Globalization and its Definition From Different Lenses
Course Description
The contemporary world is an inter disciplinary outcome-based course that c
omprehensively discusses both globalization and the globalized world throu
gh various disciplines of the social sciences. This course likewise deliberates
the economic , social , political , technological advancements abnd other tran
sformations that contributed to the interconnectedness of people and places a
round the globe.
With foremost importance , this discipline aims to guide students to
determine the challenges posed by globalization and analyze its effects on
traditional culture and communities , nations and political institutions,
including local, national and regional economies. Specifically, it is through
the combination of readings, class discussions , writing activities , group
presentations and educational trip that will make learners meet , and later ,
problematize the communities’ responses to persistent issues.
Why this Course?
Avoid parochialism
World teaches us more about our society
Filipinos increasingly interacting with the world
OFW 4,018 Filipinos per day in 2009, 6,092 in 2015
Internet, cheaper travel, presence of MNCs
The course’s approach to the study of Globalization
Globalization: inherently interdisciplinary
See contemporary world through a broad lens
Allows us to examine various globalizing processes
Forces us to ask questions re. global citizenship
Academic Definition
As opposed to popular/activist definition:
Not “neoliberal globalization”/ “market globalism”
The need for interdisciplinary approach
We need to transcend our
disciplinary boundaries… Otherwise, we won’t talk!
For a Political Scientist
Political scientist:
“Challenge to the nation state.”
Strength of regional blocks
Emergence of global political norms
Political scientist: “Challenge to the nation state.”
Emergence of corporations
For the Economist
Increased free trade
Free Trade is a policy followed by some international markets in
which countries’ governments do not restrict imports from, or
exports to other countries
Free Trade is exemplified by the European Economic Area and the
Mercosur, which have established open markets.
Speed of trade (milliseconds to trade shares)
Global economic organizations
International Monetary Fund
World Trade Organization
World Bank
Organization for Economic Cooperation
World Economic Forum
G20
International Labor Organization
United Nations Conference
Asia-Pacific Economic Cooperation
Group of Seven
BRICS
United Nations Economic Association
Group of Eight
Bank for International Settlements
OPEC
Regional trade blocks
For the Scholar of Culture and Communication
“Global village”
Communications technology as “shrinking” our world
“Cultural imperialism”
How do we bring these various perspectives together?
Working definition of globalization:
Steger: “Globalization refers to the expansion and intensification of social relations
and consciousness across world-time and world-space”
Attributes of Globalization
1. Various forms of connectivity
They are diverse (can be economic, political, cultural, etc.)
They are enabled by various factors, pressures, media, etc.
They are uneven (different degrees of interconnection)
2. Expansion and stretching of social relations
NGOs
Friendships/Relationships
Government associations
MNCs
3. Intensification and acceleration of social exchanges and activities
From snail mail to Facebook
Live television
Increased travel (cheap flights)
4. Occurs subjectively
We think about the world (#PrayforParis for example)
We associate ourselves with global trends (fan of K-Pop)
Hopefully, we feel some sense of responsibility (climate change)
Dimensions of Globalization according to Appadurai:
1. Ethnoscape- global movement of people
2. Mediascape- global flow of culture
3. Technoscape- circulation of mechanical goods and software
4. Financescape- global circulation of money
5. Ideoscape- global circulation of political ideas
Globalization
Worldwide interconnectedness in all aspects of contemporary social life
Multidimensional phenomenon
But the economic dimension is one of the major driving forces
Economic Globalization
A historical process
Increasing integration of economies around the world through the movement
of goods, services, and capital across borders. (Transportation and
Communication Revolution)
A process making the world economy an “organic system” by extending
transnational economic processes and economic relations to more and more
countries and by deepening the economic interdependence among
them (Szentes)
Attributes of Economic Globalization
The globalization of trade of goods and services;
The globalization of financial and capital markets;
The globalization of technology and communication; and
The globalization of production
When did Economic Globalization Start?
History of Economic Globalization
Grills and Thompson, globalization began since Homo sapiens began from
migrating from the African continent to populate the rest of the world
Frank and Grills considered the Silk Road (Asia, Europe, Africa)the best
example for archaic globalization 5,000 years ago
Adam Smith considered the discovery of America by Christopher Columbus
in 1492 and the discovery of the direct sea route to India by Vasco de Gama
in 1498 as the two(2) greatest achievements of human history
British Industrial Revolution spread to Continental Europe and North
America
The industrial revolution and the rise of the factory system in Great
Britain
17th – 19th century, economic nationalism and monopolized trade such as
the British (1600) and the Dutch (1602) East India Companies
20th century transport revolution
The “golden age of globalization because of :
o Relative peace
o Free – trade
o Financial and economic stability
Transportation Revolution
o Canals, steamboats, railroads
o Turnpikes (ex. national roads)
o Steamboats
o Canals
o Railroads
What is the role of nation-state in economic globalization?
Nation-state Economic Globalization
For hyperglobalists, states ceased as primary economic organization
People consume highly standardized global products and services produced
by global corporations in a borderless world
Neo - Liberals claim that nation –states have lost an important element of
economic sovereignty
“Buy Taiwan, hold Italy and sell France”, Thomas Friedman compared
countries to individual stocks.
