TOPIC

ECONOMIC GLOBALIZATION

“ Economic globalization is a complex issue, partly economic globalization is only

one part of it. Globalization is greater global closeness, and that is cultural, social,
political, as well as economic.”
Amartya Sen

LEARNING OBJECTIVES

At the end of this topic, students will be able to:

1. define economic globalization;
2. define the modern world system;
3. identify the three level hierarchy of the modern capitalist world-
economy and
4. articulate a stance on global economic integration.
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PRESENTATION OF CONTENT

DEFINITION OF ECONOMIC GLOBALIZATION

The International Monetary Fund (IMF) regards “economic globalization”
as a historical process representing the result of human innovation and
technological progress. It is characterized by increasing integration of economies
around the world through the movement of goods, services, and capital across
borders.

The global economic system, beginning in 1896, had reached its peak in
1914. There are various changes and improvements that characterize economic
globalization past and present. Structure of transportation, communication, and
capital are comparable then and now.

With the emergence of transnational companies these brought changes to

our country’s economy. For example Sony, Time Warner, Comcast, Vivendi SA,
Televisa, and Grupo Globo. Their collective vision is the media that transcends
physical barriers including national borders to reach as many people as possible.
Such companies can provide work and enrich our economy. TNMC (transnational
media corporation) production creates media commodities, ideologies, and profit,
as it also produces and reproduces the capital relation itself. (Therborn, 2008,
p.137) the underlying motivation for capitalist cultural hegemony.

Transnationalizing production to local sites does not disturb the TNMC

“organizational hierarchy or the forms of specialization which stratify the working
class and create a social layer of administrators and overseers who rule in the
name of capital over the day to day operations in the workplace” (Harvey, 1999,
p.31) no matter what nationality, ethnicity, or gender supplies the workforce or
management. The global restructuring of media production has created giant,
regional enterprises “with complex links between film, video, television,
telecommunications, animation, publishing, advertising, and game design” (Davis
& Yeh, 2008, p.65) all based on acquiring multinational talent and the cheapest
creative labor possible. TNMC production forces national governments, small
media firms, and local workers to compete among themselves over wages,
benefits, and working conditions. In China for example, Mattel requires workers

8 to be on the job 10-16 hours a day, seven days a week (Asian Monitor Resource
Center, in Miller, et al., 2005, p.122).

Beyond the bright side of so-called mental and immaterial labor, one
discovers its seamier counterpart - the production of the actual material
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infrastructure for new media. In this space, rather than illustrating how
indigenized media and information technologies contribute to cultural diversity
and human freedom, the TNMC environments that localize flexible production
appear as nothing less than crasser exploitation maximizing corporate control over
labor. The production of media and their content are not “merely a simple
reflection of the controlling interests of those who own or even control the broad
range of capital plant and equipment which make up the means by which cultural
goods are made and distributed. Within the media are men and women working
within a range of codes and professional ideologies, and with an array of
aspirations, both personal and social. The ambitions can be idealized; much
cultural productionis routine, mundane, and highly predictable” (Golding &
Murdoch, 1991, p.25-26). The autonomy and creative contribution of these
workers is curtailed within transnational production structures that prescribe who
does what and who makes decisions on what will be done.

The TNMCs are constantly on the lookout for creative initiatives that can
be herded into their own cultural hegemony, while willing academics and
entrepreneurs eagerly line up for the chance to join the ranks of profiteers. The
transnational production regime, Internet and all, keeps the average consumer
blogger on the margins.

For countries and firms that depend on outsourcing for income, their chief
asset is low paid skilled labor, their chief benefit is access to the techniques and
norms of TNMC production. Ultimately, the cultural hegemony of transnational
media is the economic and political reward obtained from rapacious free market
policies that encourage individual entrepreneuralism and undermine social
solidarity among workers on all levels by temporarily but repeatedly
subcontracting abroad will smaller independent studios and employing workers in
different countries.

In terms of transportation, in the past railroads and steamships are the

significant inventions but today airplanes have been transporting humans around
the world. In terms of communication, the internet today made the world open to
everyone.

In the recent decades, as a result of increased in exports, economic

globalization has ushered in an unprecedented spike in global growth rates.
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According to the IMF, the global per capita GDP rose over five-fold in the second
half of the 20th century. It was this growth that created the large Asian economies
like Japan, China, Korea, Hong Kong, and Singapore. And yet, economic
 CONTEMPORARY WORLD UNIT 1- STRUCTURES OF GLOBALIZATION

globalization remains an uneven process, with some countries, corporations, and

individuals benefiting a lot more than others.

