Commanding Heights: The New Rules of the Game - Essay Example

These interacting components are then included in the ‘new rules of the game’ for the global economy. In establishing concerns related to the new rules of the game, the video establishes the foundational elements of this new global economy. In identifying the global world, one of the most intrinsic elements is that this is a world with many inputs but no central oversight. It is argued that the new global economy began in the early 1990s. Within the United States perhaps the most prominent considerations during this period was in terms of trade policy.

While there was significant pressure to keep American jobs at home, there was also the notion that that increasing international trade was essential to economic recovery. The North American Free Trade Agreement became a central consideration in this debate. This free trade approach was ultimately embraced by President Bill Clinton. The argument in these regards is that NAFTA opened the gates for globalization and may have shifted the balance of power to multinational organizations that were able to capitalize on the freedom of trade.

Other central component of 1990s globalization became the transfer of currency as investments, as well as the exchange of information through email and low cost telephone calls. The video considers significant American investment in the French Stock Exchange as creating the fear of ‘Americanization’. These concerns are then extended to emerging markets where investment quickly spread. With this increasing foreign investment, however, came increasing risk. This risk emerged when Mexico nearly defaulted on foreign debt obligations and had to be given a loan by the United States; this is termed the first global financial crisis.

In terms of information exchange, the central insight is that the Internet created a new type of business and businessman. Among the prominent transformations during this period were those in India, China, and even America through Silicon Valley. Japan, however, had experienced a bubble economy and failed to keep pace with the rapidly changing world markets. With the success of the global economy, an investment contagion emerged. The main problem with this investment contagion was that in many instances it was overly optimistic.

In this way investment flowed into regions without the government or financial regulatory infrastructure to properly manage the funds. This would then result in a series of bubble economies and significant recession. The video traces these bubble economies and subsequent recessions throughout Asia and then into Russia, and finally the United States and Brazil. In the United States this recession is exemplified by the failure of Long Term Capital Management. Ultimately, fellow Wall Street banks had to put up money to ensure this investment fund did not collapse.

While the banks put up the money, there is a clear bailout precedent here that would later be exemplified in the string of bailouts that occurred following the 2008 subprime mortgage collapse. The recessions that overtook the newly globalized world, the video argues, demonstrated that new rules of the game were necessary. It was during this period, however, that anti-globalization movements emerged. Undoubtedly these movements were motivated out of the significant crisis scenarios that were caused by rampant global efforts. One