The recent economic and financial crisis seems to give an easy answer to the question whether markets can be truly global. How is it possible that German municipalities go bankrupt because they bought American mortgage papers other than by the force of a truly global market? The world is flat (Friedman, 2007) – so markets can not be anything but global. However, as we will try to show in this essay, bold statements as well as seemingly bold questions such as ‘Can a market be truly global’ need to be treated with caution. What does it mean to be ‘truly global’? What after all is a ‘market’? It is those issues that need to be addressed first. The paper will afterwards demonstrate the case of two examples of markets, namely fashion and finance. Analysing the globality of those very different types, we will try to show that it is firstly important to be attentive in regards to different parts of markets: for example, does the consumption side in the particular fashion market analysed seem to be much less global than the production side. It is secondly important to consider non-economic parts of the market when judging the degree of globalness: the seemingly global foreign exchange market in finance for instance is indeed very much ‘embedded’ into both social and material contexts which makes it what is called a ‘global hybrid’ below. It is nationally grounded but trades globally. The exemplary discussion of fashion and finance will afterwards be contextualised with a more general critical section illuminating the arguments of Marxists and sceptical school thinking before we come to a conclusion.
Table of Contents
I Introduction
II Definitive Remarks: Markets and Global Markets
III Fashion and Finance – Global Markets?
A Fashion
B Finance
B.1 – Foreign Exchange Markets (700)
B.2 Corporate Finance
C Summary
IV General Critique – Marxist Theory, World System Theory, Scpetical School
V Conclusion
Objectives and Topics
This essay explores the validity of the concept of "truly global" markets by examining the fashion and finance industries. It investigates whether markets can exist independently of national boundaries or if they remain fundamentally embedded in local, social, and political structures, even when operating on a global scale.
- The theoretical definition of "markets" and "global markets."
- A comparative analysis of the fashion industry (production vs. consumption).
- An examination of financial markets, specifically foreign exchange and corporate finance.
- The role of "embeddedness" in grounding global markets in specific locations.
- A critique based on Marxist and World System theories regarding global market inequalities.
Excerpt from the Book
III Fashion and Finance – Global Markets?
Example one is the fashion market, the market for clothing that is to be presented in section A. We will not illuminate the apparel industry as such but rather focus on branded garment retailers (BGRs) following the example of Aspers (Aspers, 2010). As part of this, we will address the two sides of this high-street fashion market – production and consumption – separately before merging them again in the conclusion.
Afterwards in section B, our attention will shift to the financial sphere that is of particular interest at the moment with regards to the 2008 crisis. Similar to the fashion market, the economic construct of ‘global finance’ (Sassen, 2006) is not a unitary being. We will therefore focus firstly on the possibly most global financial market, the one of foreign exchange. This market is part of investment banking’s ‘market operations’ (Davis, 2009: 102/122) and an example for what Knorr Cetina (Knorr Cetina, 2006) calls a ‘trade market’. Secondly, we will shed light on the ‘flexible globality’ of the corporate finance world of M&A and LevFin, drawing on Ho’s (Ho, 2009) and Davis’ (Davis, 2009) work. The following graph tries to illustrate the approach.
Summary of Chapters
I Introduction: Introduces the core question of whether markets can be truly global, outlining the methodology of comparing fashion and finance sectors.
II Definitive Remarks: Markets and Global Markets: Provides theoretical definitions of markets as embedded entities, distinguishing between national and global market systems.
III Fashion and Finance – Global Markets?: Analyzes the degree of globality in the fashion and financial industries, highlighting the split between production and consumption and the hybrid nature of trade.
IV General Critique – Marxist Theory, World System Theory, Scpetical School: Critically evaluates the expansion of capital and global market reach through the lenses of Marxist and World System perspectives, emphasizing spatial limitations.
V Conclusion: Synthesizes the findings, suggesting that while globalizing forces exist, markets remain locally embedded and unequal.
Keywords
Global markets, embeddedness, fashion industry, finance, investment banking, foreign exchange, corporate finance, Marxist theory, World System Theory, global production networks, consumption, trade markets, spatial barriers, economic crisis, globalization.
Frequently Asked Questions
What is the core focus of this essay?
The essay examines whether markets can be considered "truly global" by analyzing whether they are truly independent of national boundaries or remain embedded in local contexts.
What sectors are used as case studies?
The author uses the fashion industry (specifically branded garment retailers) and the financial sector (foreign exchange and corporate finance) as primary examples.
What is the primary objective of the research?
The objective is to challenge the notion of "truly global" markets by highlighting that even globally active industries often remain tied to local infrastructures, political systems, and social conditions.
Which theoretical frameworks are applied?
The paper draws on economic sociology, particularly the concept of "embeddedness," as well as Marxist theory, World System Theory, and perspectives from the sceptical school of globalization.
What distinguishes the fashion market's globality?
The author argues that while the production side of fashion is highly global, the consumption side remains fragmented and strongly tied to national or local consumer markets.
What characterizes the foreign exchange market?
The foreign exchange market is identified as a "trade market" that operates as a global hybrid—technologically and socially interconnected across time zones but physically grounded in a few major financial hubs.
How does corporate finance relate to global markets?
The author posits that the global presence of corporate finance, such as M&A activity, is often more "imaginary" or performative, serving to maintain a global image while being rooted in specific Wall Street-influenced organizational cultures.
What role does the "local" play in global markets?
The author concludes that the local and the global are mutually constitutive; global flows are dependent on local institutions, regulations, and infrastructure, meaning no market is ever fully "disembedded."
- Quote paper
- Johannes Lenhard (Author), 2012, Can Market be Truly Global?, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/193222
