Globalization Show That Markets Are ultimately At the Mercy of States in International Relations - Essay Example

Please Choose One of the Questions from Section A and from Section B Name of Student: Name of Course: Name of Instructor: Date of Submission: Please Choose One of the Questions from Section A and from Section B Section A Question 4 To What Extent Do Experiences with Globalization Show That Markets Are ultimately At the Mercy of States in International Relations? The modern business world is characterized by an increased inter country trading. Additionally, more and more countries are joining unions and trading blocs leading to what is now referred to as borderless markets. However, one thing which comes out strongly from several experiences in the market is that markets are dependent on the states involved in the international relations. The following section will analyze of this experiences. One of the most notable experiences in the global market in the recent times is the looming problems in the stability of the market with regard to the speculated shutdown of the United States of America economy. The projected shutdown is as a result of the debt ceiling of the United States. The government has been funding it budget deficits with debt; a scenario best explained by the Chinese as debt addiction (Reuters 2011, p.1). As the country approaches its debt limits, it is faced with the eminent problem of being unable to finance its budget. The fall of the US economy spells danger to the global markets. Firstly, it would mean the fluctuation of the value of the dollar hence translate to an unstable market. Additionally, a shutdown of events in the US economy would spell an equal or even magnified impact on the global market. The weakening of the Yen, the legal tender used by Japan is also another indicator of the dependence of the world market on the state involved in international relations. The currency problems experienced by Japan soon after the Tsunami and the nuclear leaks which had a devastating effect on the country’s economy saw the coming together of the all-time powerful G7 countries (Pym 2011, p.1). On this point, it is important to point that the G7 countries control over 50 % of the world’s wealth; hence have a great effect on dictating terms of engagement in the global market. (Joyce 2010, p.24). Owing to the great position which is held by Japan on the global economy, the problems in the country sent ripple effects to the global market. The G7 countries sought to calm things down in the market by establishing currency regulation polices which ultimately established the economy. Generally, it is worth noting that the G7 countries have a higher say than other countries in the world in all issues (Pym 2011, p.1). In fact, they are permanent members of the United Nations. Lastly, it is important to note the impacts of trade unions and other trading blocks on the global market. In a bid to increase trading activities in the regions, various countries have joined up together to form trading blocks and monetary unions. The trading blocs have in turn globalised the market and led to borderless markets. On this point, it is worth noting that the states making up trading unions and blocs have held the market at their mercy. Taking an example of the European Union which is a trading and political union under which the Euro Zone, a monetary union using the Euro as the common currency, it can be acknowledged that the activities of the various countries making up the union have held the market at their mercy. The Euro Crisis is a good example to illustrate how activities of a state can hold a globalised market at its mercy (Stracca 2013, p.1). The Euro Crisis is as a result of an inefficient economic policy in the union which emphasizes on impacting on the market via government spending. As a result, several countries have used this policy inappropriately leading to economic shutdowns in the countries for instance Greece and Cyprus (Stracca 2013, p.1). Additionally, violation of the rules and regulations of the Union by stakeholders in the union has also led to the crisis. Concluding, the essay has been able to give an in depth analysis and discussion of various experiences in the global market which have shown that that markets are ultimately at the mercy of states in international relations. Firstly, the essay discussed about the US debt limit which has had a substantial negative effect on the global and is certain to lead to more adverse effects on the market if the American economy shuts down. The essay then discussed about the intervention of the G7 countries to the aid of the weakening Japanese Yen in a bid to stabiles the global market. Lastly it was identified that trade unions have an impact on the global market and an insight was given to the Euro Zone whose market is currently affected negatively by the Euro Crisis. The discussion of the experiences in the global market is gives an insight of the influence of states on the market; hence it can be concluded that markets are ultimately at the mercy of states in international relations. References Joyce, J., 2010. The United States and International Economic Governance, pp. 24 -29 Pym, H., 2011. Japan Disaster: G7 Intervene to Control Yen Rise, Retrieved on 3rd November from http://www.bbc.co.uk/news/business-12781534 Reuters, 2011. China Blasts U.S. Over Debt Problems, Calls For Dollar Oversight, Retrieved on 3rd November from http://www.reuters.com/article/2011/08/06/us-china-sp-idUSTRE7750R720110806 Stracca, L., 2013. Our Currency, Your Problem? The Global Effects Of The Euro Debt Crisis, European Central Bank, pp. 1-33 