One of the most recent risks in the current world is the rate at which the health of the population is put at risk. “The advancement technology has given rise to advent of more sophisticated weapons which states can use for security purposes or sometimes in order to exercise more influence of the natural resources but not for the sake of protection. Some of them were turned into weapons of mass destruction and it subsequently poses threat to global health.”(Krueger, 1994, p11). These weapons have endangered the very existence of the world population. This has raised concern in the US to an extent that it has forced these countries to stop the production of these warfare products in consideration of the ethical issues. Despite the US sponsoring the development of weapons of mass destruction during the World War II, it has reconsidered the ethical issues and it is now focusing on the elimination of these weapons by formulating strategies, designed to restrict countries from the production of such weapons. At this point, we need to pay attention to a very interesting detail. The US government compels other states to stop their nuclear programs stating that it is a threat to humankind and at the same time, our country is very reluctant to refuse from the weapons of mass destruction. Thus, other nations are not willing to cooperate with the US, because it virtually dictates terms to them, and their misgivings are not groundless.

Environmental Problems

The development of global capitalism is closely associated with solving many environmental problems. One cannot deny that there is a close relationship between human beings and ecosystem. Due to globalization, most of the countries have become interwoven to an extent that the negative impacts on environment are palpable in many regions. This has necessitated formulation of ethics, which may curb the negative effects. Globalization has brought with itself an increase in the rate of industrialization as an approach towards economic development and growth. This has resulted into increased pollution culminating into global warming. The objective of the environmental ethics is to ensure the safeguarding of the ecosystem. This issue is one of the most crucial ones because many American companies choose to operate abroad just because environmental standards in third world countries are much lower that in the United States, the manufactures try to avoid extra expenses on safe technologies, and international organizations are not able to put an end to these practices. Thus, it is necessary to ensure that this unethical or unlawful conduct never continues.

Ethics is declared to be the major constituent part in the international affairs. Various aspects arise amongst countries in the course of international relation and there is the need for prior policies to address them. Some countries in the world have at one time been involved in either civil war or between countries where human rights have been violated In such instances, it is important for international ethical standards to address the injustices committed against the people by war criminals since these issues are not thoroughly handled at the national level hence the need of international intervention (Rosenthal, 2001, P., 45). Ethics is important in international business environment. Some of the issues include equity within the labor market.

This will contribute towards ensuring balance between the need to promote fair business activities and the desired profitability. Most of the countries are affected by the rampant environmental degradation that is propagated by the increased trend of industrialization. Without international environmental ethics, the negative repercussions can have a long term effects on the ecosystem and hence there is an urgent need for governmental control or even supervision. It has been argued that international politics are propagated by the need to satiate the desire for national security, and other interests whose goal is the maximization of power. This depicts that politics are considered as a means to an end in themselves and hence social consideration are given less preference. In order to ensure the US style global capitalism, the government should pay extra attention to environmental policies of the corporations that want to minimize their costs on new equipment and harm the eco-system.

The Protection of Human Rights

There is also an argument that human rights are not universal but they vary from culture to culture. This means that there is a difficulty in the differentiation of what is morally permissible and what is not. Therefore, there is a widely held opinion that ethical actions should not be reduced to only one dimension aimed at maximization of power.

Ethical actions in international affairs were previously perceived from the concept of promoting relationship amongst states. Currently it is not possible to comprehend international politics by considering the interstate behaviors. There are other interest parties such as the NGO’s, business corporations and other non-state bodies such as UN that have an influence in various issues such as humanitarian relief. This is a classical illustration of agency problem that arises in conducting ethical actions since these parties must be consulted in order to understand how these agencies interact (Steiner, 1994, p. 56). Although the connection between global capitalism and the protection of human rights may not be self-evident, yet, it should be pointed out that the United States has always been regarded as an active champion of civil liberties, but now the situation has undergone a dramatic change. The question arises whether other nations would follow American examples if they know that our country is not different from other regimes, which infringe on human rights.

Alter-globalization

In part, global capitalism has resulted in such phenomenon as alter-globalization which is aimed at eliminating negative impacts of this globalization. This movement emphasizes that globalization is detrimental to some parties and it does not promote social justice and human rights. Organizations such as the WTO, IMF that were established after the world war did not address issues related to social, political and economic structure of the world population. The US has appreciated the alternative globalization and through its influence in international corporations, it is aimed at establishing fair code of conduct in international operation and more emphasis on local markets instead of regarding the global market too much.

Application of the argument: The World Economic Crisis

In this section, it is necessary to apply this argument to some definite situation, which would illustrate the importance of economic, ethical, and political perspectives. In this respect, we may refer to the collapse of the world finance system in 2008, which took place because the government of the United States did not make any attempt to interfere into unlawful practices of the corporate power. Certainly, it is impermissible for us to accuse only American government because there were other contributing factors but it seems that some preventive measures should have been taken long before the crisis.

It is widely known, that global capitalism results into increased volatility within the financial sector. Complete elimination of trade barriers made individual state economies very vulnerable to global financial speculations such as in the case of 1992 European financial crises. It should been a warning to the international community but unfortunately it went disregarded. This can be of benefit to the some economies but causes a negative effect on countries that do not have control over the financial crises (Gilpin et al, 2000, p 10). The most stressing issue is that free trade provides no protection to national industries and they may not be able to compete with foreign companies that have larger capacity for production. As a result, regional manufactures were forced out of the market by the US corporations.

This is evident in the current situation where countries are experiencing the heat of global economic meltdown due to volatility in the developed countries economies. It is necessary for the United States and other advanced countries to develop the system of checks and balances, ensuring that the economies of separate states are less susceptible to the fluctuations of the international market. The recent crisis is mostly connected with the fact that the industry of third world countries is not actually evolving.

All the enterprises, found on the territory of such countries belong to US-based companies. On the one hand, it leads to immigration from developing countries to more advanced ones. Secondly, it increases unemployment in the United States and other developed nations. It reminds a vicious circle, which is very difficult to break.

Now, we are not arguing in favor of protectionism. The major point is that infant industries must receive some assistance from the state until they are strong enough to compete with multinational giants. Furthermore, many American enterprises off shore or outsource American jobs, and even now the government does not intend to prevent them from doing it. Traditional variant of American capitalism involves some degree of the governments protection, but not a policy of indifference and negligence. This case shows that violation of international and labor ethics only hinders the development of global capitalism. First, it is morally impermissible to think only about the benefits, economic and political course may eventually have rather detrimental effects on our country. In order to ensure US style global capitalism the government should primarily review its policies toward free trade and international relations. The major drawback of American capitalism is that it plays in the hands of large corporations, which suppress small business.

Conclusion

Therefore, it is quite possible for us to arrive at the conclusion that the global capitalism sets entirely new tasks, which international community has yet to resolve, namely, we should speak about the absence of transparence and integrity. The attempts of the United States to dictate its terms to the rest of the world are doomed to failure unless our government assumes more flexible policy. At this point, it tries to impose our values and principles on other country by means of compulsion either military or economic; in particular, we should speak about the influence our country exercises over such organizations as IMF, the World Bank or the United Nations. Now the United States is perceived as some kind of empire, hankering for the superiority. It seems that this stereotype should be broken. It turn, it will allow America to establish more harmonious relations with other states. Furthermore, we have to stress such issue as internal US politics. The main problem is that now America is no longer regarded as a paragon of advanced capitalism. Traditional variant of American market-led capitalism has transformed into a corporate one, and it imperils the very foundations of the world economic and political system. It creates instability in the global market and does not enable national industries to grow.

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