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NadiaHushke *
MARKETSTRUCTURESINANECONOMICAL CONTEXT.THEEVOLUTIONOFTHE ECONOMICMARKET **

ESTRUCTURASDEMERCADOENUNCONTEXTO ECON MICO. L AEVOLUCI NDELMERCADOECON MICO
Abstract Thisworkaimstoidentifyandanalyze similaritiesbetweenthe economic evolutionandmarket structures in a historical context. However, this workmostlyspecializes on the development of the EuropeanUnioninthemodernglobalizationperiod:thatisthestageofoligopoly.Abriefexplanationof thepreviousstages(perfectcompetitionandmonopolisticcompetition),willbegiven.Thefinalstageof monopolyisseentohavenotbeenachievedyetandisseenastheinitialfinalgoalofGlobalization. Keywords: Globalisation,marketstructures,marketevolution,EuropeanUnion. Resumen Estetrabajotratadeidentificaryanalizarsimilitudesentrelaevoluci neconmicaylasestructuras demercadoenuncontextohistrico.Secentra,noobstante,especficamenteeneldesarrollodela UninEuropea,enelperiododelamodernaglobalizacin:laetapadelosoligopolios. Se dar una breveexplicacindelasetapasprevias(competenciaperfectaycompetenciamonopolstica).Laltima etapadelmonopolioesentendidacomonoalcanzadaanycomoelfin ltimodelaglobalizacin desdesusinicios. Palabrasclave: Globalizacin,estructurasdemercado,evolucindelmercado,UninEuropea. JEL: L11,L12,L13,N14,O19.
* BachelorofartsinLeisureandTourismManagementattheEuropeanUniversityBarcelona(Spain).Masterof AccountingandCorporateFinanceattheJamesCookUniversitySingapore.Address:Harfenweg3,13127 Berlin(Germany).email:nadiahuschke@msn.com ** ForthisworkIhavebeenusingmyThesis,whichisthecompleteversionofthisdocument.Incaseofinterest forthewholedocument,pleaseletmeknow.

