by Bakri Musa

Chapter 5: Understanding Globalization (Cont’d)

The Corollary to Globalization

A corollary to globalization is the development of a common acceptable standard, or to use the language of computers, a common platform, or at least a compatible operating system. In the computer industry, a common platform enables my computer to link and communicate with thousands of other computers. One of the common platforms of globalization is language. There is a need for a common language to facilitate communication. By default English is now assuming that role. This is not a dictate from Britain or America but simply the result of an evolving pattern.

Another imperative would be a common currency. At present there is no single currency that has successfully assumed the role of a global currency. In pre-Breton Wood days when the dollar was tied to gold, it could probably be acceptable as a world currency. And indeed it was. Currently the dollar is like any other currency, backed only by the confidence consumers and investors have on the underlying American economy. When that confidence is high, the value of the American dollar shoots up; when America runs chronic deficits and its financial house in disarray, the dollar plummets. It has ranged from over 300 yen to under 80, all within a few decades.

It is more likely that eventually the world would settle into a few major currencies, with the others tied to one of them. Western Europe has dispensed with its multitude of currencies into the euro. The dollar is fast becoming the currency of choice in the Western hemisphere. Read the rest of this entry »