Globalisation (2/2)

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 Essential Understanding

1.The interconnection and interdependence of nations mean that actions

undertaken by nation(s) can have vast and complex impacts.

2.While globalisation has been beneficial for all, some have benefitted much more
while others have been left behind.

3.The failed promises of globalisation have led to widespread backlash against it

and increased support for isolationist and protectionist policies.

4.There are, however, measures that should be explored to ensure a more inclusive
globalised world.
Key Question to Guide this Lecture

Is globalisation to be welcomed or feared today?

(2019)
The interconnection and interdependence of nations mean
that actions undertaken by nation(s) can have vast and
complex impacts.
Previously…

Globalisation is the process of interaction and integration of people,

markets and governments around the world.

Globalisation has led to increased interconnectedness and, as a

corollary, increased interdependence in the world.
Previously…

Globalisation is the process of interaction and integration of people,

markets and governments around the world.

Globalisation has led to increased interconnectedness and, as a

corollary, increased interdependence in the world.
 The interconnection and
interdependence of nations mean that
actions undertaken by nation(s) can
have vast and complex impacts.

 Interconnectedness implies mutual

reliance for growth and stability
between economies.

 There are multiple supply chains

running through a single economy
– and any political/economic
decision undertaken can unravel
these chains.
 The interconnection and
interdependence of nations mean that
actions undertaken by nation(s) can
have vast and complex impacts.

 Complex nature of connections

mean we do not know exactly
what will transpire once they are
unraveled.

 Major Examples:
 Iran Oil Crisis 1973
 Asian Financial Crisis 1997
 Great Recession 2008
 Ukraine-Russia Conflict 2022
Great Recession 2008

Background:
 U.S. Housing bubble burst in 2007 when many
borrowers defaulted on subprime mortgages –
which accounted for <10% of all mortgages!
 Defaults led to loss of value on mortgage backed
securities and derivatives – i.e. stock markets and
banks lost a lot of value
 One of the biggest banks affected was Lehmann
Brothers which had investments, assets, and debt in
many other countries.
Great Recession 2008

Impact (WEF, IMF, 2018):

 Economic activity declined in half of all
countries around the world within one year.
 Speculated detrimental effects on fertility
rates based on 10-year trend.
 Income inequality exacerbated, especially
where companies dealt with the crisis with
layoffs.
Great Recession
2008
Recall:
 There are multiple supply
chains running through
a single economy – and
any political/economic
decision undertaken
can unravel these
chains.

 Complex nature of
connections mean we
do not know exactly
what will transpire once
they are unraveled.
The interconnection and interdependence of nations mean that actions
undertaken by nation(s) can have vast and complex impacts.

 Case studies for you to find out

more about:
 Iran Oil Crisis 1973
 Asian Financial Crisis 1997
 Great Recession 2008
 Global Chips Shortage 2021
 Ukraine-Russia Conflict 2022
 Brexit 2016/2020
 US-China Trade War 2018 - …
 2021 Suez Canal Blockage
 Covid-19 Supply Chain
Impacts
The interconnection and interdependence of nations mean that
actions undertaken by nation(s) can have vast and complex impacts.

Considering what we’ve discussed in the last lecture and here – what
do you think? Should we welcome or fear globalisation?
While globalisation has been beneficial for all, some have
benefitted much more while others have been left behind.
While globalisation has been beneficial for all, some have
benefitted much more while others have been left behind.

❑ Emergence of MNCs and TNCs helped

facilitate economic globalisation
❑ Large corporations operating across borders
❑ Primarily from rich, advanced economies
❑ Concentrates capital flow
❑ Takes advantage of lower costs overseas
 While globalisation has been beneficial for all, some have
benefitted much more while others have been left behind.

• Anger against
globalisation by the
masses

• “left behind” In
To the
World
US, the
explain according
Inequality
to the recently
rise in inequality
Report 2018,
that beganreleased
the turn
share
in the
of
1980s and has accelerated since the of the
national income
century, many claimed
have pointed byout
thethat
topindicators
1% of the of
population rose
globalisation, from
such as11% in 1980 to 20%
the trade-to-GDP in 2014,
ratio, have
• “rich getting richer compared to just 13%
also risen since 1980. for the entire bottom half of
the population.
while poor are getting
poorer”
 While globalisation has been beneficial for all, some have
benefitted much more while others have been left behind.

• Rich MNCs give

(relatively) high
wages in LDCs
…women working in Asian factories supplying Gap and H&M
“Most
being factories in Leicester
sexually and physicallyareabused…
small workshops,
More thanoften540
Fast fashion relies on globalisation and like all exploitative
housed
workers inat dilapidated buildings
supplywiththe little investment in
• Save on cost of described
factories that
incidents of threatsventilation.
and abuse,
two retailers
industries, it is powered by cheap labour used to generate
building safety and modern It according
have
is inconceivable
to two
huge profits with low production costs. From Bangalore to
labour, production that such factories
separate would be able
reports published last to operate
week by at
Leicester, the fashion industry is built upon the mass
whilst
Justiceensuring social distancing
on gender-based violence inandGapadequate
full capacity
Global
and H&M’s
Labour
COVID-19
garment
exploitation of those who work within its supply chains.
protection measures.”
supply chains… in Bangladesh, Cambodia, India and Sri
Lanka…
• Earn more money?
(At what cost?)
YouTube | Untold - 24 Apr 2015
While globalisation has been beneficial for all, some have benefitted
much more while others have been left behind.

