GE5 The Contemporary World lesson 1-8 PDF

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LESSON 1: INTRODUCTION TO THE STUDY OF GLOBALIZATION

Studying the Contemporary World -

Why do you need to study the world?

LEARNING OUTCOMES: 1. Differentiate the competing conceptions of globalization. 2. Identify the underlying philosophies of the varying definitions of globalization. 3. Agree on a working definition of globalization for the course.

WHY DO YOU NEED TO STUDY THE WORLD? 1. Cure parochialism. From close-mindedness to stretched imagination, outlook, and concern. One's concern is not only for their immediate context or environment. 2. It can teach you more about yourself. With knowledge about other countries, one can compare their society's condition with that of other societies/countries. This comparison may point out uniqueness and even similarities. 3. You are interacting with the world. As global citizens, being aware of what is happening with the world is a given. With all the interconnectedness and interdependence, the events happening outside us might bring a positive or negative impact.

Defining Globalization How did Globalization Began? • •

Trading of rare commodities like salt, spices and gold. In other words, there is exchange of goods among traders of different countries mainly because some of these commodities and goods are not found in their own country.

Example: Silk Road (silk is a highly prized commodity) is an Asian ancient trade route that linked China and Europe via an overland route to exchange silk, wool, gold, silver, jade, tea, spices, etc. • -

Advancement in transportation and communication resulted to an easier and increased exchange of information and goods easily. Geographical challenges are no longer an issue.

Globalization represents the global integration of international trade, investment, information technology and cultures. Government policies designed to open economies domestically and internationally to boost development in poorer countries and raise standards of living for their people are what drive globalization.

The literature on definitions of globalization revealed that definitions could be classified as either 1. broad and inclusive 2. narrow and exclusive • •

Ohmae (1992) -..."globalization means the onset of the borderless worlds..." Robert Cox - "the characteristics of the globalization trend include the internationalizing of production, the new international division of labor, new migratory movements from South to North, the new competitive environment that accelerates these processes, and the internationalizing of the state...making states into agencies of the globalizing word."

VARIOUS DEFINITIONS OF GLOBALIZATION Thomas Larson (2001) - "the process of the world shrinkage, of distances getting shorter, things moving closer. It pertains to the increasing ease with which somebody on one side of the world can interact, to mutual benefit with somebody on the other side of the world." (p.9) Martin Khor, the former President of the Third World Network (TWN) regarded globalization as colonization.

World Health Organization: Globalization is “the increased interconnectedness and interdependence of peoples and countries, is generally understood to include two inter-related elements: the opening of international borders to increasing fast flows of goods, services, finance, people and ideas; and the changes in institutions and policies at national and international levels that facilitate or promote such flows. Globalization has the potential for both positive and negative effects on development and health.

Thomas Friedman "The inexorable integration of markets, transportation systems, and communication systems to a degree never witnessed before- in a way that enabling corporations, countries, and individuals to reach around the world farther, faster, deeper, and cheaper than ever before"

GLOBALIZATION: A WORKING DEFINITION Manfred Steger • •

"The term globalization should be used to refer to a set of social processes that are thought to transform our present social condition into one globality. "The expansion and intensification of social relations and consciousness across world-time and across world-space."

GLOBALIZATION is the expansion and intensification of social relations and consciousness across worldtime and world-space. (Steger, 2013) consciousness. EXPANSION refers to both the creation of new social networks and the multiplication of existing connections that cut across traditional political, economic, cultural, and geographic boundaries.

Different levels of connections: 1.Social Media (establishing global connections between people) 2.International groups of non-government organizations (NGOs)

INTENSIFICATION refers to the expansion, stretching, and acceleration of these networks.

Expansion of global connections – with this connection, transactions happen at a higher speed – integration of economies, markets nation-states, cultures, institutions.

THE HUMAN PERCEPTION OF TIME AND SPACE; Steger notes that globalization processes do not occur merely at the objective, material level but they also involve the subjective plane of human

The perception that the world has become a smaller space and distance has collapsed from thousands of miles to just mouseclick away.

GLOBALIZATION (process) vs. GLOBALISM (ideology) If globalization represents the many processes that allow for the expansion and intensification of global connection,

globalism is a widespread belief among powerful people that the global integration of economic market is beneficial for everyone, since it spreads freedom and democracy across the world.

As Economic Process - How the evolution of international markets and corporations led to an intensified form of global interdependence.

GLOBALIZATION (Steger, 2014)

growth of ‘super territorial’ relations between people.

As Political Process

As Cultural Process

-The implication that economic -Confronted with the question of globalization might be leading to the whether globalization increases reduced control of national cultural homogeneity or it leads to governments over economic policies. greater diversity and heterogeneity.

- The notion that globalization involves the increasing linkage of national economies through trade, financial flows, and foreign direct investments.

Political globalization as a Viewing globalization not process intrinsically connected to the as a one-dimensional phenomenon, expansion of markets. but as a multidimensional process involving diverse domains of The central role of politics – activity and interaction, including especially the successful mobilization the cultural sphere. - The premium put on free trade. of political power – in unleashing the forces of globalization. Increasing network of - Two most important aspect of complex cultural interconnection economic globalization: The continued relevance of and independence. conventional political units, operating 1. changing nature of the either in the form of modern production process, Culture no longer remains nationstates or global cities. 2. liberalization and tied to fixed localities such as town internationalization of and nation, but acquires new financial transactions. The need for effective global meaning that reflect dominant governance structures as a consequence themes emerging in a global - Emergence of transactional of various forces of globalization. context. financial system. The gradual process of relative Concept of ‘globality’, deterritorialization that facilitate the - Creation of international referring to the experience of living financial markets. and acting across borders. GLOBALISM versus GLOBALIZATION www.PEDIAA.com

GLOBALISM Globalism is an ideology based on the belief that people, information, and goods should be able to cross national borders unrestricted.

GLOBALIZATION Globalization is the spread of technology, products, information, and jobs across nations.

The ideological component of globalization.

Involves increasing interconnection between people and regions throughout the world.

Anthropologist Arjun Appadurai (1996) identifies multiple and intersecting dimensions of global cultural flows he calls 'landscapes' or 'scapes' (Steger, 2014: 13).

These five conceptual dimensions are:

1. Ethnoscape. Flows of people. The movement of people. 2. Technoscape. Flows of technology. Development and boom of technology that facilitates cross-border connections and transactions. E.g. the internet, information technology, and engineering. 3. Finanscape. Flows of money. The flow of global capital. International banking and cash systems allow this to happen. E.g. credit card systems. 4. Mediascape. Flows of information. The production and dissemination of information through electronic means. The access of people to modern popular culture. E.g. access to international entertainment like Hollywood films, K-drama, and anime; media such as newspapers, magazines, the social network. 5. Ideoscape. Flows of ideas. Ideologies of state, and social movements. E.g. posting of your views on a certain event or human reality on Facebook; religious missionaries spreading their doctrines to other regions or countries; environmentalism. (Globalization occurs at multiple intersecting levels)

HOW CAN WE APPRECIATE THESE DEFINITIONS? HOW CAN THESE HELP US UNDERSTAND GLOBALIZATION?

1. The perspective of the person who defines globalization shapes its definition.

"Globalization is a 'world of things' that have different speeds, axes, points or origin and termination, and varied relationships to institutional structures in different regions, nations, or societies””. - Arjun Appadurai (as cited in Chowdhury, 2016, p. 137)

2. Globalization is a debate and the debate is globalization. - It is an uneven process that affects people differently.

3. Globalization is reality.

Lesson 2 & 3: The Structures of Globalization (The Global Economy, Market Integration, The Global Interstate System, Contemporary Global Governance)

Globalization "May be thought of initially as the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life (Held, et. Al, 1999) ➤Aspects means the political, technical, cultural and economic features (Giddens, 1999:10). Meaning, globalization is a multidimensional phenomenon

1. THE GLOBAL ECONOMY LEARNING OUTCOMES 1. Define economic globalization. 2. Identify the actors that facilitate economic globalization. 3. Define the modern world system. 4. Articulate a stance on global economic integration.

ECONOMIC GLOBALIZATION ...a historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across international borders (IMF, 2008 as cited in Benczes, 2014: 900).

INTERCONNECTED DIMENSIONS OF ECONOMIC GLOBALIZATION 1. 2. 3. 4.

The globalization of trade goods and services. The globalization of financial and capital markets. The globalization of technology and communication. The globalization of production.

ECONOMIC GLOBALIZATION We should note that globalization is multidimensional, complex, and does not influence or affect nation-states in the same way which makes it an uneven process as well.

TRANSNATIONAL CORPORATIONS (TNCs)

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TNCs are business organization whose activities are located to more than two countries and is the organizational form that defines foreign direct investment (Lazarus 2001, p 10197)

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Regarded as another important economic development that involves the changing nature of global production. TNCs are believed to be the main driving force of economic globalization. - For realists, TNCs still represent national interests and have means through which the rich can exploit the poor. The availability of cheap labor, resources, and favorable production conditions in the Third World enhanced both the mobility and the profitability of TNCs. TNCs' ability to 'outsource' manufacturing jobs-that is, to cut labor costs by dispersing economic production processes into many discrete phases carried out by low-wage workers in the global south-is often cited as one of the hallmarks of economic globalization. Enterprises like Wal-Mart, General Motors, Exxon-Mobil, Mitsubishi, and Siemens belong to the 200 largest TNCs, which accounts for over half of the world's industrial output.

INTERNATIONAL MONETARY FUND (IMF) -

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Founded at the Bretton Woods Conference in July 1944 alongside the International Banks for Reconstruction and Development (Now called World Bank)-which was responsible for post war reconstruction, as two international institutions. The mandate of IMF was to promote international financial cooperation and strengthen international trade. The IMF was expected to provide short-term financial assistance (loans) to countries. Official organization for securing international monetary cooperation. Help less-developed countries through research and giving monetary advice.

WORLD TRADE ORGANIZATION (WTO) - WTO was launched on January 1, 1995 and has become an official forum for trade negotiations. - It is a formally constituted organization with legal personality. WORLD BANK -

Two mandates of the institution: end extreme poverty and promote shared prosperity. Offers financial and technical assistance to developing countries.

WTO, IMF, and WORLD BANK -

3 institutions that underwrite the basic rules and regulations of economic, monetary, and trade relations between countries. Many developing countries have loosened their trade rules because of the influence and pressure of these institutions.

IS ECONOMIC GLOBALIZATION A NEW PHENOMENON? -

There is no consensus (agreement) on its origin Best known example of archaic (old) globalization is through the Silk Road → long distance trade Silk road is the oldest known international trade route (From China to Middle East to Europe) (trivia: one of the most profitable products traded here is silk) However, silk road was international but NOT truly "global" because it had no ocean routes that could reach the American continent Historians Dennis O. Flynn and Arturo Giraldez claims that globalization began when "All heavily populated continents began to exchange products continuously – both with each other

directly and indirectly via other continents

 Traced it back to 1571 with the establishment of galleon trade (connected Manila to Acapulco, Mexico, thus Americas become connected to trading routes) - Later, a more open trade emerged in 1857 when UK, US, and other European nations adopted the gold standard at an international monetary conference in Paris. • Its goal is to create a common system for more efficient trade • But during World War I, countries exhausted their gold reserves when they funded their armies, causing a downfall in their economy resulting to the abandonment of gold standard  They adopted floating currencies that were no longer redeemable in gold. • Today, the world economy operates on fiat currencies - currencies not backed up by gold but their cost relative to other currencies - This allowed countries to control their economies by increasing or decreasing the amount of money in circulation TIME 130 BCE – 1453 BCE

EVENT Silk Road, oldest known international trading route from China to the Middle East to Europe.

1571

Establishment of the Galleon Trade which connected to Manila to Mexico; made the connection between the Americas and the trading routes possible.

1867

A more open trade system was established when nations like the United Kingdom, the United States, and other European countries adopted the Gold Standard.

World War I (1914 To support the war efforts, the countries depleted their gold reserves, forced them to – 1918) abandon the gold standards. European countries adopted floating currencies. 1920s – 1930s

The Great Depression happened – the worst and longest recession ever experienced by the Western World.

Early 20th Century

The world economy operates based on fiat currencies – currencies that are not backed by precious metals and whose value is determined by their cost relative to other currencies. This system allows governments to freely and actively manage their economies by increasing or decreasing the amount of money in circulation as they see fit.

1944

Bretton Woods Conference gave birth to International Banks for Reconstruction and Development (IBRC or World Bank), and International Monetary Fund (IMF).

1957 1964

Establishment of the European Economic Community (EEC). The United Nations Conference on Trade and Development (UNCTAD) was established with the joint effort of the developing world.

1986 – 1994 1995

Multilateral trade negotiations were carried out under the Uruguay Round. The Uruguay Round gave birth to a ‘real’ international trade institution, the World Trade Organization (WTO).

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Today, because of the developments in transportation and communication, economic interdependence also intensified - Countries trade with each other due to lack or insufficient resources to satisfy their needs and wants.  Countries develop their own resources and then trade it for the resources they need. This can be seen long time ago when people travelled long distances to exchange goods and commodities, i.e BARTER SYSTEM - Countries import goods and services because of the following reasons: •

There are better or cheaper qualities of commodities somewhere

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Commodities are more appealing There are no alternatives in their home country

2. Market Integration - Because of globalization which created the world economy, markets have also become integrated. - Fusing of many markets into one - Global market integration means that price differences between countries are eliminated as all markets become one. - In one market, a commodity has a single price if these areas were part of the same market. - Today, markets are MORE INTEGRATED than before because transportation costs have continued to fall, and most tariffs have been scrapped altogether.

MARKET INTEGRATION Integration is a state of affairs or a process involving attempts to combine separate national economies into larger economic regions. – Ulrich Koester Two Types of Integration -

Negative Integration Positive Integration

1. Negative Integration reduces non-tariffs and tariff barriers to trade as a main tool for integrating markets.

2. Positive Integration adjusts domestic policies and institutions through the creation of supranational arrangements.

Supranational Arrangements -

is a type of multinational political union where negotiated power is delegated to an authority by governments of member states. The Government of Governments.

Forms of Integration 1. 2. 3. 4.

Preferential agreement. Free Trade Area Customs Union Common Markets

5. Economic Union

Preferential agreement – involves lower trade barriers between those countries, which have signed the agreement. Free Trade Area – reduces barriers to trade among member countries to zero, but each member country still has autonomy in deciding the external rate of tariff for its trade...