Influence of Global Economics at Micro and Macro Levels Assignment

Influence of Global Economics at Micro and Macro Levels - Assignment Example The researcher states that Adam Smith’s was the idea that free trade should prevail as well as the notions that were backing nation-building policies in the support of national defense is more important than opulence. The act of navigation and the wisest of commercial regulations also made concessions to the mercantilistic policy of regulation of foreign trade. In the 1770s, Smith wrote the wealth of nations in the widespread of mercantilism and his advocacy of free trade was supported by the comparative cost theory and the cloth/wine arguments served as the foundation for what later came to be called the pure theory of trade. This theory has then made a turn to support the free trade theory and both Britain and the United States embarked upon policies allowing the extreme of one way or unilateral free trade. According to Dunkey, free trade economists often describe the goal of globalization as deep integration or the convergence of nations’ fundamental economic structu res and policy systems, extending far beyond trade or strictly economic criteria. At the start of the twenty-first century, Americans deviated from living in a national market that was depending on its own resources. The American economy was isolated from the rest of the world by border restrictions and natural barriers, such as time, distance and lack of information. Decades of trade liberalization along with innovations in telecommunication and transportation had integrated global markets – and exposed workers in high-income countries to the pressures of global competition. The superiority of an international trading system characterized by greater multilateralism and international specialization over a trading system based on protectionism, bilateralism and a division of the world into major trading blocs is by no means as clear cut today as it was a decade ago.