The process of Globalization originated as early as the 15th century with the evolution of capitalism, and subsequently spread itself to different countries across the world. In fact, the subjugation and exploitation of Third World countries like Latin America, Asia, Australia and North American white colonial settlements and Africa can be cited as the examples where the process of Globalization initially started.
From the initial stage, the process of Globalization had its roots in imperialism. Economies opened up for accumulation in the First World countries at the cost of exploitation of the Third World countries. At this stage, the nature of Globalization depended largely on the mentalities of the imperialist rulers. It was essential for the rulers to create distinctions among people on the basis of their social strata, This facilitated them to exploit these Third World countries by extracting raw materials, labor forces, and manpower for meeting their administrative and military requirements. This way, the richer countries continued to prosper while the poor nations were pushed more towards poverty.
The second step of Globalization centered on inter-imperial commercial activities. The mutual trade between the European nations, United States of America and of late, Japan formed a series of groups on regional level, together with the governing powers. This gave birth to cooperations and competitions in the commercial spheres, making the multinational corporations struggle for gaining control over the market shares. They also joined hands to exploit the markets of the Third World countries more effectively.
Foreign trade is an intrinsic part of Globalization. Exchanges of goods on an international level is closely knitted with the various classes of the social hierarchy as well as the commercial markets. It is this association which helps Globalization attain class character.
As far as the form of Globalization is concerned, it is essentially “cyclic” in nature, changing with various phases of national economic developments. In fact, Globalization derives its ascending quality from the capital forces, which defeats the farmers, the labor class and small political parties. This results in the conquest of states, where lifestyles are lowered and there is promotion of export strategies.
The development of the concept of of Globalization is closely associated with the beginning of class conflict and the constriction of profits during the formation of 'welfare state'. In fact, the process of Globalization is not a new phenomenon; Its historical cycle of rise, integration and decline is an outcome of the socio-political scenario of a particular nation.
The global crisis changed the face of monetary policy. Central banks deployed new tools to counter the effects of the crisis, which have reduced the risk of deflation, stabilised the financial system and calmed financial markets; but potential negative side effects remain.
Two weeks ago, the IMF organized a major research conference, in honour of Stanley Fischer, on lessons from the crisis. Here is my take. I shall focus on what I see as the lessons for monetary policy, but before I do this, let me mention two other important conclusions.
Nouriel Roubini, a.k.a. “Doctor Doom”, is chairman of Roubini Global Economics and professor of economics at New York University’s Stern School of Business. Roubini has been consistently cited as one of the world’s top global thinkers. This year, he was voted as the most influential economist in the world by Forbes magazine.
Professor of Economics & Director of the Earth Institute at Columbia University. Special Adviser to the UN Secretary-General on the Millennium Development Goals. Founder & co-President of the Millennium Promise Alliance.