6. The reason that climate change has not yet been adequately addressed is because markets have not been given sufficient scope to address the problem. ‘Critically evaluate this claim. Climate change is ideally one of the biggest challenges faced by the globe in the new millennium. The following essay discusses the claim that the market has not been given a sufficient scope to address the climate change problem in world. Firstly, it can be acknowledged that market have been given appropriate scope to deal with the climate change problem. The modern market has placed a lot of focus on environmental sustainability as opposed to the previous markets. The modern consumers are more informed; hence have a tendency to associate themselves with organizations, products and services which are environmentally sustainable (Pazirandeh & Jafari 2013, p.550). For this reason, the market has provided enough scope for the observation of environmental sustainable practices hence averting the looming climate change. One of the ways in which organizations and the market can do this is by embracing green or renewable energy. One of the renewable energies which the market should try to exploit is solar energy. Solar energy is instrumental in the generation of electricity whose generation using other conventional means for instance generation using petrol or engine generation is a major contributor to the amount of carbon gases in the atmosphere (Pazirandeh & Jafari 2013, p.550) The market should also exploit bio fuels which have the capacity to turn the world away from the use of fossil fuels. Currently, there is a major progress in the research and development of bio fuels and countries such as Brazil are already reaping the benefits of using bio fuels. The continued research on technologies which use lesser fuel is a manifestation of the wide scope which the market has on addressing climate change. Automobile manufacturers are developing new engines which have reduced fuel consumptions such as Electric Fuel Injection (EFI) and the variable valve transmission injection (VVTI) which are associated with a reduced consumption of fuel. The market also has options of embracing green logistic systems and programs which are meant to ensure that organizations have minimum negative impact on the environment. One of the aspects of green logistics is the appropriate use of natural resources such as water (Martinsen & Björklund 2012, p.563). Others include the establishment of supply and distribution networks which have minimum carbon emissions per unit volume transported. This is the ideal supply chain model used by Woolworths Australia. From the discussion above, it can be acknowledged that the market has the required scope to address climate change. However, the reluctance and the lack of will to address the problem by the market is the main challenge to the mitigation of climate change (Kok & Coninck 2007, p.587). On the other hand, it can be claimed that the market is not provided with the appropriate scope to address climate change. On this point, it is important to acknowledge the fact that the market is heavily regulated by legislations, policies and laws by national and international institutions. Taking an example of the Kyoto protocol, it can be seen that the United Nations Environmental Program UNEP coerced the developed countries to enact measures to reduce the carbon footprint on the globe by buying the so called carbon credits from less producers of carbon gases. The Kyoto protocol lacked a market driven initiative to address climate change; hence its inability to address climate change (Council on Foreign Affairs 2013, p.1). The stalemate which was associated with the UNEP global meeting in Durban South Africa is a show of lack of commitment by the world leaders to address climate change (Council on Foreign Affairs 2013, p.1). Concluding, the essay has given two sides of the claim that climate change has not yet been adequately addressed is because markets have not been given sufficient scope to address the problem. On one side of the argument, the essay argued that the market has been given enough scope to address climate change. It was argued that organizations in the market have an option of embracing environmentally friendly practices such as the use of green energy and green logistics but are reluctant in doing so. The counter argument states that the reason as to why climate change has not yet been adequately addressed is because markets have not been given sufficient scope to address the problem. The essay discussed about the lack of good governance on a global platform to support environmentally friendly activities. However, it can be concluded that markets have a substantial scope from which they can be able to address climate change; hence it can be acknowledged that the reason as to why climate change has not yet been adequately addressed is not because markets have not been given sufficient scope to address the problem. References Council on Foreign Affairs, 2013. The Global Climate Change Regime, http://www.cfr.org/climate-change/global-climate-change-regime/p21831 Kok, M., & Coninck, H., 2007. Widening The Scope Of Policies To Address Climate Change: Directions For Mainstreaming, Environmental Science & Policy, Vol. 10, No. 7–8, pp. 587 -599 Martinsen,U.,& Björklund,M., 2012. Matches and gaps in the green logistics market, International Journal of Physical Distribution & Logistics Management, Vol. 42 ,No.: 6, pp.562 – 583 Pazirandeh,A., & Jafari, H., 2013. Making sense of green logistics, International Journal of Productivity and Performance Management, Vol. 62, No.: 8, pp.889 - 904 Read More