The major players of global economy are the transnational corporations or
TNCs
There will be no national products, technologies, no national companies
TRANSNATIONAL CORPORATIONS ARE CONSTANTLY EVOLVING AS
A RESULT OF OUTSOURCING ACTIVITY
-GOING OUT TO FIND THE SOURCE OF WHAT YOU NEED
We Live in an age of OUTSOURCING
Firms are subcontracting an expanding set of activities. Some have
become “virtual” manufacturers, owning designs for so many products but
making almost nothing themselves.
Example : AMERICAN CAR (WTO)
o KOREA – assembly
o JAPAN – components & advanced technology
o GERMANY – design
o TAIWAN & SINGAPORE – minor parts
o UK – advertising and marketing services
o IRELAND/ BARBADOS – data process
The Global Commodity Chains (GEREFFI)
TNCs gather resources, transform them into goods or commodities and
finally distribute them to consumers in the world market
Impact of Economic Globalization
World Bank(WB) claims that globalization
can indeed reduce poverty but it definitely does not benefit all nations.
The debate continues to rage over whether or not global expansion of
corporations and the opening of economic markets in developing countries is
good for the poorest of the world's nations.
Do the poor really benefit from investments made by large corporations in
their country, or do the rich only get richer? If there is benefit, is it simply in
job creation or are there other factors that influence a developing nation's
overall well being? Although many factions weigh in on the subject, several
basic ideas should be considered.
1. Wages and Inequality
2. Education
3. Health Status and Longevity
The competitiveness of an economy and the impact of
economic globalization depend on the capacity of the nation - state for
political intervention in order to regulate TNCs, IGOs and other market
players.
Nation –states are not influenced uniformly by economic globalization
International Monetary System (IMS)
Rules , customs, instruments, facilities, and organizations for effecting
international payments
Facilitates cross-border transactions involving trade
and investment ( Financial Intermediation )
National income can be consumed today or invested in projects that promise
future returns ( Investments )
Banks in the role of financial intermediaries connecting savers with
investors
Banks as Financial Intermediaries
People who don’t consume all their income today save it, depositing it in
banks from were it is chanelled to those who wish to use money to carry out
investment projects
Banks are able to pool savings from many savings from many people and
then transform them and then transform them into loans
The Gold Standard Fiat Vs. Commodity Money
Under the gold standard , currencies are given a set value in terms of
gold.This means that their values in terms of other currencies is also
fixed.When this works well , it can reduce trading uncertainties.
It can also hold governments to the maintenance of price stability because
the authorities cannot easily expand a money supply that has to be backed up
by gold to honour it.
Neg. During depression it limited the ability of governments to stimulate
their economies through expansion of money supply prolonging downturn.
The Bretton Woods System
During the great depression of the 1930’s
many countries shut out foreign imports to
protect ( Protectionism ) domestic markets,
leading to a disentegration of the
international economy.
A 1944 conference at Bretton Woods , New
Shampshire, lid the foundations for
rebuilding global cooperation.
Countrie’s exchange rates were tied to the US dollar.
The International Monetary fund and World Bank were set up to help
governments with financing and economic development.
The General Agreements on Tariffs and Trades later become the World
Trade Organization, oversaw rounds of negotiations that continue to the
present.
10 Points of the Washington Consensus
Fiscal policy discipline
Effective public spending-GDP
Tax reform
Competitive exchange rates
Peso Vs. Dollar
Countries ability to pay loans in dollars
Trade liberalization
Financial market liberalization
Liberalization of Foreign Direct Investment
Privatization
Deregulation
Security of property rights
Prerequisites for economic life
Buying and selling requires property rights
European Monetary Integration
Germany, France, Italy, Netherlands, Belgium and Luxembourg created a
common market where goods and services, capital and labor moved freely
European Economic Community,1957
European Monetary System, 1979
European Exchange Rate Mechanism
European Economic and Monetary Union, 1992
European Central Bank, 1999
EURO as a reserved currency
International Trade and Trade Policies
David Ricardo’s Comparative Advantage Every single nation must have
a relative advantage in something irrespective of its initial condition.
Comparative Advantage
Suppose that France is better in making cheese , England is at beer.
1. If France specializes in cheese and England in Beer and two countries trade,
then both gain:
The French get cheaper beer, the English cheaper cheese.
2. The theory shows that even if England was worst in both goods, there are still
gains from specialization and Trade.
Suppose: To make an extra keg of beer, England has to give up two wheels
of cheese output, while france would have to give up three wheels of cheese
to make an extra keg.
England has a comparative advantage in Beer production because the cost of
extra beer in terms of cheese is less than for France
What determines countries’ comparative advantage? The availability of capital and
labor in a country is one.
Most Favored Nation (MFN) Principle
One of the cornerstone of WTO trade law – which prohibits countries from
discriminating their trading partners. Grant someone a special favour ( such
as lower customs duty rate for one of their products) and you have to do the
same for all the other WTO members.
International Trade and Trade Policies
Kennedy Round (1962) - tariff cuts
Tokyo Round ( 1970)– subsidies and procurement codes
Uruguay Round (1986/1994 ) – multilateral trade negotiations
World Trade Organization (WTO), 1995 (industrialized countries trade to
developing countries, specifically on agriculture)
Doha Round – to lower trade barriers
United Nations Conference on Trade and Development (UNCTAD) to
promote trade and cooperation between the developing and developed
nations
