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#4 Best of Globalization Blog 2013

“Globalization and capitalism are like twin siblings, both with their own unique capabilities and flaws, not always walking or running at the same speed; but in the long run, they always end up walking hand in hand.” This the heart of our post, Globalization and Capitalism, published on March 27, 2013.

We like this post, as did our readers, because we took a closer look at the ideas of globalization and capitalism. Under the microscope, you will find, as we argue, these two notions are as old as mankind. Here’s our point:

 Globalization’s genesis is knowledge and what we choose and don’t choose to do with it.

If you missed this gem, we are bringing it to the top for another read. We believe as you take time to read this post and others, you’ll find that neither globalization or capitalism are bad for our future, but a natural progression of mankind.

Globalization and Capitalism

Both, capitalism and globalization have often been vilified –sometimes even paired up as a super villain duo. They have been charged with pretty much everything going wrong in our lives. Granted, sometimes, poorly implemented versions of both phenomena are to be blamed (The Cyprus debacle being one of the most recent manifestations). However, a careful and more detailed analysis will reveal that things are not as simple as they are often believed to be.

globalization and capitalism

In reality globalization and capitalism are like twin siblings, both with their own unique capabilities and flaws, not always walking or running at the same speed, but in the long run, they always end up walking hand in hand.

First things first. By definition, globalization and capitalism have existed since the very beginning of mankind. They are both an inherent component of human nature. Both globalization and capitalism have been dubbed different origins in time, depending on the reasoning applied. Something beyond any reasonable questioning, is that both age-old processes have evolved into different stages throughout the centuries.

We have been trained to think that globalization has to do exclusively with global matters. And generally speaking, that is true. Globalization’s genesis is knowledge and what we choose and don’t choose to do with it. This involves taking in something that comes from the outside and making it one’s own –expanding the base of knowledge. Therefore every time we expand our knowledge we are increasing our level of interaction with the world, and therefore globalizing. In this regard, you might enjoy reading our analysis on The Multiplying Effect of Knowledge.

This means that even a single person is capable of expanding his or her own horizons and mind. This act in itself is an act of globalization. Like Albert Einstein so brilliantly said, “The mind that opens to a new idea never returns to its original size.”

In short, globalization can be defined as the process of putting together building blocks of knowledge throughout time.

Like every human process, globalization and capitalism can spin out of control if not handled adequately. Some thoughts from Gandhi come to mind: “The world is big enough to satisfy everyone’s needs, but will always be too small to satisfy everyone’s greed”.

Since the dawn of mankind, capitalism has become a driving force of globalization and vice-versa. If we were to visualize global society as an F1 car, capitalism and globalization would be two of its most powerful engine boosters. Like every high-speed booster, they are a double-edged sword that have the power to win the race if adequately used, or crash the car if used improperly.

Contrary to common belief, globalization isn’t the big bad wolf that some people pose it to be; neither is capitalism; turns out that the big bad wolf is ourselves. Our inability to understand globalization and capitalism, and rise up to the occasion is what is keeping us from riding the wave, rather than wiping out (mainly due to a lack of skills, narrow-mindedness, ignorance, lack of a true competitive attitude –the latter being the most important).

The many limitations capitalism has proved to have are invariably related to perverse incentives and a typically untempered greedy attitudes. Those same limitations also apply to globalization.

“The Roots of Violence: Wealth without work, Pleasure without conscience, Knowledge without character, Commerce without morality, Science without humanity, Worship without sacrifice, Politics without principles.”

–Mahatma Gandhi

The above statement is a very simple, yet a profound way to visualize that there is nothing inherently wrong and/or perverse about globalization. It all depends on how the actors react to it.

Constructive, successful, globalization can be summed up in one concept: high competition spirit/action based in each individual’s unique comparative advantages. This, of course, also fully applies to all levels of society  (organizations, countries, etc.).

Hence, the solution does not reside in throwing away both, globalization and capitalism, but in learning how to  handle them appropriately. In fact, globalization and capitalism seem to be with us forever. They are not expendable. We all must constantly strive to substantially improve these dual pillars of contemporary and future society.

#5 Best of Globalization Blog 2013

It’s interesting that our post from July 26, 2012 entitled, “Globalization and The Olympics (Part I)” was the most read post of 2013. But, in fact, it was. My guess is that we tried to frame the Olympics in the context of globalization. We tried to illustrate with this point:

High-performance sports, by nature, must be global in order to make meaningful comparisons. Every athlete’s dream is to stand out around the world. Hence, the global nature of sports in general and particularly of the olympics is beyond any doubt.

As 2014 is at our door set, if you missed our commentary on sports, the Olympics and globalization, here’s your chance to catch up.

