Bretton Woods Conference's Impact on Globalization

Written by Manfred Steger, the chapter The Economic Dimension of Globalization initiates the topic of the current global economic order by discussing the financial conference which set globalization on its current path. The post WWII conference, known as Bretton Woods, permitted the participating nations to control their own economic and political policies with certain stipulations; granting them admission to the newly formed International Monetary Fund (IMF), the General Agreement on Tariffs and Trade, currently known as the World Trade Organization (WTO), and the International Bank for Reconstruction and Development, now the World Bank (38).

Despite the initial success that Bretton Woods yielded for the international members, the applied Keynesian economics gave way to the neoliberal Reaganomics. Steger outlines the largest impacts to globalization as the internationalization of trade and finance, the position of transnational corporations (TNCs), and the continued influence of the World Bank, the IMF, and the WTO (40-1).

After disassociating economic globalization with free trade alone, Steger incorporates the liberalization of financial transactions which promoted the increase of investments and deregulation of capital and markets.

The creation of the Internet added a hub on which businesses and investors could interact and, although facilitated easier transactions, also allowed for poor investments which in due course resulted in the Southeast Asia financial crisis (42-5).

Expanding to transnational corporations, the author establishes them as the power players who represent very few countries and who control most of the international market. Their ability for foreign direct investments and deregulation of the global economy provides TNCs with cheap labor and resources in the global South; Steger concludes with the sentiment that these economic institutions enjoy their positions of dominance due to the North-South gap (48; 52).

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Given that this article is written in textbook format, it is not surprising, albeit a relief, that the text is easy to follow and comprehend. Steger is clear in establishing his main argument, that the most substantial components to economic globalization have been the internationalization of trade and finance, transnational corporations, and the global organizations of the World Bank, International Monetary Fund, and World Trade Organization.

Although the aforementioned have been accused of an ethnocentric attitude, Steger acknowledges this and incorporates the pros and cons to each aspect of his argument. In this way, the article is merited with an unbiased approach and is thusly more persuasive; with facts from both standpoints presented, the concluding assertions allow for a straightforward concurrence.

Steger impartially analyzes transnational corporations, for example, by regurgitating slurs against this form of globalization, admitting that “corporate globalization” or “globalization from above” are not necessarily incorrect views of these operations in the sense that they often abuse the global South for their benefit (48).

Additionally, he points a finger at the international economic institutions, of which the United States is the puppet master, stating that countries in desperate need of financial loans are forced to agree to IMF and World Bank provisos in order to receive assistance. This claim is supported with evidence from Argentina’s struggle with these two institutions; despite the country’s initial cooperation with the World Bank and IMF, which admittedly led to an increase in economic growth, an upsurge of demands eventually ruined Argentina’s economy. Regardless of this, the author insists that it is due to these political policies that globalization occurred and that more credit must be given to the multidimensional roles that politics and economics play in globalization.