Differences in Globalization
The globalization effects in the United States and even generally is the topic ringing in the minds of many officials, scholars and the participants of the market today. They all have sensed that the integration of national economies and the development of international markets have gone higher than before. (Lawrence, & Bressand, 1996)
Globalization in the current generation is different from that in the earlier eras. Firstly the globalization of commodity and the financial markets is very dynamic as compared to the previous ones. The simplistic comparisons with the late nineteenth century not an issue the international integration of capital and the markets for commodities have gone further and they are becoming deeper than before.
Secondly, that the introduction of commodity that is highly integrated and the markets for finance has been accompanied by tensions in trade and dilemma of instability in the financial markets should not emerge as a surprise, for the earlier period of commodity and financial market integration that is our basis for comparison was also marked with tensions in trade and instability in finance. The surprise is that these difficulties are not even more severe today, given that the extend of commodity and market for finance integration is more advanced today.
The accounting factor for this surprise is the research agenda. There is the possibility if stabilizing role of the institutions which have their foundation on the interim. At the national level this implies that the social and financial safety cushions. At level of international it implies the World Trade Organization, the International Monetary Fund, Basle Committee of Banking Supervisors.
The named institutions though not perfect in their operations, they are better than being not existing if we judge the historical correlations between the integration level on one side and on the other side the trade conflict level as well as the financial instability. Financial net for financial safety may develop moral hazard, but it usually avoids catastrophe in finance. (Miranti, 1990),
Contingent protection may lead to prevention of realization of the maximum benefits which comes from trading, but it at least leads to sustenance of critical amount of support politically for the open markets. The global markets that lack global governance may create hiccups, but these multilateral institutions would seem to be providing at least an imperfect substitute for more of the functions of the latter, or like the suggestions of the outcomes.
The other explanation for the difference is that there is growth and maturity of markets over the time which has made it simpler to live with the globalization. The development of better practices of auditing and accounting at the level of nation has made it simpler for application of those same practices to transactions at the international level transactions hence leading to more stability.
The development of future markets on which producers can circumvent their exposure to prices at the globe has made it easier for them in living with the markets of the globe that have been delivering outcomes that are beyond their control. These processes were already underway in the 19th Century according to (Williams, 1986) but they have since been further developed.
For fear that we are accused of being stitch, we should put emphasis that the problems being faced currently in the trade sector and instability in the financial sector and pressing, especially for smaller and more open countries with low income with the little capability of protecting themselves from the consequences.
Reference
Lawrence, R. Z. & Bressand, A. (1996) A vision for the World Economy: Openness, Diversity and cohesion, Washington, D.C.: The Bookings institution
Miranti, P.J. (1990), Accountancy comes of age: Development of an American profession, Chapel Hill: University of North Carolina Press
Williams, J. (1986). The economic function of future markets, Cambridge: Cambridge University press
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