Keywords

Jel Classification Codes

1 Introduction

The issue of global governance of the unified world economy that manifests itself in the two economic systems becomes central, and to a certain extent has become a question of a global political economy. The role of the political economy remains irreplaceable in the new world reality and is a measure of quality and use of economic laws, providing the exact knowledge with the dialectics between politics and the economy.

The global economy is dismantled and capitalism is turning to the pursuit of monopolism, where it puts all its strength. The general crisis of capitalism, however, resulted in the linking of conditions with the crisis, but also at the same time the influence of the outcome on the conditions and causes that create the crisis. Thus, the crisis is transformed into an open system that evolves dynamically and is backed by the results it generates. This mechanism radically alters the system’s operation, subordinates it and dictates its own terms, which in turn exert a tremendous influence on the movement of the system. This in turn leads to tensions and conflicts and aggravates world-wide crises. Thus, all subjects perceive to one degree or another the need for the democratization of these new processes. The forces of the existing international institutions of both economic systems are involved as regulating mechanisms. These institutions, and the mechanisms that can be set up between institutions, will determine the political economy in the sphere of directorate, control and governance.

The objectives of the study are to investigate the new characteristics of the globalized economy. One of the most important areas affected by globalization is the economy and specifically the management system, the governance and control mechanisms of the global economy. In this case the target of this paper is to contribute in the issue of global security as a new method to regulate the global economy. Under this new approach, evaluation of global economy trends under quantitative and new qualitative criteria proposed. This article, is not proposing economic policies in correcting quantitative indicators, i.e. monetary policy, taxation, increase or decrease of production, investment, consumption, circulation of money etc. Instead, new qualitative measures are proposed to regulate the economy on the basis of global security. It traces the measures proposed and the performance of the economy, under certain economic criteria, quantitative and qualitative. Adhered to this, the relation between the qualitative solutions proposed and the quantitative performance of the economy is investigated.

2 Deregulation and Geostrategic Regulation of Global Economy

Globalization refers primarily to the integration of national economies into a global economy, triggering the process of “deleting” national borders, while internationalization is a product that stems from the diffusion of national into the international. Integration signifies the fusion of two parts to compose a new one, resulting thus in the decomposition of the parts from which it has been created. The erosion of national structures and the squandering of productive sources is no longer a national problem affecting each country separately, but impacts global society as a whole. The validity of the universal economic laws takes precedence over the fragmentary and piecemeal development of the different countries and markets, while the relationships between countries and markets are the vascular system through which these laws are expressed in the economy. The acceleration and regulation of global development processes, or their delay and deregulation, are directly dependent on the texture of the vascular system, the system of relationships.

The dissolution of the global markets is a contradictory movement, assuming different forms and going beyond deregulation in the sphere of management, circulation and production. The markets lost their identity and began to operate as a basis for the dominant powers which were in a position to promote their own interests. At the same time as the international markets, the fragmentation of the domestic markets transferred its effects into the international sphere.

The deregulation of global movement is caused by anarchic capital flight from the countries and regions; the labor force also moves in an anarchic way in search of capital, and this is manifested in the violent migration of both capital and labor force. This process is under geostrategic regulation of the economy and is subordinated in the supranational capital. The supranational capital is lacking from management methods, which are able to provide a global directorate system. Geostrategy is being developed as the subsystem of economic regulation in basic line of fulfillment of unipolar global governance. For that reason, the supranational class is recourse to geostrategy to manage the global economy. Geostrategy is connected with unipolar governance, which is destroys the productive forces and threatens the man-nature system. This direction is that of geostrategy, the line of achieving its goals with no regard for the cost to the productive forces, deregulating the global economy and distorting the movement of capital and the labor force. Geostrategy is continuous, long-term and flexible, similar to planning but with a different content.

The problems that arise have complex repercussions and there is no previous experience on how to resolve them. There is, however, the historical accomplishment which provides suggestions on resolving the basic problems in a scientifically valid way. The unified orientation and universal conception of the problems has already begun to be shaped in the global consciousness. The global economy contains a potential that is not the sum of the local economies but exponentially larger, because the quality of synergy operates through the cooperation and complementarity of the markets and the international division of labor. This direction is that of the New Political Thinking based on the New View of the world and the Program of General and Complete Security (PGCS), which is manifested in a special way in the economy. A new element under the conditions of the 2008 GECC is that two messages are broadcast, formally realist and determinist, which are initially accepted by the supranational capitalist class and supranational capital, and resort to the institutional guarantee of the G20.

