• Jermaine Fowler, Actor and Comedian

The Second Great Age of Capitalism

The Triumph of Economic Liberalism

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The Milken Institute’s Globalization of the World Economy report highlights many of the benefits associated with globalization, while outlining some of the associated risks that governments and investors should consider. But, in aggregate, there is a consensus among economists that globalization provides a net benefit to nations around the world and therefore should be embraced on the whole by governments and individuals.

Some of the risks of globalization include:


The curators of the 2006 Biennial at the Whitney Museum of American Art in New York City featured videos, films, performances, paintings, sculptures, photography and drawings highlighting the cross-cultural underpinnings of current American art.

 

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This current wave of globalization has been driven by policies that have opened economies domestically and internationally. In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure.


The 2008 economic crisis led many politicians to question the merits of globalization. Since then, global capital flows fell from $11 trillion in 2007 to a third of that figure in 2012. While some of that may be cyclical in nature, many countries implemented tariffs and other forms of designed to contain risk in their financial systems and make crises less damaging, although this comes at the cost of forgoing the benefits we’ve seen.


__. 1995. After Liberalism. New York: The New Press.

Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. Information technologies have given all sorts of individual economic actors—consumers, investors, businesses—valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with far-flung partners.

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The modern world-system originated around 1500. In parts of western Europe, a long-term crisis of feudalism gave way to technological innovation and the rise of market institutions. Advances in production and incentives for long-distance trade stimulated Europeans to reach other parts of the globe. Superior military strength and means of transportation enabled them to establish economic ties with other regions that favored the accumulation of wealth in the European core. During the "long sixteenth century," Europeans thus established an occupational and geographic division of labor in which capital-intensive production was reserved for core countries while peripheral areas provided low-skill labor and raw materials. The unequal relationship between European core and non-European periphery inevitably generated unequal development. Some regions in the "semiperiphery" moderated this inequality by serving as a buffer. States also played a crucial role in maintaining the hierarchical structure, since they helped to direct profits to monopoly producers in the core and protected the overall capitalist economy (e.g., by enforcing property rights and guarding trade routes). At any one time, a particular state could have hegemonic influence as the technological and military leader, but no single state could dominate the system: it is a world economy in which states are bound to compete. While the Europeans started with only small advantages, they exploited these to reshape the world in their capitalist image. The world as a whole is now devoted to endless accumulation and profit-seeking on the basis of exchange in a market that treats goods and labor alike as commodities.

Michael Forsythe contributed reporting from Hong Kong.

With the end of the Cold War, national priorities changed and the Western allies assigned a higher priority to their own national (and frequently parochial) economic interests. A shift in American policy had already become evident during the Reagan and Bush Administrations. The new, more nationalistic emphasis was carried further in the succeeding Clinton Administration; its declaration that had displaced the earlier concern with made the change crystal clear. Proponents of "geo-economics" argued that economic conflict had displaced traditional security and political interests. A change in American attitudes and priorities appeared in growing economic unilateralism and in ratification of the North American Free Trade Agreement. Another significant manifestation of this change was the pursuit in the early 1990s of an aggressive managed trade or "results-oriented" trade policy toward Japan.