The Challenges of Social Sustainable Globalisation

Abstract

The world economy is globalising. World trade is growing at a faster pace than world income, indicating that countries are increasingly becoming interdependent on one another. According to mainstream economic thinking, globalisation is a good thing. One of the founding fathers of economic thinking, Adam Smith,1 already emphasized the importance of the labour specialisation and the exchange of surplus output as a source for economic growth. He pointed out that specialising and trading the surplus made sense for a private family and a country alike. The only limitation would be the extent of the market. The arguments for free trade and open economies were further elaborated upon by David Ricardo,2 who formulated the theory of comparative costs, which until today forms the very basis for the economic praise of the global economy. The level of modern analysis is more sophisticated than that presented by either Smith or Ricardo; however, modern analysis is also less explicit with regard to the moral and social consequences of economic policies. The classical writers addressed the political economy, rather than merely economics.3 Neo-classical economists generally regard economics as a value-free science and often consider that the process of liberalisation is a sort of natural phenomenon.4 Under this view, the globalisation process is ‘explained’ from the perspective of technological developments which