Lecture ppt 1 Global Capitalism in the 21

Lecture (ppt 1) Global Capitalism in the 21 st Century : Current and Historical Perspective Andrés Solimano Course, University of Economics Prague, November 2014

Global Capitalism. � Increasing interdependence across countries and regions. Dimensions: � Trade in goods and services. � Capital Mobility. � International mobility of people. Migration. � Circulation of ideas, knowledge and technology. � Cultural patterns.

What is Capitalism?

Trends and Events I �The end of the “great moderation” before 2008. The financial crash of 2008 -09 in advanced capitalism. The USA and Europe. � �Crisis followed by a sluggish recovery in Europe and the US. �High Unemployment in Europe. �Growth deceleration in China and Emerging Economies.

Trends and Events II • • • A new Global Economic Geography? The rise of Developing countries. Share of Non-OECD countries in global GDP rising from 35 % in 1990 to 50 % in 2010 to 65 % in 2030. The growth of South-South Trade South-South and North- South Migration.

Trends and Events III Entry of some 1. 500 million workers to the global marketplace through trade (750 mm in China, 450 millions in India and 150 millions in the former Soviet Union). � High global debt to GDP ratios. They have risen since 2008 in spite of deleveraging and austerity. �

Trends and events IV � China and South-East Asia as a source of low cost manufacturing. � Delocalization of branches of multinational corporations in low –wage Asia. The practice of outsourcing. � Large net savings surpluses in China, NICs and oil-exporting countries. � The United States as a deficit country and a net debtor.

Trends and events IV �A multi-polar world. � The rise of the BRICS. � Stagnation and political economy stalemates in mature advanced capitalism. � High and persistent inequality in the US and UK. � Inequality in Russia, China and India.

Global Capitalism in Historical Perspective. � Global Capitalism I: First wave of globalization : c. 1870 -1914. � Global Capitalism in Crisis: the Inter-war Period; late 1910 s to late 1930 s. � Managed Capitalism: the Bretton Woods regime, 1944 -1971. � Global Capitalism II: Neoliberal globalization since the 1980 s to the present.

Global Capitalism I: The first wave of globalization c. 1870 -1914 • • Gold standard (monetary regime) Policy regime Free trade, Capital mobility and Free migration (on the whole). Geopolitics Pax Britanica and a liberal economic order.

Global Capitalism in Crisis: The inter war years (1918 -1939). �Failed attempts to restore elements of the gold standard, �Instability in the 1920 s (Hyperinflation in Austria, Germany and Hungary) �The stock exchange crash of 1929, �Banking crisis and depression in the early 1930 s, �Economic and political nationalism. �Rise of fascism and Nazi movements.

Managed Capitalism � The Bretton Woods era: � Fixed exchange rates, � Keynesian policies of full employment and the welfare state. � Resurgence of trade, � Restricted capital mobility and limited international migration. � Pax Americana.

Neoliberal Capitalism: Second Wave of Globalization since the 1970 s- 1980 s � Floating exchange rates, � increased trade, increased capital mobility, rising migration, � financial deregulation, � free market fundamentalism. � Privatization and neoliberalism. � Power of capital.