Globalization Of The Market Economy Essay

Much has been said how worldwideisation has world(prenominal)ize the commercialise economy and how this outline was able to integrate and cause international partnerships betwixt and among nations. Globalization is non unsloped a phenomenon it is a corpse, a new world body that has replaced the Cold state of war. Globalization has transcended scotch and political borders without so much undermining the national reign of any nation. This seek depart document how the key players and catalysts accomplished the integration of a real complex world market economy, allowing the creation of the so-called globose village.Specifically, this set about will look into the following ? the creation of international bodies collectively cognize as The Bretton woodwind instrument institutions ? the largest regional quite a little organizations how they come into universe, its subdivisionship, and how they argon be seen sometimes as stumbling blocs, instead of building blocs ? multi- or transnational corporations and ? proficient revolution (in make countation and communication engineering, or ICT, and the Internet). The list above will cooperate us see globularisation, an intangible system, as an observable, concrete, and measurable concept.This essay will also get down to explain the future of globalisation so as to prep be former(a) aras that it has not penetrated yet, and at the same time, to allow those who are experiencing it already to take advantage of the strengths and opportunities in the system and be vigilant with the threats that come with it. consciousness globalization There are two in truth interesting books on globalization that can serve as a starting point of this essay MacGillivrays A brief bill of globalization The Untold story of our incredible shrinking intendet and Friedmans The Lexus and the olive tree Understanding globalization.MacGillivray argues that the term globalization has rapidly extend one of the to the highest degree overused words in the field of international relations. Unfortunately, its beingness overused does not guarantee understanding of the concept. In fact, this is one of the least understand or at least broadly construed concepts in the same field. It all the federal agency covers connections amid and among political, economic, cultural, and even environmental issues or concerns. And with the recent advance in information technology, we also know that globalization also concerns itself about technology and even war.MacGillivray described globalization as the interaction and integration between and among people, corporations, and governments across national boundaries. Such web of interaction and integration is do by international contend and investment with the help of technology, particularly, information technology (MacGillivray 2006). The importance of technology in the era of globalization was further exposit and described by Friedman in his book The Lexus and the olive tree Understanding globalization through this passage In the Cold War, the most frequently asked motion was How big is your missile? In globalization, the most frequently asked question is How fast is your modem? As compared to former(a) writers who remember that globalization is a pattern of human evolution, or maybe a trend, Friedman believes that it is more(prenominal) of an international system which existence was significantly felt after the Cold War period. He argued that the movement of globalization in this contemporary period is just an credit of the previous period which has marked the end of the First earth War (Friedman 1999).Whereas the Cold War has changed the whole world into a bipolar one, globalization has changed this into a global village with shared or integrated resources in terms of capital, technology, political and market sentiments, and information across and, even more interesting, through national borders. Establishing new grounds Th e collapse of economic and market frontiers Globalizations effects are very much evident in some aspects of international relations. In this essay, the effect on economic main(a)ty would be the focus.It should be noted though that as utmost as these effects are concerned, globalization does not destabilize the reign and legitimacy of a nation in any one way or anformer(a). With globalization, we could say that the economic borders of any sovereign nation has about been transcended, i. e. , protectionist policies are either challenged if not eliminated completely. The Bretton Woods system The first attempt to international openness One of the best ways of seeing globalizations effect to international relations is by looking at international pecuniary institutions having direct or indirect effect to sovereign nations.While they do not exactly dictate what the economic policies of countries should be, these bodies without a doubt influence the making of such policies. In the early 1930s, money swap grade, even those of the major economies, are unstable. A number of countries are protectionists and had very restrictive trade policies. A decade after that, bang-up Britain and the coupled States, the only two super index fingers then, proposed the establishment of international financial or fiscal institutions that would aim to stabilize exchange rates and, more importantly, improve international trade.In 1944, 44 nations through their representatives convened at the United Nations monetary and Financial Conference in Bretton Woods, New Hampshire. The participants of the conference met to plan the recovery and eventual development of post-war Europe and to discuss the monetary and customary economic issues of that period protectionist trade policies and unstable exchange rates of a number of countries (Bretton Woods Project 2007 Canadian Economy Online 2007). This has given pay to the Bretton Woods Agreement.The agreement aims to create a post-war in ternational monetary system of convertible currencies, fixed and stable exchange rates, and disembarrass trade across geographical regions. The International Monetary Fund (IMF) and the International Bank for reconstructive memory and Development (which was later on referred to as the creative activity Bank) were establish to relieve the objectives of the agreement. The resulting bodies from this Bretton Woods convention energise definitely affected the economic sovereignty of countries.Taking the case of International Monetary Fund, its main areas of concern are surveillance (advice and appraisal on the policies of its atom economies), financial or monetary assistance for pieces experiencing short- to medium-term economic problems and difficulties, and technical assistance as whole as training in monetary and fiscal policies (Ibid). The Bretton Woods agreement prevented coin and exchange rates competition and promoted monetary cooperation among its member economies.Under this system, member nations and economies agreed to have a system of up-to-dateness exchange rates that could be adjusted or computed within defined parities with the US dollar. This currency exchange rate could also be adjusted to correct a basic disequilibrium in balance of payments as approved by IMF. Advocates of the Bretton Woods system argued that establishment of a stable exchange rate would discourage