Free Essay

Global Capitalism

In: Business and Management

Submitted By kem123
Words 518
Pages 3
Global Capitalism

The term global capitalism implies much more than economic activity in different national borders. At least in theory, one could have an international economy consisting of autarchic domestic economies engaged in limited commerce with each other. Or one can imagine (as was largely the case well into the 19th Century) an international economy whose connections involved luxury goods or a few ―products (sugar and slaves, for example). A global economy, however, implies one in which few if any of the domestic economies really exist separate from the planetary whole.

A global economy is one that is interconnected and networked across a variety of borders as well as including a variety of goods and services. It also presupposes a set of agreements regarding the rules of the game whether these involve accounting regulations, or business norms. Global capitalism is the expansion of the principles and practices of property and the market to the world stage. A few summary statistics can give a sense of the size and scope of this global stage (World Bank, Maddison).

The global economy is now larger than it has ever been and the pace of its growth has been unprecedented over the past half century (despite the recent shocks). World GDP increased six fold from 1950 to 1998 with an average growth of 3.9% per year compared to 1.6% between 1820 and 1950 and 0.3% from 1500 to 1820. Over the past 10 years (prior to the summer of 2008) the world economy has grown by more than a third and some of the poorer parts by two-thirds. Each person in the world (on average) is now 7 times richer 10 than 100 years ago and 4 times richer than just 50 years ago.

Due to improvements in technology, the last 50 years have seen a fivefold increase in production per hour worked. World trade in goods and services accounts for more than half of global economic production. The total amount of merchandise exports (the amount of goods that countries send out to the global market) is roughly $10 trillion per year.

Annual global financial flows include over $625 billion invested across borders, $227 billion sent by migrants back to their countries and $750 billion spent by international tourists. $1.5 trillion is exchanged in currency markets daily.

An estimated 200 million people (3% of the global population) live as international migrants, including roughly 20 to 30 million illegal migrants. In 2007, they remitted roughly US$337 billion (International Organization for Migration 2008).

Today, we produce trade and invest much more than ever in history, and do so in a substantially farther-reaching system. All of this represents a further move away from our past of provincial poverty. Still, despite this increasing bounty and interconnectedness, global capitalism is not the same everywhere and all the time. In the following section, we describe our typology of how different countries fit into the system and then go on to describe critical moments in the creation of the capitalist global system.

(Global Capitalism - Miguel Angel Centeno and Joseph Nathan Cohen)

Similar Documents

Premium Essay

Global Capitalism Chris Hedges Analysis

...Chris Hedges. “The Future of Global Capitalism”. The Munk Debates. May 22, 2015. In this interview, Chris Hedges is discussing the future for global capitalism, as he sees it. As he sees it, global capitalism is failing to engage the imaginations of the poor, and working class people because it continues to fail at helping them. The ideas of trickledown economics are just so contrary to the reality, that a small group of elites has been able to concentrate huge amounts of wealth, that people have had enough. Movements like Occupy Wall Street and Black Lives Matter are a response to this. As the state moves further away from the social welfare, people are pushed to take radical stances. Hedges predicts that if corporate power continues to dominate political institutions, and continues to...

Words: 437 - Pages: 2

Premium Essay

Henisz, Witold J., (2012) “Summary of Global Strategic Management Frameworks, ” Ghemawat’s Aaa and Varieties of Capitalism

