Social movement
• People and organizations advocating for
positive change through a variety of
means and approaches.
Free trade
• exchange of goods or products between
nations without tariff or taxes.
Deregulation
• loosening or lifting of government
regulations, usually to favor private
corporations’ flexibility of operations and
profitability.
Liberalization
• process or policy of removal or reduction
of restrictions or barriers on the free
trade between nations
GLOBALIZATION
• the word used to describe the growing
interdependence of the world’s
economies, cultures, and populations,
brought about by cross-border trade in
goods, services, technology, flows of
investment, people, and information.
Because of globalization:
• Countries discarded taxes on imported
goods (tariffs)
• Countries opened their doors to highly
skilled workers and professionals.
• People became more interested to travel,
learn new languages, and immerse
themselves into new cultures and
lifestyle.
Thus, modern innovations bring countries closer
together through decreased travel time, efficient
communication means.
October 30, 1947
• modern globalization jumpstarted by 20
nations that signed the General
Agreement on Tariffs and Trade (GATT).
General Agreement on Tariffs and
Trade (GATT)| [now WTO]
• primarily aims to regulate international
trade.
• global international organization that
deals with trade between nations.
• Help producers, exporters, importers
conduct their business.
MANFRED STEGER
• Globalization is a contested concept used
to describe a process, a condition, a
system, a force and an age.
United Nations Conference on Trade and
Development (UNCTAD)
• Globalization is the closer integration of
national economies through trade and
financial flows as well as cross- border
migration of people.
• Thru imports and exports and FDI
EUROPEAN UNION (EU) “four freedoms”
• free movement of goods or products-
abolition of taxes on imported products
• free movement of services
• free movement of capital or investment-
deregulating or lifting of strict banking
(financial institutions)
• free movement of persons- abolishing
visa
Thomas Friedman’s
• “The Lexus and the Olive Tree”
• “Globalization is not static but a dynamic
ongoing process”.
Globalization involves:
• inexorable integration of markets, nation-
states and technologies to a degree never
witnessed before
BENEDICT ANDERSON
• He explained the “early globalization in
the last two decades of the 19th century
involves:
❖ inventions of the telegraphs/
inauguration of Universal Postal
Union
❖ wide use of steamship
❖ thickening latticework of
railways/ trains
PHILOSOPIES AND IDEOLOGIES OF/ON
AGAINST GLOBALIZATION
Globalization’s backers, supporters, and
ideologues
Six Core Claims:
• Globalization is about the liberalization
and global integration of markets.
• Globalization is inevitable and
irreversible.
• Nobody is in charge of globalization.
• Globalization benefits everyone (… in the
long run).
• Globalization furthers the spread of
democracy in the world.
• Globalization requires war on terror
CRITICS OF GLOBALIZATION
Anti-globalization side
• wants an end to what it considers as a
highly imbalanced system of globalization
that favors the First World over Third
World, corporations over citizens and
communities, and profit seeking over
environmental sustainability.
Alter-globalization current
• latter favors the current system of
globalization to make it more humane,
more pro-environment, and more
grassroots-driven rather than staying as a
top down imposition.
POSITIVE ASPECTS
Multiculturalism and Multilingualism
• Free exchange of goods and services need
swift communication, hence the need
to learn as many languages as possible.
Free trade
• Reduces cost on selling products almost
worldwide provided huge profits for a
number of big transnational corporations,
and resulted in cheaper prices of some
consumer goods such as cellphones and
computers.
Educational exchanges
• The rise of multilingualism inevitably
leads to the study of diverse cultures and
eventually, more educational exchanges
such as EU’s Erasmus Mundus Program
between universities in all continents.
Migration
• Citizens can freely visit and work in any
country and Third World migrants can
relatively easily find jobs in and eventually
migrate to more developed countries.
Global cooperation
• Globalization’s rules and mechanisms are
created and governed by global entities such
as WTO- where almost countries are
represented, encourage global cooperation on
many issues ranging from climate change and
poverty eradication.
NEGATIVE ASPECTS
Linguistic hegemony of English
• Globalization compels other countries to use
English language, even prioritizing it over
their own national languages.
Cultural homogenization
Third World dependence on the First
World
• Despite globalization’s obvious
contribution to the successful leap of
some countries from Third to First World
status, more Third World countries still
complain that the current setup favors
developed countries more.
Global income and wealth inequality
• As only the biggest corporations seem to
benefit from stiff competition and
unbridled free trade.
Tax injustice
• Under globalization, countries compete
for foreign investments and are forced to
lower corporate taxes
Racism and anti-migrant sentiment
• As corporations in many First World
countries hire more migrants to save on
wages, First World working-class citizens
complain about being left behind in their
own countries, hence partly fueling the
rise of racism and anti-migrant sentiment.
