TECHNOLOGICAL UNIVERSITY OF THE PHILIPPINES

THE
CONTEMPORARY
WORLD MC DARYL P. CUARESMA, LPT
 MARKET GLOBALISM
CHAPTER 2

LEARNING OUTCOMES:
• Describe the changes in the world economy;
• Identify the three forms of economic system;
• Distinguish the three forms of economic system;
• Explain the characteristics of the World Bank Ranking; and,
• Explain the principles, ideas, and arguments postulated on the Six Core
Claims of Market Globalism
 •

AN OVERVIEW OF THE
WORLD ECONOMY
 ECONOMIC SYSTEMS

MARKET COMMAND MIXED

ALLOCATION ALLOCATION ALLOCATION
Relies on households and firms
to allocate resources. It is an
economic democracy where
people have the option to buy
according to their choice and
budget. The role of the state in a
market economy is to promote
competition and ensure
consumer protection.
North America, Western Europe
and Japan
 LOW-INCOME LOW-MIDDLE-
COUNTRIES INCOME
WORLD BANK COUNTRIES
FOUR-CATEGORY
SYSTEM

HIGH-MIDDLE- HIGH-INCOME
INCOME COUNTRIES
COUNTRIES
SOURCE: WORLD BANK DATA, 2010
 LOW-INCOME COUNTRIES
Have a GNP per Capita of Less than $1,045.
• Limited industrialization and high
percentage of the population engaged
in agriculture and subsistence farming
• High birth rates
WORLD BANK • Low literacy rates
FOUR-CATEGORY •• Heavy reliance on foreign aid
Political instability and unrest
SYSTEM • Concentration in Africa, South of
Sahara

For Countries under this category, see the

Annex 3,pg 40-50 attached link
https://openknowledge.worldbank.org/bits
tream/handle/10986/23628/The0World0Ba
nk00countries0by0income.pdf;sequence=1
 LOW-MIDDLE-INCOME COUNTRIES
Have a GNP per Capita of between $1,046-
$4,095.
• Less-Developed Countries (LDCs)
• Typically at relatively early stages of
industrialization
WORLD BANK • Factories supply a growing domestic
FOUR-CATEGORY • market
A major competitive advantage in
SYSTEM mature, standardized, labor-intensive
industries
• Great example is Indonesia.

For Countries under this category, see the

Annex 3,pg 40-50 attached link
https://openknowledge.worldbank.org/bits
tream/handle/10986/23628/The0World0Ba
nk00countries0by0income.pdf;sequence=1
 UPPER-MIDDLE-INCOME COUNTRIES
Have a GNP per Capita of between $4,096-
$12,695.
• Industrializing or Developing Countries
• A percentage of population engaged in
agriculture drops as they move to
industrial sector
WORLD BANK • Increasing wages
• High Literacy and Advanced education
FOUR-CATEGORY • Innovative local companies can become
SYSTEM formidable competitors
• Newly Industrializing Economies (NIEs)
• Received ISO-9000 Certifications
• Emerging technology

For Countries under this category, see the

Annex 3,pg 40-50 attached link
https://openknowledge.worldbank.org/bitstre
am/handle/10986/23628/The0World0Bank00
 HIGH-INCOME COUNTRIES
Have a GNP per Capita of more than
$12,696.
• Advanced, developed, Industrialized or
Post-Industrial Country
• Reached their present income levels
WORLD BANK through a process of sustained
FOUR-CATEGORY • economic growth
Product and Market opportunities relies
SYSTEM on new products and innovations
• High level of ownerships

For Countries under this category, see the

Annex 3,pg 40-50 attached link
https://openknowledge.worldbank.org/bits
tream/handle/10986/23628/The0World0Ba
nk00countries0by0income.pdf;sequence=1
 THE SIX CORE CLAIMS OF
MARKET GLOBALISM
01

02

03

04

05

06
GLOBALIZATION: LIBERALIZATION AND
GLOBAL INTEGRATION OF MARKETS
• Free Market, ability to bring about greater social
integration and material progress.
• Libertarian variant of liberalism referred as neo-
liberalism-"free market" and "free trade"
• Globalization-interlocking of 2 concepts, "liberty" and
"integration", the triumph of market over governments
• Free-Market Capitalism-the more you let market
forces rule and more you open your economy to free
trade and competition, the more efficient your
economy will be.
• Market Globalist-natural economic phenomenon and
reduction of governmental interference
• Privatization, Free Trade and Unfettered Capital
Movement
GLOBALIZATION: INEVITABLE AND
IRREVERSIBLE
• Globalization reflects the spread of irreversible market
forces driven by technological innovations that make
the global integration of national economies.
• Governments, Political Parties and Social Movement
had no choice but to 'adjust' and to coordinate and
provide necessary facilitation of the integration of
national economies in the new global market.

Function of Politics:
• Neutralizes the challenges of alter-globalist opponents
by depoliticizing the public discourse about
globalization
• Political groups ought to comply and make the best of
an unalterable situation.
NOBODY IS IN CHARGE OF
GLOBALIZATION
• 'Self-Regulating Market'-the semantic link between
globalization-market and the adjacent idea of 'NO
LEADER' is simple.

• Robert Hormats (1998), emphasized that the great

beauty of globalization is that no one is in control.

• Thomas Friedman (1999), no one is in charge and that

the global market today is an Electronic Herd of often
anonymous stock, bond and currency traders and
multinational investors.
GLOBALIZATION BENEFITS EVERYONE

• Benefit for everyone is usually unpacked in material

terms such as 'economic growth' and prosperity

• Globalization provides great opportunities for the

future

• Expansion of trade, Opening of international trade

and opportunities, improved standards of living,
dissemination of information, technological innovation,
proliferation of skilled jobs.
GLOBALIZATION FURTHERS THE SPREAD
OF DEMOCRACY IN THE WORLD
• Free Market and Democracy is being synonymous

• The most obvious strategy by which neo-liberals

generate popular support for the relationship of
democracy and the market is by discrediting
traditionalism and socialism

• Francis Fukuyama (2000), 'clear correlation between

a country's level of economic development and
successful democracy'

• Voting
GLOBALIZATION REQUIRES WAR ON
TERROR
• Neo-Conservative commitment to "American Values"
of freedom, security, and free markets.

• Robert Kaplan (2003), you also have to have military

and economic power behind it, or else your ideas
cannot spread

• If global terror were no longer a major issue, it would

disappear without causing market globalism to
collapse
ACTIVITY #2
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QUIZ #1
Asynchronous Class for Quiz #1
Coverage: Chapter 1-2
Time: On our Official Schedule
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