Ruggie, JG. 2002. Taking Embedded Liberalism Global the Corporate Connection. John F. Kennedy School of Government, Harvard University.
Ruggie traces a bit of history regarding embedded liberalism. The core: "...economic liberalization was embedded in social community" (1).
The problem of this new world is that governments are overwhelmed by the size and scope of global capitalism. It is nigh impossible to construct a similar pact with governments as was organized through the Bretton Woods conference. "Embedding the global market within shared social values and institutional practices represents a task of historic magnitude. The reason is obvious: there is no government at the global level to act on behalf of the common good, as there is at the national level. And international institutions are far too weak to fully compensate. Accordingly, this chapter examines the role of certain social processes and movements in triggering the emergence of more inclusive forms of global governance. Specifically, I focus on the contribution of the dynamic interplay between civil society, business and the public sector of the issue of corporate social responsibility" (2-3).
"The burden of my argument, with due appreciation for the irony, is that the corporate sector, which has done more than any other to create the growing gaps between global economy and national communities, is being pulled into playing a key bridging role between them. In this process, a global public domain is emerging, which cannot substitute for effective action by states but may help produce it" (3).
"When we reflect on how hard it was and how long it took to institute the original embedded liberalism compromise at the national level, the prospect of achieving a similar social framing of global market forces seems exponentially more daunting" (27).
"I have argued that, as a result of the expansion of civil society and its engagement with the corporate sector, a global public domain is emerging. I take that to mean an area inhabited by various actors for whom the territorial state is not the cardinal organizing principle..." (28).
"Haltingly anbd erratically, something akin to an embedded liberalism compromise is being pulled and pushed into the global arena, and the corporate connection is a key element in that process" (29).
Tuesday, March 10, 2009
Steffek: Embedded Liberalism and its Critics
Steffek, J. Embedded liberalism and its critics. Palgrave Macmillan.
This text explores the relationship between international and domestic governance of global trade and financial architectures. It argues that the embedded liberalism that arose after WWII was an admission that governance should be both domestic and international. The author goes on to claim that many see this order as being normatively wrong, as it benefits the development of the north and disregards the development of the south. What is needed is a program that is both domestic and international that focuses on "redistributive multilateralism (2).
On embedded liberalism: "This blueprint for the construction of international institutions centers on the idea that international cooperation should be designed in such a way as to achieve a high degree of liberalization at the international level to facilitate the creation of a world market. At the same time it should allow states to maintain a national welfare system that can cushion the adverse effects of global liberalization. Upon closer inspection Ruggie's conception of embedded liberalism has two sides. On the one hand, it is a very general normative framework that defines appropriate goals and scope of international institutions. On the other hand, the term is also used to describe some specific institutional arrangements that were built according to this generative grammar. Embedded liberalism thus became almost a synonym for the original Bretton Woods order and the 1947 General Agreement on Tariffs and Trade (GATT)..." (4).
The author argues that, while the actual structure of this global system has changed, the normative foundations have not. The author argues that embedded liberalism has at least two distinct futures: that of being embedded within governance, ie., through a global Marshall plan, or being embedded in business, as promoted through Ruggie and his Corporate Connection idea.
This text explores the relationship between international and domestic governance of global trade and financial architectures. It argues that the embedded liberalism that arose after WWII was an admission that governance should be both domestic and international. The author goes on to claim that many see this order as being normatively wrong, as it benefits the development of the north and disregards the development of the south. What is needed is a program that is both domestic and international that focuses on "redistributive multilateralism (2).
On embedded liberalism: "This blueprint for the construction of international institutions centers on the idea that international cooperation should be designed in such a way as to achieve a high degree of liberalization at the international level to facilitate the creation of a world market. At the same time it should allow states to maintain a national welfare system that can cushion the adverse effects of global liberalization. Upon closer inspection Ruggie's conception of embedded liberalism has two sides. On the one hand, it is a very general normative framework that defines appropriate goals and scope of international institutions. On the other hand, the term is also used to describe some specific institutional arrangements that were built according to this generative grammar. Embedded liberalism thus became almost a synonym for the original Bretton Woods order and the 1947 General Agreement on Tariffs and Trade (GATT)..." (4).
