GLOBALIZATION (Joanna XIIA2-26)

GLOBALIZATION

We all increasingly feeling the winds of globalization. First, we will describe about the past globalization. Recurring cycles of the rise and fall of nations and empires are nothing new. Exhibit 1 traces which countries were the world’s largest in economic output from 1870 until today. Until the late 19^th century, populous China was the single largest economy, though it wasn’t well integrated into the world economy. In the late 19th century, the UK, with its huge colonial empire, was the most powerful economy, and the Pound Sterling served as the world’s principal reserve currency. By World War I, the US had overtaken the UK.

Jumping to 1950 on the line graph below, we can see an extraordinary moment in the history of capitalism when one country, the US, accounted for nearly one-third of world economic output and more than the next five countries combined. This dominance continued for some time—Japan’s weight in global GDP tripled by 1990, after which it entered a period of stagnation and decline (on a relative basis) from which it hasn’t recovered in 25 years. 

The remarkable transformation and rise of the Chinese economy dates from 1978, when then-paramount leader Deng Xiaoping announced his “open door” policy and kicked off radical reform of the socialist system. China passed Japan in the 1990s to become the world’s second largest economy and, depending on which measure you use, has either already taken the mantle from the US (when measuring GDP using purchasing power parity) or is on course to surpass the US economy within a decade (if using market exchange rates).

Prof. Abdelal stresses that this isn’t the end of US relevance; nor is he proclaiming a Chinese century. Rather, we are living in a different world, a multipolar one rather than a unipolar system with one dominating economy. But the center of economic gravity moving away from the US does signal an end to the post-war system of the US often writing the rules of the global economy as it wished.

The period from 1870 until 1914 marked the first great era of globalization, though this was the age of empire with far fewer political units than today—e.g., global integration included England trading with overseas colonies such as India, the Netherlands with Indonesia, and France with what was known as French West Africa.

Interestingly, commentators back then, like so many today, took the march toward globalization for granted. In 1910, Norman Angell, a prominent British journalist and author published The Great Illusion, which asserted that economic interdependence among European industrial countries had developed to such a degree that war among them was futile and militarism was obsolete. Angell’s rather utopian dream was soon devastated in 1914 by the outbreak of the First World War. This was followed by the great stock market crash of 1929 and ensuing financial crisis, currency wars and the rise of protectionism in the US and around the world, and of course the Great Depression. As is clear in Exhibit 2, by the time the Second World War broke out, the world economy had essentially de-globalized.

Over the past 30 to 40 years, we’ve rebuilt a new era of globalization in which world markets for goods, services, and capital are statistically about as integrated as on the eve of the First World War. The rise of China since 1978 is a central feature of this second era of globalization.

In the last ten years or more, such implications and effects of globalization have been at the center of national and international economic debates around the globe. Unfortunately, due to Liberia's persistently tumultuous political climate, in which the country has remained politically and economically paralyzed under leaders who have now become international pariahs, the country has been preoccupied, however justifiably, with extinguishing flames of armed conflicts, restoring domestic political sanity and peace, and reconstructing basic economic and social life. In this process, Liberians have sidestepped other equally important challenges shaping the future of their country's long-term economic development and policy.

We don’t know about the future and we can’t know what will happen later. But we can guess about the future with look from the 10 years before. In the future, the globalization will entered a new part. New generation will bring the globalization up. The world’s economy will be good. But we must be carefull. The new generations can bring us to the bright future and also can bring us to the bad future. It depend on current education. Children must know about the globalization. They should be open to the world and educated from now.