This diversity of outcomes suggests that policymakers should not use globalization alone as a scapegoat for inequality. In fact, policy can help to explain these differences among countries. As nations adopt stances on education and health policies, minimum wages, taxes, social programs, and basic incomes, they can mitigate or exacerbate the effects of globalization. They can also have effects outside of globalization altogether.
Economists can also expand their way of thinking about inequality. Most economists focus on relative inequality, but many noneconomists think in absolutes.
The Truth About Globalization
If the bottom ten percent and top ten percent both see a five percent increase in income, the top ten percent is accumulating significantly more money. Economists talk about the comparable five percent increases, whereas most people think about the differences in cash. By prioritizing relative inequality, economists are missing an important part of the conversation.
Finally, Ravallion wants people to think about why they care about inequality. Even if there is no intrinsic reason to care about inequality, he says, studying inequality is essential to understanding how economies work.
True Globalization: Uniting the whole world in Christ
It is also instrumental to objectives like reducing poverty, especially among the poorest people in the world. This is why inequality should be a more central issue in economics, says Ravallion. When it is treated as a peripheral issue, economists cannot fully confront these related challenges. Of course, it is not enough for economists to focus more on inequality. Commercial integration has improved since last century, barriers that inhibit trade are lower and transport costs have decreased. From and up to World War I instability in trade was a problem, but in the post war period there has mostly been economic expansion which leads to stability.
Nations have to take care of their own products; they have to make sure that foreign goods do not suffocate their domestic products causing unemployment and maybe social instability.
True Globalization: Uniting the whole world in Christ
Technological changes have caused lower transporting costs; it takes just a few hours to transport goods between continents to-day, instead of weeks or even months in the nineteenth century. By consideration financial crisis one key difference is the monetary regime. In the 19th century it occurred under the fixed exchange rates of the gold standard. But in the 20th century it took place in a regime of managed flexibility. Furthermore, in the 19th century countries had developed effective lenders of last resort, but the same was not true at the periphery and countries there suffered the consequences.
A century later there was a domestic safety net in most emerging countries so that banking panics were changed into situations where the debts of an insolvent banking system were taken over by the government. The recovery from banking crisis is another key difference.
It has tended to begin earlier in the recent period than in the typical crisis episode a hundred years ago. In the 19th century there were no international rescue packages available to emerging economies. But in the recent period such rescues were a typical component of the financial landscape all over the world.
The flows information were an important downside in 19th century. Prior to the Transatlantic cable and the Radiotelephone , it used to take very long for information to go from one place to another. So this means that it was very difficult to analyze the information. For instance, it was not so easy to distinguish good and bad credits. Therefore, the information asymmetry played a very important role in international investments.
The railway bonds serve as a great example. There was also many contracting problems.
It was very difficult for companies working overseas to manage their operations in other parts of the world, so this was clearly a big barrier to investment. Several macroeconomic factors such as exchange risks and uncertain monetary policies were a big barrier for international investments as well. The accounting standards in the U. The British investors played a very important role in transferring their accounting practices to the new emerging markets.
The first phase of "modern globalization" began to break down at the beginning of the 20th century, with World War I. Racist and unequal practices became also part of their practices in search of materials and resources that from other regions of the world.
The increase of world trade before beginning in right before World War I broke out in were incentives for bases of direct colonial rule in the global South. Since other European currencies were becoming quite largely circulated, the need to own resource bases became imperative. Military potential of Africa was first to be emphasized unlike its economic potential…at least at first. Africans in the French army were treated with feelings of inferiority from the French. This coming after the outbreak of the war which had left France without the ability to support itself agriculturally since France had a shortage of fertilizers and machinery in Globalization, since World War II, is partly the result of planning by politicians to break down borders hampering trade.
Their work led to the Bretton Woods conference , an agreement by the world's leading politicians to lay down the framework for international commerce and finance, and the founding of several international institutions intended to oversee the processes of globalization. Development and growth of international transport and telecommunication played a decisive role in modern globalization.
Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade GATT , which led to a series of agreements to remove restrictions on free trade. Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity.
However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity.
The Uruguay Round to  led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement NAFTA have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.
World exports rose from 8. In the s, the growth of low cost communication networks allowed work done using a computer to be moved to low wage locations for many job types. This included accounting, software development, and engineering design. In late s, much of the industrialized world entered into a deep recession. From Wikipedia, the free encyclopedia. It is not to be confused with World history.
Main article: Archaic globalization. Main article: Proto-globalization. Berkeley Press, Oxford University Press. Retrieved 4 March Retrieved The University of North Carolina. Bordo, Barry Eichengreen, Douglas A. June Globalization: A Very Short Introduction. Winged Victory. Jonathan Cape. Globalization: a short history. Global Policy Forum. Archived from the original on 12 July Retrieved 11 November The Washington Post. March 5, February 18,