Globalization Wins Five Stars in ForeWord Clarion Review

Reviews are important for authors, because it shows other’s approve of their work, and offers readers insight into the work that is objective. Today my book earned a five out of five star rating and was reviewed by ForeWord Clarion Reviews,  a print magazine and online review service for readers, booksellers, book buyers, publishing insiders, universities and librarians. Read the review here.

ForeWord Clarion Review reaches 20,000 print subscribers and about 150,000 people visit the review service’s website every month.

Among the comments of the reviewer, Barry Silverstein wrote, “The second section of Globalization, titled ‘Around the World in Ten Chapters,’ should prove to be exceptionally useful to any corporate manager who needs insight into the economic viability of virtually every region of the world.”

“The breadth and depth of Globalization suggests this book could be the single reference required for the reader who needs to know more about any aspect of the global economy.”

My intention for writing this book is to show people how current globalization movement can effect them, but more important to help them find answers to engage the globalization movement. So the comment from Silverstein is approps.

The Scottish Connection: Adam Smith, Charles Darwin and Andrew Carnegie

It might be pure coincidence, but the three notables mentioned defined and/or revolutionized very important areas of knowledge and human activity.

Adam Smith (1723-1790) the undisputed father of economics –to whom a previous post was dedicated– established the foundations of that area of knowledge with his seminal book, An Inquiry into the Nature and Causes of the Wealth of Nations (1776). He was born and lived most of his life in Edinburgh.

Charles Darwin (1809-1862) revolutionized biology with his momentous theory of the evolution of species. Like Smith, he was also born, and lived most of his life in Edinburgh.

Andrew Carnegie (1835-1919) –born in Scotland, in Dunfermline, northwest of Edinburgh– was probably the first philanthropist in the world to go loud, public and wholeheartedly into devoting his life in this direction, setting an utmost precedent for future generations.

The profound personal transformation that Andrew Carnegie experienced –being one of the wealthiest industrialists in the world and becoming an ardent practitioner and advocate of philanthropy– was unprecedented. In his early 30s, Carnegie began to manifest a marked spiritual search centered on helping others, on a mass scale, while simultaneously detaching himself from material wealth.  In those years, he drafted a memo to himself that read, among other concepts: “ …the man who dies thus rich dies disgraced.”

The philanthropic work of Carnegie is legendary. Faithful to his strong beliefs, it is estimated that by the time of his death he had given away as much as 98% of his personal wealth. He reputedly helped open over 2,800 libraries. Devoted to learning, in 1904 Carnegie founded the Carnegie Institute of Technology in Pittsburgh, now the Carnegie-Mellon University. One of Carnegie’s major philanthropic interests was world peace; towards that end, in 1910 he established the Carnegie Endowment for International Peace.

Most contemporary praiseworthy philanthropists can trace back their ideological roots to this great human being.

In summary, the Scottish lands were the birthplace of three outstanding characters:

  • The father of economics

  • The redefiner of biology

  • The pioneer in large-scale-high-visibility philanthropy

It is truly remarkable and unusual for a single region to have produced such outstanding set of minds, within a time window of a little over a century.

David Ricardo: Comparative Advantages and Globalization

In the previous post we boarded a similar line of thought, regarding Adam Smith and The Wealth of Nations. It is only natural, almost a reflex, to do the same thing with another pillar of economics, the  British, David Ricardo (1772-1823).

Among the many anxieties and fears about globalization, there are two very closely related, legitimate questions that stand out:

  1. How do we currently deal with globalization?
  2. What is the best way to deal with globalization?

positive effects of globalization

From my experience, the best way to answer these questions is by using the principle of comparative advantage, brilliantly explained by David Ricardo. Ricardo stated that economic activity and international trade, at all levels, depends on everyone doing what they know how to do best. This principle is universal and applies to all individuals, societies, corporations, regions, and countries at all times.

Originally, Ricardo termed it the principle of comparative costs, and documented it when opposing the protectionist Corn Laws, which restricted imports of wheat. That term was later substituted by comparative advantages – also frequently referred to  as competitive advantages. Personally, I also use the expression making a constructive use of differences, to refer to the same principle.

Human preferences, tastes, abilities, physiques, and metabolisms are different. Therefore, another way of understanding the principle of comparative advantage is by focusing on the constructive use of all differences that exist among individuals.

The principle of comparative advantage can be fully implemented even within a single work group. A football team can be a good example. The position of each player on the field is well defined and different from the others. Yet the individual positions complement one another and are thus mutually reinforcing. Everyone relies on their own team members—just as it happens in everyday life, be it within a profession, family, or any other setting.

The business and professional world is exactly like sports. Using comparative advantages involves specialized labor, for the constructive use of differences and teamwork. The good news is that, as hard as it may be to believe, there are enough jobs for everyone in the world. However, this only holds true if society is appropriately organized. A reasonably well organized society functions under the not-a-zero-sum-game principle, whereby new growth is constantly created, without having to subtract that growth from elsewhere, on the average. In order to properly understand the not-a-zero-sum-game principle, in this context, we must constantly have in mind the creative destruction mechanism. On top of that, given the ever-present protectionist instinct in many nations, it makes us wonder how much humanity has really learned about the multiple, profound and lasting benefits of free trade. The evidence suggests that there is still plenty of learning to do in this regard.

Rise of the Talent Economy

Has talent killed capitalism? In the traditional sense, absolutely! And that’s one the positive effects of globalization. Power in the ‘yes’ economy is moving increasingly in favor of the creative, small, quick-thinking, agile business, country or individual.

positive effects of globalizationSo, to say that the traditional sense of capitalism is dead isn’t overstating our current global environment. More precisely, the greatest philosophy that has fueled the world’s most successful economies is evolving. For the Huffington Post blog, Klaus Schwab founder and executive chairman of the World Economic Forum, writes that financial resources ruled capitalism until recently. The more capital a business could acquire, the more power it possessed, the more influence it could wield.

But things started to change with the advent of the Internet, which leveled the marketplace. The Information Age was born and information became cheap, and the bar to enter the marketplace lost tremendous value.

In my book, Globalization Opportunities and Implications: The ABCs to a global social revolution, I write, “The most important value of the information age [became] intellectual capital, much more so than financial capital. “

Shared value creation and powerful social networks are growing stronger, quicker, and faster than ever before. In this new environment, “capital is being superseded by creativity and the ability to innovate,” as Schwab has written. He continues, “If talent is becoming the decisive competitive factor, we can be confident in stating that capitalism is being replaced by talentism.”

This is no dream, either. The positive effects of what Schwab and I write about are shedding light in countries with economic growth, such as the Scandinavian countries, and in far eastern economies too. Check out our post on “What do Singapore and Congo (DRC) have in common?

There really isn’t anything these countries have in common. Congo is a miserable failure, even though it’s resources are immense. From the perspective of the old capitalism paradigm, it should be prosperous, powerful – influential. Not so.

Singapore, however, has very little in natural resources among other old-school success indicators, but its gross domestic product is nearly 31 times greater than the Congo, its exports are just over 40 times greater than the Congo’s, and its per capita gross domestic product is nearly 200 times that of the Congo.

What’s fueling this? Creative, talented, socially responsible leadership.

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