New Media as a Celestial Emporium of Benevolent Knowledge

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New Media as a Celestial Emporium of Benevolent Knowledge

Erin T. Altman

21 March 2013

Abstract

 

Conceptualization of the nation-state has a geopolitical history in territorial definition. Defined by political borders, the nation-state is comprised of citizens and non-citizens. Regulated by national policy, national education systems, economy and (other state regulation), citizens and non-citizens have specific experiential boundaries within the nation-state. Fast-forward to the 21st-century, introduction of the Internet increased rapid global communication. Uniting experiential differences with cross-border commonalities, the institution of “New Media” allowed life spheres once bounded by the nation-state to thrive in a global community. In this vein of rapid and broadened communication, does New Media undermine political hegemony?

An epoch of globalized knowledge has intrigued geographers and political philosophers alike. The Internet’s spectrum of information is mediated by the formalized interest in communication studies, and reaches a point of practical convergence in the field of Communication Geography. Beginning through the discourse of globalization under the Association of American Geographers’ ‘Geography of the Global Information Society’ in the late 1990s, Communication Geography now represents phenomenal points of geographic and political intrigue. Dissemination of knowledge over a non-physical space indicates a differentiation in geopolitical power from that of the post-modern age of print media. The epoch of New Media signals a revision in philosophies of communication, geography and power.

New Media’s relationship with the Internet is a viral one; increased access to the Internet and subsequent Internet enlargement are aspects of New Media’s definition of being ‘new, unregulated content’ (Lister, 2003). Inexorability of New Media has gained the attention of geographers and political philosophers, situating the Internet as an entity ‘without boundaries, without limitations, except through state regulation of media.’ (Lister, ibid). New Media is a broad representation of this exponential production of knowledge, unto a platform which is controllable only through governmental intervention with citizens’ freedoms to information. Content that faces scrutiny and regulation includes pornography, intellectual property, and anti-social movements. New Media’s ethical dimension calls in to question the moral biases, societal pressures and most importantly- political agendas in the globalized community.

The globalized community is defined in this case as those who have infrastructural ability to allow Internet access. Establishment of this ‘core’ and ‘peripheral’ relationship echoes the economic mapping of modern nation states, and substantiates the discussion about New Media geopolitical philosophy by outlining the actors. For the sake of giving primacy to New Media politics, rather than global inequities, the ‘Core’ represents those countries whose annual income per capita is higher than the annual cost of an Internet-capable device. Because of the significant difference in income distribution, it is unnecessary to determine the cost of this computer, rather the ‘peripheral’ countries can be outlined by those misfortuned by civil war, populations with 1/3 prevalence of HIV/AIDS, infant death above 50% and other development indicators outlined by the United Nations (2000). Geopolitical inactivity of ‘peripheral’ countries allows ‘core’ countries to enable the discourse surrounding New Media’s information society.

Positioning New Media as an ‘information society’ clarifies its internal discourse separate from that mediated by state-civil society relations. Bringing to light the state-civil society relationship as different from the global-New Media relationship requires the understanding of nation-states as maintaining hegemonic power. Given that the modern livelihood of any societal actor is defined by citizenship through state legibility (O’Tuathail, 1998), New Media represents a differing societal discourse in its allowance for society to remain anonymous from a hegemony. Signifying again the global, a-political aspect of New Media discourse, anonymity of expression is adverse to the legibility of print media. New Media’s exponential increase in communication, coupled with the significant transcendence of non-economic geographic borders, lends to an institution of power that is not the nation-state.

In defining the nation-state against New Media, there is a blatant primacy in their different situations of power (Hanafi, 2005). Reflecting on the resource struggle that established colonial relations, leading to modern-day borders of nation-states (Murphy, 2013), power is expressed over a given territory and over a given population. These two elements of capital, human and territory, suggest a physical embodiment to the nation-state. New Media, on another level, has no physical embodiment. Speculation by the Osmo Project (2008) about mapping New Media, so as to physically represent the ‘Geography of Internet Infrastructure’ proved to be a spatial model of network expansions. So to say, the map of New Media is impossible to represent cartographically, but does maintain a certain taxonomy of expansion. Using the Barbasi-Albert model of evolving networks, which was originally designed for the purpose of tracking military communications in the Second World War, Osmo Project represents the expansionary possibilities of the Internet as limitless. The geographies of nation-states remain steady until a phenomenon of upheaval, as opposed to New Media, which expands without physical boundaries. In the discourse of geopolitics, expansion is akin to power gains, because of the increase in territorial and human resources. Unlike geopolitics, New Media assumes no hegemonic desire for power. Given that geopolitics is etymologically relational- given the root of ‘politics’ in the Grecian division of men based on political affiliation- New Media is merely one actor against no others. Why, then, is New Media involved in the discourse of geopolitics, if it is not an inherently power-seeking institution, with no geographical territory, and with anonymity of societal involvement?

