Part of the problem is that the nature of globalization is generally framed according two conflicting ideological perspectives. On the one hand, the anti‑globalization side emphasizes the effects of self‑interested intentionality, in which major powers want to extend their access to markets or resources. The opposing story of globalization emphasizes a complete absence of intentionality in which people merely respond to presumably efficient, impersonal market forces in a way that supposedly allows the invisible hand to spread shared prosperity throughout the globe.Counterpunch
The Anarchy of Globalization
Michael Perelman | Professor of Economics at California State University, Chico
3 comments:
So-called free trade undermines what I call "regulatory sovereignty." The rich can effectively blackmail governments to reduce regulations and taxes by threatening to move offshore.
For example, signatories of free trade agreements surrender their right to regulate imports of cigarettes or junk food, which might affect the health of their populations. The United States is particularly insistent in demanding that no country can prevent the marketing of genetically modified seeds .... These so‑called free trade agreements also regulate the regulation of virtually everything that an independent government might do.
MMT recognizes the importance of monetary sovereignty but has been slow to catch on (with the usual exception of Tom Hickey and a few others) to the significance of regulatory sovereignty.
"The rich can effectively blackmail governments to reduce regulations and taxes by threatening to move offshore."
Interstate in the US, too.
As I discussed in an earlier Perspective,[1] the use of investment incentives is pervasive and growing. The most recent example [this was completed prior to the Tesla auction] of a big bidding war was when Boeing threatened to move production of its 777-X aircraft out of Washington state, prompting some 20 states to offer incentive packages to the company (including $1.7 billion from Missouri). In the end, Washington gave Boeing a package of tax incentives worth a record-breaking $8.7 billion over the 2025 – 2040 period to stay, and the unions made substantial concessions regarding pensions.
http://www.middleclasspoliticaleconomist.com/2014/10/how-to-deal-with-growing-incentives_28.html
The rich do not have this power over a country that understands and practices functional finance / MMT / monetary sovereignty. So the rich move offshore. Good riddance! Trying to arbitrage one state against another is even sillier.
All the nation has to do is to decide to have full employment, as by a JG. Why on earth would a US state compete with another one for jobs when the central government guaranteed them? Which is why such tax incentive competition did not really exist in the postwar era.
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