September 15, 2016

AND AS SOON AS THEY CAN AFFORD IT THEY'LL SEEK INDEPENDENCE:

Globalization Goes National (Tyler Cowen, 9/15/16, Bloomberg View)

Globalization typically is defined as the movement of goods, services, ideas, labor and investment across national borders. But many nations lack integrated economic relations within their borders, and thus they could reap high gains from trade by opening up internally. This is happening, and its logic very much resembles that of globalization. 

In China, for instance, there has been a long history of geographical fragmentation. The Chinese economy has had a tendency to cluster around megacities, such as the Beijing-Tianjen-Hebei, Shanghai-Nanjing, or Guangzhou/Shenzhen/Hong Kong clusters. In the past, a Chinese port might have had better trade connections to Korea or California than to many parts of the Chinese interior. But these days the story in China is the rise and extension of national brands. The Internet is bringing the whole country's economy together through Alibaba, WeChat, and other services that ease the online purchase, shipping, and advertising of goods at the national level.    

You might decline to call this globalization because economic integration does not fit the formal definition of crossing national borders. But in the recent past, different regions of China were often economically like distinct nations. Domestic integration is lowering costs, smoothing out price differences and allowing differing cultures and linguistic areas to exchange ideas. So these improved internal trade relations have the economic features of globalization, whether or not they merit that exact name. [...]

India also is seeing its different states and regions being tied together through migration, trade, and investment. You can see this in the food: tandoori chicken and dosas have become national standards, available throughout the country, and less closely associated with their particular regions of origin. Hindi is becoming more of a national lingua franca, and the Internet makes it possible to broadcast the same messages to the entire country at relatively low cost. Many these "globalizing" developments have spread expertise and capital from the more developed southern and western parts of India to the poorer eastern and landlocked regions. Labor, in turn, has migrated from the poorer states to the wealthier cities.

Posted by at September 15, 2016 3:05 PM

  

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