Internationalism Entrapping the World in Economic Crisis

When the US economy goes down, why does the rest of the world have to be dragged down into its mess? The world is so intricately interdependent economically because of the capitalist propaganda that free trade based on comparative advantage benefits every country involved. Such internationalism indeed has a downside as well as its advertised advantages. If one major economic power collapses, the rest of the world goes down with it. We're witnessing this happening today. The United States which produces one fourth of the world's total output certainly has huge impact on the world economy (According to IMF data as of 2007, US GDP is $13.8 trillion whereas the world total GDP is $54.6 trillion).

Internationalism also forces countries to open up their financial market. This makes it easy for money to cross borders and brings potential risks along. Many resourceful investors in advanced countries invest heavily in developing countries. When there is a crisis, foreign investors withdraw their investment abruptly from the developing countries, critically destabilizing stock markets in the developing countries.

On the other hand, international financial organization such as IMF plays a powerful, sometimes abused role in the global economy. IMF is a world organization that regulates monetary policies between nations, assesses credit ratings of countries, and facilitates loans to developing countries. However, IMF was occasionally accused of being abused by western powers to control and manipulate the economies of weak nations to the advantage of western powers.

All things considered, internationalism or world federalism does more harm than good for individual nations in the sense that concentration of power leads to abuse and instability. The world divided into several trade blocs with controlled financial exchange is more desirable in my opinion.

In recent years, there were moves to form trade blocs around the world. If nations had been successful in forming trade blocs and containing economic activities mainly in the blocs, the current US economic crisis wouldn't have affected the global economy so seriously. Perhaps, it's time for the world to wise up.