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owadays economies throughout the world are experiencing the impact of modern globalization.Inthelastpastdecadesmanyeconomieshavedevelopedandgrown consistently,wherebysomeofthesewereabletoacquireamajoreconomicstatus.The concept of modern globalization, which is based on the neoliberalistic view, suggests the cooperationbetweeneconomies,whereeacheconomyspecializesinitscomparativeadvantage andremovestradebarriersinordertoachievemaximumeffectiveness,thatshouldcontributeto globalequallydistributedwealth. However,thesituationfacedinthebeginningofthe21stcenturydoesnotlooklikethis. Althougheconomieshaveexperiencedmajoreconomicgrowth,andcountrieslikeChinaand India are now receiving increased attention due to their progress, there is still the major domination of very few economies. In fact, economies that had been relatively developed previouslytotheSecondWorldWar,havefurtherincreasedtheireconomicstrength.Asaresult thereisJapan,togetherwiththeUSandtheEuropeanUnion(EU),thataccountforaround68% of the WorldGross Domestic Product (GDP). Hence, thereis a clear domination of these economies. Thisphenomenoncanalsobeseenintheindustrialmarketstructureofanoligopoly.An oligopolyisusuallydescribedasamarketinwhichtherearejustasmallnumberofdominant companiesthatholdthemajorsharesofthemarketsrevenues,andwhereeachofthemain competitors is sensitive to the others marketing strategies. Indeed, many of the trade agreementsthathavebeenestablishedoverthelastdecadeshaveincreasedtheconnectivityand interdependenceamongeconomies.Asaresultsensitivityamongthesehasbeengrowingas well. Oneofthemaindevelopments,whereinterdependencehasbeenprobablybyfarthehighest, isthecreationoftheEuropeanUnion.In1957acustomunionconsistingofsixEuropean countries was established. It has grown to an economic union with 27 member states and simultaneouslyachievedgreatereconomicimportancethanthesumofitspieces. TodaytheEUrepresentsoneofthestrongesteconomiesintheworld.Throughtheremoval of trade barriers the EU is able to allocate resources most effectively and so improve the productivecapacityofitseconomy,whichsoenforcesandfacilitatesintraandextraEUtrade. ThisgainedpositionoftheEU,incontextofthetimeofGlobalization,togetherwiththe othermainplayersoftheeconomicmarket,raisesthequestionofthecomparabilityofthis situationwiththeoneofanoligopoly. Theanalysisofthiswillprovideaclearerpictureofthecurrentstateoftodayseconomies, aswellasitwillindicateparallelswithhistoricaleconomicdevelopments.TheEUwillhereby bethemajorfocusofthiswork,asitscreationanddevelopmentisseenasamainpioneerof economicintegrationandthustherealizationoftheneoliberalisttheory. MarketStructuresinaneconomicalcontext Generallytheconceptofmarketstructurescanbeessentialtomarketingandeconomics. Bothemphasizetheenvironmentinwhichthesecompaniesoperateanditsimportanceithason strategic decisionmaking. Economics is more concerned about the degree of market
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competition and the pricing strategies of these firms. Marketing, on the other hand, concentratesitsfocusonconsumerbehaviour. Basically there are four major market structures perfect competition, monopolistic competition, oligopoly and monopoly. Market Structures categorize companies based on differentcharacteristicslikethenumberofsellersintheoverallmarket,thekindofproduct, marketshare,barrierstoentry,pricingpower,efficiencyandprofits.Foreachofthesespecific criteriaisusedtodescribethecircumstancesandtheenvironmentinwhichtheyoperate.Table Iwillillustratesthiscriteriainmoredepth.
TableI. MarketStructuresintheIndustrialContext Criteria Numberof Sellers PricingPower Supply Barriersto Entry Efficiency Perfect Competition Veryhighnumber ofsellers Pricetakers PerfectInformation None/verylow High Monopolistic Competition Manysellers Somecontrol overprice Highdegreeof information Relativelylow Oligopoly FewSellers Pricemakers Minimal information High Monopoly Onedominant seller PriceMakers Noinformation Veryhigh
Medium Relativelylow Low Limited High Competition High Nocompetition competition interdependence Smallpositive Profits Zeroprofit AbnormalProfits Abnormalprofits profits Basedon:MarketStructures,www.bized.co.uk/educators/1619/economics/firms/.../structure.ppt,9July 2009.
Thisconcept,howitisillustratedabove,willnowbeappliedonamacroeconomicscale.To doso,aredefinitionofthecategorizationcriteriawillbenecessaryandwillbeasfollows:
Pricing: Degree of economic power GDP, Share in world trade, Foreign Direct Investment(FDI) Supply:Developmentperspectivebasedontheendogenousgrowththeory Barrierstoentry:Capitalandhumanendowment,Levelofadvancement Efficiency:Incomegrowth,GDPgrowthrates,Inflation DegreeofCooperation:degreeofcollaborationanddependence Profits:HumanDevelopmentIndex(HDI)
Basedonthiscriteriaanewframeworkcanbecreated(TableII):
TableII. MarketStructuresintheeconomiccontext Criteria Perfect Monopolistic Oligopoly Monopoly
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revista interdisciplinar Competition Yes Relativelyequal, somewithslightly biggershare High Relativelylow Medium Fewcooperation Relativelylow Yes Dominanceofshare byfeweconomies Mediumtorelatively low High Mediumto potentiallyhigh Relativelyhigh interdependence Medium Competition Existenceof Dominance ShareofWorld GDP No Equally distributed
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No Onebigshare Low Veryhigh Low Veryhigh High
Development Medium Perspective Barriersto None/verylow Entry Economic Low Efficiency Degreeof Nocooperation cooperation HDI Low Source:TheAuthor
ThisstudywillusetheaboveframeworkinordertoexplainthedevelopmentoftheEUinits internationaleconomiccontext.ItwillbethemainaimtoanalysetowhichextenttheEU nowadayscanbeconsideredtobeanoligopolisticplayer.However,abriefintroductionabout theothermarketstructuresandtheirfountainheadswillbegiven,aswellasabriefelaboration aboutthedevelopmentofGlobalizationwillbeprovided,asthisistheenvironmenttheEU operatesin. Furthermorethisstudywilluseanotherclassificationoftheeconomicplayers.Byputtingall economies in the concept of a market structure, each economy will therefore represent a player in the market. As each player holds a different share, a categorization will be necessary.ThiswillbebasedontwomajorindicatorstheshareofWorldGDPandGDP growthrates.ThereforetheBostonConsultingGroupMatrix(BCGMatrix)willbeused.This matrixisaconceptthatisoftenusedinMarketing,inordertodeterminethepositionand profitabilityofaproductorservice,butwillherebereformulated(seeFigureI).
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The categorization will be based on two determinants. Firstly there is the market/GDP Growth,showingatwhichpercentagerateaproduct/economyisgrowing.Thiscanoccurata high rate, which exceeds percentage growth rates of over 3% and low rates (below this percentage).Secondly,thereisthemarketshareaproductholdswithintheoverallmarket.For theeconomythiswouldrepresenttherelativeshareitholdsintermsofWorldGDP.Toholda strongpositionintheWorldGDPsharetheeconomywillneedtohaveashareof10%.Invery generalterms,themajorityoftodaysdevelopedcountrieswillrepresentacashcow,whereas emerging economies will represent a question mark. Dogs will be developing and underdeveloped countries, which hold a very small World GDP share and experience a relativelylowgrowthofGDP.Astarwillbeaneconomythatalreadyholdsalargeshareof WorldGDPanditstillgrowingataratethatexceed3%annually.Thispositioncouldbe achievedalready,butonlyonashorttermbasis,asforexamplefortheEUin2006withaGDP growthrateof3.1%. FigureIIItriestoillustratethedevelopmentofWorldGDPsharethroughoutthepast.Asit canbeseenthedistributionofWorldGDPwasrelativelyequaluntiltheendofthe17hcentury. Afterthistimeperiodsmallchangesoccurred,whichcontinuedwiththebeginningofthe19th century, and are furthermore enforced until nowadays. And thus shows the economic progression,whichwillherebethemajorfocusofthiswork.
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PerfectCompetition Priorthe15thcenturymosteconomiesintheworldwereselfsufficientandweremainly basedonagriculturalproduction.Familiesandhouseholdsgrewtheirowngoodslikecorpsand cattle.Productionsurpluseswouldbetradedinordertoacquireothergoods. There was very little transnational trade. The majority of trade rather took place on a regional level. Most economies had relatively identical conditions in terms of productive capacity.Thereweredifferencesinlabourandcapitalendowment,aswellasnaturalresources andclimatethataffectedproduction.However,asagricultureisanalmostzeroprofitbusiness, theeconomiesthemselvesgrewbyverylittleandthemajorityoftheworldcanbeclaimedto havehadthesameshareofGDP1.WorldGDPwasrelativelyequallydistributedandgrowth rateswereconsiderablylow.ThiscategorisesmostoftheeconomiesatthattimeasaDog. Assuch,itcanbeclaimed,thattherewasnoeconomicanarchyandthatthemajorityofthe countriesenjoyedahighdegreeofsovereigntyandtherewasjustlittleinteractionandtrade withothereconomies.Productivityandsoeconomicefficiencyatthattimewasrelativelylow.2 Economicperformanceandthustheperformanceintheagriculturalsectorwasmainlybased onhumanresourcesandthenaturalendowmentoftheeconomy,includingitsnaturalresources, geographicalconditionsandclimate.Entrybarriers,asdefinedpreviously,canbesaidtohave notexisted.
1 ChinahererepresentedanexceptionintermsofGDP,thisishowevernotduetoahigherlevelofproduction, buttothesizeofitslandmass,whichsogivesitahigheraggregateGDP: 2 RondoE.Cameron,AConciseEconomicHistoryoftheWorld,(OxfordUniversityPress,1993)15.

