REVIEWER IN CONTEMPORARY WORLD

THE GLOBAL ECONOMY

United Nations- they tried to address different problems in the world guided by 8 Millennium
Development Goals; they tried to reach them by year 2015.

8 MILLENNIUM DEVELOPMENT GOALS:

- eradication of extreme poverty
- achieving universal primary education
- promoting gender equality and woman empowerment
- reducing child mortality
- improving maternal health
- combating disease like HIV/AIDS and malaria
- ensuring environmental sustainability
- having global partnership for development

In the Philippines, a person is officially living in poverty if he makes less than 100,534 pesos a year,
around 275 pesos a day. (poverty line/ poverty threshold)

Extreme Poverty (UN)- It is a condition characterize by severe deprivation of basic human needs
including food, safe drinking water, sanitation facilities, health shelter, education and information.
- living on less than $1.25 a day. The organization aim to eliminate this by 2030.

United Nations 2015 report that 836 million people still live in extreme poverty but it is down from
1.9billion. The World Bank predicted that by 2030 the number of people living in extreme poverty
could drop less than 400 million.

Economic Globalization- It refers to the increasing interdependence of world economies as a result of

the growing scale of cross-border trade of commodities and services, flow of international capital, and
wide spread of technologies

2 TYPES OF ECONOMIES ASSOCIATED WITH ECONOMIC GLOBALKIZATION

1. Protectionism- a policy of systematic government intervention in foreign trade with the objective
of encouraging domestic production. (quotas and tariffs)
Tariffs- the required fees on imports or exports; practiced during Mercantilist era 16th- 17th centuries.
The Great Depression of 1929 marked the peak of protectionism; even today (china, japan, us)

2. Trade Liberalization (free trade)- it means goods and services move around the world more easily
than ever.
Jeffrey Sachs: mobile phones are the “single most transformative technology” when it comes to the
developing world.
Leapfrogging- an economic term of countries idea to skip straight to more efficient and cost-effective
technologies that were not available in the past.
International trade- created new opportunities for people to sell their products and labor in global
marketplace.

Fair Trade (defined by International Fair Trade Association )- it is the concern for the social,
economic, and environmental well being of marginalized small producers (Downie, 2007).

- it aims for a more moral and equitable global economic system. Specifically, it is concerned with
more protection of workers and producers, establishment of more just prices, engagement in
environmentally practices, South as producer while North as consumer, and promotion of safe
working environment.
Sustainable development- the development of our world today by using Earth's resources and the
preservation of such sources for the future
- seeks to chart a middle path between economic growth and sustainable
environment (Borghesi and Vercelli, 2008)

Industrial Revolution- hastened economic development. This is the period in human history that
made possible the cycle of efficiency.

Efficiency- means finding the quickest possible way of producing large amounts of a particular
product.

Cycle of efficiency- this process made buying goods easier for the people; but harms the planet in
many ways.

Harvey (2005) noted that neoliberals and environmentalists debate the impact of free trade on the
environment.

Environmentalists- they argue that environmental issues should be given priority over economic
issues (Antonio, 2007).

Neoliberals- they see the efforts of the environmentalists as serious impediments to trade.

Ecological Modernization Theory- sees globalization as a process that can both protect and enhance
the environment (Yearley, 2007)

Kyoto Protocol- aimed at a reduction of global carbon emissions, but failed to take off largely because
it was not ratified by the US (Armitage, 2005)

There are significant challenges involved in implementing various measures such as “carbon tax” and
“carbon neutrality” to deal with environmental problems (Ritzer, 2015)

Barrionuevo (2007) stated that the use of ethanol as an alternative to gasoline has an attendant set of
problems- it is less efficient and it has led to an escalation in the price of corn, which currently serves
as major source of ethanol.

Biofuels- produce lower emissions but its extraction and transport contribute significantly to total
emission.

Global Food Security- it means delivering sufficient food to the entire world population.

Security of Food- means the sustainability of society such as population growth, climate change,
water scarcity,and agriculture.

The demand for food will be 60% greater than it is today and the challenge of food security requires
the world to feed 9 billion people by 2050 (Breene, 2016). He also cited the case of India to show how
complex the issue of food security. Agriculture accounts 18% of the economy’s output and 47% of its
workforce.