Considering what we’ve discussed in the last lecture and here – what
do you think? Should we welcome or fear globalisation?
 The failed promises of globalisation have led to widespread backlash
against it and increased support for isolationist and protectionist policies.
The failed promises of globalisation have led to widespread
backlash against it and increased support for isolationist
and protectionist policies.

Rich get richer, but cost of living rises,

Increased interdependence → bad
so I get poorer. Where are my jobs
things happen out of my control
going?

Exploitative employment policies or Unregulated production overseas →

a lack of oversight → Human Rights detrimental impacts on the
issues environment

Why should I bear with the problems of globalisation then?

The failed promises of globalisation have led to widespread
backlash against it and increased support for isolationist
and protectionist policies.

Rich get richer, but cost of living rises,

Increased interdependence → bad
so I get poorer. Where are my jobs
things happen out of my control
• Anti-globalisation / anti-immigration movements
going?

•Exploitative
Calls employment
for policies or or Unregulated
“deglobalisation” at least production overseas →
“slowbalisation”
a lack of oversight → Human Rights detrimental impacts on the
issues environment

Why should I bear with the problems of globalisation then?

 The failed promises of globalisation have led to widespread
backlash against it and increased support for isolationist
and protectionist policies.

YouTube | Financial Times – 7 Feb 2017 YouTube | CNN - 21 Jan 2017

YouTube | euronews (in English) – 21 Jun
2016
The failed promises of globalisation have led to widespread backlash
against it and increased support for isolationist and protectionist
policies.

Considering what we’ve discussed in the last lecture and here – what do you think?
Should we welcome or fear globalisation?
The failed promises of globalisation have led to widespread backlash
against it and increased support for isolationist and protectionist
policies.

Considering what we’ve discussed in the last lecture and here – what do you think?
Should we welcome or fear globalisation?
YouTube | World Economic Forum – 29 Jan 2021
There are, however, measures that should be explored to
ensure a more inclusive globalised world.
There are, however, measures that should be explored to
ensure a more inclusive globalised world.
There are, however, measures that should be explored to
ensure a more inclusive globalised world.

Overwhelmingly positive for society

Increased life expectancies
Drastic reduction in global poverty rates
Increased SOL in many countries, etc. Counter
Terrorism

Global interdependence as a key point

to begin diplomatic discussions for
solving global issues
So, what do we do about the numerous problems highlighted previously?

There are, however, measures that should be explored to ensure a

more inclusive globalised world.
There are, however, measures that should be explored to
ensure a more inclusive globalised world.

Inclusivity More Cooperation

There are, however, measures that should be explored to
ensure a more inclusive globalised world.

• “Trickle-down” economics has not worked

• Business regulations need to be changed

National governments
…The business tax cuts mayof wellrecent
the need 2017
to examine options
tax lawand
(known of
as
Taxation
…the extentpolicy
of and lies at
redistribution the core
could of
be inequality social
universal
the Tax basic
Cuts income
Jobs Act) (UBI)
were orincreased.
too otherto be
large This can be
redistributive
affordable;
protection
done through through combination
channels of of increases
tax avoidance, tax
tosome in tax rates
Inclusivity Tax
• (greater
both laws
alternatives
Republicans
expenditures,
by job
need
dealand
tax
displacement,
havens,
progressivity in toand
income
regardless
be
withDemocrats
revised
householdhad income
unfairness
taxes;
of the
declines
previously
of tax systems.
increased
causes.
caused
suggested
reliancegiven
on
more responsible revenue-neutral reforms. However,
wealth andbaseline
the new propertycreated
taxes) and programs
by the 2017 law,to help those
we will whoto
need
lose out from globalization.
• Wealth needs to be redistributed more fairly
increase taxes on the business community.
 There are, however, measures that should be explored to
ensure a more inclusive globalised world.

• Success and/or failure of the globalised system

requires fair and open cooperation from
everyone

More Cooperation • Any implementation or progress requires

coordination between stakeholders
 There are, however, measures that should be explored to
ensure a more inclusive globalised world.

• Success and/or failure of the globalised system

requires fair and open Counter
cooperation from
everyone Terrorism

More Cooperation • Any implementation or progress requires

coordination between stakeholders along the
supply chains
Conflict
 There are, however, measures that should be explored to
ensure a more inclusive globalised world.

A better approach would be based on effective forms of

multilateral and global
Covid-19 also cooperation.our
has crystallised ...for example, the world
understanding of the
In the national security domain, countries should work
should
threatsdevelop a more
globalisation ambitious
poses… shared early-warning
Only co-ordinated actions can
together to develop what are essentially “arms-control
More Cooperation system
addressandthis
agree to stockpile
“butterfly medical
defect” equipment inas
of globalisation,
treaties” for cyberspace, data governance, artificial
regional
no one
centers,
country overseen by threat…We
can stop the the World need
Health to Organization, with
redouble our efforts
intelligence, and bio-engineering.
established
to create acost-sharing policies better
healthier, greener, and flexible deployment
regulated and more
plans.
inclusive globalisation.
There are, however, measures that should be explored to ensure a
more inclusive globalised world.

Considering what we’ve discussed in the last lecture and here – what do you think?
Should we welcome or fear globalisation?
1.The interconnection and interdependence of nations mean
that actions undertaken by nation(s) can have vast and
complex impacts.

2.While globalisation has been beneficial for all, some have

benefitted much more while others have been left behind.

3.The failed promises of globalisation have led to widespread

backlash against it and increased support for isolationist and
protectionist policies.

4.There are, however, measures that should be explored to

ensure a more inclusive globalised world.
 YouTube | eurofinancechannel – 2 Nov 2016
Dr. Ian Goldin Professor of Globalisation and Development, Oxford University