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MonopolisticCompetition Withthebeginningofthe15thcenturyinternationaltradewasstartingtocatchupand experienceditsfirstpeakduringtheeraoftheBritishIndustrialRevolution.Thistimeperiod, whichcoversthe15thcenturyuntiltheearly19thcentury,isoftenalsosaidtobethefirst Globalizationperiod. InternationalTradeandtheideaofMercantilism Definition:Globalizationistheincreasingworldintegrationthroughtrade,financialflow andknowledge.3 Bydefiningglobalizationassuch,itisnotanewphenomenon.Alreadyinthe15thcentury until the 18th century, increased trade among national economies was common. Eurasian 4 countriesduringthattimebasedtheireconomicperformanceoftradeonthemercantilistidea, which was popularized by Adam Smith (1776). However, it was Thomas Mun who first introducedtheideaofMercantilism.Inthelate1620shestatedinhisbookEnglandsTreasure byForraignTradethatTheordinarymeansthereforetoincreaseourwealthandtreasureisby ForraignTrade,whereinweemusteverobservethisrule,tosellmoretostrangersyearlythan weeconsumeoftheirsinvalue5.ItisthismainideaonwhichMercantilismisbuilt.Itsays thateachnationaleconomymustaimtoachieveapositivetradebalance,whereexportsexceed imports,sothatmorepreciousmetalswouldflowintothecountry,thatcouldbeusedtoinvest inthecountrysmilitaryandsoenhanceitsnationalwealthandpower.6 Governmentinterventionplayedakeyroleinshapingandcontrollingthenationaleconomy. Tradehasbeenseenasazerosumgame,whereoneeconomygainsandtheotherlosesout.In ordertoachievethisfavourabletradebalancehightariffsweresetonimports.Thesewere considerably higher for manufactured goods, whereas the tariffs on raw materials were relativelylow.7 Thestatethusheldahighdegreeofcontroloverthenationseconomy,by controllingcorporationsandtradingcompanies,aswellasregulatingproductioninorderto securegoodsofhighqualityatarelativelylowcost,sothatthenationwasabletomaintainits positionintheforeignmarkets.8 Manufacturinggoods wereherefavouredoveragriculture. However,agriculturalproductionwasessential,sothatthereisalowneedfortheimportof thesegoods,aswellasnationalsecuritywouldbeprovided. Henceitwasseenasimportanttoengageininternationaltradeinordertoincreasethe holdingofpreciousmetalandthuspower.Indeed,internationaltradebegantoblossombythe late15thcenturywhichalsoledtoanincreaseinmoneycirculation.Theincreaseinprecious metalsthatseveralEuropeancountriesexperienced,wasreinvestedinstrengtheningthearmy, navyandmerchantmarine.Asaconsequenceoftheseinvestmentsseveralimprovementsfor exampleforthemarine,couldbeachieved,aslongerdistanceandfastershippingwasenabled andsofosteredtradeadditionally.
3 4 5 6 7 8 EconomicGlobalization,http://www.freeworldacademy.com/newbizzadviser/fw6.htm,8June2009. EurasiacompromisestheEuropeanandAsiancontinents. ThomasMun,http://www.maths.tcd.ie/local/JUNK/econrev/ser/html/tommy.html,14July2009. Mercantilism,http://www.newworldencyclopedia.org/entry/Mercantilism,8June2009. Ibid. Ibid.
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In order to improve the nations success it would be highly favourable to access larger markets and expand the sources for raw materials, which was often achieved in this time throughcolonisation,whichexperienceditspeakinthe16thcentury,duetothetechnological improvementsinnavigation.9Asmanyofthecolonisingstatesexploitedthesecolonies,these were able to increase their productivity in trade and thus increase their power. Trade was consequentlyfosteredbycolonisation,asitcouldbeusedasalowcostsourceofrawmaterials, agriculturalproductsandasapotentialmarketformanufacturedexportsfromthecolonising state.10 Nationstatesatthistimewerestillrelativelysovereignandcooperationbetweennational economieswasratherlimited,asitjustservedthepurposeofpurchasingrawmaterialsfor production,aswellasforthegeneraltrade.Followingon,growingintegratedworldmarkets werecreated.In1851theEnglishChanneldevelopedthefirstsuccessfulsubmarinetelegraph cable,linkingfinancialmarketsinLondonwithotherEuropeancapitals.11 This increase in trade and productivity was furthermore enforced through the industrial revolutiontowardstheendofthe18thcentury. With the British industrial revolution many economies entered the second stage of the structuralchange,thatis,theshiftofthemainfocusontheprimarysectortothesecondary sector.Withthatthedistributionoflabourforcechanged.Priory8090%ofthelabourforce wasoccupiedinagriculturalproduction.Thisproportiondecreasedto50%bytheendofthe nineteenthcentury.12 Throughindustrializationsomecountries wereabletoenjoyimproved productivityandhigheconomicgrowth.DuetothatsomecountrieslikeBritain,Germany, FranceandotherEuropeancountrieswerestartingtodevelopaslightdominanceintermsof WorldGDPshareandthuseconomicpower. Simultaneouslywiththeindustrialization,thedevelopmentofindustry,capitalinvestment andincreasedproductivityandknowhowthefirstbarrierstoentrywereestablished.However, thesewerestillrelativelylowastheprocessofindustrializationwasstillinitsearlystages. Alsoincreasedinternationaltradeandincreasedinterdependencetookplace,duetogrowing demandfornaturalresources,suchascoalandoil.Henceashiftinthefactorsofproduction tookplace.Beforethefactorsofproductionweremainlybasedonhumanandnaturalresources, afterwards physical resources in form of industry add on to this. Thus the high degree of sovereigntycouldnotbesustainedanymore,andthebeliefinthemercantilistideastartedto erode
Oligopoly
Thestageofoligopolyrepresentsthecurrenttimeofthemodernglobalizationthatemerged inthe1980s.Inthistimeinternationaltradewasstartingtoincreaseinimportanceastrade barrierswereremovedandtheopeningupofseveraleconomiesafterthefalloftheBerlinWall, areseenasmajorhistoricaleventsandasthebeginningofthestageofOligopoly.
9 Colonialism,http://plato.stanford.edu/entries/colonialism/,8June2009. 10 DennisR.Appleyard,InternationalEconomics,(McGrawHillIrwin,2006)19. 11 KevinH.ORourke&JeffreyG.Willliamson,NineteenthCenturyAtlanticEconomy,(TheMITPress,2001) xiii. 12 RondoE.Cameron,AConciseEconomicHistoryoftheWorld,(OxfordUniversityPress,1993)15.
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Through the growing international trade that takes places nowadays resources can be allocated most efficiently and each economy is enabled to specialize on its comparative advantage and so engage in international trade. As a consequence there is a growing interdependenceamongeconomies,asthesedependoneachothersimportsandexports. Furthermorethroughthefreemovementofthefactorsofproductionincreasedefficiencyis achievedandcanoftentogetherwithFDI,contributetopositiveGDPandGDPperCapita growth.Asaconsequenceofmajorinvestmentsthathavebeentakenplaceinmanydeveloping countriessuchasinChinaandIndia,thereisagrowingproportionofthemiddleclass,and thusthereseemstobemoreequallydistributedwealth. However,stillthemajoreconomicpositionandWorldGDPShareisheldbythreemajor economicplayers. TheEuropeanUnion TableVIIIaimstoshowthedistributionofWorldGDPshare,underwhichitbecomesclear thatNorthAmerica,theEUandSouthEastAsiaclearlyownthemajorshare.
TheUS13,EUandJapanaccountforover68%ofworldGDP.Thisunderliestheconceptof anoligopolisticmarketstructure,asaminorityofplayersholdthemajorshareofWorldGDP andsooftheworldswealth.ThisconceptisalsomanifestedinParetosprinciple,whichclaims

