Chapter 23 Module 8

2. What factors contributed to economic globalization in the second half of the twentieth century?

There were many factors that contributed to economic globalization in the second half of the twentieth century. During the beginning of the twentieth century, World War 1 and the Great Depression wreaked havoc on the world economy (Strayer 1138). In 1944 a conference in Bretton Woods New Hampshire there was an agreement between the World Bank and the International Monetary Fund laying the foundation for postwar-globalization. The Bretton Wood System negotiated rules for commercial and financial dealings among the powerful capitalist countries in the world. Technology started rising becoming a factor in economic globalization.  Technology made trades faster for countries to receive goods as well as communicating with other countries faster instead of taking a while for a message to get delivered. “ Containerized shipping, huge oil tankers, and air express services dramatically lowered transportation costs, while fiber-optic cables and later the Internet provided the communication infrastructure for global economic interaction” (Strayer 1139). Countries that were developed had increased population growth which led to growing economies and modernizing societies.  Economic Globalization started taking place and rising in the 1970s better known as Neoliberalism. The United States and Great Britain abandoned political controls dealing with economic activity as leaders and businesspeople viewed their world as a single market. As communism collapsed by the end of the twentieth-century capitalism started rising worldwide. 

3. In what ways has economic globalization more closely linked the world’s peoples?

Many conditions affected economic globalization. Economic globalization accelerated circulations of goods, capital, and people. World Trade skyrocketed from roughly $57 Billion in 1947 to about $16 Trillion in 2009 ( 1140). Department  Stores and markets all around the world stocked with goods and valuables making the economy stronger. Money achieved global mobility through three ways Foreign Direct Investment, Short Term Movement of Capital, and Personal funds of Individuals. Foreign direct investment is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. The second form of money in motion is the short term movement of capital. Short Term Movement of Capital is when Investors spend trillions of dollars annually purchasing foreign currencies or stocks likely to increase in value and most often sold quickly after with no consequences. The third and final form of money movement involves the personal funds of individuals. “By the end of the twentieth century, international credit cards had taken almost everywhere, allowing for easy transfer of money across national borders” (1140-1141). The movements of goods and capital in the twentieth century were new patterns of human migration caused by war, revolution, poverty, and the end of the empire. Many people all across the world escaped their countries to live in America and Britain to escape poverty.

5. What new or sharper divisions has economic globalization generated?

The economic globalization generated immensely rapid and unprecedented creation of wealth, having an impact on human welfare.  Economic Globalization helped generate economic growth in world history. The overall economic growth in crises and in growth shaped the course of history.  An inflated housing market — or “bubble” — in the United States collapsed, triggering millions of home foreclosures, growing unemployment, the tightening of credit, and declining consumer spending. Soon this crisis rippled around the world (1143).  The gap between the rich and the poor has gotten wider than years before in history. These new disparities affected and started a global conflict. Eastern and Western states of Capitalism and Communism started fading away out of existence as well as the riches in the Global North and the developing countries of the Global South in the world affairs. Economic globalization has contributed to inequalities not only at the global level and among developing countries but also within individual nations, rich and poor alike (Strayer 1146). Globalization also divided Mexico as well. The northern part of the country, with close business and manufacturing ties to the United States, grew much more prosperous than the south, which was a largely rural agricultural area and had a far more slowly growing economy.  All that pain and suffering of the people left behind fueled a movement aimed at criticizing globalization.