MARKET

GLOBALISM
Overview of the World Economy
• The term world economy refers to all of the
economic activity within each country and
between countries around the world.
• The most fundamental change happened
after the second World War wherein there is
an emergence of global markets. (Drucker
1986)
• Integration of two regions specifically the
European Union and the North American Free
Trade Area. (Krugman, 1992)
Changes in the World Economy
• Capital Movement rather than trade have become the driving
force of the world economy
• Production has become a source of generating employment
• The World economy dominates the scene. Individual
economies play a subordinating role.
• The 75-year struggle between capitalism and socialism is
largely over. (Simon & Schuster, 1997)
Economic System
• Market Allocation System. It is an economic democracy
where people have the option to buy according to their
choice and budget.
• Command Allocation System. The country or nation has
broad powers to serve the public interest on what is
appropriate based on their judgment.
• Mixed Allocation System. All market systems have a
command sector and all command systems have a market
sector.
 World Bank Four Category System
Low-Income Countries
• Less than $766 GNP
• Limited Industrialization
• High Percentage of
Population
• Agricultural and
subsistence farming
• High Birth rates
• Low Literacy Rates
• Heavy Reliance on
Foreign Aid
• Political Instability and
Unrest
Low-Middle- Income Upper-Middle-Income High-Income Countries
Countries Countries
• $766 - $3,035 GNP • $3,036- $9,385 GNP • Above $9,385 GNP
• Early Stage of • Newly Industrializing • Advanced, developed,
Industrialization- Economies (NEIs) industrialized or post-
countries with major • Percentage of industrialized countries
competitive advantage in Agriculture sectors • Heavily dependent on
mature, standardized, moves to industrial new products and
labor-intensive industries sectors. innovations.
such as toy-making and • High Literacy Rates and • Ownership levels for
textiles advance education basic products are
• Export-driven economic extremely high
Growth
Six Core Claims of Market Globalism
LIBERALIZATION and GLOBAL INTEGRATION OF
MARKETS

INEVITABLE and IRREVERSIBLE

NOBODY IS IN CHARGE OF GLOBALIZATION

GLOBALIZATION BENEFITS EVERYONE

GLOBALIZATION FURTHERS THE SPREAD OF

DEMOCRACY IN THE WORLD

GLOBALIZATION REQUIRES WAR ON TERROR

Liberalization and Global Integration of Markets
• Ability to bring Social integration and Material progress.
• Free Trade or Free Markets. The idea and importance of open
competition or referred as the ideology of Neo-Liberalism
• Free-Market Capitalism is the key to a more efficient
economy.
• Privatization is the natural way for realizing individual liberty
and material progress.
Inevitable and Irreversible
• Irreversible market forces are driven by technological
innovations.
• Ability of markets to use new technologies to solve problems
far from than any alternative course
• Governments had no choice but to “ADJUST” to the
inevitability of globalization.
Nobody is in Charge of Globalization

• Self-Regulating Market
Concept
• No one in control
Globalization Benefits Everyone
• Economic Growth and Prosperity
• Great Opportunities for the future
• Expansion of investment and trade
• Improve the standard of living
• Technological innovation; and
• Proliferation of skilled jobs
Globalization Furthers the Spread of Democracy
in the World
• The most obvious strategy by which neo-liberals generate
popular support for the relationship of democracy and the
market is by discrediting traditionalism and socialism.
Globalist tends to treat freedom, free markets, free trades
and democracy as synonym terms.
 Globalization Requires War on Terror
• It is the neo-conservative
commitment to “American Values”
of freedom, security and free
markets.
• Military and economic Power which
is an American led global war on
terror. It is an idea of economic
globalization with openly militaristic
and nationalistic ideas.
The International Economic Environment
• The international economic
environment can be described as
the global factors that affects the
way that businesses operate. The
assessment of a foreign based
market environment should start
with the evaluation of economic
variables relating to the size of the
global market.