ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Understanding the World Global Economy

Updated on August 20, 2019
KESTONE WEKESA profile image

Kestone is a registered teacher and researcher/writer. At the same time masters student at Mount Kenya University in Political Science.

Abstract and Introduction

Abstract

Different dimensions characterize globalization. The relationship between the aspects serves to propel the global relationship towards future development. This paper introduces the different dimensions that comprise of the worldwide system before narrowing down to the global economy. It explicitly reveals the transition the global economy has taken over the years to the present society. The paper further explains the failures in policies and the repercussions such failures had on the worldwide economy. Additionally, the paper advocates for policymakers to avoid repeating past mistakes, and preferably, to focus on the development of a system that prevents incidences like depressions from occurring again. Furthermore, discussion of capitalism and colonization comes as a priority before the paper moves on to elaborate the decline of Britain's economic might as well as the ravages of both the world wars and the actions during the post-war period. The paper concludes by summarizing the major arguments put forth as stated in the thesis statement.

Keywords: Economic dimension, Capitalism, Colonization, World Wars.

Introduction

Studying the history of globalization dimensions including disciplines such as politics, economics, sociology, and ethics does present a nostalgic feeling. Simple concepts of bartering are now advanced forms of industrial production and cultural collaboration across different nations. As a result of the development, coining the concept globalization aims at defining growth in international trade and the development of a structure centered upon capitalism. By becoming a global system, different geographic regions merge in an effort of forming efficient industrial systems for growth. Additionally, the merging has led to the formation of territories and blocks to ensure unity in growth and appreciation of diversity. Development in different dimensions is inevitable; however, the economic proportion surpasses politics, sociology, and ethical aspects.

Economic Dimension

The birth of capitalism is at the center of the development of the global economy. Historically, different scenarios present incidences of the economic growth, for example, the 11th century witnessed flourishing long-distance trade between Vernice and Netherland. As such a time, the living conditions were not a priority; instead, people worked for their benefits. As the years advanced, commerce grew as well, and although it was at a slow rate, most feudal systems became replaced by capitalistic merchants. Sailing worked to ensure long-distance trading especially with foreign nations; as a result, modern capitalistic systems came into existence. Different institutions developed to handle the growth of capitalism including banking systems that allowed deposits, development of private property principles, international financial markets and development of financial markets (Lloyd-Jones & Lewis 2014). With a vulnerable feudal system, industrialization and urbanization thrived as a hub for development.

Capitalism and colonization

Capitalism and the development of the economy were not limited to Europe; instead, North America and Australia were beneficiaries too. The population is asserted to be the main reason for the failure in development of other regions. English and French colonists’ immigrants overwhelmed most of North American and Australian indigenous populations. The immigrants used skills learned from home countries to develop new industries. Although Africa, East Asia, and Latin America were under colonization too, their huge population limited the number of immigrants into those nations. Additionally, the immigrants preferred an administrative structure that advocated for the production of primary production for exports to colonial master’s countries (King, 2015). The nations transformed the exports into finished products with some being re-exported by to the colonies. With such incentives in play, the colonizers had little motivation for the creation of new industries.

Britain’s Decline

Britain was at the center of the 19th century due to her advance in the industrial revolution. With the nation’s currency being a significant currency at the time, the government advocated for the formation of the gold standard in an effort of creating a fixed exchange rate system. The 19th century ended with Britain having spread her technology and investments across different nations not only to Europe, but also North America which created an internationally competitive environment. However, due to lack of her response to technologies and realities in management, the nation’s dominance begun to diminish (Lloyd-Jones & Lewis 2014). Large corporations were a result of development in the steel and chemical industries that often are not bound by strict economies of scale laws. While Britain enjoyed an established status quo, the US growing market capitalized on the developed new industries. As a result, Britain fell behind while the US advanced at a steady pace.

Twentieth Century

The century began with a global economic turmoil. With the financial crisis becoming a common occurrence, protection of domestic industries using tariffs only worsened the situation. Moreover, political alliances divided Europe into two camps, and with Archduke Ferdinand assassination in the Balkans, the first world war became a reality (Walker & Vatter 2015). The war exposed different barbarism among the warring nations including armored tanks and poisonous gas. The WWI led to abandoning the gold stand exchange rate by Britain. Moreover, the postwar era witnessed different countries resurging to economic development, especially in the US. With the US market-crushing in 1929 due to inappropriate policies, it was only right in passing the Hawley Tariff Act to protect the domestic industries (Walker & Vatter 2015). As a result, different nations adopted the same tariff, a feature that almost crippled the global economy due to the created vicious cycle.

Post-World War II

The year 1994 witnessed the anticipation of WWII coming to an end which led to propositions of institutions to smoothen the functioning of the global economy. The proposal included using the International Bank for Reconstruction and Development, an institution that has evolved into an essential world lender to-date. Furthermore, the overseeing of the Bretton Wood System by the International Monetary Fund, and after the Bretton Wood System dissolution in 1970, the institution became the reigning overseer of the financial system on the international front (Walker & Vatter 2015). The cold war and the decolonization period worked to open the world to different possibilities and fears. Some nations were also born from the decolonization period, and as a result, the global economy had to adjust itself to accommodate not only developed countries but the newly formed developing nations. While the economy experienced free trade on a high level, failure and the great depression were a result of established policies.

Present

The international economic structure and economic policies have changed with each passing year. Most nations have witnessed improved financial stability while measures have been put in place to reduce inflation. Furthermore, governments have slowly shifted towards the formation of market-friendly policies with most economies having central planning models as cushions. Additionally, another change witnessed presently is the fact that no longer is the United States the only major power. While that was the case with the 1970s, it is different with nations such as China, Japan, and Europe taking a center front in determining how the world economy should be (Varoufakis, 2015). Development has also been witnessed in the living standards, such that no longer does the global economy focus on commercial development, somewhat, quality of life has become a priority. Based on the millennium development goals aspirations, it is only right to presume that more nations are concerned about offering their citizens quality of life more than past efforts.

Conclusion

The economic dimension has evolved over the years. Although the aspects of capitalism invocation across different countries are inevitable, the development is slowly shifting towards a communistic approach where nations advocate for quality of life instead of merely aspiring for individual monetary ambitions. As discussed above, throughout the different centuries, different methods were employed to ensure growth as well as resurgence whenever failures occurred. By learning from past mistakes and adopting measures that promote a combination of policies and economically conducive operational environments, the present and future global economies are bound to be more beneficial with little room for failures such as what happened during the great depression. As a result, it is safe to argue that global economy has developed the most.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://maven.io/company/pages/privacy

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)