3 Global Economy and Security

The 2008 crisis checked the aims of supranational capital and unipolarity in global governance, forcing the US to request the assistance of the international community to handle the crisis. Having recourse to cooperation is an objective movement with specific significance, as well as the fact that this cooperation was institutionalized in the G20, an institution born of the 1990s crises and confronted with the general crisis of 2008.

The G20 imposes from its core the universal nullification of this tension and violence. From this same core derives the change of the geostrategic line of supranational capital in its geopolitics and geoeconomics, resolving the crisis. In this context a reevaluation of the control of global economy is recommended, i.e. their necessary regulation, both functional and structural. This process has also been on the G20 agenda since the appearance of the 2008 general crisis and its first accords. This is the implementation of the relevant concern during the decades preceding the 2008 crisis, which matured rapidly during the great upheavals caused by the crisis. It is apparent from the establishment of the G20 that the peace dividend expected from these accords was already a basic programmatic aim, while the logical approach to the dialectical unity of this analysis of the issues it handles is based on the theoretical-methodological practice, the New View, the New Political Thought and the PGCS. Consequently, the logic of this agenda approaches the objective assessment of the supranational capital, initially as a complex, difficult function beyond the limits of elementary, market-based and anarchic bourgeois thought and practice.

The G20 document that emerged from the 2009 London summit does not mention the general crises and associated issues, but it is based in global security. In other words, the handling of the 2008 GECC is not traditionally bourgeois, but consistent with the PGCS and one of its components, economic security (University of Toronto). The regulation concerns economic security, which touches upon the issue of investment in the global economy, and constitutes a structural reform against neoconservative development, which is summarized in intelligent entrepreneurship, the military industry (The Strategic Defense Initiative 2015), and the virtual economy, where the defining quality of money of buying everything is applied in the invented Enron-type (Encyclopedia Britannica) investment field of creative accountancy. Economic security also covers the intelligent management of the “model” advisor on business, entrepreneurship, development and all such things, with offshore companies, NGOs, the dead ends of tax havens (Broomfield 2016), where dollars, euros and other currencies are laundered and stagnate.

The negotiation of ecological security from G20 was, as expected, a multifaceted and nuanced issue. This, together with the reduction of the above and the environmental crisis to a parameter of the 2008 GECC, confirms, separately and together, the identity of the latter. The geostrategically steered condensation of this reduction into green growth, (International Bank for Reconstruction and Development), although obviously far from expressing its full meaning,Footnote 1 reveals the dead ends of market mechanism, regarding virtual development. Moreover, the ecological dimension of security or environmental regulation of the environment presupposes a universalist approach (ICAO Environment, Emission Trading System), which was established as such in global public discourse decades earlier, particularly in the first five years of the 1970s in connection with the 1974–75 general crisis.

At the G20 Summits, the self-evident and front-line management of another dimension of the 2008 general crisis was also raised, that of humanitarian security, the starting point of which is the right to work and decent working conditions. As in the case of the General Environmental Crisis (GEC), the content of the new arrangement is the answer of the G20, indeed of humanity, to the labor problem. The G20 London Summit resulted in a conciliatory document, in line with the participating interests and their structure and quality, the conflicts among which create and perpetuate this problem. This compromise does not, of course, solve the problem of humanitarian security, much less from the point of view of the workers. The question also remains open regarding the measures, programs, policies, financial aid packages, etc. intended to handle humanitarian security, since their starting-point is the reduction of unemployment, and also regarding the threats to the system from rising unemployment and the surge in migration. It is also a given that the most condensed development index of a capitalist country is the rate of wage labor in the active population, and that capital, before producing a profit, inevitably creates the conditions for wage labor, which is a deterministic process. In summary, the problem of humanitarian security is not resolved in the aforementioned conciliatory document. This would be impossible to do within the limits of the participants in the mechanism regional and universal conflicts.

Capital, labor and technical progress are moving together, and this movement is complex, it is balanced or counterbalanced and is associated with their asymmetric or symmetrical development. At global level, reality puts the issues more specific and distinct, because the applies the law of continuity, where everything that comes out throws its unsustainable elements, keeping only the sustainable ones.

