THE GLOBAL ECONOMY

CHAPTER 2
 CONTENT
 Economic Globalization and Global Trade
 Economic Globalization and Sustainable Development
 Environmental Degradation
 Food Security
 Economic Globalization, Poverty, and Inequality
 Global Income Inequality
 The Third World and the Global South
 The Global City
 Theories of Global Stratification
 Modernization Theory
 Walt Rostrow’s 4 Stages of Modernization
 Dependency Theory and the Latin America Experience
 The Modern World System
Economic
Globalization
and Global Trade

BY: Shane S. Aurellano

Economic Globalization and
Global Trade
Economic Globalization refers to the increasing
interdependence of world economies as a
result of
 Growing scale of cross-border trade of
commodities and services,
 Flow of the international capital and
 Wide and rapid spread of technology
-United Nations (as cited in Shangquan, 2000 page 1)
Economic Globalization and
Global Trade
It reflects the continuing expansion and mutual
integration of market frontiers, and is an
irreversible trend for the economic
development in the whole world at the turn of
the millennium.
-United Nations (as cited in Shangquan, 2000 page 1)
Two different types of economics
Protectionism
• A policy of systematic government
intervention in foreign trade with the
objective of encouraging domestic product
which includes giving preferential treatment
to domestic producers and discriminating
against foreign competition.
-(McAleese, 2007 as cited in Ritzer, 2015, p. 1169)
 Trade Protectionism
• Usually comes in the form of quotas
and tariffs. This policy was
practiced during the mercantilist
era, from 16th to 17th Centuries until
the early years of Industrial
Revolution.
-Chorev, 2007
Tariffs
- Are required fees on imports or experts.
Trade Protectionism
• Until today, protectionism exists in the world
economy despite the growth of trade
liberation. Countries such as China, japan
and United States are being accused of
practicing protectionism.
-Ritzer, 2015
Trade Liberation or Free Trade
• Word War II heavily influenced the shifting of
dominant economic policy from
protectionism to trade liberation or free trade.
• Free trade agreements and technological
advances in transportation and
communication mean goods and services
move around the world more easily than
ever.
Delivery units for Production Unit Delivery units for
parts finished goods
W

Old warehouse before

ar
eh

Just-in-Time
ou
se

FACTORY
Assembly Line

Moving storage Assembly and warehousing Moving storage

units place units
 Leapfrogging

• The idea that countries can skip straight to

more efficient and cost effective technologies
that were not available in the past.
Fair Trade Is the “Concern for the social, economic, and
environmental well-being of marginalized
producers” (Downie, 2007, pp. C1-C5). It
aims for a more moral and equitable global
economic systems. Specifically, it is
concerned with the protection of workers and
producers, establishment of more just prices,
engagement in environmentally sound
practices and sustainable production,
creation of relationships between producers
in the South and consumer in the North, and
promotion of safe working environment.

-International Fair Trade Association

Advantages of International Trade
• Creates new
opportunities for people
to sell their products and
labor in a global
marketplace.
Disadvantages of International Trade
• Allows some countries
especially developing ones
to gain more in the global
economy at the expense of
other nations. There are
various ways, however, the
country can make trade
easier with other countries
while lessening the
inequities in the global
world. One of them is “Fair
Trade”.
-Nicholls and Opal, 2005)
Fair Trade Products
• Coffee
• Bananas
• Cotton
• Wine
• Tea
• Chocolate