Is Financial Regulation Hampering Globalization?
Is Financial Regulation Weakening Globalization?
To supporters of globalization and the opening of borders and markets to individuals, the biggest threat was thought to be increased opposition from the people. Julie Novak of Australia’s Canberrra Times says that the government leviathan which was borne of the financial crisis has grown exponentially and weakened efforts to further globalize.
“The most optimistic had hoped that post-1970s globalisation would wither away the state, but the 2008 global financial crisis ushered in a largely synchronised enlargement of government with a momentum rarely seen in the postwar period. In other words, what we have experienced in recent years is effectively the globalisation of statism on policy steroids,” she writes.
Policy Is Driven By Economic Data, But Can We Trust That Data?
The release of economic numbers can move the markets and sway investors. And political debates are shaped by the economic data produced by the government. These numbers have become part and parcel of governance in the US, but should they be?
As Zachary Karabell notes in a Washington Post column, the Congressional Budget Office, which scores budgets, is not even 40 years old, yet “major spending bills in the United States must be justified based on statistics and formulas, and those become the basis of partisan commentary and ideological debates about what we spend and how we pay for it.”
Furthermore, the Gross Domestic Product (GDP) has only existed as a reliable statistic since the 1930s and that deficits rarely appeared on the political radar until the 1970s. Given how new both are, Karabell, president of River Twice Research, contends, “understanding the relationship between debt and GDP, therefore, is largely guesswork based on a limited amount of data for a very short time.”
Can (And Should) Innovation Be Crowd Sourced?
The new book, Crowdstorm: The Future of Innovation, Ideas, and Problem Solving, promotes the idea that the trend in crowdsourcing is emerging as a leading developer of new ideas.
Sudhir Venkatesh, a contributor to the Freakonomics blog, recently interviewed co-author Shaun Abramnson – even admitting that he remains a skeptic.
Abramson says that the practice will lead to a change in how organizations conduct business and pursue new ideas, which he views as a positive development.
“It forces organizations to focus on what they need to be great at. And what they can get from outside. I think many will find that they need to be great at things like overseeing production or managing distribution partnerships or marketing or financing. But I think there is one important difference to outsourcing. Wanted to come up with great ideas is not the same as being able to come up with great ideas. So I think more organizations are going to find that they can reduce risk but looking outside for some portion of their ideas,” he says.
The notion that crowdsourcing can be used to enhance innovation, particularly for businesses, is not exactly a new idea. In a 2009 BusinessWeek article John Winsor raised some concerns about its proliferation.
“While crowdsourcing will take the slack out of the system, it could seriously depress wages for anyone pursuing a career in advertising, graphic design, and industrial design. This worries me a great deal. It also represents a much larger issue that other industries, including journalism and photography, are grappling with as well.”