Economic globalization and crime

Economic Globalization: The 2007/8 Financial Crisis Name: Institutional affiliation: Course: Date: Introduction Economic globalization refers to the ever-increasing interdependence among world economies largely due to cross-border trade, international trade flows, and extensive technological expansions. Accordingly, globalization affects several industries including health and agriculture, but the financial sector ranks as the most developing and influential category of economic globalization (von Werlhof, 2008). For many years, nations have pursued economic globalization, and the rise of neoliberalism post World War II further enhanced economic globalization by ushering in a new way of doing things including deregulation, free market economy, and privatization. Post WWII, wealthy enterprises were forced to build a wealthy class that was going to counter-react to post-war policies that supposedly favored the working class. The result was neoliberal policies that not only discouraged state interference but also ceased state participation in economic, financial, and social affairs. But while neoliberal policies helped shape the economic landscape of economic globalization, they also facilitated the evolution of financial crimes. For example, the lack of state financial market regulation is largely attributed to the financial crimes that led to the financial crisis in 2007/8. More so, Ban, Scheiring, & Vasile (2023) state that the rollout of neoliberal policies led to the rise of harmful economic consequences, including increased unemployment, increased poverty, and a deterioration of income distribution across the globe (Ban, Scheiring, & Vasile, 2023). All these brought together collectively revolutionize crime in and outside the financial sector. Concerning the 2007-8 global financial crisis, this paper explores how crime has evolved within the globalization of economies. Financial Crimes in the 2008 Stock Market Crash The basic requirements of neoliberal policies are to have relaxed or fully dismantled financial policies to facilitate the free flow of capital, and information among others across borders and subsequently trigger economic growth (von Werlhof, 2008). While this is true, neoliberal policies have often created room for illegal criminal and yet costly financial practices, especially by the owners of capital. Throughout 1980, the American administration implemented neoliberal policies with the sole goal of managing stagnation that had persisted for a long (Fligstein & Roehrkasse, 2016). The basis of the neoliberal policies was founded on the notion that reduced state intervention in economic activities and deregulation of financial markets and commerce, would liberate the massive capabilities of capitalists to promote societal well-being, something that might never happen. Looking at the 2007/8 financial crisis, the immediate cause of the crisis was the bankruptcy of the US banks because of excessive mortgage defaults, which accumulated due to the lack of financial market checks attributed to deregulation. As a norm, banks and all financial institutions have relied on financial innovations to reproduce products in a manner that the newest product appeared more friendly and original than the original product. But when the financial fraud, (as was the case in 2007/8) came to light, banks failed and the confidence of consumers declined as they opted to avoid any investment sold to them by banks, and of course, the result was a serious economic crisis (Kotz, 2015). As such, fraud is part of the game in financial institutions. As such, in addition to deregulating markets, the neoliberal argument also eroded moral standards, because finance experts have become the new champions of the capitalist market. As seen through the case of the 2007/8 financial crises, corporate scandals doubled and fraud became a common practice in financial markets and institutions. As written by Fligstein & Roehrkasse, (2016) 2007-8 financial crisis was not unavoidable but occurred because, greed and neoliberal ideas were made dominant and also, and deregulation was unde...