This global reality includes the interdependence of the two socio-economic systems, both in their confrontation and in their co-operation. The explanation of this interdependence lies in the action of the subjects and the influence of the objective laws, and this interaction will determine the form of the globalized economy. The form will also be judged by the contrast between the class approach that is outdated and as a remnant of the outdated urban, classical way of thinking and the supreme, new ecumenical. They are, however, two realities, with class-based thinking being an obstacle to the second, ecumenical and distorting the move towards globalization. It is, of course, a joint conclusion, but it does instill real-world issues that cannot be hidden either in class or ideological. This was done through the cooperation of the two systems, on an economic basis, imposed by economic laws.

Therefore, cooperation at a global level is objectively imposed, and it has been institutionalized in the G20, which is the “sprout” of continuing and worsening crises. G20 has reassessed global security arrangements as a basic prerequisite for the liberation of the productive forces and their development. The application of the above law is not automatic, and its unsustainability is an obstacle to growth and the fleeing of mankind forward. The world community is showing signs of compromise when problems are also global and are seeking universal solutions.

The new issues arising here is that for the first time, the handling of the economic problems is not traditional; it is not proposing economic policies in correcting quantitative indicators, i.e. monetary policy, taxation, increase or decrease of production, investment, consumption, circulation of money etc. Instead, new qualitative measures are proposed to regulate the economy on the basis of global security.

4 Qualitative Versus Quantitative Criteria

Thus, for an aggregate evaluation of the global economic performance it is necessary to have certain criteria to evaluate the results of the actions taken. The criteria proposed are a combination from the commonly considered, modified in globalized economy and new, which are derived from the previous analysis.

The criteria commonly considered include, among others, the following (Bornstein 1979):

  1. 1.

    The level of output (revised: for the global economy.)

  2. 2.

    The rate of growth of output (revised: for the global economy.)

  3. 3.

    Stability (of output, employment, prices.)

  4. 4.

    Economic security of individuals, (security of income and/or employment—Revised: at the level of nation-state.)

  5. 5.

    Equity (involving both an “appropriate” degree of inequality of income and wealth, and equality of opportunity. – Revised: at global level.)

The new criteria proposed are the following:

  1. 1.

    FDI equality (the rate of FDI change between developed and underdeveloped countries is presupposed to be the same when there is investment security.)

  2. 2.

    The rate of industrialization by country, (the rate must have a tendency towards the world average for every country.)

  3. 3.

    The percentage of businesses integrated Corporate Social Responsibility in their operations.

  4. 4.

    Number of embargoed and sanctioned countries.

  5. 5.

    Rate of emission reduction. (with further consideration and/or revision, and development.)

The new qualitative measures are proposed to regulate the economy on the basis of global security. The qualitative proposed criteria concern each one and all together the regulation of the global economy and the basic content of the economy. Economic security regulates the movement of capital in global economy. The FDI net inflow indicates this movement among countries and is connected with the issue of investment security. The rate of industrialization by country is also concerns the quality of the economy and it is also connected with the issue of economic security. The humanitarian security, concerns the regulation of movement of labor force, concerning the reduction of unemployment and the balancing of migration. In this work we propose an additional quantitative criterion, the net migration. Rate of emissions is connected with the ecological dimension of security or environmental regulation of the environment. The issue of corporate social responsibility concerns the socially conscious society and business, social issues management, public policy and business, stakeholder management, corporate accountability. Corporate social responsibility is connected with the includes corporate citizenship and corporate sustainability. Both corporate social responsibility and rate of emissions concern the issue of preservation of social wealth and the man-nature system. This is the regulation and the rational development and use of scarce resources. Finally, the number of sanctioned and embargoed countries are connected with the global security. Global security arrangements are the basic prerequisite for the liberation of the productive forces and their development.

4.1 Materials and Methods

The engagement of the unity of the objective or subjective criteria of economy performance no longer requires the cognitive quantitative analysis but also is a key factor the interconnection of them, which constitutes a sphere covering the global sphere. This perception recognizes the possibility arises from a specific economic action as the initiator for another, so the isolation and abstractive analysis to become very difficult, ignoring the dynamics of the intertwined development at global level. Each economic action can be lurking in the outburst of firing of another variable regardless of their geographic, financial or social proximity, so as to address the economic phenomena in the globalized economy it might lead to a global reflection and create a new situation which cannot be explained but only by its association. It becomes multilevel challenge the explanation to global economic effects and the more multilevel interference from corporations, states, international institutions the more effective is the identification of each variable and its interconnections, in confronting the causes as well as solution’s initiation.