Describing the “constellations” of New Media as representative of globalizing forces, senior geopolitical philosopher Jürgen Habermas suggests that the communicative and geographic scope of New Media leads to political fragmentation. Habermas’s conversation about evolving identities and cultures within the nation-state are significant, due to their representation throughout the discovery of the Internet. Habermas recognizes the global forces of New Media as being overwhelmingly powerful of the nation-state; New Media’s transcendence of borders- omnipresence if you will- acts as a “cultural substrate of civil solidarity.” (Habermas, 2001.) Solidarity is used in Habermas’s conversations about changing geopolitical structures, to power lying increasingly in the hands of civil society, rather than with the state. Phenomenal separatisms highlight the increasing volatility of civil society’s solidarity, and are in a direct rebellion to the increased power of the state (Foucault, 1977). From the beginning of nation-state creation, the consolidation of internal power through citizenship and representation within a hegemonic vacuum has likewise increased the state-civil society bond. Foucault’s notion of rebellion in the face of increased power proves that civil society, although identifiable within the nation-state’s borders, begins to fraction. By centralizing the state hegemony, nation-states are disregarding the smaller substrates of civil society. New Media’s representation of these ‘cultural substrates’ encompasses the ability for members of global civil societies to communicate their alterity from the confines of state legibility- citizenship. This formalized understanding of New Media’s pressure on hegemony can be summed as a platform, which allows civil societies to communicate towards solidarity, which effectively fragments the consolidation of state power.

Defining the discourse of geopolitical theory in to the formal (theoretical), practical (implemented) and popular (societal) expertise, historian Paul Routledge has outlined the three analyses of New Media: the formal being the outside speculation, like this essay. The practical, being the regulated state policy regarding New Media. And finally, the popular, being civil society’s use of New Media. It is important to note here, that the popular is not a reaction to the regulation, but is a discourse within itself. Civil society is divided from hegemony of the state through the anonymity of New Media, which allows for the solidarity among actors. Expanding on solidarity as a popular discourse, the predictions of Habermas have become significant in the recent Arab Spring uprisings.

New Media gained an entirely greater geopolitical significance after the popular uprisings of the Arab Spring. University of Washington study, “The Project on Information Technology and Political Islam” (2011) quantifies the New Media traffic of popular democratic expressions leading up to the Tunisian revolution and subsequent Egyptian overthrow of President Mubarak. The study shows that conversations about liberty, democracy and freedom gained almost 80% of total viewership, and the taxonomy of expansion was proven through the civil society’s rebellion going viral between network clusters in just the week before any given Arab Spring uprising. University of Washington’s study is intriguing, because although touted as the ‘Arab Spring’, the uprisings had very little to do with each other. Egyptian feelings of tax oppression and Tunisian desire for furthered reputation did not exist within the same network clusters, yet the New Media usage patterns were parallel.  Leading the study was Professor Phillip Howard, who claimed that it was not a regional movement, but ‘circumstantial evidence of New Media’s ability to insight solidarity.’

More intrinsically, the solidarity of the New Media movement in the Arab Spring was through the creation of online communities and use of forums. Enabling civil society debate to occur outside the sphere of physical interaction within the state, New Media gave rise to less-geographical, more-ideological communities. In an interview with Egyptian friend and colleague, Omar Hagrass, who took part in both the ‘freedom-blogging’ and Egyptian uprisings, the interconnection between separatist groups through New Media was shocking; not only had Egyptian Computer Scientists created network clusters to divert state attention, but the networks created communities among separatists from the Zapatista movement in Chiapas, Mexico, and the Ulster Nationalist movement in Northern Ireland, United Kingdom. Described by renowned author Benedict Andersen as an ‘imagined community’, the New Media networking done by Egyptian, Mexican and Irish separatists had nothing to do with personal relationships, but instead an imagined kinship in their cause. (1991) Andersen’s prediction of globalized communication as a means to develop a certain consciousness away from that of the traditional nation-state oriented map is congruent with Habermas’s understanding of solidarity between civil society actors as a weakening of the state. New Media becomes a vehicle for shared experience, despite the geopolitical setting.

The anti-geopolitical use of New Media is concurrent to the post-Soviet evolution of geographic theory. Known formally as ‘critical’ or ‘feminist’ geopolitics, the movement for recognition of the intricacies of civil society dominate discourse and shed light on the access to shared experiences. Assuming that the state creation of citizenship creates an empirical definition between one group and another- effectively ‘othering’ them- shows the consolidation of state power in the territorializing of its’ citizens.  This power dynamic is known as the ‘Logic of Alterity,’ which suggests that unified identities are inevitably the hierarchical power. (Isin, 2007. Arendt, 1958.) The Logic of Alterity maintains that subdivision in civil society is seen as ‘wrong’ because of its implied danger to the normative power. The bond between state and civil society consolidations of power are approached monolithically from a macro- to micro-scale. As suggested by New Media’s increased capacity for communication, the state-civil society power is weakened in its normatively unbound allowance for subdivision.

