INTRODUCTION TO THE STUDY OF GLOBALIZATION Globalism

BASIC CONCEPTS IN THE STUDY OF GLOBALIZATION ● It is the widespread belief among powerful people that the global
integration of economic markets is beneficial for everyone, since it
spreads freedom and democracy across the world.
Globalization
● A common belief forwarded in media and policy circles.
Manfred Steger - the expansion and intensification of social relations and
consciousness across world-time and across world space.
THE GLOBAL ECONOMY
 Expansion - both the creation of new social networks and the
multiplication of existing connections that cut across traditional, Economy - it is the wealth or resources of the country, especially in terms of
political, economic, cultural, and geographic boundaries. the production and consumption of goods and services (Oxford Languages
 Intensification - expansion, stretching, and acceleration of these Dictionary).
networks.
Economic Globalization - it is characterized by the increasing integration of
 Globalization involves the subjective aspect of human consciousness.
economies of various nation-states through the movement of goods,
services, and capital across borders (International Monetary Fund (IMF)).

Factors of Globalization

 Trade and Transactions - Containerization, improved technology, Growth of the Value of Trade as a Percentage of World GDP
Trading blocs,
 Migration of People - Improved transport
 Movements of Capital and Investments - Improved technology, Growth
of MNC’s,
 Dissemination of Knowledge - Improved technology, Growth of global
media, Internet

Five Scapes of Globalization

Arjun Appadurai - there are multiple and intersecting dimensions of

integration which the various kinds of globalization occur.

1. Ethnoscape - global movement of people.

2. Mediascape - flow of culture.
3. Technoscape - circulation of mechanical goods and software.
4. Ideoscape - dimension where political views move around.
5. Financescape - worldwide circulation of money.
 INTRODUCTION TO THE STUDY OF GLOBALIZATION Galleon Trade and Mercantilism

INTERNATIONAL TRADING SYSTEMS ● Dennis O. Flynn & Arturo Giraldez - globalization started with the
Galleon trade connecting Manila (Philippines) and Acapulco
(Mexico) and the Americas directly connected to the Asian tradings.

● It was part of the age of mercantilism.

● Mercantilism (16th-18th century) is an economic practice by

governments to increase their state power at the expense of rival
countries with the use of their economies.

● Focused on accumulating bullion and maximized export.

Gold Standard

● A more open trade system which emerged in 1867.

● Its goal is to create a common system that would allow for more
efficient trade and prevent the isolationism of the mercantilist era.

● The value of gold became the basis for currency prices and fixed
exchange rate system.

World War I - Great Depression & Gold Standard

● The worst and longest recession experienced by the Western world

(1920’s-1930’s).
Silk Road
● Some economists argued that it was largely caused by the Gold
● Oldest international trade route.
Standard since it limited the circulation of money and in return,
● A network of pathways in the ancient world that spanned from reducing demand and consumption.
China to what is now the Middle East and Europe.
● Barry Eichengreen believed that the United States started to
● Was used regularly from 130 BC until 1453 BCE. recover when they abandoned the Gold Standard.

● International but not global.

Fiat Currencies Global Keynesianism and Stagnation

● Value is backed by the government’s regulations and their cost ● The Organization of Arab Petroleum Exporting Countries (OAPEC)
relative to other currencies. imposed an oil embargo which made the prices of oil rose sharply.

● This allows the governments to freely and actively manage their
economies by increasing or decreasing the money supply if
necessary.
● Western economies were affected.
● The oil embargo was also used by the Arab countries to stabilize
their economies.

● Also, the stock markets crashed in 1973-1974 after the US stopped

Global Keynesianism & the Bretton Woods System linking the dollar to gold.

● Inaugurated in 1944 during the United Nations Monetary and ● This result to stagnation, means a decline in economic growth and
Financial Conference. employment happens alongside a sharp increase in prices.

● International Bank for Reconstruction and Development (IBRD) or

The World Bank - responsible for funding postwar reconstruction
Neoliberalism
projects.
● Friedrich Hayek and Milton Friedman - the government’s
● International Monetary Fund - the global lender of last resort to
intervention resulted to the malfunctioning of the economy and the
prevent individual countries from spiraling into credit crisis.
pouring of money into their economies created inflation.
● This would ensure a longer-lasting global peace that would promote
● Washington Consensus - a set of policies by the US Treasury, WB,
economic interdependence and prosperity.
IMF, and WTO.
● Largely influenced by the ideas of John Maynard Keynes.
● It advocates for the minimal spending of the government to reduce
its debt.

Global Keynesianism ● Pushed for the privatization of government-owned companies.

● Economic crisis happens when the government is not spending ● Pressured countries especially the developing ones to reduce tariff
enough money, and not by not having enough money. and open up their economies.

● Governments should have an active role in the economy especially

in putting capital when the economy is slowing down.

● When money supply increases, demand increase, so with the prices.

When prices increase, business firms earn more and hire more
employees.

Economic Globalization of Today (EXPORT)

 ● Economies grow at present.

● By 2011, developing countries around the world like the Philippines,

Brazil, and India accounted for the 51% of global exports while the
advanced nations were down to 45%.

● Trade liberalization has profoundly altered the dynamics of the

global economy.

● The global per capita GDP increased over five-fold in the second half
of the 20th century.

Disadvantage of Economic Globalization

● Reduction of trade barriers has often been unfair.

● Developed countries are protectionists.

● Transnational Corporations (TNC’s) benefit more than the

government.

● Race-to-the-bottom refers to countries’ lowering their labor

standards, including the protection of workers’ interests, to entice
foreign investors.