Functionalism presents a new take on interdependence: regional integration.

Under this thinking, states should become interdependent on states that are in close proximity to them so that they can coordinate on a number of different low political issues while continuing to expand each other's economies.

I think that this system (like all systems we have read about) is designed to keep wealth distribution to a minimum. For example, let's look at Canada.

This week, for the first time ever, Canada's dollar value has exceeded the United States dollar value. If you are a Canadian, this should be good news, right? Most products coming in from the US are cheaper, your currency is the most powerful in North America, and your DisneyWorld vacation will be cheaper, right?

Well, yes - in the short-term this is good news for our northern neighbors, but economics does not operate solely in the short-term. The flip side to this new situation is that those active in Canada's export business will be faced with new challenges related to their American buyers. A whopping 82% of Canada's exports were shipped across the border to the United States in 2006. Those companies that sell to Americans will now have another issue to contend with: either they lower their prices to stay competitive with their American buyers, or they start shipping more to Europe or Japan, their next two highest export partners. In many situations, the thought of shipping to Europe or Japan is not feasible because Canada exports such commodities as industrial machinery, aircraft, and timber.

Shipping timber to the United States is oftentimes as simple as floating logs downriver, collecting them at a certain point, loading them on a trailer, and trucking them down into any one of America's many northern paper mills (so located because of Canada's timber exports). Shipping to Europe or Japan? For starters, there would likely not be nearly as many mills to buy the logs. In addition, the process would require docks, boats, cranes, and permits that do not factor into the equation when trading with the U.S.

So my point here is that while regional integration might make sense on paper, it very often holds down some countries that might otherwise be able to hold their own on the world market. It also has its own very severe pitfalls, as we saw during the Asian Financial Crisis during the 1990's.