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INTRODUCTION TO GLOBALIZATION
GLOBALIZATION
is the process in which people, ideas and goods spread throughout the world, spurring more
interaction and integration between the world's cultures, governments and economies.
is a process of interaction and integration among the people, companies, and governments of
different nations, a process driven by international trade and investment and aided by
information technology. This process has effects on the environment, on culture, on political
systems, on economic development and prosperity, and on human physical well-being in
societies around the world.
is the process of integration of economies across the world through cross-border flow of
factors product and information.
According to the International Monetary Fund (IMF) globalization is the growing economic
interdependence of countries worldwide through increasing volume and variety of cross border
transactions in goods and services and of international capital flows and also through the more
rapid and wide diffusion of technology.
It involves both the creation of new social networks and the multiplication of existing
connections that cut across traditional, political, economic, cultural, and geographical
boundaries.
Globalization is reflected in the expansion and the stretching of social relations, activities,
and connections.
Globalization involves the intensification and acceleration of social exchanges and activities.
Globalization processes do not occur merely or an objective, material level but they also
involve the subjective plane of human consciousness.
Dimensions of Globalization
1. Economic Dimension
This refers to the extensive development of economic relations across the globe as a result of
technology and the enormous flow of capital that has stimulated trade in both sources and goods.
2. Political Dimension
This refers to an enlargement and strengthening of political interrelations across the globe.
3. Cultural Dimension
This refers to the increase in the amount of cultural flows across the globe.
Individualism and consumerism which are the dominant cultural characteristics of our age
and the drive for economic success stimulated by the internet and other technological
devices circulate much more easily than they did in earlier periods.
4. Religious Dimension
Social justice
This refers to the creation of the conditions in which the first two categories
of justice can be realized and the common good identified and defended.
5. Ideological Dimensions
Ideology is a system of widely shared ideas, beliefs, norms and values among a group of
people. It is often used to legitimize certain political interests or to defend dominant power
structures. Ideology connects human actions with some generalized claims
UNIT II : THE STRUCTURES OF GLOBALIZATION
Session 2.1 : THE GLOBAL ECONOMY
International monetary system (IMS) refers to a system that forms rules and standards for
facilitating international trade among the nations. It helps in reallocating the capital and investment
from one nation to another. It is the global network of the government and financial institutions that
determine the exchange rate of different currencies for international trade. It is a governing body
that sets rules and regulations by which different nations exchange currencies with each other. IMS
as rules, customs, instruments, facilities, and organizations for effecting international payments with
the main task of facilitating cross-border transactions, especially trade and investment. It also
reflects economic power and interests, as money is inherently political, an integral part of high
politics or diplomacy.
Gold was believed to guarantee a non-inflationary, stable economic environment, a means for
accelerating international trade and the gold standard functioned as a fixed exchange rate regime,
with gold as the only international reserve. Gold Standard is a system of backing a country’s
currency with its gold reserves. After World War I, the use of gold declined due to increased
expenditure and inflation which were caused by war. Major economic powers were on gold
standards but could not maintain it and failed because of the Great depression in 1931.
In 1944, 730 representatives of 44 nations met at Bretton Woods, New Hampshire, United
States to create a new international monetary system called as the Bretton Woods system, the aim
of which is to create a stabilized international currency system and ensure a monetary stability for all
the nations. Since the United States held most of the world’s gold, all the nations would determine
the values of their currencies in terms of dollar. The central banks of nations were given the task of
maintaining fixed exchange rates with respect to dollar for each currency. The Bretton Woods
system ended in 1971 as the trade deficit and growing inflation undermined the value of dollar in the
whole world. In 1973, the floating exchange rate system, also known as flexible exchange rate
system was developed that was market based. To assess whether the gold standard was successful,
the following roles of a properly designed IMS must be considered: to lend order and stability to
foreign exchange markets, to encourage the elimination of balance-of-payments problems, and to
provide access to international credits in the event of disruptive shocks. The gold standard has never
worked satisfactorily in controlling inflation or maintaining equilibrium in international transactions
International trade is the exchange of goods, services and capital across national borders.
This type of trade allows for a greater competition and more competitive pricing in the market. The
two key concepts in the economics of international trade are specialization and comparative
advantage. Comparative advantage comes in; so long as the two countries have different relative
efficiencies, the two countries can benefit from trade – the country with absolute advantage will still
benefit by directing its resources to those goods where it is most productive and trading for the
others while specialization refers to this process; countries as well as individual businesses can
maximize their welfare by specializing in the production of those goods where they are most
efficient and enjoy the largest advantages over rivals.
Trade policies on the other hand refer to the regulations and agreement of foreign countries.
It defines standards, goals, rules, and regulations that pertain to trade relation between countries.
Tariffs
These are taxes or duties paid for a particular class of imports or exports.
Trade barriers
Theses are measures that governments or public authorities introduce to make imported
goods or services less competitive than locally produced goods and services. They are state imposed
restrictions on trading a particular product or with a specific nation.
Safety
This ensures that imported products in the country are of high quality. Inspection regulations
laid down by public officials ensure the safety and quality standards of imported products.
