The paper "The History of Multinationals and the Creation of Global Capitalism" is an outstanding example of business coursework. Globalization is the integration and democratization of the world’ s monetary status, culture and infrastructure by transitional investment, the intensified proliferation of communication and modern information technology and how the international, local and regional economies are impacted by the introduction of the free local market. Globalization is no longer a myth but a reality as it is a process that can be traced back from the early trade by mankind. The latest invention in the transport, communication and business transactions has made the world’ s economic space and time to be shrunk progressively.
This can be traced back from the early explorations and industrial revolution processes. The state ventures in colonization have to an extent driven the globalization process and have had its effects reflected on the market. This is evident through the exploitation of smaller upcoming markets by the larger developed markets in the world that is full of opportunities (Griffin, 1991). The earlier periods witnessed the internationalization of capital due to a strong demand from regions outside Western Europe that was accelerated by the exchange rate system that was fixed, lack of regulatory restrictions and the abundance of capital mainly in the Western Europe regions.
The era ushered in the yardstick of global reintegration due to the fact that the international commercial and monetary relations attained levels that had never been achieved before. The international economy at this point was in favor of Europe. Most of the major investments and business transactions radiated from the Western Europe region. The era also witnessed a sharp divide between the countries that were debtors and those that were creditors.
Infrastructure determined their export zones whereas the regions that had mineral resources for exploitation being favored by the foreign investors. Western Europe gave loans to countries that were struggling with their economies or needed financial aid in the exploration of minerals that were in their countries. This witnessed the increase in the proportion of debenture holdings and companies’ equity (Douglas and Wind, 1987). The great depression in most regions began in 1929 and lasted until the late 1930s. The depression which had its roots in the United States saw the sharp fall of stock prices and eventually the cr7ush of the stock market in October of 1929.
The era saw a surge in oil prices, revenue tax, transactions profits and the plunge of the international trade by more than 50%. The employment rates rose sharply to 25% in the US and even 33% in some other countries. Economic gains in the construction industries were halted as most of the construction in most countries was stopped (Griffin, 1997).
The effects of the depression were mainly blamed on the weaknesses in the economic structures. The massive decline in employment and income had an effect on the expenditure rates thus the economy reached its equilibrium at low rates and levels in the economic activity and high unemployment. The economies were expected to rise if the countries increased their spending and cut down on the tax. Most countries that depended on foreign trade suffered more as their trade sharply declined. Countries like the US called in on her loans to the German state (Ghemawat, 2001).
Douglas, S. and Wind, Y. (1987). Columbia Journal of World Business, Winter87, 22(4), p.19-29.
Ghemawat, P. (2001) ‘Distance Still Matters: The Hard Reality of Global Expansion’. Harvard Business Review, September, 137–47.
Held, D., et al. (1999) Global Transformations. Stanford: Stanford University Press.
Gupta Anil K. G. (2004) Global Strategy and Organization. New York: John Wiley & Sons.
Levitt, T. (1983) ‘The Globalization of Markets’. Harvard Business Review, May–June, 91–102.
Dicken, P. (2007) Mapping the Changing Contours of the World Economy, 5th edn. London: Sage.
Richardson, J. (1995). “Income Inequality and Trade: How to Think, What to Conclude.” Journal of Economic Perspectives. 9(3): 33-55.
Griffin, K. (1991) ‘Foreign Aid after the Cold War’, Development and Change 22(4): 645–85.
Griffin, K. (1997) ‘Globalization and Development Cooperation: A Reformer’s Agenda’, in Albert Berry, Roy Culpeper and Frances Stewart (eds) Global Governance and Development Fifty Years After Bretton Woods, pp. 22–49. London: Macmillan.