I was just told about this ad campaign and I couldn’t more than agree. Because #FirstWorldProblems are not real problems when understood in a global context,
DDB New York has created an ad for the Haitian charity “Water Is Life” that humiliates whiners on Twitter who use the “#Firstworldproblems” hashtag to complain about life’s trivial challenges.
In the video (below), ordinary Haitians — standing amid shanty huts, broken school buses and wrecked buildings — read the inane tweets of self-entitled idiots who complain about phone cords that won’t reach their beds, and leather car seats that aren’t heated.
A month ago the world’s richest woman made a comment that got everyone’s attention. Major sensationalist papers in the globe elaborated different arguments on Gina Rinehart case for a $2-a-day pay. But putting emotions aside, what was she really talking about? Well, she was explaining in very rough terms what globalization is about and what is the role of competition in the global political economy.
In order to understand what Ms. Rinehart referred to, it is necessary first to briefly evaluate the history of the word competitiveness. The term is historically rooted in the writings of classical economics. Its core is the theory of comparative advantage expressed by David Ricardo in 1819, in which he underlined how countries should/do compete. Later on, the term was used by Marxist economists starting with Marx’s “Capital: A Critique of Political Economy” where he emphasized the impact of the sociopolitical environment on economic development in a global perspective, and therefore the communist idea that changing the political context should precede economic performance. Later, in 1942 the term was integrated to the role played by capitalists and entrepreneurs in the writings of Joseph Schumpeter, who stressed their creative and economic (“economic” here refers to capital as a mean of production) role as a factor of competitiveness by underlining that progress is the result of disequilibrium, which favors innovation and technological improvement. Further, Israel Kirzner’s emphasis on the redefinition of entrepreneurship by highlighting how global competitiveness is more about the capitalist’s innovative abilities rather than just the capital accumulated and how he/she invests it.
Ms. Rinehart’s comment reflects both the impact she plays as an actor in the global sociopolitical environment and her role as a capitalist and entrepreneur capable of generating innovation and of inciting creative destruction.
A $2-a-day pay in Africa means that many capitalists and entrepreneurs as Gina Rinehart are considering the possibility of moving their investments from less competitive continents to places in which competitiveness allow them to produce at lower costs.
Unfortunately, the region Ms. Rinehart was referring to has disincentives to competitiveness and innovation. Competitiveness is more than just lower wages and a cheap offer of labor. By following Ricardo, Marx, Schumpeter and Kirzner in order for Africa to become competitive in global terms the regions will require also to achieve what Stéphane Garelli in the “IMD World Competitiveness Yearbook 2012” explains as the need to also A.) Create a stable and predictable legislative and administrative environment. B.) Ensure speed, transparency and accountability in the administration, as well as the ease of doing business. C.) Invest continually in developing and maintaining infrastructure both economic (road, air, telecom, etc.) and social (health, education, pension, etc.). And finally, D.) Strengthen the middle class: a key source of prosperity and long-term stability.
Ms. Rinehart’s comments were not a call for Australians to lower their wages to a $2-a-day pay since they have already achieved other of Garelli’s requirements for competitiveness. Her comments are a very clear example on how global economy works. If African governments manage to improve the rule of law in their territories, develop infrastructure and allow for a stronger middle class then the chances that investment will move to Africa are going to be higher. As such, economies as Australia’s should continue producing at the same efficiency rates or improve and innovate in order to avoid losing investors. Ms. Rinehart’s comment on how “her country’s mining industry couldn’t compete with nations that are willing to pay workers less than $2 a day for their sweat and labor” is as such partially truth. Australia’s economy has many other competitive assets to offer and as such do not require to compete by offering lower wages. The country has many other competitive assets to offer for investors. However, as time has passed since Australia’s boom in the last decades many other countries are also trying to spur competitiveness.
There is much more to be said about this topic and on how global competitiveness allows for rising standards of life and prosperity. Also there is much more to be said on how competitiveness in other regions of the world can destroy (remember Schumpeter’s work) the not-so efficient economies of other countries that have not managed to cope with a changing global economy.
The Water We Eat [angelamorelli.com] by information designer Angela Morelli is an infographic story that unfolds by the act of scrolling down the page.
Several months ago when I heard the news about Facebook paying $1 Billion for Instagram I thought ‘the world was going crazy’. My first impression was to think that the ruling scale of values was mistaken. That people was giving value to unimportant things while the rest of the world was still trying to manage to survive the day. I couldn’t understand Why would a company pay such a huge amount of money for a software application for smartphones and iPhone that is only used for procrastination and doesn’t create any value for the world? Last week’s volcanic eruption of Fuego Volcano in Guatemala made me change my mind.
The entrepreneurs behind Instagram, Kevin Systrom and Michel “Mike” Krieger, created an application that was not only user-friendly but that enabled users to share images from anywhere in the world immediately. Such an application was created (maybe unintentionally) to become one of the fastest image reservoirs of instant news and global interconnection. When Facebook bought this photo-sharing app and paid $1 Billion they had not only bought the access to an essential function in millions of smartphones around the world but also connected visually the planet as we had never seen before. Last week’s event in Guatemala was the first time in my life when I could see through my phone in Denmark high quality images of events that were taking place in real-time more than 5,843 miles. Indeed, Hayek’s ideas of how an spontaneous order works was going global!
“Spontaneous order is what happens when you leave people alone—when entrepreneurs… see the desires of people… and then provide for them. They respond to market signals, to prices. Prices tell them what’s needed and how urgently and where. And it’s infinitely better and more productive than relying on a handful of elites in some distant bureaucracy.” Leonard Reed
To say that the world is interconnected and interdependent means to say that we are able now able of bypassing normal newsbroadcasters around the world. No longer will be that easy for anyone to control what the world would see and what the world wouldn’t see (as critized when News corporations around the world have been used to show a biased reservoir of images and videos during the Gulf War, or in the war in Iraq to mention some examples). Now, with access to photo-sharing applications such as Instagram the world not only has access to interconnection of real-time events but also has what Hayek explained as “a more efficient allocation of societal resources than any design could achieve.” Instagram is one more societal tool that enables us to achieve the best of humanity if used for the right purposes. Because of this reasons the founders of Instagram earned that billion dollars and the world is wealthier today.
Remember 1989? Well, as argued by many scholars, that years was the culmination of global interactions that “dynamized in many places of the world crisis phenomena and synchronized, the resulting transformation processes Had they been previously locates primarily in a national framework, now its global dimension is obvious. Thus began both reflect on the established order of the world is understood relationship with their respective areas of sovereignty in the resolution, as well, should be designed as the new world order.” (Read more on 1989 in a Global Perspective).
“The MIT Technology Review explains how CSI’s model works: “The evidence comes from two sources. The first is data gathered by the United Nations that plots the price of food against time, the so-called food price index of the Food and Agriculture Organisation of the UN. The second is the date of riots around the world, whatever their cause.” Plot the data, and it looks like this:……”
Globalization & Capitalism 