As our world becomes increasingly more technological it is
interesting to view how the international marketplace adapts. Things such as jurisdiction, taxes and even questions regarding
imports/exports all come into question as we acclimate to this new “cyber”
world. As both goods and services become readily available electronically we
must alter many aspects of the economic marketplace in which products were
originally bought and sold. Things such as software, music and programming
services are now available entirely online.
An interesting example is brought up in Kobrin’s Economic Governance in an Electronically
Networked Global Economy. In the example Kobrin describes an Indian
programmer working out of India, but directly supporting a bank in New York
installing something or updating their system remotely (Kobrin, pg 52). This brings
up many questions, would this transaction be considered an import or export for
India? What about for the United States? Where was the work performed, India or
the USA? Whose jurisdiction does the work fall under and who does the company
pay taxes to. As far as jurisdiction and taxes this probably depends on where
the company is incorporated and where it’s physical headquarters is located,
however, we see how these aspects become debatable when we operate on a
completely cyber level.
The global marketplace will have to continue to adapt as
technology advances. It will be interesting to see a shift in the geographic
dominance of the market to a more cyber-oriented one. Kobrin himself states, “Geographic
space is losing meaning as the basis for the organization of markets” (Kobrin,
pg 46). Nations will have to adapt to this new larger global market as
technology continues to advance and the cyber marketplace expands.
I also liked that piece. It will be interesting to see if any new or existing international organizations have to step up to help regulate this new type of market structure. If that does happen, there are a variety of questions out there about how states would interact with such a regulatory body.
ReplyDeleteThis is something I thought a lot about as well when I was taking international economics. It's almost as if the individual economies of the world are being shoved into one all encompassing global economy. At this point there is no one organization to oversee this new cyber-global economy as a whole. It will be interesting to see what happens in the years to come as it grows at a quicker pace.
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