Free Capital Mobility and Capital Control :: Essays Papers

Economists, albeit, argue for rationalize trade, but when it comes down to the idea of untrammeled swell flow, it doesnt depend to get unanimous support. It is a natural phenomenon that al just about everything we see in nature (i.e. fluid, air, etc) travels down the concentration gradient. Same way, it had been thought that freeing international neat flow would help the countries that are struggling economically as the cap should flow down the concentration gradient but in reality it doesnt quite happen that way. During the 1980s, worlds economic policy makers prevailing view was that money should move freely around the globe, allowing capital to find the most profitable and productive investments, no matter what country there happen to be in. Wessel, Davis, 1998 Even though policy makers want to make the world a safer place for free trade in goods, services and capital, according to Rodrik .. the idea of global capitalism is inherently impracticable. big(p)ism is, and will remain, a national phenomenon. (Rodrik)Capital is the most important ingredient of a countrys economic existence. It is really important we understand what we really mean by the word capital. According to the Merriam- Webster dictionary, the etymology of the word capital says that in Medieval Latin this word came to mean the head of cattle or other livestock. De Soto in his book The brain-teaser of Capital suggests that the cattle and the livestock are low maintenance possessions they are mobile and can be moved away from danger they can be counted etc. On top of it, they can generate future value by reproducing, or giving us milk, meat, leather, etc. Thus the word capital begins to do two jobs simultaneously- capturing the physical dimension of the assets (livestock) and its potential to generate future surplus (Paraphrased, De Soto, 2000 pg.40-41). So, capital of a country is a very important instalment for its stable economy. All the countries, rich and poor, have capital s in their own place. But, some countries know how to inject life to their capitals while the rest of the other countries dont- and thats what makes all the difference.Economists have argued for free trade of goods and services for hundreds of years but free capital mobility is a fairly new phenomenon. We have learned that free trade of goods is beneficial for the consumer it also boosts peoples living standard.