Global Economy: The Captivity of Numbers #1

Why the Global Economy?

Studying the global economy has become a necessity not only for economic experts but for every individual today. The reason for this is the increasing economic relations between countries and the fact that borders have largely disappeared in economic terms. For example, although the 2008 Global Financial Crisis began in the United States, it quickly spread to Europe, Asia, and developing countries, leaving millions of people unemployed. This situation clearly shows that even the economic problems experienced by a single country can affect the whole world. Furthermore, examples such as the parts of the cell phones we use today being manufactured in different countries and assembled elsewhere, the food we eat coming from all over the world, and energy prices being determined in international markets show that the global economy is directly involved in our lives. Therefore, understanding the concept of the global economy is critical to comprehending both world politics and the daily lives of individuals.

What is the Global Economy?

The global economy, simply put, refers to the structure in which the economic activities of all countries around the world are interconnected and function as a single system. In academic terms, the global economy is an economic order in which capital, goods and services, labor, technology, and information transcend national borders and become integrated, increasing mutual dependence. To understand this concept, it is necessary to examine its fundamental components. First, international trade is the most important pillar of the global economy, as countries import goods and services from each other to meet their needs. The second element is capital mobility. Capital can flow from one country to another for investment purposes; for example, an American company opening a factory in Turkey or investing in foreign stock exchanges is an example of this. Furthermore, labor mobility, or migration, is also one of the fundamental components of the global economy. In particular, the migration of educated labor to developed countries has given rise to the phenomenon of brain drain. Finally, the spread of technology and information is rapidly transforming the global economy. Artificial intelligence technology developed in one country today can be used around the world in a short time. Therefore, the global economy represents an integration in which countries cannot act independently of each other in the modern world.

The Global Economy Today

Today's global economy can be characterized by high integration, rapid technological transformation, and constant uncertainty. The volume of international trade has increased exponentially since the 1990s, along with the acceleration of globalization. According to World Trade Organization data, the volume of world trade constitutes a significant portion of global gross domestic product (GDP). However, the global economy is no longer limited to trade; it also has a structure in which financial markets are deeply integrated. For example, the US Federal Reserve's decision to raise interest rates can directly affect not only American citizens but also the exchange rates and capital inflows of many countries, from Turkey to Brazil. Furthermore, technological revolution is at the heart of today's global economy. The proliferation of e-commerce, the emergence of cryptocurrencies, and the incorporation of artificial intelligence into production processes have fundamentally changed the economic structure. On the other hand, regional crises no longer remain local but have global repercussions. The Russia-Ukraine war has increased food prices worldwide, while the Covid-19 pandemic has disrupted global supply chains and raised production costs. Furthermore, developing economies such as China and India are playing increasingly decisive roles in the global economy, partially shifting the center of gravity of the Western-centric economic order to the East. All of this demonstrates that today's global economy is a system open to rapid change, full of uncertainty, and involving multiple actors.

The Global Economy and Its Impact on Individuals

The impact of the global economy on individuals is extremely direct and comprehensive. The prices of the products we use in our daily lives are actually the result of global economic mechanisms. For example, rising oil prices on international markets cause the prices of many items in Turkey to increase, from transportation to electricity. This directly affects individuals' purchasing power. Similarly, global economic fluctuations also shape job opportunities. Multinational companies opening branches in different countries creates international career opportunities for individuals, while also increasing global competition. With digitalization, the global job market has become even more integrated; today, a software developer in Turkey can provide remote services to a company in the United States. In addition, the global economy also affects our cultural consumption habits. A series we watch on Netflix, a shirt we buy from Zara, or a coffee we drink at Starbucks are actually the most concrete reflections of the global economy in an individual's life. In short, the global economy affects almost every area, from an individual's daily consumption to job opportunities, salary, and lifestyle. Therefore, understanding the global economy is not just theoretical knowledge, but also a fundamental requirement for individuals to make sense of their own lives.

All these reasons—the global economy increasing interdependence between countries, crises crossing borders and affecting the world, technology transforming economic structures and directly impacting individuals' daily lives—show us how important it is to understand this phenomenon. These reasons necessitate that we understand, know, and reflect on the global economy. Because the global economy is one of the most defining dynamics of our age, shaping not only the future of states and companies, but also that of individuals. In this dossier, I will attempt to convey these points to you.