The implementation of globalization has not been without its major flaws. Abolishing it, however, is paramount to anti-socialist behaviour or looking inwards. This concept is against the tendencies of human nature.
If you read up on any definition of globalization, you will see that the intention was always genuine. The need to integrate and collaborate for the mutual benefit of nations.
It can, however, like any product (like knowledge), be exploited out of selfish desires and lead to exploitation.
Of course, it also doesn’t mean that globalization must apply to every sector of your economy. Some inward investment is always healthy. It should, however, not lead to extreme nationalism for a fear of loss of national identity.
The problem, like many others, lies in the hands of politicians who are controlled and dictated to by a handful of large corporations. These ‘corps’ have one and only self-interest – profit, power, and control.
The main concern for sovereign governments is that ‘giving up’ or sharing one’s technological, innovative, or manufacturing secrets to other countries. The premise is that this would make them ‘vulnerable’.
The real issue lies in a lack of trust – leading to the notion: “I will not let you know how I do it because you may use it against me – in trade or war”.
Despite the existence of supposedly ‘compartmentalized’ trading blocs and free trade areas like NAFTA, EU, ECOWAS, SADC, etc, the rate of globalization has sped up significantly in the past decade.
This is due to boundless advances in information technology as accurately predicted by Neoclassical Growth Theory.
Information technology has now given us valuable new tools to identify and engage in economic activity.
Tech provides access to and faster, more informed analysis of information, transfers of assets, and collaboration.
The impact on finance
A globalized world means that with the aid of technology, you can buy and sell shares of an Italian firm from a desktop in Namibia!
You would then only have to deal with the commissions and transaction fees (capital gains tax) locally pertaining to your online trades.
And think about it, on a micro-level. If globalization is entirely a bad concept then no-one should be using Amazon, eating MacDonalds, or watching Netflix in protest. Hard to imagine, isn’t it?
We must praise its positive outcomes and work hard against the negative impacts. The negative ones are also giving rise to a new era of extreme nationalism or populism.
You can only do your bit by promoting and backing policy-makers who can enforce good trade laws. This would force both local and international competitors to play by the same rules.
Penalties for financial misconduct should be a lot greater to deter exploitation. Rather, perpetrators still get the proverbial slap on the wrist.
The creative destruction of the financial system will be brought about by cryptocurrency and its underlying blockchain technology.
Depending on its uptake, and whether the authorities can legitimize its legality, we may see individuals and governments using decentralized currencies.
The Venezuelan president is investigating the concept of a national cryptocurrency dubbed ´Petro´. They would use it to alleviate dependency on (heavily interest-ridden) loans.
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