The author argues that, while the actual structure of this global system has changed, the normative foundations have not. The author argues that embedded liberalism has at least two distinct futures: that of being embedded within governance, ie., through a global Marshall plan, or being embedded in business, as promoted through Ruggie and his Corporate Connection idea.
Friday, March 6, 2009
Wood: Empire of Capital
Wood, EM. 2003. Empire of Capital. Verso.
If one makes arguments of the nature that the US is an imperial body, they are routinely countered that the US does not control any territory. This is, of course, true. However, this misses the fact that there is an imperial force at work in the world, that it originates and derives power from the system hegemon and that it all operates within the capitalist system.
Wood highlights the driving power of capital to continually search for higher returns as being the ultimate source of global imperialism. This imperialism does not have the same characteristics as did previous imperialistic eras; no longer is there a search for territory or direct rule. Instead, this imperialism is a control of a different and more amorphous type: the logic of capitalism.
Military expansionism is another piece of this puzzle: the US in particular possesses massive amounts of military power, and this is used as the ultimate prop for regulatory frameworks that are necessary for the further promotion of capitalism.
If one makes arguments of the nature that the US is an imperial body, they are routinely countered that the US does not control any territory. This is, of course, true. However, this misses the fact that there is an imperial force at work in the world, that it originates and derives power from the system hegemon and that it all operates within the capitalist system.
Wood highlights the driving power of capital to continually search for higher returns as being the ultimate source of global imperialism. This imperialism does not have the same characteristics as did previous imperialistic eras; no longer is there a search for territory or direct rule. Instead, this imperialism is a control of a different and more amorphous type: the logic of capitalism.
Military expansionism is another piece of this puzzle: the US in particular possesses massive amounts of military power, and this is used as the ultimate prop for regulatory frameworks that are necessary for the further promotion of capitalism.
Thursday, February 26, 2009
Romm: The Internet and the New Energy Economy
Romm, J. 2002. The Internet and the New Energy Economy. Sustainability at the Speed of Light. Sweden, WWF.
In the period from 1996 to 1999, there was a drop of 3.2% per year in energy intensity, which is a measure of the amount of energy required to produce one output of GDP.
"Growth in the Internet Economy can cut energy intensity in two ways. First, the IT sector is less energy-intensive than traditional manufacturing, so growth in this sector engenders less incremental energy consumption. Second, the Internet Economy appears to be increasing efficiency in every sector of the economy, which is the primary focus of this paper" (131).
"In the late 1990s, a startling shift appeared in the statistics. The nation's energy intensity dropped 3.7% in 1997 and 3.9% in 1998. It is unprecedented for the US economy to see such improvements in energy intensity during a period of low energy prices and relatively low public awareness of energy issues" (133).
"Analysis by EPA and the Argonne National Laboratory suggests that one third to one half of the recent improvements in energy intensity are 'structural.' Structural gains occur when economic growth shifts to sectors of the economy that are not particularly energy intensive--such as the IT sector, including computer manufacturing and software--as opposed to more energy-intensive sectors, including chemicals, pulp and paper industry, and construction" (135).
Thus, one third to one half of the 3.2% average decline from 96-99 are structural, of which the internet economy represents an ambiguous portion.
"The Internet does not consume 8% of US electricity as Mills claims. The Koomey et al. analysis showed that this estimate is too large by a factor of eight. Computers, office equipment, and the like do not consume 13% of electricity, as Mills claim; a better number is 3%" (146).
In the period from 1996 to 1999, there was a drop of 3.2% per year in energy intensity, which is a measure of the amount of energy required to produce one output of GDP.
"Growth in the Internet Economy can cut energy intensity in two ways. First, the IT sector is less energy-intensive than traditional manufacturing, so growth in this sector engenders less incremental energy consumption. Second, the Internet Economy appears to be increasing efficiency in every sector of the economy, which is the primary focus of this paper" (131).
