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Re: [Re: Globalisation kills Indian Industry??!!]



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Please help make the Manifesto better, or accept it, and propagate it!
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Are you implying that there is no correlation between liberalization and
globalization?  A more important question is whether one can "exist"
without the
other (the so called "isolated" markets)?

Basically, I am not buying your argument that liberalization and
globalization are
2 different things.  It is impossible to have a completely liberalized market
where there is no globalization and vice versa.

In fact, in Modern Economics the two can be unified effortlessly (I assume).

Sincerely,
Vamsi M.

Srinath S wrote:

> ---------------------------------------------------------------------
> Please help make the Manifesto better, or accept it, and propagate it!
> ---------------------------------------------------------------------
> Liberalization and globalization are two different things. And it is
> imperative to understand the difference between the two.
>
> Liberalization is freeing a market from the shackles of protectionism and
> government control. And as long as the market exists within a single
framework
> liberalization leads to a free market economy.
>
> Globalization on the other hand is opening up trade *across* market
> frameworks. This need not necessarily lead to a "global free market."
This is
> because of the different levels of instutional development in different
> markets, and the notion of exchange rates. Exchange rates is an arciaic
notion
> in which globalization existed in the past. (Note that we have always been a
> globalized world, it is only the trading configuration that changes.
> Isolationism is also a kind of globalization where connections across
markets
> is zero.)
>
> A few researchers from the IGIDR have recently discovered an impossibility
> condition: It is impossible to have globalization, independent monetary
> policies (based on demands) and a constant exchange rate.
>
> It is not difficult to notice many profound ideas hit the mud in India. And
> the reason for this is not always government controls. In a globalized
soceity
> it is much easier to seek out demands of a market whose currency is strong,
> rather than nurture and build solutions for meeting local demands. But then,
> it is the meeting of local demands that increase local economic strength.
>
> I am not sure the Mumbai club was asking for more protectionism. Or
rather, I
> am not sure protectionism is the answer. Government controls and
protectionism
> not only suffocates the local machinery, but it also prevents ideas and
value
> flowing in from the outside. But at the same time FDI and unbacked rupee is
> also not the answer. Because market dynamics seek out the stronger economies
> ignoring ground realities of local economies completely. The answer, I
guess,
> lies somewhere in a rethinking of the notion of money and value.
>
> We still use archaic definitions of money -- something based on bullion
value
> and currency interchange. But in today's world it is possible with no great
> efforts to set up an MNC in the room upstairs and transact with several
> countries and their currency at the same time. The technology is there, but
> economic paradigms to match them aren't yet there. Whenever rupee falls down
> wrt the dollar there is a cry to regulate money supply for preventing
> inflation. What this does is to increase the barriers between the rich
and the
> poor (not that the rich and the poor here are not the same rich and poor
> created in a free market economy; the poor aren't lazy here -- they're just
> hard workers doing thankless and revenueless jobs.)
>
> This topic is much more complex and much less understood than what is
usually
> portrayed over the "global" media. And I feel it is imperative to be
> addressing (and leveraging) over this issue soon.
>
> Srinath
>
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> This is the National Debate on System Reform.       debate@indiapolicy.org
> Rules, Procedures, Archives:            http://www.indiapolicy.org/debate/
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--
Sincerely,
Vamsi M.



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This is the National Debate on System Reform.       debate@indiapolicy.org
Rules, Procedures, Archives:            http://www.indiapolicy.org/debate/
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