INDIA- the 2nd biggest producer of fruits and vegetables in the World.

According to the FAO (Food and Agriculture Organization) of UN, some 194 million Indians are
undernourished, the largest number of hungry people in any single country. 15%, A third of the world
malnourished child live in India.

THE MAJOR CHALLENGES OF FOOD SECURITY IN ENVIRONMENT

- destruction of natural habitats, deforestation (Diamond, 2006)
- destruction of marine life and ecosystems, industrial fishing (Goldburg,2008)
- decline in availability of fresh water (Conca, 2006), degredation of soil (Glantz, 1977)

Privatized commodity- a natural resources owned by private sectors available for purchase.

Virtual Water- where people inadvertently use up water from elsewhere in the world through the
consumption of water- intensive products (Ritzer, 2015)

Climate refugees- people who are forced to migrate due to lack of access to water or due to flooding
(Ritzer, 2015)

POP (Persistent Organic Pollutants)- cause industrial pollution (Dinham, 2007)

Greenhouse Gases- gases that traps the sunlight and heat in the earth's atmosphere, cause global
warming.

The UN has set ending hunger, achieving food security and improved nutrition,and promoting
sustainable agriculture as the second of its 17 Sustainable Development Goals (SDGs) for the year
2030.

The World Economic Forum’s New Vision for Agriculture (NVA) in 2009 wherein public-private
partnerships were established.(farmers, civil society, private sector, and governmen)

Hans Rosling, a Swedish statistician that said “ the 1 to 2 billion poorest in the world who don’t have
food for a day suffer from the worst disease, globalization deficiency. The way globalization could be
much better, but the worsyt thing is not being part of it”.

Multiplier effect- means an increase in one economics's activity can lead to an increase in other
economic activities.

Paul Krugman, an economist talks about Bangladeshi apparel industry

Exploitation and Oppression- a form of economic colonialism that puts profits before people

United States produces an annual publication called the list of goods produced by child labor or
forced labor; if company is buying products from that list, they are likely to be blasted by officials.

Microcredit- the private lenders, governments and nonprofit organizations on board to lend money to
the deprived people and used the money to fund plans that could raise their income.
-allows people to improve their lives by participating in the economy of their own terms.

Muhammad Yunus, a Bangladeshi who won Nobel Peace Prize known for his ideas; giving small loans
on average around $100 to low-income people in rural areas.
- he explained that poor people are the world’s greatest entrepreneurs.

TWO MAIN TYPES OF ECONOMIC INEQUALITY

1. Wealth inequality- speaks about unequal distribution of assets.
Wealth- refers to the net worth of a country.

2. Income Inequality- new earnings are being distributed, it values the flo of goods and services not
stock of assets.
Gross Domestic Product (GDP)
Income- new earning that are constantly added to the pile’s of a country’s wealth.

According to the Global Wealth Report 2016 by Credit Suisse Research Institute, global wealth today
is estimated to be about 3.5 Trillion dollars and is not distributed equally.
Branko Milanovi (2011)- explained the “economic big bang”; the explosion of of industry and modern
technology, some nations became economically develop while others were developing.

Richard Freeman, Harvard econimist “the triumph of globalization and market capitalism has
improved living standards for billions while concentration billions among few”

Skill-based technological change- complemented skilled workers but replaced many unskilled
workers by technology.

During cold war, Western policymakers began talking about the world’ as three distinct political and
economic blocs (Tomlinson, 2003)

- Western Capitalist countries were labeled as the “First World”.

- The soviet Union and its allies were termed “Second World”
- Everyone else was grouped to “Third World”

Gross Domestic Product- measures the total output of a country

Gross National Income- measures GDP per capital

Global North- First World Countries: US, Canada, Western Europe, Developed parts of Asia
Global South- Third World Countries: Caribbean,. Latin America, South America, Africa, and other
parts of Asia.

Ritzer (2015)- “at the global level, whites are disproportionately in the dominant North, while blacks
are primarily in the South”

The relations of agricultural production have been altered due to the rise of global agribusiness and
factory farms (McMichael, 2007)

The South produces non traditional products for export and become increasingly dependent on
Industrialized food exports from the North.