"In the late 1990s, a startling shift appeared in the statistics. The nation's energy intensity dropped 3.7% in 1997 and 3.9% in 1998. It is unprecedented for the US economy to see such improvements in energy intensity during a period of low energy prices and relatively low public awareness of energy issues" (133).
"Analysis by EPA and the Argonne National Laboratory suggests that one third to one half of the recent improvements in energy intensity are 'structural.' Structural gains occur when economic growth shifts to sectors of the economy that are not particularly energy intensive--such as the IT sector, including computer manufacturing and software--as opposed to more energy-intensive sectors, including chemicals, pulp and paper industry, and construction" (135).
Thus, one third to one half of the 3.2% average decline from 96-99 are structural, of which the internet economy represents an ambiguous portion.
"The Internet does not consume 8% of US electricity as Mills claims. The Koomey et al. analysis showed that this estimate is too large by a factor of eight. Computers, office equipment, and the like do not consume 13% of electricity, as Mills claim; a better number is 3%" (146).
Laitner: Information Technology and US Energy Consumption
Laitner, JAHS. 2002. Information Technology and US Energy Consumption: Energy Hog, Productivity Tool, or Both? Journal of Industrial Ecology 6, no. 2: 13-24.
The authors suggest that the wrong questions are being asked in the debate about ICT and energy consumption. Current questions are too limited. Instead, we should be asking questions like this: "What impact with the information age have on our ability to produce goods and services within our economy; and what impact will it have, in turn, on the nation's overall energy requirements? IN shot, will the information economy prove to be an energy hog, a productivity tool or both?" (14).
The author argues that yes, ICT does have an impact on energy efficiency. "Even with a small correction to reflect the influence of weather, it appears that the annual rate of change in 1996-2001 was surprisingly larger than many analysts might have expected on the basis of past trends. This is all the more surprising because it occurred in the absence of any significant price signals or major energy policy initiatives within the United States" (15).
"The initial evidence with respect to information technologies appears to support a trend toward decreasing energy intensity compared to the trends now represented in conventional forecasts. Nonetheless, as long as GDP grows faster than the decline in energy intensity, overall energy consumption will continue to increase, albeit at a smaller rate" (20).
The authors suggest that the wrong questions are being asked in the debate about ICT and energy consumption. Current questions are too limited. Instead, we should be asking questions like this: "What impact with the information age have on our ability to produce goods and services within our economy; and what impact will it have, in turn, on the nation's overall energy requirements? IN shot, will the information economy prove to be an energy hog, a productivity tool or both?" (14).
The author argues that yes, ICT does have an impact on energy efficiency. "Even with a small correction to reflect the influence of weather, it appears that the annual rate of change in 1996-2001 was surprisingly larger than many analysts might have expected on the basis of past trends. This is all the more surprising because it occurred in the absence of any significant price signals or major energy policy initiatives within the United States" (15).
"The initial evidence with respect to information technologies appears to support a trend toward decreasing energy intensity compared to the trends now represented in conventional forecasts. Nonetheless, as long as GDP grows faster than the decline in energy intensity, overall energy consumption will continue to increase, albeit at a smaller rate" (20).
Laitner and Ehrhardt-Martinez: Information and Communication Technologies: The Power of Productivity
Laitner, John, and Karen Ehrhardt-Martinez. 2008. Information and Communication Technologies: The Power of Productivity. American Council for an Energy-Efficient Economy, February.
ICT helps to promote energy consumption savings. "For every extra kilowatt-hour of electricity that has been demanded by ICT, the US economy increased its overall energy savings by a factor of about 10" (v). There has been a delinking of economic growth from growth in energy consumption, and this report posits that ICT is a major contributor to this delinking. In addition, it indicates that we are probably not using ICT to its fullest potential.
"There is broad agreement that greater levels of productivity can lead to greater economic returns" (1).
"During the current historical period, gains in productivity are most likely to result from the continued development and application of new information and communications technologies" (1).
There is an outline of how ICT contributes to productivity, relying heavily on Jorgenson et al (2005). Then the topic of energy is explored: "...it does appear that ICT investments may actually be 'energy saving' more broadly speaking. That is, the same digital age investments that are driving a more robust economic productivity are also increasing the efficiency in how we use energy more generally" (3)
"As we implied in the previous section, ICT has not only transformed our economy and our lives, they ahve also reinvigorated economic productivity. What is less well-recognized is that ICT systems have revolutionized the relationship between economic production and energy consumption" (4).
