The Global Economy

Abstract

By the end of the nineteenth century a truly global economy had been created. In this century the internationalisation of production has continued apace. National economies are now more closely linked than at any time in history. Although the bipolar division of the world after World War II created two international economic systems they have never functioned completely independently of each other and are now more increasingly intertwined. The increased sensitivity and vulnerability of national economies to economic events outside their borders coupled with the increased role of governments within national economies combined to transform the dialogue on international economic relations. A key feature of post-1945 international relations is the attempt by states to institutionalise multilateral management of the international economic system. Furthermore, the accession to independence of the Afro-Asian states produced new demands on the international economic system. The new political consciousness of these states served to highlight the issue of global economic inequality and they attempted to use international organisations to redress their grievances. The number of actors in international economic relations has also increased with the spread of the transnational corporation and the increase in international banking. The readings in this chapter are concerned with the globalisation of economic activity.