Examining the affinity between the quantitative and qualitative criteria an aggregate evaluation of the global economic performance will be made. The performance of the global economy under the consideration of the proposed qualitative criteria in this work is a first attempt of assessing their efficiency in order to explain the intertwined globalized economy, the movement of capital and labor force at global level and can be extended in several ways.

This paper compares the two groups of criteria in regard of their ability to illustrate the quality of the global economy and its quantitative performance. The analysis is based on three out of the 5 listed qualitative criteria, namely the FDI equality, the rate of industrialization and the emission rate, adding the new proposed criterion, the net migration. Qualitative indicators: FDI net flows refers to direct investment equity flows. It is the sum of equity capital, reinvestment of earnings, and other capital. Direct investment is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy. The industry value added is the indicator used to represent the rate of industrialization. Industry corresponds to International Standard Classification of All Economic Activities ISIC divisions 10–45 and includes manufacturing, mining, construction, electricity, water, and gas. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. Net migration is the net total of migrants during the period, that is, the total number of immigrants less the annual number of emigrants, including both citizens and noncitizens.

The group of countries are selected according to World Bank ranking and G20 countries as separate group, when there a sum of G20 countries then Germany, France, United Kingdom, Italy are not counted at the G-20 total because they are included in the EU total. For the current 2019 fiscal year, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method: low income economies, including 34 countries; middle-income economies, including 103 countries; high-income economies, including 81 countries.

Quantitative indicators: GDP, GDP rate of growth, unemployment, income vulnerability, and Income inequality are compared in the following group of countries: G-20, High income, Middle income, Low income, Least developed countries-UN classification and heavily indebted poor countries. Data are in current U.S. dollars. For a few countries where the official exchange rate does not reflect the rate effectively applied to actual foreign exchange transactions, an alternative conversion factor is used. Aggregates are based on constant 2010 U.S. dollars. Unemployment refers to the share of the labor force that is without work but available for and seeking employment. Vulnerable employment is contributing family workers and own-account workers as a percentage of total employment. Data for income inequality retrieved from OECD research, and presented a summarized conclusion, concerning the world income inequality. Emphasis is placed in year presentation, starting from 1999, the year of G20s first summit and inclusion of 2008, year of the general crisis and the following years 2009 and 2010. Where data were available for year 2017 and 2018, these are included, otherwise the last year is 2016.

4.2 Quantitative Criteria—Indicators

Table 1 represent the results obtained GDP for G20 countries and high, low, middle income and least developed and poor countries, respectively, and the percentage of each group of the world total. GDP increase at world level and for all the other group of countries from high income to the least developed countries and poor countries. There is a decrease in G-20 GDP from 90% in 1999 to 85.7% in 2017. In the opposite there is an increase for poor and least developed countries, from 0.5% and 0.6% to 0.9% and 1.3% respectively.

Table 1 GDP (Current US$ X 1.000.000.000)
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The rate of GDP growth is greater as we move from G-20 and high income countries towards least developed and poor countries (Table 2).

Table 2 GDP growth (annual %)
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Unemployment for all countries remained close to the level of 5%, as percentage of total labor force. Unemployment to G-20 countries is higher and the percentage is fluctuating from 8.22 in 1999 to 7.10 in 2018 (Table 3).

Table 3 Unemployment, total (% of total labor force) (modeled ILO estimate)
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Vulnerable unemployment is higher as we move from G-20 and high income countries towards least developed and poor countries. The difference between them is significant, from 22.10% and 11.50% for G-20 and high income countries to 68.5 and 64.4% for poor and least developed countries (Table 4).

Table 4 Vulnerable employment, male (% of male employment) (modeled ILO estimate)
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Analysis on income inequality indicates that the more unequal incomes are distributed in high income and G-20 countries. The income of the household is attributed to each of its members, with an adjustment to reflect differences in needs for households of different sizes. According to the OECD data based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, inequality rages from perfect equality to perfect inequality (OECD 2019). The OECD’s statistical analysis shows higher inequality for high income and G-20 countries than low income and poor countries. The indicator for USA, UK and South Africa for example is 0.39–0.35 and 0.62 in comparison to Slovak Republic, Poland and Slovenia with 0.24–0.28 and 0.24 respectively. (Range between 0 in the case of perfect equality and 1 in the case of perfect inequality).

