Has the financial crisis catalysed the globalization process?
James Forsyth 9:15pmThomas Friedman argues in his New York Times column today that the end result of this financial crisis will be more globalization not less.
“The real and sustained bailout from the crisis will happen when the strong companies buy the weak ones — on a global basis. It’s starting. Last week, Credit Suisse declined a Swiss government bailout and instead raised fresh capital from Qatar, the Olayan family of Saudi Arabia and Israel’s Koor Industries. Japan’s Mitsubishi bank bought a stake in Morgan Stanley, possibly rescuing it from bankruptcy and preventing an even steeper decline in the Dow. And Spain’s Banco Santander, which was spared from the worst of this credit crisis by Spain’s conservative banking regulations, is purchasing America’s Sovereign Bankcorp.
I suspect we will soon see the same happening in industry. And, once the smoke clears, I suspect we will find ourselves living in a world of globalization on steroids — a world in which key global economies are more intimately tied together than ever before.”
Now given Friedman’s previous work on globalisation, you can say well he would say that wouldn’t he. But the early evidence does seem to bear out Friedman’s thesis.
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mitch
October 19th, 2008 10:20pm Report this commentWho will control the world then eh? not stupid politicians thats for sure,CEOs will have more power than any nation head and will not be accountable except to share holders and banks.
Johnson
October 19th, 2008 11:39pm Report this commentSpot on. The most ridiculous thing in the Cameron speech was the claim that we needed less globalisation.
Seasurfer1
October 19th, 2008 11:59pm Report this commentNot Globalisation- Just Easternisation!
Bianca
October 20th, 2008 5:25am Report this commentWhat theses? The observation of events does not start to translate into a thesis. Thomas Friedman had correctly predicted the devastation that the roaming capital can bring to communities. He considers that a progress. Until we see that the lessons have been actually learned, it is too early to draw conclusions. Perhaps when the Western institutions finally ditch the notion that public capital is less valuable then private, we will be making some progress. For now, they keep on giving our money away. Taking a page from Chinese capitalism may help, but Thomas Friedman is too conceited for that. He does not get it. Joe Public has had enough.
Ray
October 20th, 2008 8:46am Report this commentSo, as Ron Paul and Pat Buchanan have warned, we will not merely be buying everything from the Chinese; we'll end up working for them too.
Chuck Unsworth
October 20th, 2008 9:50am Report this commentOf course he's right. The enemy of Globalisation is fragmentation. If banks and other financial institutions become centralised the process of globalisation is greatly facilitated. It's so much easier to deal with single entities rather than a multiplicity of bodies. That is one of the chief dangers of the EU.
Minnie Ovens
October 20th, 2008 10:23am Report this commentThomas Friedman is not unique but he is one of an esoteric group, an intelligent man with a great deal of common sense and pragmatism.
Listen well when he speaks.
Ian C
October 20th, 2008 10:51am Report this commentOf course he's right. The economies of scale are even more international than they were local yesterday.
oldtimer
October 20th, 2008 11:24am Report this commentSounds like a good analysis to me. It will be interesting to see if any of the cash rich sovereign wealth funds or big investors like Olayan are tempted by the depressed prices of the likes of RBS.
dennis
October 20th, 2008 12:54pm Report this commentA good thought, but it is not practical in one sense that every nation and organization and even majority of individual is selfish and we are not practicing justice to its highest order.Time will only ahow this contention of the writer.
Thanks. http://www.statedemocracy.org
Warren Buffet
November 3rd, 2008 1:14am Report this commenteconomics is silly!
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