the beggar thy neighbour policies, which would eventually benefit several, if not all, member economies by the promotion and expansion of international market and trade.The competitiveness of currency exchange rates decreased overtime due to infrequent changes in parities. many expressed concerns that a fixed currency exchange rate system may prohibit countries enough liberty for them to truly pursue and give their own monetary and fiscal policies. IMF uses both its surveillance as well as technical assistance work or functions in maturation codes and standards of good pr actice in its areas of responsibility (Articles of Agreement of the International Monetary Fund 2007).The creation Bank, which is officially named International Bank for Reconstruction and Development, is rattling a development institution. Its mandate is to build a climate of healthy investment, sufficient jobs, and sustainable growth. It also invests in hapless people and empowers them to insert in development projects. Its efforts on poverty reduction can be observed in national as well as global levels (Schiff and Winters 2003, 1516). The humankind Bank gives emphasis on extending aids to poor and developing nations.But more than just these financial aids or loans, the bank gives advice on policymaking and training to countries needing them. Now, in return for IMFs and World Banks financial support or any other kind of advice, recipients of these financial aids should implement necessary structural valuation reserve policies that will back up healthy public spending, espe cially on tender services delivery systems. These policies usually decrease governments affaire in the economy (or market, to be specific).Currently, the World Bank is the largest international contribute institution dealing with least developed to developing countries (Ibid, 2526). The World administer presidential term is probably the most intrusive of the three bodies established by the Bretton Woods convention. The convention created a provision for an International employment Organization. However, such plan lay dormant until the actual establishment of the World Trade Organization in early 1990s. This original plan did not materialize in the form it was originally conceptualized because of the refusal of the US Congress to accept it.(The refusal of the US Congress is primarily anchored on the idea that had the International Trade Organization been approved then, this body would have the power of a supranational body that can implement sanctions, penalties, or discipline s to any member economies that the ITO sustain violating the principles and agreements reached at the Bretton Woods. ) In lieu of this, an international organization, so to speak, in the form of General Agreement on Tariffs and Trade or GATT was created. As an international body, it has the primary responsibility of reducing trade barriers through multilateral and international negotiations.ITO, however, does not have the power to effect any policies, i. e. , its agreements are non-binding (Timeline World Trade Organization A chronology of key events 2007). The World Trade Organization came into existence on 1995. It replaced GATT as an international body overseeing the multilateral calling system. One hundred and twenty-eight (128) countries had signed GATT by 1994. And as of the socio-economic class 2007, there are 151 full-fledged members and 30 economies/countries having observer status.Every member coarse of the WTO has the right to challenge or simply question other coun tries local, state, or federal practice of laws granted that such laws may impede good and effective international trade. In such cases, if the WTO judges the law to remove violations of WTO ideals, it WTO may order the government to overturn or modify the law or else, the country can experience or suffer from trade sanctions. This is exactly why the US Congress did not approve the confirmation of the treaty for the creation or establishment of the WTO (Ibid).These three international bodies have exposedly penetrated the economic barriers, even political to some extent, of any of its member economies. For this purpose, however, it is clear that these effects are for the benefit of the member economy. While it is clear that these Bretton Woods bodies do not directly dictate economic policies, it has the power to influence its members to act towards its direction. Again, this is not to emphasize that economic sovereignty is being taken away from the country itself, but clearly, t he economic barriers have been breached.regional trade associations or blocs Regional trade associations are offshoots, so to speak, of the globalization phenomenon where inter-nation or inter-state agreement is established. These associations are actually the ones that manage, promote, and direct all the trade activities of the concerned group of countries or regions of the world (UC Atlas of Global Inequality, 2007). This is a case where instead of an institution penetrating the borders of a country, the sovereign country itself initiates the surrender of their economic, or more particularly, trading, policies.Regional trade associations, in everyday terms, are groupings of economies or nations at a governmental level that aims to promote, manage, and encourage trade within and among their own region and defend its member countries or member economies against a larger global competition. Protection against this larger global competition is done by most countries by establishing t ariffs on commodities produced by its members economies, import quotas, onerous bureaucratic import processes, government subsidies, and technical and other non-tariff barriers.Trade is not an isolated activity and other areas of relations between countries or economies involved are also affected political, security, and other issues touching the region (Ibid). A good example of a regional trade bloc affecting other aspects of inter-national relations is the case of the European gist or EU. This group is the worlds largest trade association, and by far, the most effective in terms of certain aspects.EU has harbored not just economic but also political ambitions extending way beyond the free trading arrangements entered into by the participating economies (Gibb and Michalak, 1994, 75). The ideological foundations of EU were actually center on ensuring development and maintaining international or even inter-regional stability, specifically, encapsulating communist or socialist expan sion in the post-WWII Europe. EUs plan actually involves possible joint policies on military security and citizenship. Some researchers believe that trade associations complement globalized trade.There are those, on the other hand, who believe that regionalism is a threat to free trade due to its protectionist nature having bourgeois policies being implemented by these blocs that shield the member- countries from outside competition of global trade. Such debates contain sharp disagreements. In the same work by Gibb and Michalak (1994, 1), they noted, the multilateral trading system is in decline and regionalism is on the ascendancy. They emphatic that regional trade blocs are an alternative form of trade that attempts to look to more aggressive policies of trade, especially as espoused by the WTO.