The Globalization Of Capital

Paper Summary:

This paper discusses the means by which capital is becoming globalized and argues that capital has become even more unevenly distributed between the North and the South, giving rise to the argument that the creation of global capital has had untold negative consequences for the poorer nations. The paper then attempts to prove this argument through an examination of the consequences of free trade and the activities of MNCs. Finally, the paper concludes that the removal of capital controls and the removing of much of a nation's control over capital has not just jeopardized national sovereignty, but has placed the Lesser Developed Countries (LDCs) in a position of financial instability.

From the Paper:

"The development of global economy has always depended upon the globalization of capital. For a global economy to emerge, capital itself must become global whereby it can easily move across national boundaries, without being confronted with obstacles. In this respect, capital here means both finance capital, and capital assets, including labour. Therefore, under the umbrella of globalization, and the determination to make capital global, labour, capital assets and finance capital will move across borders. In brief, globalization, guided by the World Trade Organization (WTO) and aided by the World Bank (WB) and the International Monetary Fund (IMF), will establish a global economic system guided by the principle of free movement of capital, as facilitated by trade, foreign direct investment in the form of multinational corporations (MNCs), and the transference of chunks of national economic sovereignty to international financial institutions (IFI), such as the WB and the IMF, creating a largely uniform global economic system (Adams, 1999)."

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