Globalization and The Olympics (Part I)

Every four years, during two weeks and a half, the entire world –figuratively speaking– takes a breather to see and learn about high-performance athletes competing with the best-of-the best, in search of  new olympic –and world– records setting and all sort of sports feats.

High-performance sports, by nature, must be global in order to make meaningful comparisons. Every athlete’s dream is to stand out around the world. Hence, the global nature of sports in general and particularly of the olympics is beyond any doubt.

globalization and the olympics

Sports are a near perfect example of human social activity at its best. Very few human endeavors are as universally extended as sports. Global sports is one of the few human activities where virtually everybody agrees on; that is, in the fundamental spirit behind it: open competition, open benchmarking, with widely communicated instantaneous results.

To a great degree, sports exemplify much of the best of the human spirit: teamwork, management by objectives, persistence, emotional equanimity, discipline, and so on. Very few human endeavors, if any other at all, personifies so well the noble spirit behind well understood competition. Naturally, among contenders, it is very pleasant to result a winner, particularly if that is in the top spot in any sports discipline. However, it is of great importance to also learn how to be a dignified loser, like in life in general. The top spots are just a handle. Not everybody is going to win; in fact, the majority will end up losing.

There is another rarely analyzed angle about global sports: the legal structure behind the sponsor organizations, be it the olympics (the International Olympic Committee –IOC) or soccer’s World Cup (the FIFA). For practical purposes, the nature of the sponsoring organizations in global sports are those of a private foundation, where there are no owners behind it. The amount of economic resources managed and deployed is enormous; revenues for tickets, advertising and transmission rights are in the billions, with a lot of entrepreneurship behind sports’ global competition. Hence, the paramount importance of observing the highest moral standards, and adhering to the best corporate governance practices. Yet, this is a relatively unexplored territory, that deserves deep research and some punctual lucid suggestions for improvement. To whom are the top decision makers of global sports organizations like the IOC and FIFA accountable to?

It is evident that there cannot be profit sharing among the non-existent shareholders; despite it, when dishonesty shows up, there are multiple –immoral– ways to gain enormous personal benefit if some top official is willing to. Full transparency and accountability to the worldwide society that finance those extraordinary endeavors must be sought after. The inevitable conflicts of interest can result in horrible situations -as have already occurred in the past– which cloud the otherwise one of the finest endeavors of mankind.

How the Olympics helps (or even hinders) globalization efforts? From my standpoint, the Olympics are a near-perfect example of globalization at its best.

  • First, globalization in sports is an uncontroversial multicentury-old reality, with increased visibility due to contemporary instantaneous and virtually omnipresent communication means.
  • Second, as in any other human effort, not exempt with occasional controversies, the rules of the game are understood to near perfection by everybody.
  • Third, global sports are so embedded in the human mindset, that they are considered an indispensable part of human activity; nobody would ever think otherwise.
  • Fourth, given the three previous points, global sports is an excellent equalizer –at the very least from the equal opportunities perspective–, an excellent role model for globalization, in its wider conception. Global sports are a bright spot in human activity and thus an appropriate reminder to people all over the planet about the multiple benefits that well conducted globalization represents for mankind. Like everything else in life, if not appropriately done, any human endeavor can lead to conflict and even worse outcomes.
Part II of this post elaborates on the Olympics under the light of competitiveness and knowledge, two of the basic pillars of successful globalization.

In my book, GLOBALIZATION, there is a subsection (in Section One) devoted to Globalization in sports.

Las Vegas Sands Corp., Singapore, and Spain. If Only…

Eurovegas-spain

Last Friday, Sheldon Adelson, Chairman and CEO of Las Vegas Sands Corp. [LVS], announced the company’s abandonment of the project to build a more than US $20 billion gambling complex in Alcorcon, a suburb of Madrid. The project, announced earlier in February —the so-called Eurovegas—, would have been Europe’s largest resort, and the first Las Vegas-style operation on European soil.

The cancellation of the Eurovegas project was a major blow for both Madrid and Spain. Madrid had already suffered an earlier blow this year when its bid to host the Olympic Games failed for the third time in a row.

The reason cited by LVS for dropping the project was the lack of clarity in the regulatory environment. Las Vegas Sands Corp. was looking for an increased level of certainty in tax and regulations. Unfortunately, the political atmosphere in Spain is far from inspiring enough confidence about the most likely future scenario. Sheldon Abelson and his team, being very savvy hotel and casino developers and operators, seem to have reached a logical conclusion  after about a year of analysis and interactions with top local and federal Spanish government officers.