Practically speaking, subdivision in society is increasingly unavoidable with ever-increasing flows of immigration, ideas and innovation. Subdivisions could be ignored, like in the extreme case of fascism, or subdivisions could be embraced under greater state regulation. In the case of the Arab Spring, subdivisions were stifled; New Media was blocked on Internet servers, or Internet itself would be entirely cut off from an area. When this occurred during the Palestinian riots for statehood from Israel in early 2012, the international reaction became an official UN movement towards the ‘Right to Internet Access’. Beginning in 2003, upon the introduction of a knowledge-based economy in Great Britain, the Internet became institutionalized by UN members as a significant expression of freedom. Pressure towards sanctions by the German and French governments (and later acting as leaders in the 2012 vote for Palestinian statehood) depicted a civil society subdivision that was actually favoured by the Social Democratic party leaders. German and French states had seen 8-15% more Palestinian refugees since the upswing in Israeli-Palestinian conflict in the mid-1990s (Human Rights Index, 2005), and despite their non-citizen status of asylum, their voices were clearly present in the decision of French and German ministers to the UN. Despite Palestine having the infrastructural and income capabilities for Internet access, Palestinian refugees were unable to connect to their families in a time of crisis, creating a heightened solidarity around immigrants and New Media discourse.

This hegemonic representation of a non-state civil society is based in the power of New Media itself. As a tool not only for the civil society actors, the state uses New Media to analyze changes in society, which could lead to possible separatism or other fractions of state power. Using New Media as a regulatory mechanism, the German and French governments issued an official Eurobarometer forum on the UN’s ‘Right to Internet Access’ (2011). The Eurobarometer, as the official European Union mediation of member states’ citizens’ feelings towards policy and livelihood, is a vehicle for the maintenance of relations between the state and civil society. The European Union (EU) is a supranational regional power, with a doctrine of supremacy over specific member state policy and is exactly the type of burgeoning power that Foucault described as piquing rebellion (1977). Foucault’s description of heightened power leading to heightened rebellion was a founding anti-geopolitical argument; the European Union stifles rebellion through institutions facilitating power-civil society discourse, such as the Eurobarometer. In fact, in an effort to reduce waste, the EU cut all publically distributed paper materials from its budget- leaving only one vehicle of representative democracy (outside of the national legislatures)- New Media.

Presence of the EU in New Media supersedes any other governmental body, because of it’s expansive “The EU and You” section for forum, information and response. Provided in all 27 recognized European languages, as well as Norwegian, Mandarin, Arabic and Japanese, “The EU and You” is a vehicle of power consolidation through civil society connection (Lister, 2003). This use of New Media by a regional economic hegemony is telling of New Media’s coalescence of communities that that never existed before. If we assume that interest in the EU’s New Media campaign comes from the representative desire from these member states, can we also assume that the representation is being fulfilled?

In the case of Palestinian representation to the UN, Germany and France had already written the ‘Internet as a Human Right’ proposals before the Israeli stripping of Palestine’s Internet access. To this extent, the leading question in the Eurobarometer poll read, “Does freedom to access and contribute to the online community part of your rights to expression?” (personal translation, Europa.eu, 2012). Charged with the vernacular of ‘freedom’, ‘contribution’, ‘community’ and ‘your rights’, the Eurobarometer poll had a suggestive slant towards the affirmative. Upon solicitation of the UN for Internet rights, the EU’s New Media campaign expanded to include open access to textbooks, learning tools for production, and other knowledge-based constructions of European hegemony. Recognizing New Media’s potential for a vehicle of neoliberalism, the EU uses the Internet to distribute ‘Western’ ‘knowledges’ under the guise of open access to information towards a emboldened economy (Cooke, 2004). Nuancing the core-periphery status of nations within and outside of the western ideological constraints, the EU is using New Media to create an ideological hegemony.

New Media’s ability to expand communication across multiple geographical confines is seen as both a tool and threat to state-civil society relationships. Established so far, New Media is a supragovernmental concept, which causes state-civil society distress because of the anonymity of its exponentially increasing character. New Media is also seen as a community-building tool, which can provide democratic reflection on society, amongst a wider group of people. This democracy, though, has established a new ‘core’ and ‘peripheral’ structure- beyond that of economic difference, although beginning with it. New Media’s discourse is essentially a Western phenomenon (Cooke, 2004). The Internet, begun by economic forces like any other modern capitalist endeavour, is also perpetuated by economic forces through payment for its access (on a device) and use. The specifics of the Internet’s existence through the capitalist market, and with the largest servers (Cisco Systems) and largest domain providers (Google, Apple, Yahoo!, and others) being traded publically, does New Media exist within a predominant power structure of the economy?