The World Trade Organization (WTO) deals with the global rules of trade between nations
with the main function of ensuring that trade flows smoothly, predictably and freely. It is the only
global international organization dealing with the rules of trade between nations with WTO
agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their
parliaments at its heart. WTO is viewed as the means by which industrialized countries can gain
access to the markets of developing countries.
Market integration refers to how easily two or more markets can trade with each other. It occurs
when prices among different locations or related goods follow similar patterns over a long period
of time.
International companies – operates of such companies lie on single home country as the base
center. They are mainly exporters and importers. The office is only existing in home country and
there is no foreign direct investment in other countries.
Multinational companies – companies have direct operations in more than a single country.
Focused on adapting their products service to each individual local market.
Global companies – larger than multinational corporations. They market their products through
the use of the same coordinated image/brand in all markets.
CEO (Chief Executive Officer) - main role of overseeing the operations of the entire company.
CFO (Chief Financing Officer) – highest ranking finance professional in an
organization/company and responsible for the financial health of business.
1. Financing
A group’s tax bill can be reduced by the CFO like borrowing in countries with high tax
rates and lending to operations in countries with lower rates.
2. Risk Management
Global firms can offset natural currency exposures through worldwide operations instead
of managing currency exposures through financial markets.
3. Capital budgeting
Getting smarter on valuing investment opportunities CFOs can add value.
THE GLOBAL INTERSTATE SYSTEM
Nation - is a group of people with common history, culture, or language, and tradition.
State – is a group of people exercising permanent power within a specified territory.
In everyday political speech and media commentary, the terms nation and states are used
interchangeably. The term nation-state has a dual concept, with the modern state going back to the
Peace of Westphalia, and nationalism tracing back to Protestantism, the Enlightenment, the rise of
the vernacular, with both concepts of nation and state fused in the French Revolution. Nation –states
are territorial organizations characterized by the monopolization of legitimate violence (qua states)
while nation –states are membership associations with a collective identity and a democratic
pretension to rule (qua nation).
The rising momentum of global free-market capitalism in the final decades of the 20th
century, the accompanying rise in transnational enterprises, and the resulting disparities between
easy flows of money and commodities across international boarders and the legal barriers and
logistical hurdles that keep most workers tied to their home communities are associated with
globalization.
The belief that globalization imposes a forced choice upon states either to conform to free
market principles or run the risk of being left behind is termed into a phrase called “Golden
Straitjacket” by Thomas Friedman, a neoliberalism journalist and advocate, to illustrate the forcing
of states into policies that suit the preferences of investment houses and corporate executives
(Electronic Herd) who swiftly move money and resources into countries favored as adaptable to the
demands of international business and withdraw even more rapidly from countries deemed
uncompetitive.
There are two things that will happen if a country is in Golden Straitjacket: the economy
grows and politics shrinks. It is a straitjacket because it narrows the political and economic policy
choices of those in power to relatively tight parameters.
Westphalian Sovereignty
It is based on the principle that one sovereign state should not interfere in the domestic
arrangements of another.
Interdependence Sovereignty
It is the capacity and willingness to control flows of people, goods and capital into and out of
the country.
Domestic Sovereignty
It is the capacity of a state to choose and implement policies within the territory.
7. Complete economic integration – final stage of economic integration in which member states
completely forego independence of both monetary and fiscal policies. (over all integration)
Theories of European Integration
Neo-functionalism
This theory focuses on the supranational institutions of the EU of which the main driving
forces of integration are interest group activity at the European and national levels, political party
activity, and the role of governments and supranational institutions. The European integration is
mostly seen as an upper class- driven process- driven by national and international political and
economic upper crusts. The core of neo-functionalism is the use of the concept ‘spill –over’,
situations when an initial decision by governments to place a certain sector under the authority of
central institutions creates pressures to extend the authority of the institutions into neighboring areas
of policy, such as currency exchange rates, taxation, and wages. This core claim meant that
European integration is self- sustaining: ‘spill-over’ triggers the economic and political dynamics
driving further cooperation.
Intergovernmentalism
This theory provides a conceptual explanation of the European integration process. The main
concept of the Intergovernmentalism is emphasizing on the role of national states in the European
integration; in another words it argues that "European integration is driven by the interest and actions
of nation states.
Liberal Intergovernmentalism
Liberal intergovermentalists stated that the bargaining power of member states is important
in the pursuit of integration, and package deals and side payments also occur in the process of
making deals.
A social movement is a type of group action. It refers to the organizational structures and
strategies that may empower oppressed populations to mount effective challenges and resist the
more powerful and advantaged elites". They are large, sometimes informal, groupings of individuals
or organizations which focus on specific political or social issues. They carry out, resist, or undo a
social change. They provide a way of social change from the bottom within nations. A social
movement is a collective challenges to elites, authorities, other groups or cultural codes by people
with common purposes and solidarity in sustained interactions with elites, opponents and authorities.