According to information provided by LVS, the job creation projected by this development was in the range of 164,000 direct jobs, plus around 97,000 indirect ones. The proposed first phase would have included four casino-resorts with 12,000 rooms. The Eurovegas project was to be developed in phases during a 10 to 12 year period, and would have totaled 12 casino resorts with 36,000 rooms.

After dropping the project in Madrid, the gaming group stated that it will continue aggressive pursuit of opportunities in Asia.

LVS (US $13,191 million in sales in the 12-month period ended September 2013) is the largest operator of casinos, entertainment, hotel, retail, food and beverage, and convention center operations in the world, and has been extremely successful in its Asian operations, in Macau and Singapore. In fact, over 85% of its income is derived from Asia. Thus, LVS global credentials are very well established.

Nobody knows for sure how Eurovegas would have exactly fared. However, given the stellar track record of LVS, in most likelihood it would have been very successful for investors, and in employment creation for the Madrid region. Yes, it is true that the type of jobs that hotel/casinos generate are not the most enviable ones from the social standpoint, not to mention the understandable negative connotation that gaming operations entail. It is precisely because of all these factors that it is relevant to contrast the Spanish case with Singapore’s.

The Marina Bay Sands in Singapore

The Marina Bay Sands in Singapore

Singapore’s society is very well known for its conservatism, and despite being one of the most affluent nations in the world, Singapore went ahead and approved in 2006 the construction of the world’s most expensive casino standalone property, at about US $5.7 billion, including the cost of the land. Up to now, it seems like it was a good decision for both sides, Singapore society and LVS shareholders.

It is very difficult  to reconcile the Singaporean case with the Spanish one —Spain is one of the less affluent among developed nations— particularly given Spain’s current dire social and economic conditions, with unbearable high levels of unemployment, 26%.

Within Spain, Madrid has fared worse than Barcelona, the second largest city. A recent example is that visitors to the Madrid region fell by 20% during August, while visitors to Catalonia —home to Barcelona— rose by 12%, during the same period.

To really know what is best for society in such a complex social issue as hotel/casino operations is extremely challenging, given that there are many conflicting sides and angles at play.

Alternatively, it is safe to assume that the comparative level of cohesiveness and discipline of these two societies is miles apart, which in turn is reflected in how their respective political systems are run, and reach decisions. In Singapore, in the midst of affluence and conservatism gaming operations were given the green light, and the gorgeous Marina Bay Sands is a thriving reality; in Spain, despite being in the midst of a horrendous economic crisis, and of being an essentially more liberal society, it wasn’t able to take off.

Of course, there is also the possibility that the concessions LVS was trying to extract from the Spanish government —both levels, local and federal— to go ahead with the project were beyond logical limits, and, if that were the case, Eurovegas was inevitably doomed for cancellation. There is simply not enough public information for a deeper analysis and for a proper understanding of the whole affair.

Beyond all previous considerations, the would-be Eurovegas is unquestionably an excellent case for reflection about the huge contrasts the global society constantly presents us with.

The Quest for True Statesmanship

“ …a man of uncommon grace and compassion, for whom abandoning bitterness and embracing adversaries was not just a political strategy but a way of life.”

——Bill Clinton on Nelson Mandela

Nelson Mandela

Once in a while, the world is blessed with the presence of human beings whose leadership inspires and lifts the spirit, changing the face of society for the better: a true statesman —or stateswoman.

One of the brightest of soul and heart, whose global influence and legacy will transpire for ages to come has just passed away, the unforgettable Nelson Mandela (1918-2013). His passing compelled us not only to analyze his life’s work, but also to put it in a larger context and  decant the core virtues that define the true statesman —regardless of time and space.

Most deservedly so, the world has consistently shown true respect, admiration, and even reverence to such sporadic and extraordinary human beings. Unfortunately, these unique people don’t come along that often; though, on the fortunate side, there have already been enough cases throughout history that allow a deeper analysis.

Thus, it is not difficult to decode what is behind the virtuosity of true statesmanship, that is, to analyze common traits, values, and practices that have made those people true icons of mankind.

Two characteristics made Nelson Mandela such an outstanding example of true statesmanship:

  • Far from being poisoned and consumed by bitterness, resentment, hatred, and thirst for vengeance towards white people, while unjustly incarcerated during 27 years —mainly for political reasons— basically uncommunicated from the rest of the world, Mandela developed the spiritual stature of true forgiveness towards the white and racist ruling minority of the time. He gained the wisdom to understand that hatred is self destructive, and instead transformed it into constructive energy and channeled it to uproot the primitive racist values of Apartheid. His efforts were directed toward the system, not toward specific people or groups.

