Connections between monetary policies and globalization

• Author: PhD Professor Alexandru Olteanu PhD Madalina Antoaneta Radoi (Olteanu) Nicolae Titulescu University
• Pages: 82-88

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Introduction

One of the most approached problems of the last decades has been the one of economic and financial monetary integration, implying the interests of states, classes and nations.

Etymologically the term to integrate means to include or to comprise in a whole. The French economist Jean Weiller tries to enlarge the meaning of the definitions given to the concept of integration. For him "integration is not a simple act of adding, but, in a given space, it means increasing the possibilities of decision plan centre coordination, with a view to create a single economic system. The study of integration means rising above the level of the market and focusing on decision, anticipation and intentions." This definition refers to western European integration and the "decision centres" are the authorities and the bodies of the different national states involved.

For economists like Viner, Seitovschi, Haberler integration simply means putting into contact the existing economies by eliminating all barriers that oppose change. This integration would be nothing else than the creation of a vast free market, formed by uniting two or more economies. In this case, according to André Marshall, one cannot speak about integration but about a juxtaposition of economies that each preserve their own characteristics and that become more or less independent of each other, each of them being affected by the consequences deriving from their neighbour influence. The true integration according to André Marshall is the one conceived in the structural and voluntary meaning of the word: "It

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manages to combine the different elements that make up an economic system in such a way that it represents a solidarity space."

François Perroux defines the concept of integration by means of Western European integration. "The act of integration unifies the elements in order to create a whole or it increases cohesion of an already existing whole. To integrate Europe will be, supposing that the elements of Europe are its nations, to join all these nations into a whole that deserves - thanks to its cohesion - to be called European or to increase the level of cohesion characterizing a whole that will naturally deserve to be called Europe."

Integration tries, according to Perroux, to replace national balances created within every European nation, between every European nation and the other European nations and the ones exterior to it, thus creating a more favourable and profitably stable system.

Taking the definition given to Western European integration as a starting point André Marshall considers that this integration is of four types:

1) Economic - which can result from the multiple and complex economic connections existing between the producers of the member nations: industrial entrepreneurs, bankers, traders, by excluding the national policies coordination or the application of a common policy.
2) Social - this means that one can accomplish what Myrdal has called "the equality of chances" which implies, contrary to economic integration, the intervene of national and European public powers. If economic integration can be of a private nature, then social integration cannot be conceived otherwise than institutional.
3) Political - this is accomplished when within Western Europe the unity of leading is reached and the conditions for the creation and functioning of a super-national authority are reunited, thus the wholly integrated system being structured as each nation is.
4) Territorial - this is the real integration since it is at the same time economic, social and political.

We regret to mention that André Marshall, as well as other economists, omits one of the fundamental integrations that conditions the other four mentioned above - the financial monetary one.

Thus, we appreciate that Perroux's theory according to which there are three forms of integration is a much more complex one. Perroux mentions the following forms of integration:
a) market integration
b) integration by investments
c) integration by institutions

These forms are actually different stages of the integration process. Market integration is the simplest form of integration, its aim being to create a common economic and monetary-financial market by eliminating the customs barriers and ensuring the free movement of the goods and the money within the given area. A decisive role in the formation of the common market is played by monetary-financial integration whose most important element is represented by the free convertibility and flow of the currencies.

Economically the unification of Western Europe has meant the creation of an enlarged market which allows economy to function on a superior level, as the American and Asian ones function.

However, expansionist policy characteristic of the big capitalist countries and imperial monopolies hide themselves behind phrases like "the great inter-territorial unity", "optimal dimension", and this happens to the disadvantage of the small states...