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Economic globalization has had mixed results for the United States. On one hand, the NAFTA period has brought unemployment down from 7.1% to 4.6%, but on the other hand, the job market has moved from high paying manufacturing to low paying service. Additionally, the Gross Domestic Product has grown from $7.5 trillion to $13.3 trillion. Yet, US debt has doubled since 1990 from $4.5 trillion to nearly $8 trillion. The value of U.S. manufacturing exports has risen from $666 billion to $853 billion, but some of the data is skewed because the US exports a lot of parts to Mexico or Singapore for assembly, only to import them back in again. In addition, 11% of our exports to Canada and Mexico were foreign-made.
"New globalization" as we know it resulted from the Great Depression, which drew international attention to the dangers of an increasingly interdependent world. For the first time, people fully understood the dangers of having an economic system that relied so heavily on remote parts of the world and saw firsthand how instability in one region could spread, in a domino effect, to other regions. Also, capitalists began to suffer from the downturn of "supply and demand," as most consumers no longer had the means to demand, causing an oversupply and massive layoffs. They knew they had to expand to untouched regions to assert their influence, free up demand and save a few bucks on labor. Suddenly, more than ever, economic globalization meant stabilizing assets in other countries, spreading Democratic principles around the world and creating a sustainable environment of supply-and-demand, free trade and wide-scale participation.
Eventually we did bounce back. Obviously the Great Depression wasn't the first financial crisis, nor was it the last, but the magnitude and severity shocked economic scholars around the world. In the 1930s, economist John Maynard Keynes spread the idea that government intervention is necessary to regulate trade strategy and maximize financial gain. The European "Marshall Plan" and American "New Deal" both took hints from the Keynesian model of economics by developing specific reconstruction policies and economic trade strategy. At the Bretton Woods conference, IMF and World Bank were created with these very principles in mind. Writer Susan George comments, "When these institutions were created at Bretton Woods in 1944, their mandate was to help prevent future conflicts by lending for reconstruction and development and by smoothing out temporary balance of payments problems. They had no control over individual government's economic decisions nor did their mandate include a license to intervene in national policy."
Historically, from the Ottoman Empire to the Romans, trade strategy was always an important motivation for waging war and as a mode of acquiring wealth. Much of what propelled America forward during the Industrial Age was the manufacturing and exportation of automobiles, as well as the harnessing of raw materials and energy resources. Aggressive free market societies enjoy the largest benefits of economic globalization, which is why military might often follows business globalization like a bedraggled puppy dog. To have is not enough, when forces like Communism or international Terrorism are threatening one's trade strategy and assets, as we have seen in the Persian Gulf War and the War in Iraq.
In some ways, we've seen positive progress with poverty rates going down and literacy rates as well as life expectancy going up. GDP was on the rise and it looked as though competition was keeping prices fair. Yet a series of key events (like Cambodian garment worker strikes in 2000 or the Coffee Crisis of the 90s) alerted the public to the dangers of unrestrained economic globalization and an Imperialistic trade strategy which may lead to exploitation or human rights abuses. Today we continue the globalization debate in search of that comfortable balance.
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