Globalization Economics

Topics: International trade, Globalization, World Trade Organization Pages: 13 (4283 words) Published: May 18, 2014
The notion of globalization has become a highly debated topic as its implications and consequences are becoming harder to ignore. Individuals, institutions and whole communities, local, national or transnational, are finding it more difficult to thrive without taking part in the global market system. Petras states, “The concept of globalization argues for the inter-dependence of nations, the shared nature of their economies, the mutuality of their interests, the shared benefits of their exchanges” (1). Reinicke notes a distinction between global interdependence and globalization, “Often confused as one and the same, interdependence is actually an important precursor of globalization” (1). This precursor has evolved into what can be considered a global interdependence between nation states, whereby economies and markets are becoming increasingly integrated. Further explained, “The fact is that the world's people and nations are more interdependent than ever before and becoming more so. The evidence of interdependence is global flows of such things as trade, investment, and capital” (Lodge xi). The results of this integration do not just have mutual financial consequences but can extend to political, cultural, and social levels touching institutions and individuals in all countries and on all levels of society. An emerging global economy opens a new global market to any and all players within the international stage, creating interdependent relationships linking businesses, countries, even individuals. Evidence of this global interdependence is seen in the evolving markets and the relationships between its actors. Evolution of a new type of global market, current trends in international trade, international flow of capital, erosion of international borders, roles of Multi National Corporations, the increased role of international organizations, and the role of information technology, illustrate how global interdependence has been increasing and will continue to increase. The most profound nature of this growing global marketplace is the inherent growth of the global interdependence that accompanies it. Evidence of an evolving global economy is seen by the new markets being created. Already established global markets in services such as banking, insurance and transport are growing rapidly. The ability and willingness of not only nation states, but corporations and small businesses across the globe, to take advantage of what globalization offers is increasing global interdependence. Traditional balance between nation-states is still necessary for the maintenance of stability, however the evolution of global markets is affecting nation-states in new ways. Friedman examines the emerging relationship of nation-states and global markets; These global markets are made up of millions of investors moving money around the world with the click of a mouse. I call them ‘the Electronic Herd’ and this herd gathers in global financial centers (that) I call ‘Supermarkets.’ The attitudes and actions of the Electronic Herd and the Supermarkets can have a huge impact on nation-states today, even to the point of triggering the downfall of governments. Who ousted Suharto in Indonesia in 1998? It wasn’t another state, it was the Supermarkets, by withdrawing their support for, and confidence in, the Indonesian economy (Lexus 13). Nation states are no longer contained within their own borders and walls as the ability to access, and more importantly act, on information is available 24/7 across the globe. The absence of boundaries both real and imaginary and the resulting interdependence allow Friedman to proclaim, “Individuals from every corner of the (world) are being empowered … companies-large and small- have been newly empowered in this era as well…the world (is) no longer round-but flat” (World is Flat 11). As borders are shrinking and people, business, and nations are expanding their outreach, relationships are being formed where all parties are...

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