Global Capitalism

The theory of global capitalism is concerned with the relations of power between the main classes of capitalist economy. Capitalism has always been concerned with the relationship between the capital owners and the workers, but global capitalism now sees these relationships take on a global perspective.

The growth of global capitalism has been enabled by a series of technological revolutions since the end of World War II. These changes include the modernization of ocean transport with new, larger containers and ships being used and quicker, more efficient engines reducing the transit time and cost of shipping bigger goods. Air transportation has arguably been an even bigger revolution with journey times across the Atlantic Ocean, for example, being a mere fraction of what they were before, which enables the quicker movement of people especially than before.

What makes global capitalism especially unique is a combination of five features separating it from the international economy which, although not as dynamic or ubiquitous as the current global economy, was still active and prevalent. First, it exhibits deeper, more extensive and more interconnected cross-border transactions. Second, resources, capabilities, goods and services which are more mobile than ever before. Third, multinational enterprises playing a more significant role as creators and distributors of wealth, and originating and producing in more countries than at any other point in history. The final two features are cross-border markets seeing more real and financial volatility (especially capital and exchange markets) than at any other point in history, and digital and electronic commerce has completely changed the character and geographic profile of cross-border transactions.

Because of these technology changes businesses are no longer confined by location. Multinational firms are now able to have their research and development, administration and manufacturing located in different areas of the globe, not just the country – and be confident that they can control the processes taking place in these separate locations efficiently and precisely. For example, the Ford Escort is assembled in fifteen countries across three different continents where previously the Ford manufacturing plant would be located in America.

Information technology, including the global growth of the internet and data processing has contributed to the growth in world financial markets. Capital can now move across the globe at speed through either satellite communication or undersea fiber-optic cabling. In short, the world has shrunk and this has meant money can move and be controlled around the world in real time, unlike in any previous era.

It also means businesses are now able to select the cheapest price on a global rather than local scale and instead of moving factories from state to state, can instead move their manufacturing process from country to country. If a labor source is cheaper in a different region of the world to the businesses' current location, they can move their production, which is a major contributor to the growth of global capitalism.

Global capitalism has created wealth for the majority of people in the world. The world's output has risen to six times what it was 50 years ago. There is more wealth in the world than there has been at any previous time in global history, and global capitalism has been a major contributor to this. Because of the global flow of commodities and ideas it is now possible to trade freely with partners around the globe. This growth in free trade has led to more prosperity in the countries compared to those that have stuck to an isolationist policy. The advent of global capitalism with the free flow of capital and ideas into new countries has brought economic growth to their populace.

Global capitalism has also been the main catalyst for the creation of the knowledge economy as a move away from a global economy based on commodity exchange. Wealth is created by the exchange of ideas rather than the transfer of physical assets that had previously typified the international commodity. The producers of ideas are now the main creators of wealth, as intellectual property cannot easily move across borders as with the growth of global capitalism there are also global patent laws.

Selected full-text books and articles on this topic

Multinationals and Global Capitalism: From the Nineteenth to the Twenty-First Century
Geoffrey Jones.
Oxford University Press, 2005
Making Globalization Good: The Moral Challenges of Global Capitalism
John H. Dunning.
Oxford University Press, 2003
City of Gold: An Apology for Global Capitalism in a Time of Discontent
David A. Westbrook.
Routledge, 2004
The Crisis of Global Capitalism: Open Society Endangered
George Soros.
PublicAffairs, 1998
In Defense of Global Capitalism
Johan Norberg.
Cato Institute, 2003
Three Cheers for Global Capitalism
Norberg, Johan.
The American Enterprise, Vol. 15, No. 4, June 2004
Global Capitalism at Bay?
John H. Dunning.
Routledge, 2001
The Capitalist Revolution: Together with Rapid Growth, Dazzling Technologies and Widening Circles of Development, Global Capitalism Is Delivering a Turbulent, Unequal, Out-of-Control World. Just as We Demanded
Hancock, John.
Literary Review of Canada, Vol. 19, No. 10, December 2011
Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
George A. Akerlof; Robert J. Shiller.
Princeton University Press, 2010
Cultural Contradictions of Global Capitalism
O'Hara, Phillip Anthony.
Journal of Economic Issues, Vol. 38, No. 2, June 2004
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