The impact of economic distribution of New Media access, through either personal access or promotional capabilities, creates a symbiosis between civil societies, the state and the outlying force within them- capitalism. New Media presents an epoch to this relationship, though, in its force of mediation between geopolitical economic disputes. In this vein, New Media is a disruptive force to the history of trade war and commoditization of political relations, because of the anonymity of online economic actors. The financial industry, comprising over 85% of the British Gross Domestic Product, is almost entirely mediated by New Media forecasting and broadcasting (Rowe, 2013). Global Stock Exchanges use the medium of New Media to freely express geopolitically important resource abundance and exchange value. Intrinsic relations of the very essential definition of power- resource security (Murphy, 2013) and the power of New Media access have made those who hold it increasingly more powerful than before.

In a World Systems Theory analysis of the access to New Media, author Mark Graham suggests that the ‘core’ and ‘peripheral’ economies will no longer be defined by income per capita, but rather by their participation in “democratic, capitalist endeavours” (2011). With a strong New Media bias in favour of the democratic system, which promotes and perpetuates a capitalist society, the ‘core’ expands and the ‘periphery’ becomes now a ‘gap’ (et al.). New Media’s perpetuation of dominant capitalist and Westernized communication has created a perilous ‘gap’ between participating countries- and those who do not subscribe to capitalist or democratic idealism- such as Russia, North Korea and greater Africa. Taken on as a practical policy by the United States’ New Rule Association (2005), the ‘gap’ was described as former President George W. Bush Jr. as a, “threat to democracy”. Could it be, that actually New Media is a threat to states that do not so well mediate their civil societies? Or, is New Media just neoliberalization mechanism that is addressed as transnationally important?

The epoch of New Media symbolizes a change in the discourse about communication, geography and power. As a tool for consolidation of both state and civil society power, and as a mechanism of mediation between the two, New Media allows greater flows of knowledge and communication. New Media does not stand without a greater influence, though. Creating a symbiosis between the geopolitical economic sphere and the civil society representative sphere, New Media allows relations to form beyond the control of hegemonic power, but within the influence of it. As seen by the undertakings of both civil society actors and governments, the influence of New Media is strong upon society, and society’s participation in it gives access to the Western powers of knowledge and capital.

Bibliography

Anderesen, B. 1991. Imagined Communities.

Arendt, H. 1958.

Bourges, J. 1940. Celestial Emporium of Benevolent Knowledge.

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Frost, C. 2006. Internet Galaxy Meets Post-colonial Constellation: Prospects for Political Solidarity After the Internet.

Foucault, M. 1977. Power/Politics.

Eurobarometer. 2011. Right to Internet Access

Graham, M. 2011. Time Machines and Virtual Portals: The Spacialities of the Digital Divide.

Habermas, J. 2001. Old Europe, New Europe, Core Europe.

Hagrass, O. 2012. Interview: Egyptian Uprisings.

Hanafi, S. 2005. Reshaping Geography: Palestinian Community Networks in Europe and the New Media.

Howard, P. 2011. The Project on Information Technology and Political Islam.

Isin, E. 2007. Logics of Alterity.

Koopman, S. 2010. Alter-geopolitics: Other securities are happening.

Leszczynski, A. 2012. Situating the geoweb in political economy; The Osmo Project.

Lister, M. 2003. Networks, Users and Economics.

Murphy, A. 2013. University of Oregon Colloquium Series: Historical Geopolitics.

Rowe, J. 2013. Interview: New Media Basics.

United Nations. 2005. Human Rights Index Promotions.

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United States’ New Rule Association. 2005. The Pentagon’s New Map.

 

Model European Union 2013; Great Britain Position Paper

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Position Paper on a European banking union

The United Kingdom

I. Introduction

The United Kingdom welcomes a discussion of common banking oversight as a key instrument in stabilizing financial relations across the shaken Eurozone. Recent years have painfully exposed the insufficiency of the status quo to protect both the Eurozone from financial crises that engulf its neighbors and partners as well. Yet if substantial steps are necessary, negotiations for a Eurozone banking union must also stress pragmatism and the prudent protection of the diverse interests of all EU Member States. We must focus on concrete measures directly related to strengthening Eurozone financial actors, not rush to unrelated grand initiatives merely to show action against the backdrop of crisis.

II. Background to the British Position

As home to Europe’s largest financial center, with roughly 36% of the EU’s financial business, the United Kingdom has profound interests in financial stability across the continent. Even were our financial concerns not so strong, economic stability in the Eurozone would be of fundamental importance to the British economy because it accounts for 58 per cent of our foreign trade. The UK is in a position to participate in some efforts to respond to these challenges, and may encourage others among Eurozone members. At the same time, it must also safeguard the distinct interests that come from retaining its own currency and relating to its special position in European and global finance.