"To more fully explore the ICT paradox and to gain a better understanding of the potential net energy benefits provided by ICT, this report explores the following questions: What is the enabling role of ICT investment and how might they be expanded to increase energy productivity beyond current patterns of improvement? How might a productivity-led ICT strategy provide greater energy security while contributing toward climate change mitigation efforts? What do current energy and efficiency trends look like and how do ICT provide a positive complement within the emerging trends? We begin by assessing where ICT fit within the historical and technological context and by discussing our working definition of the term 'energy efficiency" (4).
"Energy efficiency is a process that achieves the same ends with fewer energy inputs. It's about producing, transporting, traveling, lighting, cooking, heating, and communicating in ways that maintain or increase our productivity for every unit of energy consumed. In other words, energy efficiency is about providing the same goods and services using less energy. Energy efficiency and energy conservation are not the same" (6).
"In recent periods, there is no doubt that ICT have played a critical role in reducing energy waste and increasing energy efficiency throughout the economy" (8). Anecdotal evidence is provided.
Huber and Mills wrote in Fortune that PCs use much electricity, and they forecast that trend to continue. However, Koomey concluded that there was only an overall consumption of electricity of about 3% by computers in 2000 as opposed to about 15% by the former authors. The key question that this report attempts to address is not how much energy ICT uses, but what is the net effect of ICT on energy consumption.
There is then much anecdotal evidence that ICT is improving energy efficiency: processers in cars, smart homes, easy business transactions, etc.
The authors conclude with a statistical analysis of the relationship between ICT consumption and energy use, arguing that for every kilowatt-hour of electricity consumed by ICT, 6-14 were saved.
ICT helps to promote energy consumption savings. "For every extra kilowatt-hour of electricity that has been demanded by ICT, the US economy increased its overall energy savings by a factor of about 10" (v). There has been a delinking of economic growth from growth in energy consumption, and this report posits that ICT is a major contributor to this delinking. In addition, it indicates that we are probably not using ICT to its fullest potential.
"There is broad agreement that greater levels of productivity can lead to greater economic returns" (1).
"During the current historical period, gains in productivity are most likely to result from the continued development and application of new information and communications technologies" (1).
There is an outline of how ICT contributes to productivity, relying heavily on Jorgenson et al (2005). Then the topic of energy is explored: "...it does appear that ICT investments may actually be 'energy saving' more broadly speaking. That is, the same digital age investments that are driving a more robust economic productivity are also increasing the efficiency in how we use energy more generally" (3)
"As we implied in the previous section, ICT has not only transformed our economy and our lives, they ahve also reinvigorated economic productivity. What is less well-recognized is that ICT systems have revolutionized the relationship between economic production and energy consumption" (4).
"To more fully explore the ICT paradox and to gain a better understanding of the potential net energy benefits provided by ICT, this report explores the following questions: What is the enabling role of ICT investment and how might they be expanded to increase energy productivity beyond current patterns of improvement? How might a productivity-led ICT strategy provide greater energy security while contributing toward climate change mitigation efforts? What do current energy and efficiency trends look like and how do ICT provide a positive complement within the emerging trends? We begin by assessing where ICT fit within the historical and technological context and by discussing our working definition of the term 'energy efficiency" (4).
"Energy efficiency is a process that achieves the same ends with fewer energy inputs. It's about producing, transporting, traveling, lighting, cooking, heating, and communicating in ways that maintain or increase our productivity for every unit of energy consumed. In other words, energy efficiency is about providing the same goods and services using less energy. Energy efficiency and energy conservation are not the same" (6).
"In recent periods, there is no doubt that ICT have played a critical role in reducing energy waste and increasing energy efficiency throughout the economy" (8). Anecdotal evidence is provided.
