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What factors led to the development of contemporary economic…
What factors led to the development of contemporary economic globalization?
Bretton Woods Conference
During the conference 44 countries agreed to a monetary system where each country would maintain a fixed exchange rate for its currency, they also agreed that the fixed exchange rate for its currency is based on gold standard. (a system by which the value of a currency was defined in gold, for which the currency could be exchanged.)
the agreement created the international bank for reconstruction and development, which divided into the world bank group and bank for international settlements. IMF
World Bank and the IMF
world bank
basically promoting stability cooperation here and there and to reduce poverty. loans with conditions.
there goal was to benefit economic globalization but became targets for anti globalization movements
the world bank is an agency of the united nations, it was independent and controlled by 184 member countries
The IMF
international monetary fund that also came for bretton woods conference, it purpose to work with the world bank to bring stability to monetary affairs to expand the world trade
Capitalism
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.
GATT became the World Trade Organization in 1995. (general agreement on tariffs and trade) which where basically like rules to make trading better
New technology and communication
new technology and communication have drastically transformed our society, the advances of tech made the world seem smaller. they decentralized international money markets
new tech had changed international investment and money markets. anyone with a computer can look for profit and buy things. money was transfered around the world at a press of a button
Economic theorists like Hayek and Friedman
hayek believed that if governments tried to plan or control societies they were doomed for failure. his theories were based on totalitarian regrimes where governments had enormas control over society including the economy
free market, importance of prices, many planners,human action not human design, dynamic competition
Transnational corporations
multinational corportions, which basically are corporations that operate in two or more countries.
they take advantage of cheap labour and they use more machines then people, they use there influence to get exempted from tax and they violate human rights
they often bring wealth, provide many job opportunities for others. they help others grow skill and they pay tax which is good for globalization
Free Trade/WTO
free trade is a policy followed by some international markets in which countries governments do not restrict imports or exports to other countries. trade disbuts are handled by WTO
expulsion can reduce trade oppurtunities
helps the spread of goods in and out of international countries benefitting globalization