Economic Influence

Globalization of contemporary society has many factors, from social and political to the biggest factor, economics. The largest influences on economic globalization come from both the past and the present. There are the ideals of the esteemed John Maynard Keynes and Friedrich Hayek. Many of today’s ideas have stemmed from the Bretton Woods agreement. Organizations are also a leading force such as the World Trade Organization the International Monetary Fund and the World Bank. Lastly there are trade agreements such as the North America Free Trade Agreement. All of these influences play a huge role in world economics.

John Maynard Keynes and Friedrich Hayek are the creators of many original ways of thinking; they debated the role of the government in the economy. Their ideas became to base of many economic systems in place today. However as much as these two are alike they differed on many things. Keynes believed that government should play a larger role in the economy, such as regulating exchange rates and help the economy if was to fall into a recession; Canada’s government is much like this. Hayek however believed that the government should take a more standoff role, he believed that economies were simply too complex to be planned and anyone that was attempting to do such a thing was doomed to failure. Hayek thought that the government should be limited to how much control they can exert over the economy. Hayek’s and Keynes ideas are still widely accepted today, along with other factors that drive the economy.

The Bretton Woods agreement was one of the first modern agreements in trade, which came about at the end of the Second World War, in 1944 delegates from the 44 allied countries signed onto the agreement. It established a system of rules, institutions, and procedures for a postwar economy. The Bretton Woods agreement established a new international monetary system, to promote international trade and the regulation of currency in these countries.

Organizations to control and regulate trade have huge power in today’s economic world, none so much as the World Trade Organization (WTO) the International Monetary Fund (IMF) and the World Bank. The WTO deals with the rules of global trade for its participating countries. It regulates trade and promotes fair and equal trading between countries with as low tariffs and restrictions as possible. The IMF came out of the Bretton Woods agreement and was created in conjunction with the World Bank to stabilize international monetary affairs and help expand world trade. The World Bank works as an agency to the UN and provides loans to less developed countries that are in financial need. These organizations play a major role in developing trade in the economic portion of the world society.