FIRST SECOND
WORLD WORLD
THIRD
WORLD
The Structures of Globalization
• Praises and criticisms for globalization
about people’s day-to-day experiences
are certainly guided and affected by
economics factors.
The Global Economy’s operation is
shaped and influenced by
• Refer to the exchanges of goods and
services integrated into a huge single
market.
Governments
• Its Function As Leading Policymakers And
Implementers Of Globalization’s Tenets.
Global Institutions
• Partly Managed And Funded By
Governments And Their Representatives.
Global Corporations
• Leading Role In Making The Cogs Of
Capitalist Globalization Operate As
Smoothly, Efficiently, And Profitably As
Possible.
The GOVERNMENT influences economic activity
through two approaches: monetary policy and
fiscal policy.
Monetary policy
• works on the principle of protecting the
supply of the money by making sure that
commodity prices are stable and the
citizens of the country are employed.
• gov’t should maintain supply of money to
avoid weakening of peso over
dollar.(peso weakens when more dollars
go out of the country and only few dollars
come in- reduce import, export product
became cheaper to foreign buyers,
resulting them to import more product to
us.) (net export expands but the GDP may
retain or may decline)(gov’t should
ensure that the people are employed to
ensure the movement of money;
Law of Supply and Demand
• people needed to have source of income
so they have enough money to buy basic
commodity and avail services, otherwise
if people do not have money to purchase
product- result to high supply and very
low prices of product, having great impact
on the economy; very low prices could
result to a slower inflation which is
synonymous on lower economic growth)
Fiscal policy
• government strategy to get more taxes to
people and spend those taxes for the
betterment of the economy of the
country.(to increase percentage of people
paying taxes, reforms of the gov’t should
be geared towards economic race
wherein the projects in the
infrastructures such as development of
roads and highways, good quality
education, and health care systems should
be leading to the improvement of labor
productivity to ensure production and
maximization of profits)
Tax Reform for Acceleration and
Inclusion (TRAIN) Law
• companies and firms who earn more pays
more taxes
Foreign Direct Investment (FDI)
• one of the biggest contributor in terms of
paying corporate taxes
Lender of last resort
• A financial institution that offers loans to
countries, banks, or other financial
institutions in times of crisis. Mostly first
world countries (esp US countries) since they
are the financial donors of this global
institution (funds came from the membership
fee / donated by the member counties)
(higher donation, higher influence)
• are also partly managed and funded by
governments and their representatives
World Trade Organization (GATT
General Agreement on Tariffs and
Trades)
• 159 members, represents 97% of world’s
trade
• place where governments try to sort out
the trade problems they face with each
other
• promote economic partnership through
free trade by helping each other to have
access to the world’s so many products
through imports and exports with less
restrictions
• encourage countries to focus on
producing the products they have
advantage, to promote more exports and
profits, helping resolve the country’s
problem in shortage of supplies and filling
the gr ab by importing products they have
difficulty in producing
Protectionism
• Protectionism is the economic policy of
restricting imports from other countries
through methods such as tariffs on
imported goods, import quotas, and a
variety of other government regulations.
TRADE LIBERALIZATION
• Trade liberalization is the removal or
reduction of restrictions or barriers on
the free exchange of goods between
nations
Furthermore, the WTO claims to be
capable of doing ten specific things:
1. Cut living costs and raise living standards;
2. Settle disputes and reduce trade tensions;
3. Stimulate economic growth and
employment;
4. Cut the cost of doing business
internationally;
5. Encourage good governance;
6. Help countries develop;
7. Give the weak stronger voice;
8. Support the environment and health;
9. Contribute to peace and stability; and
10. Be effective without hitting the headlines.
World Bank (IBRD International Bank
for Reconstruction and Development)
• Multinational financial institution
established at the end of WWII (1944),
alongside with GATT
• provide long-term capital for the
reconstruction and development of
member countries, provide much of the
planning and financing for economic
development projects involving billions of
dollars
Three primary goals:
• Facilitate Reconstruction by providing
financial assistance especially for the
poor and developing countries for their
infrastructures headed towards
economic progression.
• Restore and Expand Trading through
imports and exports
• Ensure Monetary and Financial Policy by
monitoring exchange rates and lending
reserved currencies to nation with trade
deficits
Bretton Woods System
• Bretton Woods, New Hampshire
• 44 countries agreed to tie their
currencies to US dollar
• American politicians assure to the rest of
the world that each currency was
dependable by linking the sell of US
dollars to gold (value is non-inflationary)
 • “Golden age of dollar” 1dollar= value of
35oz of bullion of gold in the country
• IBRD (International Bank for
Reconstruction and Development
• IDA (International Development
Association)
• IFC (International Finance Corporation)
• MIGA (Multilateral Investment
Guarantee)
• ICSID (International Center for Settlement
of Investment Disputes)
International Monetary Fund (IMF)
• similar function with World Bank
• provide loans to member countries
• ensure stability of the international
monetary system
United Nations Conference on Trade
and Development (UNCTAD)
• similar to WTO but for 3rd world countries
since they feel that they are the underdogs
of 1st world countries on WTO
• provides forum where the developing
countries can discuss problems related to
economic development. Its main objective
is to formulate the policies related to the
areas of development such as trade,
finance, transport and technology.
