From iPhones to Twitter, the world has become interconnected like never before. Consumer goods and services, culture and ideas are moving around the world at lightning speed. The interdependence of the world’s economies, cultures and people – known as globalization – has benefited millions of people, but is also fraught with dangers. On Thursday, May 27, the Boris Mints Institute at Tel Aviv University presented a special webinar, “The challenges of globalization – where do we go from here? Featuring world-renowned economists and social scientists from Israel, the United States and the United Kingdom, who discussed current economic issues and the sustainability and future of democratic institutions. The panel of distinguished speakers included Prof. Manuel Trajtenberg, director of the Institute for National Security Studies at Tel Aviv University; Dr Nadine Baudot-Trajtenberg, former vice-governor of the Bank of Israel; Professor Anat Admati, Stanford University Graduate School of Business; Professor Itai Sened, Dean of the Faculty of Social Sciences at Tel Aviv University and Director of the Boris Mints Institute; Professor Simon Hix, professor of political science and pro-director, London School of Economics; and Professor John Carey of Dartmouth College. The webinar recording is available at www.bmiglobalsolutions.org/
IN An in-depth interview with Jerusalem post, Professor Trajtenberg, economist and former Knesset member, renowned for his expertise in the economics of technological innovation, development and growth, explained that the current wave of globalization began after the fall of the Soviet Union in the late 1980s and early 1980s. 1990, with the expansion of the World Trade Organization. Many trade barriers, such as tariffs and regulations that limited the free flow of goods, have been removed. “Globalization has also been a huge expansion of what was being traded,” he added. “It was not just about goods, but also about services, people, financial capital, ideas, culture and intellectual property. It was a major expansion both in terms of the volume of trade and the type of things that were moved and traded. Another important aspect of globalization, he noted, was the growth of multinational companies that began to operate in different countries of the world, which allowed them to take advantage of wage differentials and access to jobs. raw materials. The rise of multinationals has also led to a decline in jobs in some parts of the world. “If an American company moved to the Philippines, for example, there would be fewer jobs in specific regions in the United States.

Finally, he explained, the different places and countries in which multinational companies operate often allowed them to obtain lucrative tax benefits at their sites. “The benefits of globalization,” he noted, “are obvious. Each time you expand the trade, you increase the earnings of the trade. If in Israel I can import goods from another country, I will if they are cheaper or better than those from Israel, so there is an advantage. Trajtenberg also pointed out that the free movement of capital brought about by globalization allows capital to reach locations offering investment opportunities. In addition, the outsourcing of employment to various parts of the world has led to the reduction of extreme poverty in many parts of the world. On the other hand, globalization has caused a dramatic increase in inequalities and the loss of local industries which have been relocated to other places around the world. “In the United States and in many western countries,” he explained, many people are disappointed with globalization because they have seen no benefit from it. In the United States, for example, the lowest socioeconomic group of the population has not experienced any improvement in income for several decades and has not benefited from these processes. Trajtenberg added that the largest multinational corporations hold a vast concentration of economic power. “They are not just multinational – they are transnational and they are like a power in themselves. There is a backlash in the countries, which are starting to fight against these companies, ”he said. Trajtenberg said that while the process of globalization has been easy to follow in terms of the volume of trade, movement of people and capital, other events have occurred around the world, such as the 2008 financial crisis, which threatened both policies and institutions. “The instability of the global financial system, the fragility and the 2008 financial crisis threatened both political and government institutions,” he said. TEACHER. MANUAL TRAJTENBERG, economist and director of the Institute for National Security Studies, TAU (Photo credit: MIRIAM ALSTER / FLASH90)TRAJTENBERG pointed out that many challenges for democratic institutions have emerged in recent years, such as the rise of populism, the weaknesses of the political party system in the United States, France and the United Kingdom, and the lack of accommodation and agreement between the political parties. He noted that the pandemic highlighted the weakening of global institutions, such as the ineffective performance of the World Health Organization. He suggested that the pandemic, which has isolated most of the countries from each other, has initiated a process of national soul-searching and self-examination in many countries, which may counter globalization to some extent. Governments wonder if they have the appropriate institutional framework to face today’s challenges. “Countries have found that they do not have good health systems and they will pay attention. It means looking inward and not so much outward towards globalization. Additionally, countries that have discovered that they cannot manufacture life-saving medical devices because the parts are made elsewhere may decide to develop local capacity to manufacture their own parts. Israel’s experience with globalization, Trajtenberg said, has been mostly positive. . Israel’s strength lies in its high-tech sector, which is entirely geared towards other countries. In addition, he pointed out, most of the capital involved in high-tech flows outside the country, as illustrated by the large number of Israeli companies listed on the NASDAQ. “From this point of view, we have benefited enormously from globalization,” he said. During the Boris Mints Institute webinar, in addition to discussing the challenges of globalization, Trajtenberg spoke about his solutions to “reform the rules of the game in the Knesset” to improve functionality. He suggested that the functioning of the Knesset could be changed in such a way as to positively impact the behavior of its members in fundamental ways by changing the legislative process. “It is a well-known phenomenon, he stressed, that institutions are slow objects. Technology is changing very quickly. Demographics are changing. The Knesset is the same Knesset. Over time, you have increased the friction between the slowly changing institutions and the rapidly changing circumstances in which these institutions operate. From time to time, we have to revisit them and ask ourselves how we can improve the functioning of these institutions. To do this, you have to think of it as a mechanism. Our thinking about political institutions is tainted. We are looking at it with the wrong lenses. Think of it as a machine whose operation you can change. Globalization and the weakening of democratic institutions everywhere represent a threat to a harmonious world. “The Challenges of Globalization – Where Do We Go From Here? Presented by the Boris Mints Institute has contributed to the thinking and understanding to solve these problems. This article was written in cooperation with the Boris Mints Institute for Strategic Policy Solutions to Global Challenges.



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