...MGMT 611 Class 19 Henisz, Witold J., (2012) “Summary of Global Strategic Management Frameworks,” Ghemawat’s AAA and Varieties of Capitalism Ghemawat’s AAA  Global Strategy examines the additional opportunities, challenges, and tradeoffs posed when a company crosses national borders  Ghemawat contends that to create, capture, and sustain rents in international operations firms have three strategies they can deploy at the product level to respond to distance: 1. Adaptation – seeks to boost revenues and market share by maximizing a firm’s local relevance  Requires local autonomy but must trade off the gains from such decentralization against the costs of excessive heterogeneity and local subgoals 2. Aggregation – attempts to deliver economies of scale by creating regional or sometimes global operations (standardizing the product or service offering and grouping together the development and production processes)  Requires global coordination but must trade off the efficiency gains of standardization and scale or scope economies against costs of always being perceived as an outsider or cost minimizer 3. Arbitrage – the exploitation of differences between national or regional markets, often by locating separate parts of the supply chain in different places  Requires flexibility and the management of a complex network of internal and external relationships for continuous learning, but must trade off benefits from such dynamism against costs of being perceived as fickle, rootless...

Words: 1526 - Pages: 7

Premium Essay

Global Capitalism Chapter Summary

...In Chapters 11 and 12 of Jeffery Friedman’s book, Global Capitalism, he explains the history of the international post-war economy, how the US and the Soviet Union helped the war-torn countries rebuild, the emergence of the Bretton-Woods system and the acceleration of the post-war growth. Immediately after the war, the Europeans had exhausted much of their ability to earn money to pay for imports for food, raw materials, and capital equipment. They have sold off most of their foreign investment to pay for the war, losing the earnings from these investments. The Europeans empires were crumbling, restricting their privileged access to the markets and raw material of former colonies. Therefore, the United States and the Soviet Union, as Friedman...

Words: 542 - Pages: 3

Premium Essay

The Global Economic Environment

...CHAPTER 2 THE GLOBAL ECONOMIC ENVIRONMENT SUMMARY A. The economic environment is a major determinant of global market potential and opportunity. In today’s global economy, capital movements are the driving force, production is uncoupled from employment, and capitalism has vanquished communism. Based on patterns of resource allocation and ownership, the world's economies can be categorized as market capitalism, centrally-planned capitalism, centrally-planned socialism, and market socialism. The final years of the twentieth century were marked by transitions toward market capitalism in many countries that had been centrally controlled. However, great disparity still exists among the nations of the world in terms of economic freedom. B. Countries can be categorized in terms of their stage of economic development: low income, lower middle income, upper middle income, and high income. Gross domestic product (GDP) and gross national income (GNI) are commonly used measures of economic development. The 50 poorest countries in the low-income category are sometimes referred to as least-developed countries (LDCs). Upper middle-income countries with high growth are often called newly industrializing economies (NIEs). Several of the world’s economies are notable for their fast growth; the BRIC nations include Brazil, Russia, India, and China. The Group of Seven (G7), Group of Eight (G-8), and Organization for Economic Cooperation and Development (OECD) represent...

Words: 8143 - Pages: 33

Free Essay

New World Order

...until the Global Financial Crisis * From the GFC to present day ------------------------------------------------- From the Cold War until 9/11 * Period from 1989 until 2011 * After a stagnant period, the 1990s turned into a decade of economic growth * Globalization saw a technological revolution * Number of states increased at the UN 1989: End of power politics * End of Bipolarity – The Cold War was marked as an era of bipolarity in which the US-inspired capitalist system ‘played off’ against the Soviet-inspired ‘state socialism’. * NATO vs WARSAW PACT; US dollar system played off by COMECON * Move towards Perestroika effectively killed off competition – leading to a reduction of ideological contestation End of Ideology/ Victory of Capitalism? * Belief that capitalism ‘triumphed’ over socialism – greater expansion of capitalist norms. * TINA syndrome. With the exception of a few ‘rogue’ states, most have realized its best to ‘play’ the game and embraced market values. * Led to: * 1. The ‘Retreat of the State’ argument * 2. The ‘End of History thesis’ Post-Cold War Triumphantism * Led to the liberalization moves in the 1990s and the renewal of International Organizations * Increase in collective forms of Security * The growth and spread of the neoliberal form of capitalism that had emerged in the 1980s * Growth of regionalism * Transnational Class formulations led to an increase in global inequality...