13 TheUSaccountedfor26%ofWorldGDPin2006.WorldGDPShare, http://mjperry.blogspot.com/2008/04/worldgdpshareemergingeconomies.html,7August2009.
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that roughly 20%of (in this case) the worlds population hold about 80%of wealth. 14 As alreadymentioned,therearejustfewdominanteconomicplayersinworld,ofwhichtheEUis one. Thefollowingsectionwillprovideamoredetailedexplanationofthereasonsandaimsofits creationandhowtheEUhasperformedanddevelopedsinceitscreation. Ther iseofdevelopingcountr iesasatoolforeconomicgrowth However, although Neoliberalism suggests positive economic growth, wealth and internationalcooperation,thisdevelopmentcanalsobeseenfromadifferentperspective. The development of developing economies brings several favourable aspects. Through increased FDI in several economic sectors, as well as infrastructure, technology and other sectorscanbemade.Bydoingsotheeconomywillbeabletoimproveitsproductivecapacity andthereforebemorecompetitive.ConsequentlyeconomiesexperiencepositiveGDPgrowth. ItisclearthatFDI,whichoftencomesfromdevelopedeconomies,tendstoinvestinan economyby,forexample,outsourcingsupplychainactivitiestoacountrywithrelativelylow labourcosts,asitisoftenthecaseforcompaniesthatusetheGlobalProductDevelopment strategy(GPD)15.Thiscreatesbenefitsforbothparties. Inthelongrunthedevelopingeconomygrows,whichmostlycomesalongwithincreased GDPperCapita.Increasedincomes,asitwouldthecaseinIndia,oftenoccursinaparallel fashionwithincreaseddemandforconsumergoods.Mostnotablythisincreaseddemandwill beforgoodsfromdevelopedcountries,andsoincreasesthedemandforimports. Thisfactincreasesexportsforthedevelopingcountriesandcontributesagaintoeconomic growth.Statisticallydevelopingcountriesgrowatamuchfasterrate,duetothecatchupeffect. Developedeconomiesinturnseemtogrowatamuchlowerrate. Thereforethedevelopedeconomyisabletoincreasedemandforitsexports,thusmaking moresales.Withincreasedwealthindevelopingcountriesdevelopedcountriescansoexpand thesizeoftheircurrenttargetmarketsandinbestcasefindnewmarkets.Inmarketingthis processisoftendescribedasmarketexpansionandmarketdevelopmentsalesanddemandare stimulatedandcreatedinmarketswheretheyhavenotbeenbefore. This situation can be compared to a specific extend with the USs European Recovery Program (ERP) in Europe through the development and strengthening of the European economythedemandforUSgoodshasgrownsignificantly,whichatthesametimebenefited theeconomyoftheUS.Thereforetheincreaseddemandfromtodaysdevelopingcountriesalso strengthenstheeconomicpositionandcompetitivenessofdevelopcountries. However,whatthemainpurposebehindthestimulationofgrowthofdevelopingcountriesis remains an open question. Just time will be able to show, to which extend all developing
14 ParetosPrinciple:The8020Rule,http://www.bsu.edu/libraries/ahafner/awhthmathpareto.html,29July 2009. 15 GPD:GlobalProductDevelopmentStrategy,thataimstomaximizethefinancialandoperationalproductivity oftheproductdevelopmentprocessbyspreadingproductdevelopmentactivitiesacrossmultipleregionsofthe worldinordertobettermatchvalueaddtocost.,GainingCompetitiveAdvantagethroughGlobalProduct Development,www.ptc.com/WCMS/files/76863/en/3425_GPD_WP_EN_FINAL.pdf,12March2009.
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countries can liberalize sufficiently and thereby enjoy a developed level of income and wealth,andhowmuchthiswillbeequallydistributed.Assuchtheworldisnoweconomically dominatedbythreemajorplayers,andsomarksthetimeoftheOligopoly. TheEasternEuropeanEnlargement AnothersimilaritycanbedrawninthecaseoftheeasternEuropeanenlargementoftheEU. ThecontinuousexpansionoftheEUtowardstheeasternEuropeaneconomieswasacritical step in many ways. Firstly many of these countries showed a considerably lower level of developmentandtechnologicaladvancement. TheeconomicintegrationoftheeasternEuropeanmembersseemedtobeacriticalprocess duetothecountriesnegativebalanceoftradeandaccountbalance.Thedifficultiesandcosts thatarosewiththeeasternEuropeanintegrationraisedthequestionwhethertheseareseenas extractiveeconomies16,whichinthiscaserepresentedtheeasternEuropeanmemberswhich receivedonlyalowanddecliningshareintheglobaldistributionofwealth. 17AsGernetKhler andEmilioJos Chavesclaimtheeastseemstobeunabletoreapthebenefitsoftechnical progressandisbeingforcedtoexportheavilywhichmakestheeconomyincreasinglyrelianton theexportsector.Atthesametimetheredidnotseemtobeanyadvancesinenergyandincome balance.Duetothistheyproposedthethrowbackintothisoldpatternofextractiveeconomy. 18 However,ifthiswillbethecaseremainstobeseen. TheenlargementoftheEuropeanmarketledtoanincreaseofhumancapitalandthebenefits associatedwithit,increasedcapital,economicandnaturalresources.ThesizeoftheEuropean common market increased from about 370 million to 470 million people. Furthermore all membersaregoingtobenefitfromthereducedbarrierstotrade,investmentandmovementof labour.ThroughthisincreasedtradeliberalizationintheEuropeanzoneeconomicgrowthand strengthwillbeenhanced.19Followingtheincreaseofthecommonmarketeconomiesofscale canbeachievedmucheasierandproductivityofcapitalandlabourincreases,whichwilldrive downpricesinthelongrun,andthusmaketheEUincreasinglycompetitiveandenhanceits economicstrengthandpower. AssuchtheEUishavinganincreasedaccesstonewmarketsandresources,asthereareno trade barriers. This increased access however, can be compared to a specific extend to colonization,whichtookplaceduringtheMercantilistarea,inawaythatafurtherexpansionof theownmarket,whichhereistheEUthatestablishedoutofsixmemberstates,expandedto27 memberstates.Surelythemembershipofthenewstateswasvoluntarily,butthefactofmarket andresourceexpansionshowssimilarities.
16 Thistermisusedtodescribeasituationofunequalexchangewherebyrawmaterialexportingsectorsinthe periphery 17 GernotKhler&EmilioJosChaves,Globalization,(NovaBiomedical,2003),173. 18 Ibid.,p.173. 19 EUEnlargement,http://www.cato.org/pubs/pas/pa489.pdf,3August2009.

