Economic Globalisation and Developing Nations Essay

Economic Globalisation and Developing Nations - Essay Example The goal within evolution, or what animals see as "good," is the ability to survive and promulgate their genetic code. What economists see as "good," within the world of finance is for wealth to accumulate, for products and services to increase in value and for all to profit and live happily ever after. This is the goal of financial evolution. It sounds so very, very simple, doesn't it Ah, but there is a catch. Given human tendencies, it is impossible for anybody to really have "enough." By its very nature, wealth is not a matter of what one has, but rather what one has in comparison to what everyone else has. We really don't want to have enough. Enough does not exist. We want to have more. This notion is fairly across the board for all cultures. Further, the animal kingdom is equal to the economic world concerning the degree of competition that is involved. However, over time, the competitors have less and less of an advantage over one another, and the playing field is leveled somewhat. Should one introduce a foreign element that has an unfair advantage-an animal with no natural predators and an unlimited food source, for example- soon the delicate balance of power between species is torn asunder. Similarly, such an idea can be presented regarding financial globalisation. Financial globalisation is nothing new. ... Enabling framework of financial globalization essentially includes liberalization and deregulation of the domestic financial sector as well as liberalisation of the capital account. As economies progressively integrate globally, pari passu the financial structures of markets and the world of finance change. Financial globalisation cannot be considered a novel phenomenon. Trans-country capital movements are centuries old." (Das, "Globalization in the World of Finance") Arguably, the very first European pioneer into the area of global finance is Jakob Fugger, son of a wealthy, self-made merchant of textiles. Jakob Fugger used his toehold in the textile industry to expand into finance, with trade posts that stretched from the Mediterranean to the Baltic. (familybusiness.com) Later, the rest of Europe caught on, and The Royal Exchange was created in London, providing a center for English financiers to trade both locally and internationally. By the nineteenth century, it became fairly evident that money in the form of paper currency had much less stability in terms of its trading power against foreign currency. The gold standard was therefore established, the reasoning behind it being that gold was much less likely to fluctuate in value; notes were redeemable for gold, both within a country's borders and internationally. This was intended to act as a guarantee that paper currency could be used anywhere, with a fairly similar value, provided these same countries both agreed to the gold standard and operated under it. (This was prefaced by the Bank Charter Act of 1844, under which the Bank of England declared itself the only legitimate source from which paper money was to be issued.) This standard is no longer used,