Huber and Mills wrote in Fortune that PCs use much electricity, and they forecast that trend to continue. However, Koomey concluded that there was only an overall consumption of electricity of about 3% by computers in 2000 as opposed to about 15% by the former authors. The key question that this report attempts to address is not how much energy ICT uses, but what is the net effect of ICT on energy consumption.
There is then much anecdotal evidence that ICT is improving energy efficiency: processers in cars, smart homes, easy business transactions, etc.
The authors conclude with a statistical analysis of the relationship between ICT consumption and energy use, arguing that for every kilowatt-hour of electricity consumed by ICT, 6-14 were saved.
Friday, January 30, 2009
Isard: Globalization and the International Financial System
Isard, P. 2005. Globalization and the international financial system. Cambridge New York.
Ch. 2: The Evolution of the International Monetary System
"At the core of the international financial system is a set of official institutions and arrangements that govern payments between nations and exchange rates among currencies--a core referred to as the international monetary system" (13).
This system promotes stable exchanges of currencies, which is seen to expand international trade, which is then seen as driving economic growth and improved living standards.
The policy trilemma was explored explicitly by Mundell and Flemming in papers written in the early 1960s, but also must have been at least tacitly held by the framers of the IMF in the 1940s: the system was designed to achieve fixed exchange rates, domestic monetary and fiscal autonomy and constrained capital mobility.
The Gold Standard system that existed from 1870-WWI was based on convertibility of currency to gold reserves. This system suffered crises, which were mitigated in part through the cooperation of major players in the monetary system. "As these episodes suggest, preservation of the international gold standard regime required the core countries of the system not only to cooperate to help each other in times of crisis but also to accommodate over time the growing and somewhat volatile demand for gold in countries on the periphery of the system, including the United States...A second factor that contributed importantly to the credibility and longevity of the gold standard regime was a social and political environment in which it was feasible for national monetary authorities to give the maintenance of currency convertibility precedence over other possible goals of economic policy" (17).
After WWI, and a temporary stoppage of currency convertibility, countries began to return to the gold standard. First the US, and then other European countries pegged their currencies to gold and established currency exchanges, etc. The US left in 1933.
Then, after 1929, a global depression took hold, with production falling by a full 26%. "At least seven countries left the gold standard between 1929 and August 1931" (24).
During WWII, there were very tight exchange pegs.
At the end of WWII, the Bretton Woods institutions were formed, with an eye towards bridging the divide between those who ardently supported free trade agendas, and those who believed in full employment and government spending. "The outcome was a managed multilateral system that left individual countries with considerable autonomy to pursue domestic economic policy objectives but subjected their exchange rate practices and international trade and payments restrictions to international agreement" (28).
"Through period adjustments of exchange rates pegs and a resort to capital controls, the Bretton Woods system survived for a quarter century. The demise came after internationally mobile private capital had grown substantially in both volume and agility, thereby becoming a major force that was difficult to control" (30).
"The policy-oriented literature of the 1960s characterized the prevailing international monetary system as incapable of simultaneously resolving the problems of liquidity, adjustment, and confidence. With the production of new gold being inadequate to meet the increasing demand for official international reserves in a growing world economy, and with gold and reserve currencies comprising the principal reserve assets in the international monetary system, the liquidity problem could be solved, or so it was perceived, in only two ways: by continuing to increase the liabilities of the reserve-currency countries, especially those of the United States, or by raising the purchasing power of gold. This choice presented what was known as the Triffin dilemma. The first solution would lead to a persistent balance of payments deficit for the United States on an official settlements basis, which many economists viewed as an adjustment problem. The second solution, moreover, would create a confidence problem, undermining faith in the reserve system. In particular, an increase in the official dollar price of gold...could induce attempts by foreign governments to convert their dollar reserve holdings into gold and would also induce speculative investments in gold by private market participants. This would rapidly drain the gold reserves of the United States and destroy the ability of the US authorities to defend any fixed gold parity for the dollar" (32-3).
In order to solve this conundrum, special drawing rights (SDRs) were created. This was a new asset held by the IMF in reserve.
The Euro-Dollar market was created. These were dollars held in banks primarily in Britain. This eventually led to speculation on the dollar that caused Nixon to suspend convertibility in 1971. By 1973 the international monetary system had moved to a floating exchange rate system.
