Page 22 - Global Political Economy_Understanding The International Economic Order

THE NEW GL OBAL E CONOM IC ORD ER
an open and truly global capitalist economy characterized by unre-
stricted trade, financial flows, and the international activities of multi-
national firms.
Although most economists and many others welcome this develop-
ment, critics emphasize the “high costs” of economic globalization,
includinggrowing income inequality both amongand within nations,
high chronic levels of unemployment in Western Europe and else-
where, and, most of all, environmental degradation, widespread ex-
ploitation, and the devastatingconsequences for national economies
wrought by unregulated international financial flows. These critics
charge that national societies are being integrated into a global eco-
nomic system and are buffeted by economic and technological forces
over which they have little or no control. They view global economic
problems as proof that the costs of globalization are much greater
than its benefits. Foreseeinga world characterized by intense eco-
nomic conflict at both the domestic and international levels, and be-
lievingthat an open world economy will inevitably produce more
losers than winners, critics argue that unleashing market and other
economic forces has caused an intense struggle among individual na-
tions, economic classes, and powerful groups. Many assert that what
former German chancellor Helmut Schmidt called “the struggle for
the world product” could result in competingregional blocs domi-
nated by one or another of the major economic powers.
The idea that globalization is responsible for most of the world’s
economic, political, and other problems is either patently false or
greatly exaggerated. In fact, other factors such as technological devel-
opments and imprudent national policies are much more important
than globalization as causes of many, if not most, of the problems for
which globalization is held responsible. Unfortunately, misunder-
standings regarding globalization and its effects have contributed to
growing disillusionment with borders open to trade and investment
and have led to the belief that globalization has had a very negative
impact on workers, the environment, and less developed countries.
Accordingto an American poll taken in April 1999, 52 percent of the
5
respondents had negative views regarding globalization. Yet, even
though globalization is an important feature of the international
economy that has changed many aspects of the subject of interna-
tional political economy, the fact is that globalization is not as perva-
5
Andrew Kohut, “Globalization and the Wage Gap,” New York Times, 3 December
1999, sec. 1, reportingon a Pew Research Center’s national survey in April 1999,
which found that 52 percent of all respondents were negative toward globalization.
Low-income families were much more negative than wealthier ones.
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