Global Economy as a Movie
Mandel’s article “Global economy as a Movie” deals with main economic and political issues comparing them with movies’ endings. In the article the author starts stating that movie directors often have two relevant endings of the movie as well as countries’ governments have several possible ways of problem solving and people remain unaware of the future outcomes. Mandel provides examples and evidence to support his assumptions and suggestions. Firstly he argues about the movie directors and films’ endings asserting that sometimes directors don’t know till the last minutes what the ending to choose. The same situation, according to the author, is with the world’s economy. (Mandel 2005)
Mandel feels that people nowadays seem to be in society being controlled by unprofessional economist and it is practically impossible to predict the outcomes. The situation is similar to that when the film is directed by deranged operator.
As far as many countries are industrialized such situation is likely to be perplexing for workers. Mandel argues that profits nowadays are significantly higher than the wages offered.
And it inevitably has resulted in labor decrease in economy. For example, the author provides evidence that in many, even developed countries, the gross domestic income of employee share has dropped. (Mandel 2005)
Mandel explains the reasons of such labor efficiency decline suggesting that spread of the competition in the modern global world seems to be the only proper explanation of the current situation. It means that workers, having had the privileged status earlier, don’t want to be provided with lower standards of living. Mandel quotes famous Harvard economist Freeman who argues that the countries entered global economy has intensified the workforce in the whole world. It has led to current situation when the labor force is rich, returns for capital are swiftly increasing, capital seems to be scarce and the potential of labor force is decreasing. (Mandel 2005)
Mandel cites Freeman suggesting that labor markets are pressed by too many workers and too high amounts of capital. Therefore the balance has moved towards the capital.
Mandel asserts that industrialized countries have to restrict efforts in order to lead faster growth of productivity and higher profits and thus to booster economic efficiency. Labor’s share has fallen to a lower level in many countries, including USA. The author suggests that unexpected surge of efficiency and productivity growth is the reason of profits soaring. (Mandel 2005)
Mandel notes in the article that economic data presented by the government hasn’t shown significant gains in productivity as well as efficiency. It is reported that productivity growth has also declined along with labor force.
Mandel quotes Alan Greenspan who admits that the main reason to increase the productivity growth is raising corporate profits that would accelerate the growth. However, many economists are too skeptical to such notion. (Mandel 2005)
It is indicated that the same situation is observed in many other countries involving Europe and Japan. Nevertheless, productivity in some countries is accelerating due to use of high technologies and proper deregulation.
Mandel says that Europe is characterized by decent profit gains and operating profits are becoming higher due to diversified manufacturing. Other companies try to restructure to increase productivity and labor. (Mandel 2005)
The author concludes the article providing the arguments that economic statistics shows no productivity accelerating and labor force increasing. Some countries demonstrate slight increase in productivity growth, although it is not sufficient to change the situation in a global scale. Productivity growth according to Mandel can be accelerated if to revise and output, to downward the number of working hours and to stimulate workers and employees. Mandel mentions that these processes are likely to happen in the near future. (Mandel 2005)
Mandel, Michael. (2005, July 20). Global Economy as a Movie. Business Week Online. Retrieved October, 8, from http://www.biznewsarchive.com/16766-the-global-economy-as-a-movie.html