Economic Interdependence and the Emergence of Globalization Research Paper

Economic Interdependence and the Emergence of Globalization - Research Paper Example Mexico, a developing country in the Western Hemisphere and member of the North American Free Trade Agreement (NAFTA), will be used as a case study to explore the ramifications of realist-inspired neoliberalism and the effects of globalization on a country in the developing world. Furthermore, the effects of the international economic system will be discussed with reference to China, a formerly socialist state in the processing of liberalizing its economy and opening up to the global economic community. Globalization, as it exists today, rests largely on the shoulders of neoliberal economics and the global entrenchment of capitalism as the dominant economic system in the world. Inspired by Realist ideological doctrine, neo-liberalism is the belief in laissez-faire economics and its early proponents were Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States in the 1980s. US President Ronald Regan famously remarked, "government was not the solution but the problem" (Hobsbawm 1994). Neo-liberals put all of their faith in the distributive capabilities of the invisible hand of the free market, and believe that business was inherently good and that government bad. The government was longer interested in the provision of welfare but existed to stimulate the capitalist economic market. The United States under Ronald Reagan was thus described as the "greatest of the neo-liberal regimes" (Hobsbawm 1994).   How did neoliberalism, the dominant political and economic ideology of the West since the Reagan years make inroads around the world and into the formerly Communist countries of Eastern Europe' The Second World, consisting of the global Communist community during the Cold War, was severely undermined by economic and political crises which began in the late 1960s. The result was a political and economic disorder. Economic crises undermined the political foundations of states like China and the USSR - particularly after the deaths of men such as Mao & Brezhnev - and the centrally planned economic systems of these countries remained under stress and increasingly precarious. The Soviet world was also not immune to global economic crises as evidenced by the effects of the OPEC crisis of 1973. These aftershocks paved the way for perestroika and glasnost in the USSR, the implosion of Yugoslavia and popular Chinese dissent expressed in Tiananmen Square and captured live on camera. The political and economic fragilities of the Second World were exposed following 1968 and slowly led to political decay, leading to the eventual implosion of the Soviet Union.