The Economic Dimension of Globalization, Manfred B. Steger
In his article, Steger traces contemporary economic globalization back to the Bretton Woods system which birthed the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). After the collapse of Bretton Woods, we see the emergence of a new neoliberal economic order which linked globalization to the liberation of world economies. From neoliberal economics, we see what Steger regards as the most significant developments related to economic globalization. First, he says that internationalization of trade and financial the liberalization of financial transactions go hand and in hand, and that globalization of financial trading allows for increased mobility with fewer restrictions and greater investment opportunities (42) but later demonstrates how this can have its downside. Secondly, he takes a look at the control and influence of transnational corporations on the world’s investment capital, technology and access to international markets (48). Because they account for 70% of world trade, TNCs have become major determinants of trade flows, the locations of industries and other world economic activities and are thus able to greatly influence the economic, political and social welfare of many nations (51). Thirdly, he addresses how the bargaining of the international economic institutions gives them the upper hand in regulation global economies. In return for financial bailouts to aid in economic crises, the IMF and World Bank are able to demand that states implement certain structural policies and programs. The IMF and World Bank often face criticism for trying to force countries to adopt economic policies which mirror those of the United States, who according to Steger, has been the dominant power in the IMF and the World Bank from their beginnings (53). Steger’s article does not necessarily offer an argument for or against globalization. He is unbiased an objective in presenting facts to show how economic globalization has developed and how it influences other spheres of globalizations such as the political and social aspects, and provides solid examples to back up the arguments that he presents. I find it hard to disagree with Steger’s perspective since he offers examples which show the pros and cons to each argument he presented. For example, when he discussed the internationalization of trade and finances, he discussed how ‘ebusiness’ and other virtual transactions allowed for a major boom in financial trade across the globe, and in the United States itself. (Today, ecommerce is a steadily growing industry and individuals as well as corporations and government reap the benefits of its ventures.) In contrast, he also addressed how fewer restrictions on the financial industry can lead to economic crisis when global speculators take advantage of lax regulatory financial and banking policies. As an example, he used the 1997 Southeast Asia Crisis.
My only complaint would be Steger’s discussion of the role of international economic institutions. I found his discussion of the IMF and the World Bank to be somewhat one-sided. His presentation of the institutions made them sound as though they were somewhat using their financial power to lord themselves over the nations which seek their assistance by forcing them to enact certain policies in exchange for aid. Although countries seeking aid must implement and adhere to certain terms in order to receive funding from these institution, the policies are not meant to cause harm, but rather to ensure that countries do not fall victim to the same circumstances in the future. I don’t think Steger did a good enough job of highlighting this point.
Word Count: 574
Globalization: Universal Trends, Regional Implication, Howard J. Wiarda Howard Wiarda begins his article by introducing globalism as a controversial issue. Wiarda argues...