Globalization: Concepts and Definitions

• Study notes on globalization, contemporary world governance, the global economy, the global divide, and Asian regionalism

Defining Globalization

• Globalization lacks a single, clear definition
• Scholars offer various perspectives, leading to diverse understandings
• Giddens (1990) defines it as the intensification of worldwide social relations linking distant localities
• Robertson (1992) says it refers to the compression of the world and the intensification of consciousness of the world as a whole
• Harvey (1989) defines globalization as "Compression of time and space”
• It involves interaction and integration among people, companies, and governments from different nations as described by Sunny Levine Institute
• Grupo de Lisboa (1994) states Globalization heralds the end of the state system as the nucleus of human activities
• Globalization is dominated by global economic activities
• Steger (2005) says globalization is understood as a process, condition, or ideology

Process

• It is a group of social processes generating and increasing global interdependencies and exchanges
• Simultaneously, it cultivates deepening connections between local and distant aspects

Condition

• "Globality" is a social state defined by trans-planetary connectivity and supra-territoriality
• Trans-planetary connections are the establishment of social connections between people in diverse locations
• Supra-territorial relations are the social connections transcending territorial geography
• Globalization renders political borders and economic barriers irrelevant (Steger, 2008)

Ideology

• Six core claims:
• Globalization is about markets triumphing over governments
• It is unstoppable and irreversible
• No one is in control of it
• It benefits everyone in the long run
• It advances democracy
• It necessitates a global war on terror

Misconceptions About Globalization

• Globalization is not internationalization Internationalization
• Internationalization includes activities by entities like corporations, states, and international organizations with reference to national borders and governments
• Globalization encompasses a range of human activities irrespective of national borders
• Globalization is beyond liberalization
• Liberalization focuses on removing national barriers to create an open, borderless world economy
• Viewing globalization as solely liberalization narrows focus to economic aspects

Universalization and Westernization

• Globalization is not universalization and westernization
• Universalization is a process of disseminating objects, practices, and experiences globally, potentially leading to cultural, political, and economic homogenization
• Westernization, a variant of universalization, happens when Western modernity expands and displaces local cultures, also known as neo-colonialism, Americanization, or McDonaldization

Contemporary World Governance

• The present world differs fundamentally from that of previous generations
• Significant changes reshaped the structure of the world
• Global communities are now closely interconnected and intertwined

The Case of International Organizations

• Without a global government, coordination becomes problematic
• International organizations attempt to address coordination problems in collective concerns such as:
• Climate change
• Trade
• Peace
• Security

The United Nations System

• The Atlantic Charter in 1941 promoted international peace and security as World War II neared its end
• Signed by President Franklin D. Roosevelt and Prime Minister Winston Churchill
• Originated the UN Charter
• The UN Charter was signed on June 26, 1945
• Became effective on October 24, 1945

Why the UN Was Conceived

• To ensure global collective security
• To move beyond armed conflict, the UN facilitates discussion and dialogue
• War is outlawed by the UN Charter
• There are provisions for the pacific settlement of disputes
• To globally cooperate and solve international problems
• To encourage respect for human rights

The General Assembly

• The General Assembly has universal representation of all UN member states
• It makes decisions on essential questions with a simple majority
• A 2/3 majority is required for matters about peace and security, budgetary concerns, and admitting new members

Security Council

• It is the most powerful UN organ
• It has the authority to make legally binding decisions and resolutions
• Composed of 5 permanent members and 10 rotating members
• The P5 have veto power, and can reject any resolution/action

Other Principal Organs

• The Economic and Social Council (ECOSOC) promotes the economic, social, and environmental dimensions of sustainable development
• The Trusteeship Council supervises Trust Territories managed by seven member-states, ensuring steps toward independence; all 11 territories have achieved independence
• The International Court of Justice is the UN's primary judicial body that resolves legal disputes between states and offers advisory opinions

States and Globalization

• The rise of civilizations has driven different levels of internationalization
• Civilizations often form empires that dictate global/international affairs
• Growth was ushered in by Greek, Macedonian, and Roman empires via trade or conquest
• This marks an early stage of globalization rooted in globalism
• Globalism, as defined by Joseph Nye, is "networks of connections that span multi continental distances"