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ForthenewEUmembersLatvia,Poland,Eastland,Lithuania,Slovakia,CzechRepublic, Slovenia and Hungary the membership has been showing many positive effects. With the adaptationoftheEUmorestabilitycouldbeachievedandsomadethecountriesmoreattractive fordirectinvestment.20 Overall,sincethemembershipalleightcountriesrecordanaverage increaseof25%inGDP,whichrepresents anincreasethreetimesas highas theoldEU member states (see Figure IX). Additionally the GDP per Capita increased and corruption problemsdecreased. ThefurtherdevelopmentofEasternEuropeancountrieswillcontinuetobeamainissuein thefuture. ForexamplethemarketsofPoland,theCzechRepublicandHungaryrepresentthreeof Germanysmain15exportpartners,andarerepresentinganevenbiggerimportancefortrade thanJapan,BrazilandIndia.21 TheLondonCentreforEuropeanReformclaimsthatthenewenlargementhelpstheEUasa wholetobemorecompetitiveintheworldmarket. FurthermorewiththewideningoftheEuropeanmarketsandenforcedeconomicintegration where trade barriers are removed, the EU is widening its productionscale. As a result economiesofscalecanbeachievedeasier,therebydecreasingproductioncost,whichmakesthe Europeaneconomymorecompetitive. Based on the main idea of this study the widening of the European market could be comparedwithcompanymergers.Companiesmergeinordertobenefitfromvariousaspects, likesharingandreducingvariouscosts,strengtheningofmarketpower,accesstoincreased knowhow and assets. In simple terms the merging or takeover of the eastern European countriesisnotverydifferentfromthis.
20 NilsKreimeier,GroerSprungnachvorn,FinancialTimesDeutschland,30April2009,13. 21 Ibd.
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TheEUasanoligopolisticplayer
Inordertogiveamoreindepthinsightintothecurrentmarketstructureofoligopoly,a detailedanalysisoftheEUwillbeconducted,asitisconsideredtobeoneofthemajorplayers. Thereforethecategorizationcriteriawillberecalled. Pricing:DegreeofeconomicpowerGDP,Shareinworldtrade,FDI Supply:Developmentperspectivebasedontheendogenousgrowththeory Barrierstoentry:Capitalandhumanendowment,Levelofadvancement Efficiency:Incomegrowth,GDPgrowthrates,Inflation DegreeofCooperation:degreeofcollaborationanddependence Profits:HDI Pr icing ForeignDirectInvestment(FDI)isdefinedasacategoryofinternationalinvestmentthat indicates an intention to acquire a lasting interest in an enterprise operating in another economy22,FDIisanimportantindicatorfortheinternationaleconomicclimate.Furthermore, inthetimeofglobalization,itplaysamajorroleasitisanimportantindicatorforinternational relations anddevelopment,asitcanencourageincreasedefficiencyinproduction,increase technological and managerial knowhow and thus improve the productive capacity of the economyanditscompetitiveness.ReasonsforFDIcanbeaccesstonewmarketsandthebetter knowledgeofthesemarkets,theneedforlocalmarketpresenceandlowerlabour,rawmaterial andintermediaryinputcosts,andthustheoveralldecreasedproductioncosts. From2004to2005worldFDIinwardflowsincreasedby9%.TheEUrecordsanincreaseof 77%inthesametime.23TheEUrecordedaholdingof19%oftheworldFDIinflowsintheyear 2005. The majority of this investment (43%) came from the European continent (nonEU countries),followedbyNorthAmericawithashareof18%. 24 MaindestinationforEUFDI outflowweretheUnitedStates,SwitzerlandandCanada,andthusunderlinesthefact,thatmost oftheFDIflowstakeplaceamongdevelopedcountries,ratherthantodevelopingcountries. Just36%oftheEUtotalFDIoutflowswenttoemergingmarkets,wherebyEastAsiawasthe mainreceiver.TheEUsNetFDIincomerecordedahighof68Billionin2005.
22 EuropeanUnionforeigndirectinvestmentyearbook2007, http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KSBK07001/EN/KSBK07001EN.PDF,5July2009. 23 EuropeanUnionforeigndirectinvestmentyearbook2007, http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KSBK07001/EN/KSBK07001EN.PDF,5July2009. 24 Ibid.

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AsillustratedinFigureXIIthereisapositivetrendforFDIinwardandoutwardflows.EU inwardstocksincreasedby10%in2005,andoutwardstocksincreasedby16%.Overallnet assetsincreasedin2005,afterrecordingacontinuousdeclineintheyearsbefore. Supply Researchanddevelopmentexpenditureswhichareconsiderablygood,canpromiselongterm growthanddevelopment.Basedontheendogenoustheoryofgrowthitiscrucialforacountry toinvestinResearchandDevelopment(R&D25),astechnologicalinnovationsarebecoming increasinglyimportantcontributorforeconomicgrowth.R&Dcontributestotheoverallstock ofknowledgeoftheeconomyandsoenhancesitsproductivecapacity,whichinturnincreases itscompetitiveness.Technologicaldevelopment,scientificresearchandinnovationareakey factorforeconomicgrowthandcompetitivenessandarethereforeimportanttobedevelopedon acontinuousbasis.In2004R&Dexpendituresaccountedfor1.90%ofGDPintheEU25.At the moment Japan and the US still record the highestexpenditures on R&D development. However,launchedattheLisbonEuropeanCouncilandlateronestablishedattheBarcelona EuropeanCouncilinMarch2000,the EU planned toincreasethis percentage to3%until 2010.26WiththispercentagetheEUwouldcatchupwiththeUS(2.8%)andJapan(morethan 3%).However,theamountofR&DallocatedtoappliedresearchintheEUisconsiderably higher,comparedtotheUS(seeFigureXIII).
25 R&DDefinition:Activitiesthatcompromisecreativeworkundertakenonasystematicbasisinorderto increasethestockofknowledge,includingknowledgeofman,cultureandsocietyandtheuseofthisstockof knowledgetodevisenewapplications,R&DexpenditureinEurope, http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KSNS06006/EN/KSNS06006EN.PDF,6July 2009. 26 R&DexpenditureinEurope,http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KSNS06006/EN/KS NS06006EN.PDF,6July2009.
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Countries like Japan and China tend to focus their expenditures more on experimental development.27 Thebiggestspendingsectorismanufacturing,followedbytheservicesector. ForthemanufacturingsectortheEUrecordssimilarR&DexpendituresastheUS. 28Following on,thehighestamountofR&DinvestmentswasprovidedtoGermany,FranceandtheUnited Kingdom.Increasedeffortsisalsoplannedtobeinvestedoninformationandcommunication technologies, biotechnology and nanotechnology, aeronautics and hydrogen energy technology.29 FortheservicesectorpositivetrendsfortheEUarepredicted,thiswouldclosethegap betweenin the R&D spending with the US, onwhichat the moment the US is spending considerably higher amounts.30 Over the years the EU recorded constant growth in R&D expenditures.From2001until2004EUexpendituresroseby2.7%peryear.Thisfactwillbe another important issue that will contribute to the EU future economic outlook and performance.
27 R&DexpenditureinEurope,http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KSNS06006/EN/KS NS06006EN.PDF,6July2009. 28 Ibid. 29 CommunicationfromtheCommission,ftp://ftp.cordis.europa.eu/pub/era/docs/com2004_353_en.pdf,7July 2009. 30 R&DexpendituresinEuropeandtheUS,http://www.euractiv.com/en/science/rdexpenditureseurope us/article180737,6July2009.

