RE AN INTERNATIONAL ECONOMY AND CURRENCY

RE AN INTERNATIONAL ECONOMY

There was a time, many years ago, before the existence of political boundaries and the burdens they impose, when people traded amongst themselves freely and without concern.  Linked by ties of social and geographic proximity, but not yet encumbered by political and economic hobbles, they regularly exchanged the products of their hunting, fishing, and agriculture.  This elementary commerce transpired freely and easily; and problems were few and inconsequential.

Centuries later, mankind's economic picture has become far more complicated; and a great deal more troubled and troublesome.  With the development of our world into a chessboard of nations, struggling within ourselves as well as with each other, for various objectives, not the least of which being commercial superiority, we have spawned, and have had to endure, perpetual economic struggle, punctuated by occasional economic disaster.

It has been wisely commented that in many of man's affairs, first steps are often motivated by economic considerations.  Thus, the great French economist Jean Monnet was seemingly correct in his observation that mankind's earliest steps to political unity would likely be traceable along economic lines.

In the more recent past, huge economic crises usually took place in the wake of waves of inappropriate economic restrictions on the part of various nation-states.  A primary example would be the condition of economic affairs following World War I.  Large older countries strove to repair their damaged economies via excessive tariffs and exchange rates; while newer recently created states resorted to the same methods in efforts to protect their infant economies.  At that time, the pure and simple basic problem lay in the fact that our world consisted of a large group of individual national economies, each possessing very different economic concepts, together with a wide variety of structures to implement them. 

New York Times columnist Thomas L. Friedman has correctly designated such singular economic activity on the part of various individual countries as an example of "cheap nationalism."  He goes on to condemn such "jingoistic celebration of nationhood" as comprising mere "emotion-grabbing symbols," having little potential for "real, concrete improvements in quality of life."  (The Lexus and the Olive Tree)  Industries within individual nation-states which were experiencing difficulties have often turned, and still do turn, to their national governments for assistance.  When rendered, this help is usually int the form of subsidies and protection.  These forms of ostensible assistance have actually done little good for the producer or the consumer; for they create little or no incentive for real improvement or meaningful change.  In fact, a recent study has revealed that government protection of its domestic markets can actually constitute a serious cause of increasing levels of unemployment--for it serves to reduce, rather than expand, that nation's commerce and trade. 

In more recent years, our world, still consisting of dozens of individual national economies, has come to be subject to, and governed by, forces that are worldwide in nature.  We are reminded of the presence of the current crowd of "faceless stock, bond, and currency traders, sitting behind computer screens all over the globe," (Thomas L. Friedman, op. cit.) constantly transferring their funds from place to place; as well as the many multinational corporations, who regularly open and close factories around the globe, in perpetual pursuit of lower costs and more lucrative markets.  These elements are, in reality, replacing national governments as primary sources of capital and growth.  Another phenomenon of late has been the emergence in many parts of the world of a breed of "merger and acquisition" experts, whose activities result in no improvement to products or services, but are, rather, solely consecrated to the creation of additional personal wealth, for themselves or those for whom they are acting.

The nature of contemporary commercial practices has in fact evolved to a point where national labels are less important, and therefore hardly necessary.  For example, what is the national pedigree of a product turned out in nation A, when most of its component parts have been obtained or produced in nations B, C, and D? 

Reflecting another current trend, economic focus in many parts of  our world has shifted away from agriculture.  Countries with mature economies have moved into the service sector; while a number of developing countries have turned to manufacturing as their principal economic activity.

Further, "horizontal linkages" among people from the same generations across the globe exert stronger economic forces than do traditional, vertical linkages between mixed generations living within a particular locale.  A world-famous brand of jeans or sneakers will thus likely be similarly in the shopping plans of persons of the same age and socioeconomic strata throughout the world.

As economic globalization continues to march forward, national economic systems are becoming more and more similar.  At the same time, as a result of this, the marketplace has become elevated to a rank in the minds of most of us that is higher in importance than our consideration of the concept of the nation-state.  Whether we realize it or not, this recent supremacy of the market over the state, and of economics over politics, has been responsible for the nonoccurrence of a number of political struggles that, in earlier days, could have led to warfare.

The marketplace today is thus becoming more and more a single global market.  Financial successes have been achieved by investment in global stock and bond markets, by companies setting up shop in various countries, and by sale of the goods produced by such companies in a worldwide trading system.