Assessing Globalization

The debate devoted to globalisation, as it evolved, naturally shifted its focus on financial crisis even though the analysis of the short-term aspects were quickly overcome by the medium- and long-term ones. The central question referred to the nature of the crisis: is it to be considered a cyclical or a structural change? Agreeing on the second scenario would mean that we are witnessing the breakdown of an established model and the end of capitalism and globalisation as we know it. However, the mainstream opinion inclined toward the opposite interpretation: capitalism and globalisation are not living their last days, however it is inevitable that they need a reform of the rules and institutions on which they are based. Global governance needs to be reshaped, a stronger multilateral approach seems to be urgent and better regulations and controls are required by all economic players. What is not clear is how this new global order would or should look like. In sum, there is consensus on these two statements: 1) overall, over the past decades globalisation created better living conditions for all, produced more wealth and reduced poverty; 2) After this crisis we need a new form of globalisation. On the other hand, opinions diverged on the following issues: 1) what went wrong in our way of considering the global order, which component failed; 2) which shape the new global order will or should have. The second parte of the discussion moved from financial aspects to economic ones. In this perspective, the crisis is characterized essentially by complexity. First and foremost (and somehow unexpectedly), this crisis can be described more as a perfect storm than as a tsunami, because many factors were perfectly combined to compound the effect of different shocks: the burst of the house market bubble, which generated economic downturn even before the financial crisis; the commodities prices rise, inducing inflation and reduction in consumers’ confidence; the emerging economies, which experienced very high inflation; and eventually, the foreign currencies exchange. Second, the recession started before the financial crisis and it was not unexpected. Speculation on house market, for example, was unnatural, but many governments did not intervene because they could benefit from it. Third, commodity market is strictly connected to economic fluctuation. To avoid volatility in this sector, three actions could be crucial: 1) adding value to row materials; 2) helping farmers to improve standards; 3) promoting helpful technologies. In general and summing up some conclusion:1) protectionism has been a negative choice; 2) the crises played as a warning: companies have to work in a different environment, with less finance, more industry, more ethical behaviours and more corporate social responsibility.