The global economy is a complex and multi-faceted system. When one variable changes, such as a dramatic increase in the New Zealand dollar; the spin-off effects can be detrimental to some while increasing the wealth and living-standard of others. This essay will discuss the global economic system we have in place today, and the consequential distributive injustices as a result of this structure.
The start of the capitalist economy we have today can be linked back to the industrial revolution between the 1750s-1850s as the economy began to display signs of rapid growth, global population grew by as much as 6 times and average income grew tenfold (Maddison, 2003). This occurred through the advancement of machinery and an actual economy as factories, mills and new technologies provided the British population with new products more quickly and cheaply. The industrial revolution was also the beginning of cities as we know them today, as well as the start of inequality, though this essay will touch on that later (Dodd & Miller).
Currently, on European Geostrategy’s (Rogers & Simón, 2011) list of the 15 most powerful countries in the world, the United States of America are the world’s lone Superpower while China is the only other country that is a potential Superpower. It is no coincidence that these two states are seen to be the primary economic sites in the world. Of course, these counties have not just become economic leaders by chance. The rise of globalisation has seen countries such as China become prominent, as global trade, solid policy making and controlled growth rates have allowed them to quickly rise through the ranks and now have a seat in the UNSC permanent-5, a signpost of how economically powerful they have become.
The idea of the capitalist market was mentioned earlier, this is in contrast to a socialist market. The aforementioned is characterised by private business ownership, free entry into the market, profit as the ultimate goal, consumer choice and the government acting as a type of economic police. A socialist market is more typical of a government planned economy where distribution of income and wealth is the key to obtaining social gain. The Washington Consensus is a set of policy based themes its author, John Williamson, believed was necessary for the recovery of Latin America after the financial crisis of the 80s. Williamson provides a set of capitalist ideas for which the IMF, World Bank and US Treasury Department use when setting policies (Williamson, 2002). The Washington Consensus is proof that, for the most part, the economy is still in a capitalist form. However, recently there has been a huge push by socialist economies such as China and Russia as they become increasingly powerful in an economic sense, although they are also becoming increasingly westernised, in a sense – How do you evenly distribute the world’s resources, when increasing amounts of people want more than they actually need? – Socialist economic...