The global justice movement describes the loose collection of individuals and groups often
referred to as a “movement of movements”, who advocate fair trade rules and are negative to current
institutions of global economics such as the World Trade Organization. The movement is often
labeled the anti-globalization movement by the mainstream media. Those involved, frequently deny
that they are anti-globalization, insisting that they support the globalization of communication and
people and oppose only the global expansion of corporate power. Anti- capitalist and universalist
perspective on globalization in also indicated in the term differentiating the movement from those
whose politics are based on a defense of conservative on national sovereignty as they identified
opponents of globalization.
Factors which lead to the increase and acceleration of movement of people, information,
commodities and capital.
Problems afflicting the world today which are increasingly transnational in naturethose that
cannot be solved at the national level or State to State negotiations.
1. Poverty
2. Environmental pollution
3. Economic crisis
4. Organized crime and terrorism
Effects of greater economic and social interdependence to national decision- making processes.
The following can be guaranteed only by the States through independent courts:
Global Divides: The North and the South (focus: Latin America)
Global South refers to the regions of Latin America, Asia, Africa, and Oceania mostly low
income and often politically or culturally marginalized. It may also be called the "developing
World" such as Africa, Latin America, and the developing countries in Asia, "developing
countries," "less developed countries," and "less developed regions” including poorer "southern"
regions of wealthy "northern" countries.
In general, Global South refers to these countries' "interconnected histories of colonialism,
neo-imperialism, and differential economic and social change through which large inequalities in
living standards, life expectancy, and access to resources are maintained. Contemporary critics of
neo liberal globalization use the global south as a banner to rally countries victimized by the violent
economic cures of institutions like the International Monetary Fund.
Regionalization entails complex and dynamic interactions between and among governmental
and nongovernmental actors which resulted to hybrid East Asia. The main engines of hybridization
are explained by the successive waves of regional economic development that is powered by
developmental states and national and transnational capitalism that nurtured sizeable middle-classes
that share a lot in common in terms of professional lives and their lifestyles, in fashion, leisure, and
entertainment, in their aspirations and dreams. The middle-class occupies different positions in their
respective societies as well as in relation to their nation-states as they constitute the expanding
regional consumer market.
UNIT IV: THE WORLD OF IDEAS
Globalization and identity, globalization and human rights, globalization and culture,
or globalization and terrorism are some concepts related to the study of globalization by many
scholars. Among these concepts, the one that offers special insights is globalization and media.
Changes in migration patterns where people move easily and advancement in media which brought
changes to human life heightens globalization. As a process, globalization worked silently for
millennia without having been given a name; as a trend it had been with us since the beginning of
history and further argued that a multitude of threads connect us faraway places from an ancient
time.
1. Oral Communication
Of all forms of media, human speech is the oldest and most enduring. Humans are allowed
to cooperate and communicate through language. Languages as a means to develop the ability to
communicate across culture are the lifeline of globalization. Without language there would be no
globalization; and vice versa, without globalization there would be no world languages.
2. Script
Writing is humankind’s principal technology for collecting, manipulating, storing,
retrieving, communicating and disseminating information. Script is an important tool for
globalization as it considers the integration of economy, politics and culture to the world.
4. Electronic Media
It refers to the broadcast or storage media that take advantage of electronic technology. On
going globalization processes such as economic, political, and cultural are revolutionized by a host
of new media in the beginning of the 19th century. These electronic media in the likes of telegraph,
telephone, radio, film, and television continuously open up new perspectives of globalization. In the
20th century, the only available mass media in remote villages was the radio while film was soon
developed as an artistic medium for great cultural expression. The most powerful and pervasive
mass media is television as it brought the visual and aural power of film with the accessibility of
radio. The introduction of television was a defining moment in globalization. Thus,the world is
proclaimed a global village because of television.
5. Digital Media
Phones and television are now considered digital while computer is considered the most
important media influencing globalization.
Popular Music and Globalization
Music participates in the reinforcing of boundaries of culture and identity. Popular music
explains the complex dynamics of globalization not only because it is popular but music is highly
mediated, is deeply invested in meaning and has proven to be an extremely mobile and resourceful
capital.
Globalization implicates religions in several ways. It calls forth religious response and
interpretation. Religions played important roles in bringing about and characterizing globalization.
Among the consequences of this implication for religion is that globalization encourages religious
pluralism. Religions identify themselves in relation to one another, and they become less rooted in
particular places because of diasporas and transnational ties. Globalization further provides fertile
ground for a variety of noninstitutionalized religious manifestations and for the development of
religion as a political and cultural resource.
2. Post-Modernist Perspective
It rejects the Enlightenment, modernist values of rationalism, empiricism, and science, along
with the Enlightenment, modernist structures of capitalism, bureaucracy, and even liberalism. The
core value of post-modernism is expressive individualism. The post-modernist perspective can
include “spiritual experiences,” but only those without religious constraints. Post-modernism is
largely hyper- secularism, and it joins modernism in predicting, and eagerly anticipating, the
disappearance of traditional religions. Globalization, by breaking up and dissolving every traditional,
local, and national structure, will bring about the universal triumph of expressive individualism.
Forms of Glocalization
1. indigenization
2. vernacularization
3. nationalization
4. transnationalization
Take note for midterm: