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Economic globalization

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Introduction

The eighteenth century presented humankind with two visions, namely, a vision of economic prosperity based on free markets and a vision of "liberty, equality and fraternity" based on democratic political institutions. The "first industrial revolution" in England was the forerunner of material prosperity while the French Revolution raised the banner of a liberal policy and society. For nearly two centuries after the English and French revolutions, the struggle to construct a liberal political and economic system occurred within the boundaries of independent states. Despite the internationalism of "free traders" and parts of the socialist movement, political and economic liberalism, perhaps paradoxically, were closely bound up with nationalism. The implicit assumption was that it was possible to have "Economic liberalism in one country." Today that assumption is being challenged by the forces of economic globalization. State boundaries gradually are becoming less important as large and rapidly growing flows of trade, investment, technology, finance capital, labor and ideas create an integrated world economy. Our political institutions, however, have lagged behind. We have a global economy but not a global policy and hence our ability to "govern the market" and ourselves is weakened. Not everyone is dissatisfied with the present state of affairs. ...read more.

Middle

The reason is continuing discrimination against products of particular importance to low income countries. The process of liberalization has generally occurred much more slowly in the cases of foodstuffs, textiles, clothing, and footwear and leather products.1 That is, even in the areas where globalization has advanced most rapidly, there has been an asymmetrical relationship. The poor have been put at the end of the queue. Protectionist forces recently have been in the ascendancy in the United States. Tariffs have been imposed on timber imported from Canada, contrary to the spirit (and perhaps the law) of the North American Free Trade Agreement (NAFTA). Tariffs of up to 30 per cent have been imposed on imported steel, in violation of agreements under the World Trade Organization (WTO). In 2001 alone, the United States launched 79 anti-dumping investigations, with a view to restricting imports from low-cost producers. The proposed anti-dumping measures are a response to price competition from abroad. They are, in effect, a denial of liberalization and competition, the very foundation of an efficient market economy and are incompatible with an equitable global economy. Finally, last year (2002), the United States succumbed to pressure from the farm lobby and introduced massive subsidies to the agricultural sector. ...read more.

Conclusion

We have global markets but we lack global institutions to govern those markets. The institutions that exist are unrepresentative, many people do not have a full voice in them, and they fail to conform to democratic ideals. Moreover, the structure of global governance is full of holes. There is woefully inadequate provision for supplying global public goods and there is no provision for financing them in a regular way. Foreign aid programs are dying and have yet to be replaced by a tax-and-transfer scheme that would benefit the poorest countries and those that are marginalized by the process of globalization. There is thus much to do and many challenges ahead, but I am confident that slowly but surely we will be able to meet those challenges. Sources 1. Global Backlash: Citizen Initiatives for a Just World Economy, Lanham, Maryland: Rowman and Littlefield, 2002. 2. ," World Bank Research Observer, Vol. 17, No. 1, Spring 2002, Table 1, p. 116 3. Robert Heilbroner, The Worldly Philosophers, New York: Simon and Schuster, 1953, pp. 170-2. 4. World Development Indicators 2001, Washington, D.C.: World Bank, 2001, Table 2.8, p. 70 5. ," Review of Economics and Statistics, Vol. 36, November 1954 6. Joseph E. Stiglitz, More Instruments and Broader Goals: Moving Toward the Post-Washington Consensus, Helsinki: World Institute of Development Economics Research, WIDER Annual Lectures 2, January 1998. 5 ...read more.

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