Words: 577 - Pages: 3

Free Essay

Capitalist and Free Trade

...extreme poverty in the past 20 years has been capitalism and free trade” This is according to an Economist article “Towards the End of Poverty” (June 1st 2013) which claimed that the global poverty has gone down due to economic growth that has been seen certain nations. Nations like China and India are a good example, their standards of living has developed tremendously as well as the conditions of people in those countries. The article is of the belief that Africa should be the next region to experience growth and good standards of living (Singh, 2009, 874). Nations like Nigeria, and Ghana are examples of countries in Africa with good standards of living which is attributed to trade and investment. Similarly, the countries are putting much effort in doing away with social issues that connected to below par education, health and communications (Gibbs, and Leech, 2009, 186). The article goes on to state that in the year 2050, ‘extreme poverty’ would be something that is non-existent. The article goes to discourage anti-capitalists from complaining regarding the negative issues arising from free trade and markets. They called upon to allow capitalist to grow as it has been noticed as a success in the 21st century. With no regard accorded to the massive contrast of wealth in today’s world, the millions of unemployed persons and the constant deaths of babies due to preventable diseases, the article goes on to call for additional global trade (Banik, 2009, 117). Through this, high...

Words: 2401 - Pages: 10

Premium Essay

Postmodernism

...is the key political unit in modern society, we tend to think of the modern world as made up of a series of separate societies, each with its own state. In contrast to the small traditional feudal society where one had to look after themselves, modern nation states have created large administrative bureaucracies and educational, welfare and legal institutions to regulate their citizens lives. The nation state is also an important source of identity for citizens, who identify with its symbols such as the flag. Modern societies run off a capitalist economy. Capitalism brought about the industrialisation of modern society and with it the massive wealth modern nation-states now possess. However the wealth distribution within modern societies is unequal, resulting in class conflict according to the Marxist theology. The nation-state is important in regulating capitalism resulting in something Lash and Urry call 'organised capitalism'. A further feature of modern society is the domination of rational, secular and scientific ways
of thinking correlating with a decline in the influence of magico-religious explanations of the world. Technically efficient forms of organisation, such as bureaucracies and factories, dominate social and economic life. Science becomes increasingly important in industry,...

Words: 797 - Pages: 4

Free Essay

Hahafdsfadfae

...The world system today - Modern stratification: Growth of middle class, social mobility leading to a more complex social stratification. Capitalism: The components * Private ownership of means of production * Market competition * Wage labor * Pursuit of profit There are a variety ways to run a capitalist economy; Even in ‘hyper-capitalist’ USA- we have government regulation…. The debate: Capitalism Like: innovation; entrepreneurship; efficiency; growth; hard work--reward; independence/personal freedom Dislike: inequality; concentration of money and power; narrow definitions of success; economic value privileged over social value; power of corporations. Socialism: the components * Public ownership of means of production * Government runs the means of production * Central planning * Needs of people decided by a central committee * Distribution of good without profit motive * Goods produced and distributed for general welfare (Global) Neoliberal Capitalism Capitalism: private ownership of means of production; market compe…. Neo-liberalism Goals: * Macro-economic stability * Increased FDI * Integration into global economy * Modern development * Debt servicing Privatization:私有化 Market liberalization:市场自由化 Fiscal austerity:财政紧缩 Hegemony: * A word used to describe how the status quo can be preserved through consent as well as coercion. * One way to gain consent for the status...

Words: 313 - Pages: 2

Premium Essay

Marxism

...with economics rather than politics, and concerning itself more with domestic rather than international social relations. Viewed from the perspective of Marxism however, both liberalism and realism are profoundly limited, for each takes as its premise a world of pre-constituted social actors (whether self-interested individuals or security-seeking states). These theories are therefore unable to consider the social processes through which these kinds of actors have been historically constructed. Thus in analyzing the so-called war on terror, Marxism forces us to understand the development of the structures of global capitalism and the ideologies and agents situated within these structures. This essay therefore evaluates whether Marxist theories of international politics offer convincing explanations of the war on terror. I start with the Marxist understanding of capitalism as a historically particular way of organizing social life that entails political, cultural and economic aspects that need to be understood as a dynamic ensemble of social relations not necessarily contained within the territorial boundaries of nation states. I then apply this understanding to frame the war on terror through the context of economic security which has animated US policy-makers from the Second World War to the Bush administration, and in the Gramscian sense that argues instead for a more “nuanced class-theoretic explanation which allows for and explains the war and the power of the neoconservatives...

