IR Blog Post 3: Role of Govt. and Technology in the Global Economy

 Susan Strange writes in her paper, Finance, Information and Power, “The integration of the world economy has been achieved through the bringing together of national financial systems into one global system.” (Strange, 259-260) This global system has played a massive role in the global economy and capitalism throughout the world as it connects many powerful countries and large economies in a way that many benefit. Strange’s main focus was on the comparison of the US and Japan and their relational and structural power, yet she mentions the use of technology throughout the conversation of the global system.  In this blog post, I will discuss the role technology has on humans, which is connected to government involvement in those innovations, and how the role of government should continue like the “embedded liberalism” Rawi Abdelal and John G. Ruggie wrote about. In my foundation class, From Fire to Uber, we focus on the role technology has played in the development of human evolution. Through the use of fire, we began spending less time consuming food and more time developing our brains to become the dominant actors across the world. With the technological innovation of the lightbulb by Edison and his research team, humans have been able to work longer hours and not feel pressure by the rise and fall of the sun. Now, with the use of computers, telephones, and television, the communication between continents has been astronomically simplified. Not only does Strange discuss the benefit from the “improvement and standardization of modes, means, and channels of communication”, but since her focus is on Japan and the US, Abdelal and Ruggie discuss the importance of it all around the world and the effect it has on the global economy. 

Abdelal and Ruggie believe in the global economy, and with the term “embedded liberalism”, the global economy could prosper. This embedded liberalism involves a more active government in regulating and supervising the global economy. What Abdelal and Ruggie argue for is similar to what is occurring in a book I read for my foundation class by Fred Block and Matthew Keller called Where do Innovations Come From? Transformations in the US Economy, 1970-2006. Instead of this laissez-faire technique of capitalism everyone believes the US has, there actually is a hidden developmental state, where research and development are funded by the government that help corporations in their search for more efficient and modern ways to work for the economy. Block and Keller talk more about the US economy, but it could be transferred to the global stage. The global economy is one to save, as there is not a better option in terms of receiving and trading for necessary needs across country lines. Through my limited knowledge on the global economy and trade across the globe, I still believe in this hidden developmental state where the government lends aid to innovations in technology. With these innovations and the role of government the global economy should prosper. Therefore, the government should have a more significant role in the global economy, all over, so they could help struggling countries produce and participate in the global economy. The usage of this term “embedded liberalism” would be beneficial to the global market as single countries would not get too dominant in trade, and regulations could be placed on the unilateral power which the global market does not want to be dominated by. Not only would the governments, hopefully, keep good relations, but they could work together for more innovations that would lead to an economy that could continue to be easy to run and easier to trade. Economics, even on the global stage, needs politics and similarly politics needs economics for everything to prosper and eventually develop new innovations and technology that will help the entire world.