The Global Economy As A Positive Sum Game - 1151 Words

From a liberalist perspective, one views the global economy as a positive-sum game. This means that everyone stands to gain from cooperation. In essence, the positive-sum perspective views the global economy as going from a smaller pie to a larger pie. Regardless of what percentage of the pie each actor receives, cooperation still increases each actors â€Å"piece of the pie.† Through cooperation, liberalists point out, actors greatly benefit. The positive-sum perspective in the global economy can be observed through trade. Whether a state has a comparative advantage in one good, or absolute advantages in multiple goods, trade is beneficial. There is not a finite amount of wealth in the world. Rather, if states trade between themselves, they will both help and benefit each other. The diffusion of technology and innovation between states also contributes to the well-being of the global economy and global population in general. Trade also leads to competition, a driving force in increasing the â€Å"pie.† Although competition with foreign producers might be perceived as a bad thing, it actually facilitates economic growth in the world. Competition forces producers to constantly update and improve their products. Without competition, a state becomes stagnant and simply stays at the status quo for years to come. Thus, competition helps the global economy evolve with new ideas and innovations. The instrumental role of competition and trade can be seen when comparing the fate ofShow MoreRelatedEconomic Interdependence Between Countries And The Global Economy1435 Words   |  6 PagesThe opportunities for trade between countries have greatly expanded in today’s global economy. At the same time, the nature and consequences of global economic interaction have become an increasingly important issue as countries are faced with greater pressure to adopt trade liberalisation policies. 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