MULTINATIONAL CORPORATIONS
• help a developing host country by
increasing investment, income and
employment in its economy.
• They basically seeks maximization of
profits by using cheap raw materials and
labor and have contributed immensely to
the global economy.
Market Integration
• A process of economic transformation
within a region, bloc, or group of countries,
it is a situation in which separate markets
for the same products become one single
market.
2 Types:
Vertical Integration
• purchase of companies at all levels of
production
Horizontal Integration
• purchase of competing companies in the
same industry
• making one single market wherein if
different companies offer the same product,
they can get their raw material in one
company
➢ Bold ventures of global corporations into
research and development and investments
in new products and services have done
much facilitate the growth of trade between
countries, and consequently, the further
spread of globalization. (so they can keep
consumers engage with their product)
➢ Global market integration cannot be
achieved without the growth of global
corporations
➢ Modern day global corporations can trace
their lineage to the era of colonialism when
colonizers exploited colonies as cheap
sources of raw materials and, oftentimes,
serve labor; or as markets for surplus goods.
The WORLD-SYSTEMS THEORY
• The world-systems theory, developed by
sociologist Immanuel Wallerstein, is an
approach to world history and social
change that suggests there is a world
economic system in which some countries
benefit while others are exploited.
• There are three-level hierarchy approach
to economics, which consists of core,
periphery, and semi-periphery countries,
in the context of global inequality.
 The CORE COUNTRIES dominate and
exploit the peripheral countries for labor
and raw materials.
 The PERIPHERAL COUNTRIES are
dependent on core countries for capital.
 The SEMI-PERIPHERAL COUNTRIES
share characteristics of both core and
peripheral countries.
 This theory emphasizes the social
structure of global inequality.
Alejandro Lichauco (Manila Different stages of economic
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• Alejandro Lichauco sees as the IMF and Differ No Com Fact Com Com
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• Despite the positive declarations of WTO, stage rnal Exte and Curr Econ
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• Common folk affected by free trade een
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TRADE BLOC
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TRADE BLOC Mone X X X X
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WORLD’S FREE TRADE AREAS
1. NAFTA (North American Free Trade)
• The North American Free Trade
Agreement is an agreement signed by
Canada, Mexico, and the United States,
creating a trilateral trade bloc in North
America.
2. AFTA (Association of Southeast Asian
Nations Free Trade Area)
• Free trade area in South East Asia
founded 1992. Includes: Brunei,
Indonesia, Malaysia, Philippines,
Singapore and Thailand, Vietnam, Laos,
Myanmar and Cambodia.
3. MERCOSUR (Southern Common Market)
• officially Southern Common Market
• is a South American trade bloc
established by the Treaty of Asunción in
1991 and Protocol of Ouro Preto in 1994.
Its full members are Argentina, Brazil,
Paraguay and Uruguay.
4. COMESA (Common Market of Eastern and
Southern Africa)
• The Common Market for Eastern and
Southern Africa is a free trade area with
twenty-one member states stretching
from Tunisia to Eswatini.
5. SAFTA
• South Asia free trade area based around
the Indian sub-continent. Includes
Afghanistan, Bangladesh, Bhutan, India,
Maldives, Nepal, Pakistan and Sri Lanka.
6. AFRICAN UNION
• 55 countries of the continent of Africa.
Created to forge closer political and
economic ties. It has aspirations to
become a free trade area.
7. European Union
• is a political and economic union of 28
member states that are located primarily
in Europe.
8. CPTPP (Comprehensive and Progressive
Agreement for Trans- Pacific Partnership)
• Australia, Brunei, Canada, Chile, Japan
Malaysia, Mexico, New Zealand, Peru,
Singapore, Vietnam
ADVANTAGES OF TRADING BLOCKS
• Tariff removal leads to trade creation
• Increased trade enables increased
specialization
• Catch-up effects.
• Gives small countries a greater say in
global trade agreements
• Increased competition.
• lower transport and similar cultural and
economic ties.
• Increased competition which may results
to low prices and quality products and
services
DISADVANTAGES OF TRADING BLOCS
• Joining a customs union may lead to
increased import tariffs
• Increased interdependence on economic
performance in other countries in trading
bloc.
• Loss of sovereignty and independence.
• Structural unemployment