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Word Count: 855
Although the Bretton Woods system of exchange rates collapsed in the early 1970s the International organizations created at this summit have had lasting effects on the world economy Most notably their effects on the opening and stabilization of international trade have led to exponential growth in interdependence and globalization One example of this can be found in the proliferation of multi-national corporations MNCs These corporations which have their headquarters in one state and subsidiaries in others have become an integral part of the world and domestic economies Furthermore MNCs have had an enormous impact on the control that states now have over their economic resources compared to fifty years ago The growing power and resources of MNCs have made these companies rivals of political states in the arena of world trade and in some instances MNCs have usurped the power of states to control their domestic economies The rise of MNCs can be attributed to growth in the globalization of production Because strong liberal economies support the theory of comparative advantage production has shifted from a process of domestic dominance to production on a global scale More specifically MNCs produce different parts of finished products in the states with the best environment to make these respective parts and then assemble the finished product in the state best fit for assembly For example Lairson and Skidmore give the example of Toyota This Japanese corporation has globalized its operations over the span of the last 25 years building assembly plants parts plants and research and development facilities around the world Another example of globalization in the automobile industry is Mercedes-Benzs American plant This company wished to build a plant for its new M-Class vehicles a sports utility vehicle in the US due to the high demand of these automobiles in America Mercedes demanded an area with fairly cheap labor that was near an institution of higher learning so that labor and white-collar positions could both be
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