Globalization Reform for Sustainable, Global, Economic Development

Abstract

Liberalization unleashed a wave of globalization over the period 1980-2007, and the international sector experienced miracle growth. While profits rose to all time highs, global saving exceeded global investment. Long-term interest rates declined to very low levels. After a global housing appreciation, excessive risk in a deregulated financial market led to a financial meltdown. A laissez faire economy led by TNCs was unable to generate enough investment, lacking its publically provided complements: infrastructure, education, health, science, equity, environmental sustainability. While in the US restoring financial markets and reducing the housing market fallout are immediate priorities, economic growth can only be recovered by restoring global investment. Lowering interest rates cannot generate very much investment, nor will consumption flows from fiscal spending. To stimulate the global economy, whole new economic sectors and technologies must be developed in advanced countries, and economic development deepened in underdeveloped countries. Global integration is not synonymous with laissez faire. A global harmonization of taxes is required to fund publically provided goods and to balance incentives between local and international production, reducing imbalances in developed and underdeveloped countries, strengthening global cooperation, and balancing global markets with global governance. Developing the green energy sector is consistent with these aims.