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Barr ierstoentr y TheEUseconomicandtradepoliciesaregenerallycreatedinawaythatmakestheEUthe strongestandmostcompetitivesingleeconomyintheworld. 31Withthecontinuousenlargement oftheEU,humanresourceshavebeenincreasinggreatly.Withover491Millioninhabitantsthe EUholds7%oftheworldspopulationshare.Severalstrongpartnersandtradeagreementsthe EU holds, puts it in a strong economic position throughout the world. The continuous strengtheningofcommonfundamentalvalueswithtradingpartners,theruleoflaw,property rightsandthepractiseoffreetrade,theEuropeaneconomyhasbeenabletobenefitandgrow greatly. TheEUtogetherwiththeUSrepresentthelargestbilateraltraderelationshipinthe world,andmakebothofthemthekeyplayersintheglobaltradesystem, 32 Togetherboth economiesaccountforalmost60%oftheglobalGDP,33%ofworldtradeingoodsandfor about42%ofworldtradeinservices,andthusshowsthestrongpowerofthesetwoeconomies. Eff iciency GDP growth rates, the inflation rates and unemployment rates are three of the main economicindicators.Thesearesaidtobeimportant,astheycangivesomeinformationabout futureeconomicperformance. FavourableRealGDPgrowthrates33areessentialforaneconomy,asitwillreflectthehealth ofaneconomy.Thehealthieraneconomyis,themorelikelyitwillbeatargetforFDIandbe more likely to enjoy positive economic growth and development, this in turn might also contributetodecreasedunemploymentrateandthusincreasedconsumerspending. 34TheEUis consideredasacashcowasitholdsabigshareofWorldGDPandsmallGDPgrowth. ThroughouttheyearstheEUenjoyedconstanteconomicgrowth(seeFigureXIV).
31 Trade,http://www.eurunion.org/eu/index.php?option=com_content&task=view&id=52&Itemid=48,7July 2009. 32 BilateralTradeRelations,http://ec.europa.eu/trade/issues/bilateral/countries/usa/index_en.htm,7July2009. 33 RealGDPgrowthratestakeinflationintoaccount,andwillconsequentlyherenotbeconsideredseparately. 34 EconomicIndicators:GrossDomesticProduct(GDP), http://www.investopedia.com/university/releases/gdp.asp,28July2009.

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Althoughtheworldisfacinganeconomicrecessionatthecurrenttime,itisstillpredicted, thattheEUwillbeabletostandupagainquickly,duetoitseconomicstrengthsandadvantages. TheEUseconomyisconsideredasbeinghighlystable,aswellasthecontinuesgrowthinthe pastandthedevelopmentandgrowthofthenewmemberstates,itcanbepredictedthattheEU isfurthermoregoingtohavepositiveGDPgrowthratesandwillsoadditionallystrengthenits economic position. But not only the high level of advancement in the industrial and technologicalsectorcontributetothesefavourablegrowthrates.Alsothedevelopmentand increasedproductivityfurthermorestrengthenstheEUspositionthroughouttheworld.The roleasoneofthemainagriculturalproducerscouldadditionallybeenforcedinthefutureby theWorldClimateChange.Throughincreasedtemperatures,droughts,floodsandincreased sealevels moreandmorecountriesfindtheiragriculturalfuturethreatened.Forthefuture MiddleandSouthAmericawillsufferheavilyfromtheclimatechange. 35AlthoughtheEUis alsosurelyaffectedbythis,thedegreeofdamagewillstillberelativelylowerthaninSouth America.ThiscouldgivetheEUadditionalpower,asagriculturalexportsfromtheEUwillbe increasinglydemanded. Unemploymentrateisoftenusedanindicatorofgeneraleconomicactivity.Thissoreflects thelabourforceutilizationofaneconomy.Ahighunemploymentratewouldthusindicatethat humanresourcesareidlingandproductivecapacityisforegone.36
35 AppendixIIshowsaWorldMapoftheconsequencesofGlobalWarming 36 TheUnemploymentRateasanEconomicIndicator, http://research.stlouisfed.org/publications/review/76/09/Unemployment_Sep1976.pdf,29July2009.

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Astheevidenceshows(FigureXV)theEUenjoyedalowerunemploymentratethanJapan andtheUSfromtheendofthe1970son.GenerallytheEUsunemploymentrateshowsa decreasing trend, whereas Japan and the US show positive unemployment rate growth. Followingon,theEUseemstohaveuseditsresourcesmoreefficientlyaswellasitwasableto increasetheirproductivecapacity,whichgoeshandinhandwithGDPgrowth.
DegreeofCooperation The degree of economic cooperation, in form of trade agreements, has increased significantlysincethe1980s.Moreandmorecountriesliberalizedtheireconomy,loweredor reducedtradebarriers,inordertofacilitatetrade.Asaresultofeconomicliberalizationthe amount of imports and exports has grown significantly, and strategies, such as GPD and outsourcinghavebecomemorecommon.Becausemanycompaniesreceivetheirrawmaterials andservicesfromothercountries,producetheirproductsthroughouttheworldandselltheir goodstodifferentmarkets,todaysdegreeofcooperationandinterdependenceamongnation statesbecamecrucial.Assuch,itisthegoaloftheneoliberalisticideatocreatethisstronger cooperation,inordertoallocateresourcesmoreefficiently,ensurestabilityandsoreducethe potentialandriskforconflict. Companiesandeconomiescansoworktogether,whichwillsobenefitallparticipantsinthe longrun.ThisfactcanbeexplainedbytheNashEquilibrium.Thistheoryisusedtodescribe therelationships amongcompaniesandindustriesinanoligopoly.Eachparticipantwillbe affectedbytheactionsoftheothertheyareinterdependent.Followingon,itwillbemost beneficialifparticipantsdecidetocooperatewitheachother.Ininternationalrelationsthiscan
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takeplaceinformsofnegotiationsovermutualtariffreductions,theformationandreservation ofcustomunions,issuesofinternationalcommonpropertyandothers. Furtheron,ifallparticipantsandeconomiesagreeononestrategyandtocooperate,noneof themwilllose.Inthiswaytodayseconomieswilltrytoadjusttheirbehaviourtotheoneofthe othersinthegame,sothatstrategychoiceswillbecreatedinawaythatallparticipantswill experiencebetterresults.37 AsaresultthecreatedNashequilibriumwillbeaselfenforcing agreement among most economies nowadays. As the agreement of mutual economic cooperationwasreached,itwillbeintheselfinterestofeachplayertofollowthisagreement. Asaconsequenceeconomiccooperationandintegrationcouldbefurthermoredevelopedand enforcedthaninthebeginningofthemodernglobalization. Profits Profitsnormallyrefertosurplusremainingafteralltotalcostshavebeendeductedfromthe totalrevenueofacompany.Itisoftenusedasameasureofthesuccessandisoftenimportant forstockholders,asanincreaseinprofitscanleadtoincreasedprofitsforequityholders.Thus itisanindicatorofthecomparativeperformanceofthecompany. 38Ineconomictermsthesales of the company would reflect the countrys GDP. Increased sales/GDP thus often seem favourableandiswhatmosteconomiesaimfor.However,howwelloffacountryisreallyis,is oftendescribedbytheHumanDevelopmentIndex(HDI),andshowshowmuchthesociety reallytakesprofitoutofincreasedGDP.Comparabletoacompanythiswouldmean,how muchdidtheincreasedsalesreallyreflectedintheincreasedprofits,orcouldonlyincreased salesbeachievedthroughloweringprofits,whichcouldbecomparedwitheconomicgrowthfor thesufferingofthesociety.TheHumanDevelopmentIndexisawidelyacceptedmeasurefor economicdevelopmentandthusthestandardoflivingofthecountryssociety.TheHDItakes intoaccountthefollowingindicators: 1 2 3 4 Lifeexpectancy Literacy Educationalattainment GDPperCapita
TheclosertheHDIofacountryistoonethebetterthesocietysstandardofliving.
37 TheNashEquilibrium:Aperspective, http://kuznets.harvard.edu/~aroth/papers/HoltRoth.nash_perspective.pdf,8August2009. 38 Profit,http://www.businessdictionary.com/definition/profit.html,18July2009.

