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REACTION: Is Globalization Today Really Different than Globalization a Hundred Years Ago? Michael D.

Bordo, Barry Eichengreen, Douglas A. Irwin This article discusses about the stark differences between the first wave of globalization before the advent of the Second World War and the contemporary level of globalization experienced today. With lesser restrictions such as trade barriers and the abandonment of mercantilist economics, the authors believe that the recent trend of globalization is much different compared to the previous wave; though not unprecedented as what other scholars may claim. Because the level of globalization is higher compared to before, the authors claim that institutional and social safety nets are imperative to prevent the plummeting effects of bust towards the international society. In a world where global governance is considered to be quintessential with the interwoven global economies of the present times, questions of state sovereignty and the issues of state autarky prevent the formation of such global institutions that will support the global market. Problems regarding international financial markets and trade conflicts are indeed impending and looming and international economic institutions have played an important role in mitigating its effects to local societies. The writer agrees with the two possible solutions to avert such catastrophic events: one, with intensified institution building; and two, maturation of markets. However, each solution faces its own dilemmas leading to the impossibility of attaining one or the eventual display of its inherent limitations. Issues of sovereignty remain to plague the eventual establishment of institutions for global governance. Though the recent times show that states are irresponsive in solving issues of global concern, states remain to be stubborn in giving up state sovereignty for stronger global institutions. For example, global institutions like the United Nations failed to respond to the rise of jihadism and terrorism that created a strong impact to global markets. Though a hegemon may assume the role of the world police, these remains to be subject to power transitions and power balances, making global governance defined by the hegemon. On the local level, institution of social and financial safety nets remains to be defined by political parties in full-fledged democracies. With these safety nets having their own political motives, these may be subject to change depending on the shifting of popular support or political agenda. Long-term maturation of markets remain to be a distant dream as it is a well-regarded fact that perfect markets only exist as a assumption in economic models. With the inherent issues of information gaps, government regulation, inter alia, the maturation of markets may be impeded and cut short. This is brought about by shifts in government policy, inability of economies to respond to boom-bust cycles, and, as what the authors have indicated, wrong auditing and accounting practices.