Critical Analysis of the World Economy and Deglobalization Processes in Times of Pandemic

Critical Analysis of the World Economy and Deglobalization Processes in Times of Pandemic

José G. Vargas-Hernández
DOI: 10.4018/978-1-7998-6926-9.ch012
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This chapter aims to critically analyze both the world economy and the deglobalization processes under the assumption that they are the result of a dialectical evolution of economic, financial, political, and sanitary crisis. This dialectical movement of the history of the globalization and deglobalization processes is always a very complex phenomena of interactions between the economic agents and political actors, leading to both progressive and regressive events of economic growth, social development, and environmental sustainability. After a period of intensive economic, trade, and financial integration in the creation of a world economy system, suddenly the economic, financial, and sanitary dysfunctionalities emerged at the interior and created a reactive deglobalization process. However, what has been at the center are the international cooperation and trade relations determined by the need to expand the possibilities of satisfying human needs, including culture.
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Under the concept of world economy or economic globalization (Sapir, 2016, 2011) the benefits and damages caused by the advances in the international economy are analyzed, questioning the achievements of reciprocity and equivalence between the advances in the development of national economies with diametrical differences. What results from international economic relations are very distant from the economic interrelationships of a globalized economic process.

The dialectical movement of history is complex with results that are both progressive and regressive. In world history, the processes of globalization that allow trade over great distances, have played a relevant role in the economic and social growth and development of the peoples involved. In each of these stages, globalization processes have presented different characteristics.

Globalization was conceived by Valéry (1945) as described by “Now the era of the finite world begins”, an expression that bears a lot of similarity with the descriptions of the global world of the XIX century (Andretta, 2002). The world was considered by McLuhan (1962) as a global village that is generally used to define the phenomenon of “globalization”. The term globalization has been used to describe the economic periods when the foreign direct investment (FDI) and trade flows decline for whatever the reason, such as the global economic crisis. Economic globalization is a process in which organizations, business and countries operate at world scale. Globalization is a process of economic, commercial, and financial interdependence between different countries.

Globalization is a phenomenon that Goldin and Reinsert (2007: 28) define as “an increase in the impact on human activities, due to forces that extend beyond national borders.”

The concept of mundialization (World economy) is more precise because it has a connotation related to geography while the concept of globalization is more generic that is related to an increasing interdependence between finance, production, the market and trade, free transit and commercial movements and international finance as a multidimensional socio-historical free trade process.

Globalization is defined by the WHO as the increased interconnectedness and interdependence between different peoples and countries. It includes the inter-related elements of the opening of international borders to flows of goods, services, finance, people, and ideas. Globalization also refers to the changes in national and international institutions and policies aimed to facilitate and promote such flows.

Globalization is a very complex phenomenon that has a considerable influence on contemporary societies. The economic dimensions of globalization have evolved concomitantly with dimensions that have independent dynamics of a nature other than economic determinism, such as social, environmental, etc. The components of globalization and international economic integration processes are creating new challenges to national governments due to such responsible causes as the national diversity of jurisdictions for trade liberalization policies, geographical factors, and institutional quality to enforce regulations. International trade is the exchange of goods and services across borders creating global markets.

As a phenomenon, globalization processes indirectly and subjectively affect the sensitivities of human and social activities that, when objectified as a process of improving people's well-being and living conditions, imply concrete and contrasting measurements in terms of access to markets. In relation to economic globalization, the theories of economic growth and development related to the theories of international economic relations and international trade and the theory of social and personal well-being are closely linked to human development (Tugores, 2002: 233).

The economic development of globalization has been promoted by the most developed countries and multinational companies (Cepal, 2002: 17). However, the cooperation and trade relations at the international level are determined by the need to expand the possibilities of satisfying human needs, including culture.

Key Terms in this Chapter

Economic Growth: It indicates that there is an increase in terms of income or of the goods and services that the

International Trade: Is that economic activity that refers to the exchange of goods and services between all the countries of the world.

Inequality: The quality of being one thing different from another, or of being distinguished from another by having characteristics, values or traits that make it different. It is the opposite of equality.

World Economy: It is that branch of the macroeconomic economy whose mission is to address all the economic actions that a country maintains with the rest of the countries and that can be of a different nature such as: commercial, financial, tourist and technological.

Financial Crisis: It is that economic disturbance that is originated by problems associated with the financial or monetary system of a country. The financial crisis, therefore, is not due to problems in the real economy of a country.

Deglobalization: Process of reduction of international exchanges of goods, services, workers, money, etc.

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