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AsitcanbeseeninTableXJapanhererecordsthehighestHDI,followedbytheUSA.For theEUtheHDIhasbeendividedintothreegroups,basedonthedifferentmemberships.This comparison might be useful, as the new members, especially in the last eastern European enlargementstillfacemajorimbalanceswiththerestofWesternEuropeintermsofGDPper capita as well as the productivecapacity. Following this the HDIof the EU is decreasing consistentlybyaddingitsnewmemberstates. However,apartfromChinaitcanbesaid,thatthesecountriesenjoyaconsiderablyhighHDI comparedtotheworldaverageHDIof0.741.39 Itcanbeconcluded,thatthecountriesthatenjoyhighGDPtogetherwithahighsharein worldtradealsoenjoyahighHDI,fromwhichthesocietybenefitsasawhole,eventually.For thesecountrieseconomicliberalizationthushasbeenafavourablestepinordertoimprove wealth. ResultsfromtheEUscurrenteconomicstatus The economic development of the EU and other rising economies, has changed the economicpowerrelationshipsinthelastpastdecades.AftertheSecondWorldWar,therewere the two superpowers the United States and the Soviet Union. As the U.S. took on responsibilitytohelpandrebuildEurope,itincreaseditsownshareofeconomic,butalsoof politicalpowerandthusmadeitthe20thcenturyhegemony.
39 AppendixIIIshowsaMapoftheWorldHDIdistribution.
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Thesuccessfulimplementationoftheneoliberalisticapproach,embeddedintheEU,which expandedandgrewoverthepasttime,madetheEUriseandbecomeoneoftheworldsmain economicplayers.AsaresulttheU.S.lostitshegemonicstatus,althoughitisstillholdingthe positionofadominantplayer. TheneweraofGlobalization,togetherwiththeincreasedconnectivityandinterdependence, changedeconomicandinternationalrelations,wherebyeachparticipanthadtogaveupacertain degreeofsovereignty,inordertobenefit. Theimplementationoftheneoliberalistideahas increasedinternationalsecurity,inwhichinternationalorganizationsandinstitutionsplayakey role for the stabilization of the international system, as these have established a set of internationalrules,whicharepreciseandwellobeyed. The European Union, which is the economy that has realized the neoliberalist idea to probablythelargestextend,hasleadtothefurtherstrengtheningofcountries,thathavebeen powerfulbefore,suchasGermany,butisalsocontributingtothedevelopmentofcountries,that havenotbeenasfortunate,likeSlovakia,andarenowexperiencingthebenefitsofeconomic integration. Thereforethepositiveresultsfromtheimplementationoftheneoliberalistthinkingcanbe bestseenintheEuropeanUnion.AlthoughtheEuropeanUnionhasbeencriticizedtoamajor extend,andalthoughsomeofitspoliciesarehighlyquestionableanddocreateinefficiencyin someareas,theEUhasimprovedeconomicallyandsounderlinethemaingoalsofitscreation. Someeconomies,namelythequestionmarks,areabouttoacquireamajoreconomicstatus, andwouldsochangethecompositionandincreasethenumberofdominantplayersinthe economicmarket.ButtheseshouldnotrepresentathreatfortheEuropeanUnion,asitwould beinthepast,wheretradehasbeenseenasazerosumgame. WiththeretentionoftheEuropeanstrategyandthefurtherdevelopmentofitsnewmember states,thisshouldresultinthemaintenanceoftheEUspowerfuleconomicstatusandwillso makeitremaincompetitiveinthefuture,wherebyothereconomiesarealsoabletodevelopand sowillincreasinglyshowtheresultsofthepositivesumgameofinternationaltrade. Assuch,theoverallresultsofthedevelopmentoftheEUcanbeevaluatedasbeinghighly positive,andcansoserveasarolemodelforotherdevelopingeconomiesandencouragethese toshiftmoretoaneoliberalisticthinkingandopenthemselvesuptointernationaltrade. Surelythereisnoperfectmodelforeconomicgrowth.Eacheconomywillhavetodevelopa model for economic growth and development for itself, whereby domestic factors and circumstanceshavetobetakenintoconsideration.However,theincreasedneedforconnectivity andcollaboration,togetherwithincreasedinterdependenceshouldbeseenasnecessaryand positive,asitsocontributestointernationalsecurityanddevelopment.Theoveralldevelopment withintheworldmightbeuneven,wherebysomeeconomieswilldevelopquickerandmore efficientthanothers,howeverthismight,stepbystep,contributenotnecessarilytooverall wealth,buttoamoreequallydistributedwealth.
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Monopoly Thisfinalstageofmonopolywouldrepresentaworldoffullyglobalizedfreetradeanda high degree of interdependence among all economies. In this scenario resources would be allocated most efficiently throughout the world, whereby each country can focus on its comparativeadvantagewithoutfacingbarriers.Thisinthelongrunwouldresultinarelatively loweconomicefficiency,astheresultsofthecatchupeffecthavebeenovercome.Following on,wealthwouldbedistributedmoreevenlyandwouldsocontributemoretoglobaljustice, wherenodominanteconomyexistsanymore.Asaconsequenceoftheinternationaleconomic integrationthereexistsoneoverallmarketwithintheworldthusamonopoly. Whetherandwhenthisscenariowillhappenremainsquestionable,astherearestillmany otherfactors,suchaspolitical,environmental,social,religiousandothers,thatcandiminishthe possibilityforsufficienteconomicdevelopment.
Conclusion
Inthemodernglobalizationafeweconomieswereabletoacquireandmaintainamajor economicstatus,wherebyseveralothereconomiesthatopenedthemselvesuptointernational trade,areabouttogrowanddevelop. TheEuropeanUnion,asoneofthepioneersoftheeconomicintegration,hasrisenfromsix initialmemberscountriesto27andsoincreaseditscompetitivenessbyfar,asalargeamount ofmarkets,resourcesandcapitalcanbeaccessed.However,theEU,suchasothereconomies remainsandevenenforcesitsinterdependencewithotherseconomiesandnationstates.This factrepresentsoneofthemaindifferencestothefirstglobalization,wherecountrieswererather sovereignandgovernmentscontrolledtradeheavily,whereastodayeconomicgrowthissaidto bebasedonafreemarketandcollaborationamongeconomies. However,themodernGlobalizationhasnotbroughtallthebenefitsyet,forwhichmany economieswereaimingfor.Infact,upuntilnow,justthreemajorplayershavedevelopedand grownsomuch,thatthesecanbeconsideredtodominateworldtrade. TheEUtogetherwiththeUSandJapancanbeconsideredasoneofthemainholdersofthe WorldGDPshare.Thesecashcowsgrowatarelativelylowrate,comparedtoquestionmarks, butcanbeforecastedtoremainstronginthefuture,wherebytheEUwithitsfurtherexpansion and the development of the eastern European countries could even contribute to a bigger economicweightinthefuture.OthereconomiessuchasChinaandIndia,whicharesomeof theemergingmarketsatthepresenttimethatwillcontributetogrowthandsoprobablyleadto anexpansionoftheoligopolisticmarket,willbesomeofthestrongerplayerstocome. AccordingtothespecificcriteriathathasbeenusedfortheanalysisontheEU,anddueto the fact that thereis a presence of economic powers, arelation to anoligopolistic market structurecanbedrawn. Globalization has contributed to increased interdependence, economic growth and internationalsecurity.However,itremainshighlyquestionablewhetherglobalizationisgoingto reachthefinalstageofmonopoly.
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http://www.wto.org/english/res_e/statis_e/its2007_e/its07_world_trade_dev_e.pdf,24June2009. Appleyard,DennisR..InternationalEconomics.McGrawHillIrwin,2006. Aydinli,ErselandJamesN.Rosenau.Globalization,security,andthenationstate.StateUniversityof NewYorkPress,2005. Bade,KlausJ.andAllisonBrown.MigrationinEuropeanHistory.BlackwellPublisher,2003. Cameron,RondoE..AConciseEconomicHistoryoftheWorld.OxfordUniversityPress,1993. DeMartino,George.GlobalEconomy,GlobalJustice.Routledge,2000. GerhardLinski,Currentissuesandresearchinmacrosociology,(Brill,1997)101. Gross Domestic Product (GDP) Growth. http://www.euroekonom.com/graphsdata.php?type=gdp growthczech,27June2009. Jackson,RobertandGeorgSorensen.InternationalRelations.OxfordUniversityPress,1999. James,HaroldandBarryEichengreen. GoldenFetters:TheGoldStandardandtheGreatDepression . OxfordUniversityPress,1996. Klak,Thomas.GlobalizationandNeoliberalism.Rowman&LittlefieldPublishers,Inc,1997. Khler,GernotandEmilioJosChaves.Globalization.NovaBiomedical,2003. Kreimeier,Nils.GroerSprungnachvorn,FinancialTimesDeutschland,30April2009,13. Laissezfaire:Thefreedomofthemarketfromallkindsofpoliticalrestrictionandregulation.,Robert Jackson&GeorgSorensen,InternationalRelations,(OxfordUniversityPress,1999)185. Maddison,Angus.TheWorldEconomy.OECDPublishing,2006. McDonald,FrankandStephenDearden.EuropeanEconomicIntegration.PrenticeHall,2005. Nye,JosephS..TheparadoxofAmericanpower.OxfordUniversityPress,2002. ORourke,KevinH.andJeffreyG.Willliamson. NineteenthCenturyAtlanticEconomy.TheMITPress, 2001. RobertJackson&GeorgSorensen,InternationalRelations,(OxfordUniversityPress,1999)184. Squire, Lyn. Globalization and Equity: Perspectives from the Developing World . Edward Elgar PublishingLtd.,2005.
Glossary
CAP=CommonAgriculturePolicy CEECs=CentralandEasternEuropeanCountries CEFTA=CentralEuropeanFreeTradeAgreement ECA=EconomicCooperationAdministration EMU=EconomicandMonetaryUnion EEA=EuropeanEconomicArea EC=EuropeanCommunity EEC=EuropeanEconomicCommunity ERP=EuropeanRecoveryPlan(MarshallPlan) EU=EuropeanUnion FDI=ForeignDirectInvestment GATT=GeneralAgreementonTariffsandTrade GDP=GrossDomesticProduct HDI=HumanDevelopmentIndex
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IMF=InternationalMonetaryFund MNC=MultinationalCorporations NAFTA=NorthAmericanFreeTradeAgreement OEEC=OrganizationforEuropeanEconomicCoOperation OPEC=OrganizationofPetroleumExportingCountries R&D=Research&Development SEM=SingleEuropeanMarket SU=SovietUnion SAFTA=SingaporeAustralianFreeTradeAgreement TNC=TransnationalCorporations UN=UnitedNations UNDP=UnitedNationsDevelopmentProgramme WB=WorldBank WTO=WorldTradeOrganization
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MARKETSTRUCTURESINANECONOMICAL CONTEXT.THEEVOLUTIONOFTHE ECONOMICMARKET **