In its deepest and most long-term elements, Europe’s economic challenge today concerns fiscal policy and debt more than oversight of financial markets. Improved regulatory instruments and practices are desirable, but the reason why oversight and a capacity for correction action is necessary is because banks and governments themselves are awash in debt. The UK confronts its own version of this challenge and is making important progress to reduce spending, control debt, and so reinvigorate growth. As we make the hard choices necessary for a better economic future, it is even more important than in more prosperous times that the EU do nothing to risk that a return to growth. Pragmatic regulatory change and firm national commitments to mastering debt must be the order of the day.

III. Great Britain’s Proposal

The United Kingdom believes that the Council discussions on Banking Union must begin by recognizing a distinction, and indeed a strong separation, between two kinds of proposals advanced by the Presidency. The first group of proposals seeks to endow the Eurozone with a stronger regulatory framework for oversight and crisis support of banks. The United Kingdom welcomes these proposals, agreeing that the Eurozone needs better banking supervision, though they must include better arrangements to safeguard the interests of non-Eurozone EU members.  The second group of proposals suggests new taxes—a VAT increase and a Financial Transaction Tax (FTT)—but offers no clear purpose for raising the EU’s tax burden at this time. The United Kingdom proposes to set aside the Presidency’s ill-considered VAT proposal and perceives important problems with the FTT idea as well. As Europe struggles to escape the deepest recession in living memory, facing painful but necessary cuts in spending to confront unsustainable debts, this is not the time to consider vaguely-justified tax increases that could lead financial firms to leave our continent.

The key addition to the Presidency’s proposals on banking union is to make clear that non-Eurozone member-states will be protected from policies that discriminate against their financial sectors, intentionally or unintentionally, and that decision-making processes allow them input and influence alongside discussions among Eurozone members.

The United Kingdom acknowledges that of the two proposed tax increases, the FTT notion at least has some rationale relating to recent financial challenges. The main purpose of such a tax, as originally developed by economist James Tobin, is not to raise revenue but to deter speculative financial transactions (though of course they also raise revenue). Whatever the merits of this policy in the abstract, it is difficult to implement in the EU setting without bringing more costs than benefits—and especially to the UK. If extended across all of the EU, an FTT will effectively be a tax paid disproportionately in Britain, since so much of European financial activity occurs there. The British contribution to EU coffers will thus rise, absolutely and relative to other countries. Moreover, such a tax could risk London’s place in global finance, encouraging at least some global firms to move to other world centers. If applied only in the Eurozone or a subset of Eurozone members, the FTT will have the same effects on the less robust financial sectors of the participating countries. The United Kingdom would counsel its EU partners not to pursue this option.

Written Supplement; Historical Analysis of the Geographic and Institutional Implications to Economic Development

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Development

Varying patterns of development illuminate global inequalities. Measured by the welfare of citizens, ‘development’ is empirically represented by the standard of living in a given nation-state. Originating in 16th century France, development was used to describe the développer, the “unfolding” of centralized cities and expansion of state power. Referring to an increasing spatial-political relationship, development is rooted in understanding welfare as the unfolding of institutional structure within a geographically defined territory. Empirical definition of development is contentious, because it suggests that standards of living are a measurable construct. Applied through a quantitative lens, economic development analyzes the standard of living between national economies. Based in economic growth, economic development suggests the application of resources towards the welfare of citizens- the ‘welfare state’. Through a historical analysis of the ‘welfare state’, economic development is framed as dependent upon empirical geographical and institutional advantages.

What is a Nation?

Europe’s 17th-century rise of nation-states birthed the concept of economic development. French développer of cities gained signification; economic prosperity became institutionalized under the “nation-state”. As a recognized sovereign territory, the nation-state economically integrated cities in to a mercantilist capital accumulation regime. Since the 16th century, the economic doctrine of mercantilism drove the imperial practices of western European powers towards the creation of nation-states. Focus on capital accumulation towards a strengthened central military can be assumed as the first consideration of economic growth. Differing from economic development, economic growth is the measure of domestic production, without heeding to increase in the standards of living. This important difference between ‘growth’ and ‘development’ is illuminated in the mercantilist ideology; the extraction of resources towards the benefit of the central state was not dispersed through social programs, but rather towards the infinite growth of the state. These protectionist policies played the role of early political economy, as mercantilism was an effective tool in strengthening the centralized state. Important to economic development, the birth of the nation-state created a founding institutional centralization of the economy. Despite territorial convergences in later decades, the role of geographic recognition was to create a territorial commonality under a centralized economic institution.

