Capital Movement, Migration, and Maquiladoras

Most countries all over the world since the early 1980s have pursued a strategy of integration into the world economy. The strategy might well be dubbed “neoliberal globalization,” with reference to the “new economic model” used to guide policy, a program of structural reforms designed to adjust the national economies to the dictates of the new world order. The hallmark of this order is economic freedom—to liberalize trade and financial flows and to deregulate product, labor, and capital markets, thereby removing restrictions on foreign investment and the free movement of commerce. Interestingly enough, the one factor of global production that has not been freed from government control and allowed to circulate and move freely across the world is labor, distinguishing the globalization movement of the 1980s and 1990s from an earlier period of globalization, from 1870 to the First World War, characterized by free trade, the export of money capital, and an enormous flow of migrant labor, most of it from the old world of Europe to the new world of the Americas, both south (Spanish and Portuguese) and North (mostly British).

Globalization has to do with the free international trade in products and services, and the free circulation of labor, the major source of value added to economic production, as well as capital, the money invested in the process of production, money chasing profits, i.e., put up at the outset to generate a return in the form of profit for the investors. In theory, the idea is that the free market—a free movement of production, trade, capital, and labor—is the best or most efficient means of deciding who gets what in terms of wealth and income (the global marketed social product) and that attempts by governments to restrict international trade or the movement of capital and labor, the basic factors of production (land, natural resources, and technology being others), would distort the proper workings of the laws of the market, generating all sorts of problems such as the lack of robust economic growth (increase in the national output or the GNP), the informalization of labor, unemployment, and poverty.