Chapter One: Economic Foundations of Globalization


To what extent does globalization lead to sustainable prosperity for all people?


Introduction: Economic Foundations of Globalization


To what extent did the economic foundations of globalization shape contemporary globalization?


Perspectives on Globalization



When people talk about globalization, they are usually talking about the global economy. Economic globalization has a strong impact on people all around the world as they buy and sell resources, products, and services, including their own labour for use by other people. Huge corporations and powerful nations have reputations for exploiting poor and marginalized people. Economic globalization did not just happen. It is based on the theories of many economists. It is managed by international organizations, and it is affected by large corporations and all levels of governments.



"The decadent international but individualistic capitalism in the hands of which we found ourselves after the War is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn't deliver the goods ... Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone ... The difficulty lies not so much in developing new ideas as in escaping from old ones."

John Maynard Keynes, economist, in his book
The General Theory of Employment, Interest and Money, 1936


John Maynard Keynes was responding to the economic disasters of the world economy in the 1930s after a decade of global prosperity in the 1920s. The 30s were a time of severe economic depression and unemployment. National economies had been significantly undermined by the excesses of manufacturing and unbridled investments. Companies, banks, and families lost all their capacity to meet the needs of the people who depended on them. The old economic models were questioned and found wanting.

Keynes felt that governments had done a bad job guiding growth by tying itself to old theories and ways. He proposed a new way of economic progress with a clear partnership of government and private interests.

In this unit, you will consider some theories about how wealth is created. With an understanding of these theories, you can consider some of the challenges and opportunities that globalization presents.
Globalization is all about trade, technology, and interconnections among people around the world. But is it good for us? Does it lead to prosperity for all people or just for some? If it does lead to increased wealth, can that growth be sustained or will it end at some point? These ideas have been pondered by great minds and even not-so-great minds all over the world. What was the basis of their ideas?