Specific to the 250 years of Mercantilist theory is the concept of extraction. Framed by authors James Robinson and Daron Accemoglu, strong mercantilist nations of Great Britain, France and Spain practiced extractionary politics through colonization. Extraction describes the mercantilist theory of economic growth, described by Acemoglu and Robinson as operating a ‘zero-sum game’, wherein benefit to the state was at a loss to another. Extraction becomes important to economic development of colonized nations, because, unlike the centralized institutions within territorially defined nation-states, colonized nations experienced a decentralized organization of labor, effectively destroying possibilities for a welfare state.[1]

 

The Role of Inclusive Institutions

Although the idea of economic development was unconceivable in the Mercantilist period, the birth of the centralized nation-state set the institutional and geographic parameters for economic growth, which is essential to economic development. Moreover, Mercantilist economics engaged Western European nations in the forging of institutions through warfare, effectively destabilizing governments and giving rise to labor and unionist movements. Authors Acemoglu and Robinson address this phenomenon as the process of ‘creative destruction’, whereby established power relations are broken and give rise to innovation. Established trade relations, such as the Hudson’s Bay Company, supplemented the changing tide of institutional relationships with the rising economic nationalism. International trade became a vital source of economic growth, while the role of institutions shifted from centralized to representative.

Acemoglu and Robinson organize their book Why Nations Fail around the supremacy of institutional organization in economic development. The premise of this is derived from the Machiavellian persona of Mercantilist nations, whose collapse preceded inclusive institutions, and a ‘virtuous circle’ of economic development. Suggesting that Great Britain’s Glorious Revolution of 1688 was the first step of an institution towards inclusivity, WNF aligns Great Britain’s success in the industrial revolution with redistributed taxation. Beginning with the 1572 Poor Law, British taxation was given a welfare-like status. Unlike welfare, the Poor Law was parochial and redistributed in the form of workhouse care. Tradition of socially-minded taxation allowances were perpetuated through the settlement of Ireland, and transitioned in to lower taxation for plantation land ownership. This increase in land ownership also increased opportunity for profit, growing the middle class. On the other coin, extractive French taxation maintained allowances only for the noble élite, causing disproportionate growth in wealth. Mercantilist economics allowed élite French to hold almost 90% of wealth, and the French could not sustain their wars leading up to the French Revolution from merely taxing 10% of the economy. The burgeoning inclusivity of Great Britain’s institution of taxation exemplifies the ‘virtuous circle’ role that inclusivity has on economic development. The French institution of extractive taxation caused a ‘vicious circle’, resulting in collapse of public finance. Economic nationalism plagued the Western European nations, particularly France, as military spending became unsustainable. The Bourbon Monarchy came to its knees in the face of public upheaval after the dismissal of a land tax proposal in 1776. French élite chose to act in self-interest and maintain extractive taxation, instead of have their lands taxed. Power in the hands of a few resulted in the upheaval by many.

‘Creative Destruction’ of the French Revolution’s power vacuum established governance by multiple ruling classes. Most poignantly, inclusion of the Tiers État, the third class society members, asserted institutional control by the hands of merchants and laborers. Stressing working class issues and trade priorities, the National Constituent Assembly and successive Legislative Assembly involved conflicting interests of the élite and the Tiers État, resulting in the highly symbolic overthrow of the French aristocracy in favor of a Republic. This highly influential succession of institutional development played a significant role in French public policy, under which solidarity was introduced to French governance. Taking the form of a welfare precursor, French solidarity measures were not direct redistribution of government funding to the lower classes, but rather the levying of land tax and restriction of agricultural tax. Allowing the agricultural sector to flourish, while collecting tax from the élite, the French middle class expanded and pushed towards the industrial revolution.

Inclusive taxation institutions grew the middle class in both Mercantilist nation-states of France and Great Britain. In both cases, this allowed investment of both capital and labor to flow from the agrarian sector to the industrial sector, inspiring the industrial revolution. France and Great Britain developed from Mercantilist nation-states in to nationalist production economies, due to changes in the role of institutions as taxation policy.

The Role of Economic Geography

Mobilization of workers was intrinsic to the movement from agrarian society to industrial society. Political geography of France and Great Britain was changing, as demand for labor in to industrial centers encouraged movement from outlying sectors. The role of this geographical transition to economic growth is clear; new industry heightened national production and demanded labor, and the average wage rose, increasing supply of labor. This spatial adjustment of population did increase production and average wage, but had an adverse affect on standards of living. Assumed by economic geographer Paul Krugman to encounter a ‘rent seeking’ ideology, which is unsustainable for economic development, the industrial revolution in Great Britain and France encountered a changing population spatiality, and thereby, an unequal distribution of wages.

First, in discussing the role of geography to Great Britain and France’s economic development, infrastructural developments must be highlighted. Transportation of workers to the industrial centers- the process of urbanization- greatly exaggerated the core-periphery differentiation within nation-states. Still at the forefront of economic growth, and therefore, economic development, France and Great Britain had a cyclical relationship of wanting to attract laborers to the industry, therefore increasing transportation expenditure, and laborers wanting to make higher wages in the industrial sector, therefore increasing transportation innovation (Krugman, 1991). Urbanization effectively created an economy of scale for laborers to participate in, which, like the introduction of small industry to economies of scale, disvalued the labor.

