Abstract: Networks and Globalization

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2012 Douglas R. White. Download: Networks and Globalization Policies. Chapter 9, in, Balàzs Vedres, and Marco Scotti (editors), Networks in Social Policy Problems. Cambridge UK: Cambridge University Press.

Abstract. The need for a new economy is deeply rooted in Western history. The assertions of this chapter, summarized here, will make that evident. These deeper historical perspectives are needed to understand today’s conundrums. In the early Medieval Renaissance, center and periphery were based on betweenness centrality (on shortests paths), which, within Europe, gave advantages to local hubs such as Genoa. In these kinds of trading systems, commercial ethics dominated, with emphasis on building trust in order to expand markets. But, as betweenness centrality for Europe began to yield advantage to cities on its eastern boundary, and with pan-Eurasian trade routes opened by the Golden Horde under a commercial ethic "or else," i.e., conquest, Europeans from 1300 on began attempts to penetrate the more distant control points for pan-Eurasian trade. Center and periphery began to take a new shape, that of flow centrality (sum of flow capacities), which has no bounds in trading systems, so the competition is all against all, in a single-winner model. Thus, as early as 1450, European naval powers such as Portugal initiated policies of conquest for purposes of forced trade at forced prices. The guardian ethic of what's ours is not to be shared, what's ours is to be protected, pushed aside the commercial ethic that had flourished earlier in East Asia. Portugal conquered the far Eastern port cities to establish protection rackets. Following the conquest of the New World by Europeans, north European cities took over the positions of financial flow betweenness. Global outreach developed power centers shifting to the Dutch, the English, the British Industrial Complex, and eventually the U.S., without a break in military-based economic policies of trade, which by definition is coerced exchange lacking fair pricing. The English "Glorious Revolution" of 1698, resulting in a peaceful integration between Protestant and Catholic citizens and contenders for the Crown, came about with the anomaly of truly commercial trade by (British) East India Company sea captains, who recurrently defected from their EIC corporation in their second year to trade on their own account in South Asia. This malfeasance towards the EIC through private trade became so intense, it has been argued, that it created the first fully free market ungoverned by states and military policies, thus creating the "market economy." The EIC formally abandoned intraregional trading, which by 1680 was left to individuals. Once the company withdrew, however, the return of sea captains and traders to London created a entrepreneurial and merchant-empowered legislature that disempowered the landowning elites and created what was effectively the first modern commercially-based democracy. Private trade to the East continued to 1824 and beyond, with many additional predations of Europe on India and China. Unfortunately the policy of European governments, following the notion advanced by Modelski of evolution of the World System through "evolutionary learning," even while modernizing, continued the practice of militarily dominated trade. Under these circumstances, the potential for what would otherwise be "free markets" was not realized in terms of having fair pricing or fair remuneration to labor, or consideration of the ecological costs and damages of militarily dominated trade. In the broader historical sweep, it can be concluded that militarily dominated trade, continued in the present era, and the Guardian ethic of "what's ours is ours, not to be shared, and defended at all costs for us alone" continues to be implicated today in the financial meltdowns of 2008-into the future. The policy remedy is a return to the commercial ethic of fairness, trust established by regulations and punishment for illegal actions, and cooperativity. Fairness is established, from families to Champaigne fairs, by repeated evidence of consistency in behavior. Portuguese militaristic trade is an example of the diametric opposite: threaten to destroy others unless they give the price wanted, use overwhelming force on those who don’t agree, charge protection money from those who accede, and never relent on prices. Walmart is a modern variant , using techniques used in the military procurement overseas, which implants an extra dimension of demanding prima facie unfair procurement prices. We need a new economic perspective and fairness systems design. This article contains the evidentiary construction drawing from historical sources and analyses intended to validate these assertions and my conclusions.