  • Madiba, as he prefered to be called, acquired the wisdom to reinvent himself into a statesman, from his humble beginnings as a social activist that in earlier years when out of desperation and impotence, had even resorted to tactics of violence and sabotage. What a profound virtuous transformation did Mandela experience! His high spirit, extraordinary political perception, grit, and ability to learn from and adapt to new changing circumstances, and evolve with righteousness were truly remarkable.

True statesmanship is thus characterized by an extraordinary perception of the most adequate balance in the most important cost/benefit relationships, of the most crucial aspects of society’s leadership and management.

The essence of true statesmanship is not a rigid adherence to the past, but a prudent and probing concern for the future.

——Hubert H. Humphrey

Mandela also had an abundant supply of the fundamental and indispensable characteristics of superb statesmanship:

  • A very high dose of spirituality in day-to-day life, permanently placing the common good before personal benefit. That is, he had the vision, the courage, and wisdom to go against the prevailing conventionalism of his time in pursuit of the common good.

  • The ability to reconcile. The ability to pull together antagonizing forces. Madiba’s wit and great sense of humor were also a big plus.

  • As a corollary of the previous couple of points, Mandela had it crystal clear in his mind the great value of stepping out of office after only one term as president, even though there was a very strong popular demand for him to stay for a second term. He was way beyond the trappings of power and fame. Mandela learnt the superlative importance of setting the bar very high, of setting virtuous precedents. As the old Greek proverb says: A society grows great when old men plant trees whose shade they know they shall never sit in.

  • And, above all, he had a great sense of the high impact that society would attain by smartly leveraging his unparalleled moral authority, image and prestige in building and fortifying South African institutions in pursuit of the best practices the world had to offer.

quote-one-man-s-opportunism-is-another-man-s-statesmanship-milton-friedman

Nelson Mandela represents a before and after in many respects, particularly in regard to race discrimination and reconciliation. He dismantled the most grotesque faces of apartheid with firmness, great balance, and grace. Mandela had the unique opportunity to put into practice an entire credo of virtuosity.

There have been a handful of great statesman in the past three centuries; among others: George Washington, Benjamin Franklin, Martin Luther King, Mahatma Gandhi, Robert Schuman, Deng Xiaoping, Margaret Thatcher, Ronald Reagan, Bill Clinton, Lula da Silva, Pope Francis I, and of course, Nelson Mandela.

The fundamental traits of great statesmanship have already been outlined a few paragraphs back. Of utmost importance, there is a momentous distinction between great and superb statesmanship: the presence and relentless practice of the highest moral values, particularly the highest spiritual principles, distinguish the superb statesman. That was Mandela’s case.

There is no exaggeration to state that a superb statesman behaves with a very high level of virtue and, not surprisingly, no small measure of sainthood, in some specific aspects:

  • Mandela’s forgiveness onto others, after 27 years in jail —essentially ridding himself of bitterness, resentment, hatred, and thirst for vengeance—, in pursuit of a higher goal, the common good, is an impeccable example.

  • Mahatma Gandhi, with his legendary peaceful resistance, and the search for harmony among different ethnic and religious groups, along with his consistent refusal to occupy high office is another excellent example of true statesmanship. Gandhi, along with Mandela, were in a league of their own; the world hadn’t seen statesmen like these, whose legacy has rippled throughout the world.

  • Deng Xiaoping rose above and broke the chain of bloodshed, violence, and revenge that had characterized the Chinese Communist regime up to Mao, and his successor, Hua Guofeng. During Mao’s government, there had been several displays of violence toward Deng’s family —after a series of sketchy events, Deng’s imprisoned son was left paraplegic as a result of being tortured during Deng’s last purge prior to Mao’s death.  After Mao’s death, Deng destituted Hua, and gave testimony of greatness by forgiving him. In this regard, Deng Xiaoping’s case is not that different from Mandela’s, as far as essentially ridding themselves of bitterness, resentment, hatred, and thirst for vengeance; looking forward in a constructive way, in pursuit of the common good.

  • Pope Francis’s ascetic lifestyle began as a priest, and now, he’s trying to implement it church-wide as Pope; breaking with age-old papal practices.

quote-Walter-Lippmann-social-movements-are-at-once-the-symptoms

All previous cases are unquestionable examples of high virtue, of superb statesmanship.

True statesmanship must be an aspiration for the political class all around the world. The inherent virtues should be a source of inspiration for the global political system. Yes, most politicians are far from it, and that is why it is up to society (individual and institutional level) to have these superb and great examples of statesmanship in mind to permanently contribute and exert as much pressure as possible in governments’ actions, in the pursuit of the common good, and ultimately, raising the level of society’s consciousness.

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