Krugman suggests that under the marginal production theory of income distribution the ‘rental rate’ of a given industry must equal the production value of laborers to maximize profit. So, as industry expands, demand for labor must increase with wages relative to the costs of production. This ‘rent seeking’ ideology is at issue, because in the case of a large supply of labor moving from agrarian to industrial society seeking employment, profit can be maximized by not distributing wages at the ‘rental rate’ equilibrium. Wage inequality is not an institution, because it was not a policy, but is instead the effect of geography by way of population and labor supply. Wage inequality begets the institution of solidarity movements after the transfer of knowledge from the German welfare state.

Economic Growth to Economic Development

Transfer of knowledge between economies is an effect of trade. The impact of the industrial revolution was the increase in demand and supply of labor and goods, because of the heightened middle-class as discussed through the role of institutions. Trade theory, developed significantly after the industrial revolution, explains the nature of trade and its benefit to industrialized economies. Trade theory is important to the role of geography and the role of institutions, as it conceptualizes reasoning for and effect of actualized spatial-political relationships. Trade theory also further explains the intrinsic nature of Mercantilist desire for economic growth, to the beginning of economic development.

Assuming that all actors will act rationally, economic theory always suggests profit-maximizing behavior. Conditioned by Keynesian economics, the gains from trade maximize supply and demand, increasing the opportunity for profit through comparative advantages. The Hecksher-Ohlin model (1933) suggested that even in a situation of absolute advantage, gains from trade were possible due to relative advantages of goods and labor. Relative advantage highlights the disproportionate production possibilities among actors, but does not recognize the disproportionate competition between them. Competition occurs because there is profit-maximizing opportunity in increasing supply, in order to meet the larger demand of trade. With demand increasing through trade, and supply increasing thusly, industries involved in trade will develop increasingly, given that the factors of endowment are also increasing. The Linder hypothesis (1961) shows that competition is essentially dependent on production possibilities, which are dictated by factors of endowment, such as capital, labor, resources and technology. These ‘externalities’ affect growth of industry, creating imperfect competition between actors.

According to Linder, imperfect competition limits the possibilities of trade, because actors with dissimilar factors of endowment are unable to inspire competition in industry. By operating under the assumption that gains from trade are necessary for economic growth, but actors are endowed with different factors, it is reasonable to assume that there are supplementary motivations for trade. The Gravity Model suggests that relative size of economies (their factors of endowment) and relative distance of trade are the contingencies of benefit (Tinbergen, 1962.) Distance of trade is meant to limit transportation costs, similarly to Krugman’s assumption of urbanization as cost saving. Geography’s role in economic growth is shown here- neighboring nations tend to trade with each other.

Tendency to trade with relatively close countries will be analyzed specifically by the parameters of the Gravity Model, to emphasize the process from economic growth to economic development, rather than the socio-political relationships between countries. Although significantly more able to trade due to historical relationships of language and culture, neighboring countries tend to establish trade relations at an institutional level- with underpinnings of geographic spatiality. Coming to a case-in-point, trade relations between Germany and France perfectly represent this Gravity Model, because of their relative distance. Krugman suggests that the geographical relationship supersedes the necessity for relative factors of endowment, and the Linder hypothesis speculates that the syncing of German transportation and industry to the levels of France and French increase in levels of welfare to Germany represents this relationship.

German and French difference in factors of endowment in the industrial revolution must be analyzed first through the difference in institutional arrangement. Present-day Germany did not exist, in that it had not undergone the same pattern of nation-state building as France, due to maintenance of parochial taxation in Germanic territories (Nietzsche, 1885). The reasoning for this 1881 federalization of Germany is speculated as an effect of rising German nationalism, in response to French nationalism and militarization of German territories (Said, 1978), which would correspond to geographic role in synchronization of factors of endowment. Also correspondent, is the upswing in German transportation efforts nearly a century after the industrial revolution began in France and Great Britain. Increasing German nationalism after the Napoleonic Wars threatened German territory began the process of transportation building, especially near the French border and along the Rhein. Germany’s geographic growth in facilitated trade, and the coming of the industrial revolution, under the guise of national protection in warfare.

Learning from France’s regularity in working class institutional change, the development of the German state was based in Otto von Bismarck’s welfare programs. Germany offered the first economic development plan, by learning from the failure of extractive economic growth policies of the French. France, likewise, modeled it’s own welfare program after that of the Germans; policy making in an effort to stabilize the French institutions necessitated working class benefits, because of the severe wage inequality issue due to labor demand and supply. This institutional learning curve is suggested by the Linder hypothesis, because of Germany’s geographical relativity to France. Dialectic of German and French nationalism would soon be overshadowed by the increasing tension over remaining variances in factors of endowment.