Words: 2090 - Pages: 9

Free Essay

Neoliberalism and the Global Financial Crisis

...Neoliberalism and the global financial Crisis Introduction The fusion of neoliberal beliefs and the western society started in the early 1970’s, it has incorporated in the society to such an extent that it can be portrayed as being impending. For more than forty years now neoliberalism has controlled governments, technology, housing and financial sector and has impacted our society in destructive ways. Neoliberalism reached a new height after the 2008 financial crisis leaving recession as an aftermath. Neoliberalism as explained by Harvey (2005) is a model of private enterprise which concentrates on the economy and its deregulation to empower a free market based monetary framework. Hillyard and Tombs (2004) see neoliberalism as a destruction breeding form of capitalism which they think makes a commanding dispute for, the state demanding to be considered in charge of methodically creating destruction. Neoliberalism as indicated by David Harvey is a "hypothesis of political monetary works on recommending that human prosperity can best be progressed by the augmentation of entrepreneurial opportunities inside of an institutional system portrayed by private property rights, individual freedom, unhampered markets, and free trade" (2005:2). The idea of neoliberalism in western social orders is connected with the Thatcher government in the UK and the Reagan government in the US which came to power in the late 1970s – mid 1980s henceforth presenting neoliberalism as a key financial...

Words: 3663 - Pages: 15

Premium Essay

Summary of Dicussion Questions

...DISCUSSION QUESTIONS 1. Explain the difference between market capitalism, centrally planned capitalism, centrally planned socialism, and market socialism. Give an example of a country that illustrates each type of system. Market capitalism is an economic system in which individuals and firms allocate resources and production resources are privately owned. Consumers decide what goods they desire and firms determine what and how much to produce; the role of the state in market capitalism is to promote competition. Market capitalism is found in the United States. Centrally-planned capitalism is an economic system in which command resource allocation is utilized extensively in an environment of private resource ownership can be called. Centrally-planned capitalism is found in Sweden, where two-thirds of all expenditures are controlled by the government. Centrally-planned socialism is an economic system in which the state has broad powers to serve the public interest as it sees fit. State planners make “top-down” decisions about what goods and services are produced and in what quantities; consumers can spend their money on what is available. The government owns industries as well as individual enterprises. Centrally-planned socialism was found in the former Soviet Union. Market socialism is an economic system in which market allocation policies are permitted within an overall environment of state ownership. Market socialism is found in China where farmers can offer...

Words: 661 - Pages: 3

Premium Essay

Perspectives on Globalization

...A Perspective of Globalization: The Influences of a Capitalist-based Global System The implications of globalization today are inherent. Of note is Leslie Sklair, stating that globalization is based on transnational practices (TNP)s. These, at the highest level of abstraction, are the building blocks of the system. Currently, these practices are encompassed in the global capitalist system, but do not comprehensively define globalization (Lechner 2007). Additionally, key spheres contribute to the current globalization scheme; these spheres are distinguished as economic, political and the cultural-ideology (Lechner 2007). Furthermore, Sklair’s approach differs from the weak/strong heterogeneous or homogeneous approach as outlined by Appelrouth, stating that the interactions of such are more complex than a cut and clear weak vs. strong approach. The economic sphere regards the ability of TNCs to control global capital and material resources. Economics revolves around the idea that resources are scarce, and a current pursuit of allocative efficiency creates a sound economic environment. The more resources any corporation has allows for not only an ability to create a monopoly-like scenario depriving competitors of resources, but also in establishing a larger profit margin achieved through market control. These resources are not limited to natural resources, but also of intellectual property and human resources themselves. Although allocative efficiency is not reached...