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No Onebigshare Low Veryhigh Low Veryhigh High

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1 ChinahererepresentedanexceptionintermsofGDP,thisishowevernotduetoahigherlevelofproduction, buttothesizeofitslandmass,whichsogivesitahigheraggregateGDP: 2 RondoE.Cameron,AConciseEconomicHistoryoftheWorld,(OxfordUniversityPress,1993)15.

TheUS13,EUandJapanaccountforover68%ofworldGDP.Thisunderliestheconceptof anoligopolisticmarketstructure,asaminorityofplayersholdthemajorshareofWorldGDP andsooftheworldswealth.ThisconceptisalsomanifestedinParetosprinciple,whichclaims

16 Thistermisusedtodescribeasituationofunequalexchangewherebyrawmaterialexportingsectorsinthe periphery 17 GernotKhler&EmilioJosChaves,Globalization,(NovaBiomedical,2003),173. 18 Ibid.,p.173. 19 EUEnlargement,http://www.cato.org/pubs/pas/pa489.pdf,3August2009.

22 EuropeanUnionforeigndirectinvestmentyearbook2007, http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KSBK07001/EN/KSBK07001EN.PDF,5July2009. 23 EuropeanUnionforeigndirectinvestmentyearbook2007, http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KSBK07001/EN/KSBK07001EN.PDF,5July2009. 24 Ibid.

35 AppendixIIshowsaWorldMapoftheconsequencesofGlobalWarming 36 TheUnemploymentRateasanEconomicIndicator, http://research.stlouisfed.org/publications/review/76/09/Unemployment_Sep1976.pdf,29July2009.

37 TheNashEquilibrium:Aperspective, http://kuznets.harvard.edu/~aroth/papers/HoltRoth.nash_perspective.pdf,8August2009. 38 Profit,http://www.businessdictionary.com/definition/profit.html,18July2009.

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