Global Capitalism

The term global capitalism implies much more than economic activity in different national borders. At least in theory, one could have an international economy consisting of autarchic domestic economies engaged in limited commerce with each other. Or one can imagine (as was largely the case well into the 19th Century) an international economy whose connections involved luxury goods or a few ―products (sugar and slaves, for example). A global economy, however, implies one in which few if any of the domestic economies really exist separate from the planetary whole.

A global economy is one that is interconnected and networked across a variety of borders as well as including a variety of goods and services. It also presupposes a set of agreements regarding the rules of the game whether these involve accounting regulations, or business norms. Global capitalism is the expansion of the principles and practices of property and the market to the world stage. A few summary statistics can give a sense of the size and scope of this global stage (World Bank, Maddison).

The global economy is now larger than it has ever been and the pace of its growth has been unprecedented over the past half century (despite the recent shocks). World GDP increased six fold from 1950 to 1998 with an average growth of 3.9% per year compared to 1.6% between 1820 and 1950 and 0.3% from 1500 to 1820. Over the past 10 years (prior to the summer of 2008) the world economy has grown by more than a third and some of the poorer parts by two-thirds. Each person in the world (on average) is now 7 times richer 10 than 100 years ago and 4 times richer than just 50 years ago.

Due to improvements in technology, the last 50 years have seen a fivefold increase in production per hour worked. World trade in goods and services accounts for more than half of global economic production. The total amount of merchandise exports (the amount of goods that countries send out to the global market) is roughly $10 trillion per year.

Annual global financial flows include over $625 billion invested across borders, $227 billion sent by migrants back to their countries and $750 billion spent by international tourists. $1.5 trillion is exchanged in currency markets daily.

An estimated 200 million people (3% of the global population) live as international migrants, including roughly 20 to 30 million illegal migrants. In 2007, they remitted roughly US$337 billion (International Organization for Migration 2008).

Today, we produce trade and invest much more than ever in history, and do so in a substantially farther-reaching system. All of this represents a further move away from our past of provincial poverty. Still, despite this increasing bounty and interconnectedness, global capitalism is not the same everywhere and all the time. In the following section, we describe our typology of how different countries fit into the system and then go on to describe critical moments in the creation of the capitalist global system.

(Global Capitalism - Miguel Angel Centeno and Joseph Nathan Cohen)