Competition, Coordination and Diversity

Competition, Coordination and Diversity

From the Firm to Economic Integration

New Thinking in Political Economy series

Pascal Salin

Competition, or the freedom to enter into a market, contributes greatly to the differentiation of human activities and therefore to economic progress. This fascinating book highlights the similarities between human systems at both the micro and macro level, and demonstrates how competition can positively affect the economic workings of firms and countries.

Chapter 5: Arguing in favor of globalization

Pascal Salin

Subjects: economics and finance, austrian economics

Extract

What does globalization mean? It is in fact more or less synonymous with the traditional term, free trade, but it is more fashionable. In reality, one may consider that there is a slight nuance between both expressions: When speaking of free trade, people have in mind trade in commodities and services, whereas globalization may have a broader meaning, including free exchange not only of commodities and services, but also of factors of production, knowledge, culture, laws and rules, and so on. Globalization has been a matter of growing concern during recent years. Its growing importance can be explained by institutional factors (multilateral liberalization of exchange, economic integration) and by technological factors (the development of internet and telecommunication techniques). However, if one takes a much longer historical perspective, globalization has existed – at least over some parts of the world – for centuries.

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