Final answer:
According to Robert Reich, fears of 'economic ransom' are irrational due to the interconnectedness of the global economy, which has increased the standard of living worldwide and allows for greater resilience against individual economic crises.
Step-by-step explanation:
Fears of "economic ransom" are irrational, according to Robert Reich, because of the growing interconnectedness of the world economy. The evolution and globalization of economies have led to an increase in international flows of financial payments and investments, suggesting that economies are not isolated entities but part of a larger, integrated system. As a result, the singular actions of one economy are less likely to hold "economic ransom" over the global market as the interdependencies ensure some level of stability and risk diffusion.
The phenomena of foreign investments, like those experienced by the East Asian Tiger economies, demonstrate the double-edged nature of financial capital flows, with the potential for both dramatic growth and precipitous economic downturns. Nonetheless, the robust growth and increases in the standard of living globally have shown the potential of interconnected markets to overcome individual economic crises. Thus, while concerns pertaining to individual national economies are valid, fears of singular economic events holding the world economy at ransom may not account for the resilience and adaptability that globalization has afforded the global economic system.