Cross-Cutting Issues in International Capital
For many decades, particularly since the 1970s, markets have been praised as the most effective economic mechanisms, and the more market actors there are, the better the mechanisms work, making the world economy an ideal stage for the interplay of market forces. Different streams of liberalism and the ideas stemming from them, have emphasized the critical importance of unrestrained market functioning for the overall well-being of individuals, states and probably the global economy as a whole.
From the 1970s onwards (or at least until the late 1990s), neo-liberalism strove to revive the ‘classical’ impetus to deregulate and/or move the formation of regulatory regimes from governments to the private sector. Transparency and a market-based approach have become critical features of global financial regulation.
On the other hand, a number of scholars have already emphasized that strict demarcation lines between economics and politics are gone, with an ever increasing intensity linking high politics and high finance. Furthermore, classical state-centric approaches to analyzing both international economics and international politics have faced numerous competing concepts with new actors, issues, policy domains and modes of politicking in the globalised world.
In order to have ‘global values’ authoritatively allocated, global governance might be viewed as the evolving system of coordination across multiple political levels of public authorities and private actors (NGOs and corporations) which seek to realize common goals or resolve common issues through the making and implementing of global/transnational norms, rules, programs and policies. Nevertheless, processes of the ‘real world’ can develop very quickly and quite often theories do not keep pace. This is particularly true of the global economic sphere. According to Cerny,
Complex systems are characterized by “overlapping memberships” and “cross-cutting affiliations in the international / transnational / global context – whether we look at states and state actors, multinational corporations, interest groups, and/or individuals – their tasks, roles and activities cut across the different levels and structures...To put it differently, the global capital market might exemplify what Kratochwil has recently described as a shift from aiming to build a wall and protect the insiders to forming a set of loosely attached and boundary-spanning communities with questionable or temporary loyalties.
So, if the world economy is an ideal place for market forces to play “freely” and deliver optimal results, what are the building blocks of the global framework for capital flows and who really are the “builders”, what do they strive to achieve or how they make their agendas?