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Is globalization a driver of economic growth and social development?

A cross-national, quantitative perspective on current, pro-globalist strategies of the European Union

Society and Economy
Author: Arno Tausch

This article starts from the assumptions that the world can learn a lot from the empirical and theoretical debates and research results of dependency and world systems research. The European ‘political class’ seems to react more slowly to the implications of the global economic crisis. The policy package currently offered by the Commission still relies on open economies as pillar number 1 of any conceivable strategy. A rediscovery of this radical ‘dependency perspective’, first introduced by the Argentine economist Raúl Prebisch and other Latin American thinkers during the Great Depression of the 1930s, and more fully developed in the so-called Latin American ‘dependency debate’ of the late 1960s and 1970s; and the current empirical ‘world systems theory’ mean a fundamental break with the existing dominant thinking on the subject of economic and social convergence. Continuing critical perspectives, initiated by Polanyi, and developed in Hungary by Andor, Inotai and Szentes, and above all in the quantitative investigations by the Swiss sociologist Volker Bornschier and his associates, we show that on a global cross-national scale, very important indicators of the future and well-being of our continent, ranging from the famous ‘European social model’ to tertiary educational enrolment, infant mortality, rule of law, female survival rates, economic growth, inequality, unemployment, and environmental security are significantly being determined by our models, and all the explanations point in the direction of the penetration of multinational corporations (MNCs) and its growth over time as constituting a major and important development bottleneck. Our dependency approach thus re-iterates the substantial findings, proposed by the Bornschier sociological school. A thorough re-thinking of basic premises of policy-making in Europe is thus necessary. In our opinion, European policy-making finally should dare to take the globalization-critical organizations of ‘civil society’ seriously.

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Is Europe becoming the world’s leading knowledge-based economic area of the world, as European leaders planned at their Lisbon meeting in 2000? In this article, we analyze the Lisbon performance of the countries of the European Union from a long-term, structural perspective. We examine performance in the Lisbon indicators by factor analytical means. To measure progress, we observe contradictions between some of the indicators, chosen by the member governments and the European Commission. Finally, we conclude that only a Schumpeterian vision of capitalism as a process of “creative destruction,” or rather “destructive creation,” can explain these contradictions, which we empirically reveal in this analysis, and which beset the “Lisbon strategy” from the very beginning. European decision-makers often seem to be unaware of these underlying contradictions, which is why the goal of our paper is to clarify the processes involved. In Schumpeter’s elitist-conservative visions of society, the decay of values in the capitalist society was an all-important element in his pessimistic theory developed in “Capitalism, Socialism, and Democracy”. For Schumpeter the disappearance of the enterprising, male-dominated capitalist family was a critical element in his theory. But it is not the disappearance of the enterprising capitalist family that threatens the future of capitalism in Europe, but the often still existing incompatibility of work and family life, which explains more than 60% of the Lisbon process failure.

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With the growing environmental crisis affecting our globe, ideas to weigh economic or social progress by the ‘energy input’ necessary to achieve it are increasingly gaining acceptance. This question is intriguing and is being dealt with by a growing number of studies, focusing on the environmental price of human progress. Even more intriguing, however, is the question of which factors of social organization contribute to a responsible use of the resources of our planet to achieve a given social result (‘smart development’). In this essay, we present the first systematic study on how migration — or rather, more concretely, received worker remittances per GDP — helps the nations of our globe to enjoy social and economic progress at a relatively small environmental price. We look at the effects of migration on the balance sheets of societal accounting, based on the ‘ecological price’ of the combined performance of democracy, economic growth, gender equality, human development, research and development, and social cohesion. Feminism in power, economic freedom, population density, the UNDP education index as well as the receipt of worker remittances all significantly contribute towards a ‘smart overall development’, while high military expenditures and a high world economic openness are a bottleneck for ‘smart overall development’.

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Ever since Goldin (1995) proposed the idea that there is a U-shaped female labor force participation rate function in economic development, empirical research is stunned by the question why the countries of the Middle East and North Africa (MENA) are characterized by such low rates of female labor force participation. This gap in labor economics research is all the more perplexing since gender equality, particularly in education and employment, significantly contributes to economic growth. The research strategy of this paper is within a relatively new tradition in labor market research, initiated by Besamusca et al. (2015), which does not exclude the “religious factor” and what the authors call “gender ideology”. Our analysis of the “gender ideology” of Islamism and gender values is based on an empirical analysis of World Values Survey data. In recent economic theory, Carvalho (2013) maintained that Muslim veiling is a strategy for integration, enabling women to take up outside economic opportunities while preserving their reputation within the community. The empirical data clearly support a pessimistic view. We show that Muslim Feminism, which according to our analysis implies the rejection of Islamism and the veil, and the democracy movement in the Muslim world, are closely interrelated. Thus, it is imperative that Western Feminism develops solidarity with Muslim Feminism, and that labor economics stop excluding the religious factor from the analytical frameworks explaining low female labor force participation rates.

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