Globalization’s Aftershocks

The new world order born out of the fall of the Soviet Union triggered fundamental changes in the global economy, many out of the reach of government regulation. Italian economist and author Loretta Napoleoni, in an interview with Newsweek, defines this trend of trade in unregulated markets as the rise of “rogue economics” – including black market sales, poaching of fish or rare species, as well as human trafficking. The current credit crisis in the US serves as a large-scale example of lack of regulation causing economic turmoil. Post-Cold War global financing has allowed banks and private investment firms to engage in heavy borrowing regardless of capital holdings, creating a domino effect of failings: As borrowers fall into heavy debt, lenders struggle as well. As the credit crisis deepens, the need for reform becomes pressing. Illicit trade has taken advantage of the rapid pace of globalization – and it’s in the interest of governments and legitimate consumers and producers to demand accountability and reasonable regulation. – YaleGlobal