Words: 1084 - Pages: 5

Premium Essay

History of Capitalism

...Samson Diegbegha 5/26/2009 Moscow University Touro; Course Title; History of Philosophy, Project Titled; History of Capitalism By; Professor; Marion Wyse Table of content 1:1…….…..………………………………………………………………………Introduction 1:2..………….………………………………………………………………capitalism history 1.3.…….………………………………………..….. Merchant capitalism and mercantilism 1:4……………………………………………….. Transition from 'feudalism' to capitalism 1:5……………………………………………………. Industrial capitalism and laissez-faire 1:6…………………………………………… Finance capitalism and monopoly capitalism 1:7……………………………………………… Capitalism following the Great Depression 1:8……………………………...………………………………………………... Globalization 1:9………………………..………………………………………………………… conclusion 1:10……………………………………………………………………….…………. References The History of capitalism 1; 1 Introduction | Capitalism as we all know is an economic system of producing wealth in which the wealth is privately owned. in capitalism, the land, labor, and capital are owned and operated by private individuals who are trading for one purpose that is, the generation of more income or profits in a legitimate way without force or fraud, by singly or jointly, and investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy. A distinguishing feature of capitalism is that each person is entitled to his or her own labor and therefore is allowed to sell the use of it to any employee....

Words: 3339 - Pages: 14

Free Essay

Capitalism

...Do you believe that Capitalism is moral? Justify you answer. Capitalism can be defined ideally as an economic system in which the major portion of production and distribution is in private hands, operating under what is termed a profit or market system. (Shaw et al. 2013, p.118) As compared to other forms of economic systems, capitalism benefits the society in various ways (and based on utilitarian argument, this will be morally preferred because the balance of good over bad is the greatest). Few would deny that capitalism is the most productive and efficient economic system, especially after the collapse of Soviet Communism. But some critics still contend that capitalism is not a moral system. Yet morality is impossible unless one is free to choose between alternatives without outside coercion. Since capitalism is based on freedom of choice, it provides the best environment for morality and character development. In addition, business success not only requires but also rewards virtuous behavior by participants in the market.  A social system such as capitalism is a system of relationships and cannot be moral or immoral in the sense that a person can be – only individuals can be moral agents. However, a social system can be moral in its effects if it promotes the possibility and likelihood of moral behavior by individuals who act within it. It follows, then; that there is a moral imperative to create a political and economic system that permits the greatest possibility...

Words: 1293 - Pages: 6

Free Essay

Modernity

...everything we are.” – Marshall Berman, All That Is Solid Melts Into Air, (Verso, London, 1988 p.1). Drawing on a variety of sociologists writings on modernity explain the idea of modernity as both positive and negative. Modernity is defined in the Collins English Dictionary as the quality or state of being modern. (Hanks 1979) This state of modernity, as described by M. Berman, is one that has positive and negative influences on both the private and public spheres. The modern world in which we live is one that is heavily influenced by the havoc of war and the ongoing process of capitalism. In order to understand the complexities of modernity, one must weigh its pros and cons. Ex-Cambridge Lecturer and sociologist T. Bilton pinpointed the origins of modernity to be during the Industrial Revolution of the 18th century. He discusses the slow industrialisation, new attitudes towards capitalism, and mass urbanisation. These attributes of modernity saw positive growth in wealth and the creation of bigger and more fluid markets. The trends that originated in 1780s England were to soon spread globally, with an increasing concentration of workers in larger workplaces, in tandem with deteriorating work conditions and an increase in the formation of unions. Thus, despite the periodic economic advantages of the modernisation in the workplace, there was a significant degradation of the social structure that supported the workforce as a whole. The growing distance between employee and...

Words: 1733 - Pages: 7