In the standard neo-classical view, absent government interference, both national economies and the integrated global economy operate efficiently.
Resources flow to their most productive possible uses.
When fully liberalized, global financial markets will allocate world savings efficiently, and the flow of funds from the capital rich North to the resource rich South should increase. The most productive investment projects will be funded, no matter where in the world they are located. Replacing state economic guidance with liberated markets will thus improve output and productivity growth rates in the developing world. Second, high trend excess capacity must be avoided, and industry must establish some method of investment coordination that can prevent supply from running too far ahead of demand. Third, corespective competition may be a necessary, though not a sufficient, condition for the adoption and maintenance of 'high road' enterprise-labour relations, to ensure a loyal, experienced and flexible labour force, with maximum firm specific skills, needed to initiate and react efficiently to innovations and to environmental change of all types, and to a high degree of production efficiency.