Geographic development of infrastructure and institutional development of welfare in the German federation lead to quick expansion in factors of endowment. Coupled with the German access to warfare and industry resources of iron and steel, the French became defensive over the German’s economic development. Political tensions rose and resulted in World Wars I and II, which destroyed both French and German economic development up to that point. Despite the remaining principles in the benefit of a welfare state, when economic growth is depleted like it was due to warfare expenditure, economic development is impossible. Measured empirically by gross domestic product (GDP) per capita, ‘economic development’ is a country-based analysis of quality of life (Krugman, 2010). Measuring economic development by GDP per capita aligns all given factors of endowment with the country’s welfare. Maintenance of the welfare state is considered “economic development” because of the definition of welfare within the industrialized Western European countries. After WWII, the concept of foreign aid became related to economic development, as the welfare of Europe gained assistance from the United States’s Marshall Plan for European Recovery.

 

International Institutions and Economic Development

Politics of development assistance between the United States and Europe did not rest in pleasant diplomatic relations, seeing as world warfare had just cost both sides great deals of money and citizens. Rather, the United States’ interest in European economic development was towards the end of reconstructing the benefit of trade. As the most developed economy next to the United States’, Europeans had a history in purchasing power for traded goods, based on the Gravity Model’s suggestion of relative factors of endowment in industry. Geographical and institutional significance of foreign aid as a means of economic development lies in the globalization of economic growth, and the regionalization of economic development.

Institutionally, the Marshal Plan was significant in it’s ability to suggest peace negotiations among European nations. Instigating the first supranational free trade and common monetary system, the European Recovery Program recognized the tensions between trade barriers, and disregarded the geographically disjointed Europe. The European Union’s force as both an intergovernmental and supranational regime is unique in its configuration, and shares historical commonalities. The successful binding of national economies is fluid in nature, allowing for moderation and stabilization when necessary. With the recent Euro Crisis, this economic unity is threatened by the vacuum of power towards a higher authority, the European Central Bank. Economic development, the process towards increasing welfare, has become a supranational institution, threatening the sovereignty of nations involved. Geographically transcendent, the European Union still maintains tensions between institutional roles of intergovernmental actors.

Shown by the activity of the Development Assistance Committee, international aid is disproportionately decided upon by the 55 wealthiest nations in the world (Ragnar, 1961). The implications of this disproportionate aid include economic development dependence, resulting from the unstable institutions began during the extractionary period of colonization (WNF). Recent global politics suggest that the effect of development assistance created a tertiary extraction regime, whereby trade benefits only the country with greater factors of endowment. Trade between countries with varying factors of endowment can obviously result in tension and warfare, but if the one country is institutionally and geographically disadvantaged, the Linder model fails in applying the logic that it can essentially “scale up” to the factors of endowment of its larger trading partners. Subsumption of smaller economic industry in to economies of scale is represented through trade agreements like NAFTA, suggesting that despite the relativity in distance, the disproportionate factors of endowment negate efficient trade models. Specifically NAFTA represents this issue; the United States, although attempting to boost economic growth of Mexico towards the benefit of its agricultural relative advantage, effectively destroyed welfare of it’s farmers. The cyclical relationship between economic growth and economic development is realized by the downturn in economic growth due to lack of farming development. Farmers, dependent on United State’s investment, are economically unsustainable and suffer severe weaknesses thereby.

Implications of the institution of foreign investment and aid resonate in dependency theory. Unlike the Marshal Plan investment in Europe, which aided the re-growth of economically competent countries, the introduction of small economies with relatively little economic history, to large economies with significant economic competence assumes a sort of dominance of “development” (Ragnar, 1961). Derived from the French concept of the unfolding of political-spatial relationships, is development aid a mechanism of instituting foreign policy? Benefits derived from trade with developed countries are empirically visible in the increase of competition, and the significance of industrial growth to economic development. The role of institutional policy on economic development can be assumed as positive, in it’s responsive nature towards inclusive demands. The role of geography problematizes institutional benefit, because it suggests that a necessary institutional cohesion between geographically different nations, despite their different factors of endowment. Institutional cohesion, as seen on the supranational level of regional free trade agreements NAFTA and the EU, must respect the sovereignty of the country’s policy creation. If policy makers have little experience with economic development and no history in the welfare state, like NAFTA, they can fall in to a ‘vicious circle’ of economic dependence.

Works Cited

Acemoglu, Daron, and James A. Robinson. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown, 2012. Print.

Krugman, Paul R., and Maurice Obstfeld. Internationale Wirtschaft: Theorie Und Politik Der Außenwirtschaft. München [u.a.: Pearson Studium, 2010. Print.

Krugman, Paul R. Cities in Space: Three Simple Models. Cambridge, MA: National Bureau of Economic Research, 1991. Print.

Nietzsche, Friedrich Wilhelm. Thus Spoke Zarathustra. New York: Modern Library, 1995. Print.

Nurkse, Ragnar (1961). Problems of Capital Formation in Underdeveloped Countries. NY: Oxford University Press.

Tinbergen, Jan. Mathematical Models of Economic Growth. New York: McGraw-Hill, 1962. Print.


[1] This phenomenon of geographic and institutional implications in economic development will be discussed further in relation to foreign aid and economic development.