Economic Nationalism and the Global Financial Crisis

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The process of economic development entails the creation of wealth through the mobilization of human, financial, capital, physical and natural resources to generate marketable goods and services and fundamentally centres around the enhancement of a country’s factors of productive capacity, namely land, labour, capital and technology. Subsequent to World War II, many Western industrial countries and former colonies were allowed the opportunity to move forward at a national level. Economic development could not be attained either through capitalist market oriented behaviour or by means of the route of state control and economic planning that de-emphasized or rather denigrated the initiative of the individual. Prior to the crash of the U.S. financial system and the overall meltdown of the global economy, countries utilized the heavily capitalist or individualist driven approach to economic development. This approach of economic internationalism advocated by David Hume’s “Contractarian Political Theory”, Sir Edward Coke’s “Concept of Law Sanctioned by private arrangements” and Adam Smith’s laissez- faire in the 1770’s all contended that the only way to effectively create prosperity is by liberating the economy from political restriction, that is essentially eliminating all barriers to trade; subsidies, sanctions and any other fiscal tools that might be employed locally by the state to prevent the free movement of trade in attempts to protect their economy. Advocates of economic internationalism utilize the actions of intergovernmental organisations and national programs only to promote their capitalist ideals. The ongoing global financial crisis nicknamed the ‘Great Recession’ signalled the shortfalls of economic internationalism. It was deemed the worst financial downturn since the Great Depression of the late 1920’s into the early 1930’s. This crisis was characterized by U.S. trillions of dollars decline in consumer welfare, failure of key business like General...
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