THE MODERN WORLD SYSTEM

One of the famous works that captures the socio-historical and economic
nexus of pre-capitalist economies and the present world was that of Immanuel
Wallerstein’s research on the modern world system. His analysis focused on the
broad economic entity with a division of labor that is not circumscribed by
political or cultural boundaries.

His idea of the world system is larger than workers, classes, or even states.
Through the global economic activity, countries around the world have been
divided according to their economic power in the global arena.

It should be noted that the world-systems have existed before and not a
unique feature of the contemporary world. What is significant is the
transformation of this world-system. In the past, the system that binds the world
together is based on political and military domination. This was the world empire.

The modern world-system is also known as the modern capitalist world-

economy. It is a system which relies on economic domination. It encompasses
many states and a built-in process of economic stabilization. This means that it is
economic forces (and the economy of the world) that pull people, states, and
societies toward the arena of worldwide economic transactions.

THE THREE LEVEL HIERARCHY OF THE MODERN

CAPITALIST WORLD-ECONOMY
Not all countries or areas are equal in the modern world-system according
to Wallerstein. A three-level hierarchy is a remarkable feature of the modern
capitalist world-economy.

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CORE
US, Japan, and
Germany

SEMI-PERIPHERY
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PERIPHERY

African Region, Eastern Europe and Latin America

Dominate and exploit the Share characteristics of

peripheral countries for both core and
labor and raw materials peripheral countries

Dependent on core
countries for capital

This diagram shows the characteristics of the World System Theory of

Wallerstein.

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Based on the Wallerstein’s World System Theory Model, the world is

now divided into three categories and thereby creating the worldwide
division of labor. These are:

a. Core – These are areas that dominate the capitalist world-economy

and exploit the rest of the system (e.g., US, Japan and Germany).
This means that the core regions benefited the most from the
capitalist world economy.

b. Periphery – These are areas that provide raw materials to the core
and are heavily exploited (e.g., many countries in African region,
Eastern Europe (especially Poland) and Latin America). These
areas lacked strong central governments or were controlled by
other states, exported raw materials to the core, and relied on
coercive labor practices. The core expropriated much of the capital
surplus generated by the periphery through unequal trade relations.
c. Semi-periphery – It is a residual category that encompasses a set
of regions somewhere between exploiting and the exploited (e.g.,
India, China, Indonesia, Mexico, Iran and Brazil). They often also
served as buffers between the core and the peripheries.

The international division of exploitation is defined not by state

borders but by the economic division of the world. There are three things
necessary for the rise of the capitalist world-economy. These are
geographical expansion, worldwide division of labor and core state’s
development.

Why are countries being pulled toward this system? Can the countries or
areas of the world “resist” being part of it? Ritzer (2010-310) explained:

“The pressure for incorporation into the world-economy comes not

from the nations being incorporated but rather from the need of the world-
economy to expand its boundaries, a need which was itself the outcome of
pressures internal to the world economy” (Wallerstein 1989:129).

In maintaining a good balance between maintaining state powers

and being part of the modern world-system, the states must be strong
enough to protect their own economies from external threats. However,
8 this strength of theirs which comes from, perhaps, their external
sovereignty should not be too much for them to be able to stand on their
own and refuse to act in accord with the demands of the capitalist world-
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economy. It is a matter of striking a balance between the state’s power and

the pressures of the global economy.

REFERENCES:

Aldama,PK.R., (2018). The Contemporary World (pp.13-34). 84-86 P.

Florentino St., Mesa Heights, Quezon City: Rex Printing Company
Inc.

Claudio, L.E., Abinales, P.N. (2018). The Contemporary World (pp.

12-25). 839 EDSA, South Triangle, Quezon City: C & E Publishing,
Inc.

Steger,M. B,. The SAGE Handbook of Globalization (Chapter 9- The

Globalization of Economic Relations by Istvan Benczes). Thousand
Oaks, California: SAGE Publications Ltd.

https://www.sociosite.net/sociologists/texts/wallerstein_summary.php

https://www.cairn.info/revue-l

https://www.study.com

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APPLICATION

In Just-A-Minute (JAM) you write your own understanding about

economic globalization and modern world-system. Once the time is up
you will present the JAM papers to the class. You will discuss what you
had written in your JAM papers.