The European Union also has its own version for corporate social responsibility. (Landau, 85) Thus the U.S. polity was forced to adapt international opinions and legislate both for the external and internal aspects of its economy. Human rights, labor laws and a host of international issues like global warming and the use of chemicals were all reflected in amendments of the local laws while some of the issues like terrorism and nuclear proliferation have conversely changed the international conventions as per the dictates of the U.S. policies. International accounting practices which has undergone more transparency checks is one such result.
Earlier in the divided world, the international trade related to trade surplus, and the maximization of foreign exchange. International financial responsibility is a result of the changes that came about in the world in the later part of this century, and the impact of financial decisions both of the U.S. And the capitalist advanced countries have a greater global impact. Prior to the Second World War, the British financial order was the decisive factor in the capital markets of the world and set about the financial powers within each economy. The U.S. was seen imposing its policy after the war with the Marshall Plan aid. (Langley, 114) American financial order has in the modern era become powerful and stable. "American financial order heralded 'a new phase in international finance'. (Langley, 114) This has its obvious implications. The political and economic policies of the U.S. today can affect any nation in the world. For example restrictions on the credit based on the policy regarding any nation can have severe repercussions. The theorists, who propound the neo-liberal orthodoxy of 'global finance', accuse that this policy is based on the expansionary tendencies of markets. However still others argue that the U.S. is declining with the rise of Japan, and there is a probability of Japan rising to economic power and dominating the world market. (Langley, 127)
The concepts are many but the argument regarding financial power stems from the consideration of money as a commodity. It is surprising to note that in spite of its competitive and absolute advantage at the end of the 1990s the United States had large international and foreign debt. This was then regarded as an important determinant for the dollar's parity with other currencies. (Fatemi, 76) in other words there is a great responsibility that always comes with greater power, and while in the earlier century's policies of political economy first affected the U.S. And much later the world, today the difference is thin. While it appears that the economy is strong, Barry Herman on analyzing the "net transfer of resources" of the U.S. foreign debt predicted far back in the beginning of the millennium that the dollar as an asset is now risky. They also predicted that there could be a "crisis" for the United States in future. (Fatemi, 76)
These predictions somehow seem to come true in the current year with the fall in dollar prices and the internal stagnation of the U.S. The answer to the problem of losing out to developing nations on the economic front is not only based on the mercantilist attitude highlighted earlier but also on the attitude of world organizations largely controlled by the U.S. For example the International Monetary Fund which manages the debt problem of the developing countries, and the conditions imposed by the fund is not encouraging to payments adjustment. (Fatemi, 78) U.S. policies regarding the institution must therefore be in making it more flexible and affording development in real terms. The credit that is made available through the monetary institutions to the countries of the world cannot be viewed as a mere commodity. Investment policies also create equity and debt and institutions like the IMF therefore is looked at by some as its savior and by others with distaste. A large part of the decisions of these agencies today is evidently based on U.S. policies.
The Competition and Modern State
In the earlier times, right from the times of Smith, it was believed that the nation got richer by accumulating wealth and that the superior basis of production created a better product that could be trades at an advantage overseas. Earlier the value of commodities and things were based on the enhancement of labor. In the information age, the total global changes in information and the transfer of technology have all made it necessary for countries to abandon pure capitalism and legislate, both to protect the domestic economy and also to sustain the interest in the global arena.
The most important concept and the fundamental theory that advocated a control free economy is now not viable. This is because of the changes in the whole globe and also the need to revitalize and make the U.S. economy and keep in line with the global changes have necessitated the intervention of the state in many economic affairs. The policies of the U.S. have the same global economic impact as did the policies of the British Empire to the colonies. For more than a century the United States has retained domination of the global politics, economics and scientific progress. It has a say in all international institutions. The mercantilist policies of military use of power and progress have to be replaced by a better understanding of the emerging new world order. While the U.S. can hope to be the world leader for a long time to come, the policy adopted at home and in the international arena is likely to create strife in other nations which may become hostile to the country. The costs of keeping the peace will be found to be costlier than the business gains acquired. No doubt the U.S. policy both domestic and international has a wide immediate repercussion on a global scale. It is time that the U.S. woke up to its own position and used its might to save the global community.
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