4.3 Qualitative Criteria—Indicators

International production is still expanding, but the rate of expansion is slowing, resulting in decrease of the percentage of industry value added in GDP (Table 5).

Table 5 Industry (including construction), value added (% of GDP)
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Production as percentage of GDP is increasing for poor income countries and remains stable for developing countries but decreases for G-20 and high-income countries. It is also decreasing for middle income countries (Table 6).

Table 6 CO2 emissions (metric tons per capita)
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The new data, from researchers at the Global Carbon Project (GCP), show a rapid increase in 2018. This year, the largest increases have occurred in China. US emissions have also increased markedly in 2018. The table shows the significant difference between G-20, high income countries and low income, poor countries (Table 7).

Table 7 Net migration
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Migration flows to high income economies from low, middle and low income economies. Despite the vast number of immigrant flows to high income economies the absolute value has decreased from 2002 to 2017. The comparison of data on migration flows indicates that the number of net migration flows in least and poor countries have decreased for the same period (Table 8).

Table 8 Foreign direct investment, net inflows (BoP, X 1.000.000.000 current US$)
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Global foreign direct investment (FDI) flows fell in 2017. FDI flows to developing economies remained stable according to UN, world investment report for 2008 (World investment report 2018). FDI flows to developing countries remained stable and in structurally weak and vulnerable economies remained fragile and flows to the least developed countries increased. FDI flows fell in G-20 and in high income economies.

This elementary analysis show that poor, least developed, low- and middle-income countries increase participation in global GDP, they have higher GDP growth, lower unemployment rate than the high income and/or G20 countries. They have also lower income inequality than high income and G-20 countries. They have low performance in employment vulnerability. Accordingly, the poor, least developed, low- and middle-income countries have lower emission rate, industrialization is increasing for the poor, least developed and low income countries and remains stable for middle income countries. FDI, in these countries, is increasing significantly from 1999, although they remain fragile. Net migration is only positive for high income countries. In summary the analysis show that countries with better performance in qualitative criteria have better quantitative performance. This is consequent with the qualitative approach in handling the regulation of global economy.

5 Conclusion

The creation of the G20 is a landmark in global evolution. Its importance arises from the participation of the countries producing more than 80% of global product, and its political and economic orientation. The innovation lies here in the inclusion, in this intervention of the world community interests. The above-mentioned arrangements set in motion by the G20 already give the measure of its significance and, far more importantly, its dynamic. They move in the spirit of the Modern Era, within which has been launched a movement towards the restructuring, reconfiguration and organizational and functional rearrangement of the elements of the global system, first and foremost as the objective laws of socioeconomic development require. The deepening involvement of the G20 in issues of global security is the most important element in the above historical creation, regarding innovation in the governance system, providing the G20 institution with the necessary elements for the creation of a global economic directorate mechanism.

The intervention of G20 is universal, addresses all components of 2008 general crisis, the unity of production and management methods, on a holistic approach. The handling of the 2008 general economic crisis, by G20, is not traditionally but consistent with economic security, as part of the global security. This is a completely new approach in regulating the economy, adding in it qualitative directions in conjunction with the quantitative measures. The mechanism approaches the problems of globalized economy, through the global security, concerning economic security, which is directly associated with the issue of investment. This is the regulation of secure movement of capital in global economy. Another issue is the environmental security, concerning the preservation of social wealth and the man-nature system, which is associated with the regulation and the rational development and use of scarce resources under a universalist approach. The humanitarian security comprises the programs, policies, financial aid packages, etc., concerning the labor force, the reduction of unemployment and the balancing of migration. Thus, humanitarian is associated with the regulation of movement of labor.

This paper analyzes the new qualitative measures are proposed to regulate the economy on the basis of global security. Qualitative criteria are focused in understanding the economic base quality of a country and how it is related with its quantitative performance. This elementary and simple comparison between quantitative and qualitative criteria is to measure the performance of the economies to be compared. This evolves many other problems of world comparisons, such as difference between high income and least developed and poor countries. Although this approach is difficult, it is yielding a direction towards the economic system is directed. It is shown the difference in performance, which is to be explained by the further analysis of the causes and the operation of each country’s economic system. An interesting extension on the current work would be the reassessment of the possible qualitative criteria and their further sophisticated statistical analysis in order the conjunction between the qualitative criteria and the economic performance could be evaluated.