Having supper with Bill McNeill, the eminent world historian, is always a pleasure, but last night there was a bonus: new perspectives on the falling stock markets. We were talking about historical trends and examples, and he explained that the first international credit crunch took place in the 14th century, involving Edward III of England and Florentine bankers. Lack of access to credit, rising prices, conflict over who is to blame – it sounds familiar, doesn’t it?
The role of the United States in the global crisis is bound to be much debated. I’ve begun planning a Berkshire publication about globalization and the global economic systems, and thought I should share an article on “Economic Globalization” from Berkshire’s Global Perspectives on the
Whether operating at the domestic or international level, market economies always rely upon a complex social, legal, and physical infrastructure that only national governments can provide. Even so-called free-market economies do not arise organically out the private sector, but rather are the result of sustained and coherent public-policy choices. For this reason, most social scientists disagree with popular accounts of how economic globalization originated. Most often, such accounts intimate that economic globalization began when corporations in the advanced industrial countries started relocating their routine manufacturing operations to low-wage regions of the world economy, something that was made possible by technological advancements associated with the information revolution. While the actions of the private sector were clearly important in this process, this view underestimates the degree to which U.S. policy makers and their allies in other advanced industrial countries actively encouraged economic globalization through specific public-policy choices.
By the way, even MSNBC is asking if this is “The end of American capitalism?”
And here’s Newsweek, on What the World Thinks of the U.S. Financial Crisis.