In the 70s, the countries of Europe moved towards creating a monetary union.
The remainder of the chapter deals with the different kinds of forms that monetary systems and policies can take in the post-Bretton Woods system, as well as the implications of moving to fiat money and relatively floating exchange rates.
Ch. 2: The Evolution of the International Monetary System
"At the core of the international financial system is a set of official institutions and arrangements that govern payments between nations and exchange rates among currencies--a core referred to as the international monetary system" (13).
This system promotes stable exchanges of currencies, which is seen to expand international trade, which is then seen as driving economic growth and improved living standards.
The policy trilemma was explored explicitly by Mundell and Flemming in papers written in the early 1960s, but also must have been at least tacitly held by the framers of the IMF in the 1940s: the system was designed to achieve fixed exchange rates, domestic monetary and fiscal autonomy and constrained capital mobility.
The Gold Standard system that existed from 1870-WWI was based on convertibility of currency to gold reserves. This system suffered crises, which were mitigated in part through the cooperation of major players in the monetary system. "As these episodes suggest, preservation of the international gold standard regime required the core countries of the system not only to cooperate to help each other in times of crisis but also to accommodate over time the growing and somewhat volatile demand for gold in countries on the periphery of the system, including the United States...A second factor that contributed importantly to the credibility and longevity of the gold standard regime was a social and political environment in which it was feasible for national monetary authorities to give the maintenance of currency convertibility precedence over other possible goals of economic policy" (17).
After WWI, and a temporary stoppage of currency convertibility, countries began to return to the gold standard. First the US, and then other European countries pegged their currencies to gold and established currency exchanges, etc. The US left in 1933.
Then, after 1929, a global depression took hold, with production falling by a full 26%. "At least seven countries left the gold standard between 1929 and August 1931" (24).
During WWII, there were very tight exchange pegs.
At the end of WWII, the Bretton Woods institutions were formed, with an eye towards bridging the divide between those who ardently supported free trade agendas, and those who believed in full employment and government spending. "The outcome was a managed multilateral system that left individual countries with considerable autonomy to pursue domestic economic policy objectives but subjected their exchange rate practices and international trade and payments restrictions to international agreement" (28).
"Through period adjustments of exchange rates pegs and a resort to capital controls, the Bretton Woods system survived for a quarter century. The demise came after internationally mobile private capital had grown substantially in both volume and agility, thereby becoming a major force that was difficult to control" (30).
"The policy-oriented literature of the 1960s characterized the prevailing international monetary system as incapable of simultaneously resolving the problems of liquidity, adjustment, and confidence. With the production of new gold being inadequate to meet the increasing demand for official international reserves in a growing world economy, and with gold and reserve currencies comprising the principal reserve assets in the international monetary system, the liquidity problem could be solved, or so it was perceived, in only two ways: by continuing to increase the liabilities of the reserve-currency countries, especially those of the United States, or by raising the purchasing power of gold. This choice presented what was known as the Triffin dilemma. The first solution would lead to a persistent balance of payments deficit for the United States on an official settlements basis, which many economists viewed as an adjustment problem. The second solution, moreover, would create a confidence problem, undermining faith in the reserve system. In particular, an increase in the official dollar price of gold...could induce attempts by foreign governments to convert their dollar reserve holdings into gold and would also induce speculative investments in gold by private market participants. This would rapidly drain the gold reserves of the United States and destroy the ability of the US authorities to defend any fixed gold parity for the dollar" (32-3).
In order to solve this conundrum, special drawing rights (SDRs) were created. This was a new asset held by the IMF in reserve.
The Euro-Dollar market was created. These were dollars held in banks primarily in Britain. This eventually led to speculation on the dollar that caused Nixon to suspend convertibility in 1971. By 1973 the international monetary system had moved to a floating exchange rate system.
In the 70s, the countries of Europe moved towards creating a monetary union.
The remainder of the chapter deals with the different kinds of forms that monetary systems and policies can take in the post-Bretton Woods system, as well as the implications of moving to fiat money and relatively floating exchange rates.
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