Schlosser (2005)- he pointed out that as commercial agriculture replaces local provisioning, the
relations of social production are also altered.

Sassen (1991)- he used the concept of global cities to describe the 3 urban centers of New York,
London, Tokyo as economic centers that exert control over the world’s political economy.

Bauman (2003)- he claimed that these cities are the most severely affected by global problems.

THEORIES OF GLOBAL STRATIFICATION

Modernization Theory
- this theory framed global stratification as a function of technological and cultural differences
between nations. It specifically pinpoints two historical events that contributed to Western Europe
developing faster rather than much of the rest of the world.
- rests on the idea that affluence could be attained by anyone.

- (1st ) Columbian Exchange- this refers to the spread of goods, technology, education and diseases
between Americas and Europe after Christopher Columbus’ so called “discovery of the Americas”.

- (2nd ) Industrial Revolution 18th - 19th centuries- this is when new technologies, like steam power and
mechanization, allowed countries to place human labor with machines and increase productivity.

Max Weber (Protestant Work Ethic)

The Protestant Reformation- primed Europe to take on a progress-oriented way of life in which
financial success was a sign of personal virtue.

WALT ROSTOW’S FOUR STAGES OF MODERNIZATION

1. Traditional Stage- this refer to the societies that are structured around small, local communities
with production typically being done in family settings.

2. Take-off stage- people begin to use their individual talents to produce things beyond the
necessities; greater individualism takes hold and social status is more closely linked with material
wealth.

3. Drive to technological maturity- technological growth of the earlier periods begin to bear fruit in
the form of population growth, reductions in absolute poverty levels, and more diverse job
opportunities.

4. High Mass Consumption- It is when the country is big enough that production becomes more
about wants than needs. Many of these countries put social support systems in place to ensure that
all of their citizens have access to basic necessities.

Dependency Theory and the Latin American Experience

Starting in the 1500s, European explorers spread throughout the Americas, Africa, and Asia. At this
point, British Empire covered about 1/4 of the world.

In 1870, only 10% of Africa was colonized. By 1940, only Ethiopia and Liberia were not colonized.

Dependency- it is a condition in which the development of the nation-states of the South contributed
to a decline in their interdependence and to an increase in economic development of the countries of
the North. (Cardoso and Felato, 1979).

Dependency Theory
- it focuses how poor countries have been wronged by richer nations.
- it argues that the prospects of both wealthy and poor countries are inextricably linked.
-it argues that in a world of finite resources, we cannot understand why rich nations are rich without
realizing that those riches came at the expense of another country being poor.
- global stratification starts with colonialism
- it was initially developed by Hans Singer and Raul Prebisch in the 1950s.

Peripheral Nations- are countries that are less developed and receive an unequal distribution of the
world’s wealth.

Core Nations- are countries that are more industrialized and receive the majority of the world’s
wealth.

Dependency Theorists- saw that the development of peripheral nations is stagnant because of the
exploitative nature of the core nations (Ferraro,2008)

Andre Gunder Frank (1969)- espoused the NORTH AMERICAN NEO-MARXIST approach. He
contented the idea that less developed countries would develop by following the path taken by the
developed countries.

LATIN AMERICAN STRUCTURALIST- Palma (1978 ) noted that the chief among the arguments
accounting for Latin American underdevelopment was the excessive reliance on exports of primary
commodities, which were the object of flaunting prices in the short term and a downward trend in
relative value in the long haul
Hans singer- he documented a secular deterioration in the terms of trade of Latin American countries

Presbich- credited for explaining the factors underlying this downward trend.
- in his status as head of UN’s Economic Commission for Latin American (ECLA). he came to
have far-reaching political influence and profound policy implications.

Cardoso and Falleto- set the foundations of the historical-structural variant of the dependency
theory.
- believed that Latin American economies were the result of capitalist expansion
in the US and Europe

DEPENDENCY- was used to underscore the extent to which the economic and political develoment of
poor countries was conditioned by THE GLOBAL ECONOMY.