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Interpreting Globalization
Quiggin, John
Quiggin, John
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quiggin.pdf
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"Introduction In the late 1990s, heated debate broke out over what had previously been seen as a rather abstruse technical concept, the use of purchasing power parity measures, rather than exchange rates, to compare income levels in different countries. The reason for this debate was the publication, in the United Nations Development Program (UNDP) Human Development Report of data showing that inequality in global incomes, adjusted using exchange rates, had increased since 1980 (UNDP 1998). Critics such as Castles (1998) pointed out that exactly the opposite conclusion could be obtained using more sophisticated measures based on the concept of purchasing power parity (PPP). The reason for the intensity of the debate and the interest it generated was linked to the rise to prominence of the concept of globalization as a way of describing changes in the international economy that had been evident since the 1970s, most notably the growth in international trade in goods and services relative to world output and the more spectacular expansion in short-term and long-term international capital flows. Critics of globalization argued that it benefited only the rich, and particularly the increasingly conspicuous participants the global financial markets, variously referred to as The Masters of the Universe and The Electronic Herd . The UNDP finding seemed to confirm the views of these critics, and the arguments of Castles and others were consciously directed at refuting these views. The object of this paper is to describe the changing nature of the global trade and financial system, putting the recent debate about globalization in a broader context and in a longer historical perspective. Changes in the volume and direction of flows of goods, services, capital and income are described. The technical issues surrounding international comparisons of income and consumption are described and the debate over changes in global income inequality is reviewed. A key conclusion is that no unambiguous conclusion can be reached on such broad questions as Has global inequality increased and Does globalization increase inequality . Rather it is necessary to address issues in their context, without relying on the appealing, but specious, simplicity of notions such as globalization."(pg 1)
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2002-09
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With permission of the license/copyright holder