Thin versus Thick Globalism

• Thin Globalism marks an initial phase of interconnection, but has limited connection density
• The Silk Road is an example, which connected East and West, but was limited to trade, with a small impact
• Thick Globalism has immense network connection density
• There is increased reliance among nations, communities, and economies
• It characterizes the level of interconnection in the 21st century
• It has significant socio-economic impact, cultural transfers, and dependence on supply chains

Globalization and Power

• History has always granted powerful entities an advantage in global affairs
• Influential nations often wield control in different aspects of globalism: economic, political, military, and cultural
• Wealthy and militarily strong nations tend to shape the global order with examples like the United States

Types of Power

• Hard Power: direct power using "carrots and sticks," including military force (sticks) and economic measures (sanctions and carrots)
• Soft Power: attraction through culture, such as the Hollywood effect, films, music, language, anime, and Korean dramas
• Smart Power: combination the two types of power

Power Dynamics

• The modern state operates on a Westphalian model
• It highlights the sovereignty and existence of nation-states
• This model is fundamental to modern international relations, made up of independent sovereign states
• The existing IR order still relies on the power of states
• The USA has notable influence in global trade and politics
• China is an emerging power establishing itself in global politics and economics
• Middle Powers: Dominating some aspects of global trade and politics

Globalization in the 21st Century

• Since the Cold War's end, globalization is thicker
• Trade is freer because of the removal of tariffs and quotas
• Borders are thinner as travel across countries increases
• Complex supply chains are developing
• Components for products like the Nintendo Switch are manufactured in Malaysia, the Philippines, China, and Japan
• Different Ubisoft studios based in countries such as Hungary, the Philippines, and China develop Assassin’s Creed franchises

Challenges to the Nation-State

• Trade and interdependence have led to an increasingly multipolar world
• The West is no longer the only global power overall
• According to Joseph Quinlan, the East has grown notably since 2008
• The traditional power, culture, and economy borders are becoming less Westernized and more Easternized
• The Westphalian model is facing challenges by globalization's new standard

Quick Review

• History allows victors or superpowers to organize the global order
• Globalism defines the core of globalization
• Thin versus thick globalization
• Power and its impact on the global order
• Globalization's challenge to the state

The Rise of Non-State Actors

• With growing global interdependence, analysis extends beyond state actors, with non-state entities playing a role
• Non-state actors include:
• Inter-Governmental Organizations like the UN, NATO, ASEAN, Europen Union
• International Non-Governmental Organizations such as the Red Cross and Amnesty International
• Multinational Corporations such as Coca-Cola, Apple, Samsung, and McDonald's

Multinational Corporations

• Multinational corporations operate in different countries
• Example: Apple
• Apple designs its products in Cupertino, California
• They source raw materials from across the globe, including Taiwan
• Manufacturing occurs in China, Vietnam, and India
• They invest in other countries

Economic Globalization

• It is a process in which the world economy is being turned into an organic economy by broadening transnational processes and economic relations and increasing interdependence (Szentes, 2003)

Economic Globalization Components

• Capital flow across borders is increasing
• Trade increase via free trade or the removal of quantitative restrictions
• There is a creation of an interdependent supply chain

Increased Capital Flow

• Corporations and individuals are moving investments to other countries
• Primarily, there are two forms:
• Foreign Direct Investment
• Foreign Portfolio Investments
• There is money circulating in economies that receive them, resulting in job creation and economic growth

Advantages and Disadvantages of Economic Globalization

• Advantages:
• Brings more capital in
• Creates jobs that cut unemployment
• Delivers income for government-provided social service
• Heightens productivity through technology
• Disadvantages:
• Makes countries globally vulnerable, including capital flight
• MNCs may overshadow local industries
• Has the potential effect of capital outflow or inflationary effects

Charter Change in the Philippines

• There are attempts to change the 1987 charter
• The main argument surrounds a need for economic liberalization
• Advocates see the current constitution as overly restrictive and ill-prepared for globalization
• Detractors see it as an attempt by the political and economic elite

Increase in the Flow of Goods

• International trade is crucial for economic relations
• It facilitates market expansion
• Countries employ different trade policies, such as protectionism and trade liberalization

The World Trade Data During and After the Pandemic

• Covid effected the world trade data
• there was a plunge in the amount of world trade vs the previous rate

Trade Policies and Agreements

• Trade Policies are implemented through quantitative restrictions like quotas and tariffs
• Tariffs involve taxes on imported goods
• Free Trade Agreements: Bilateral or Multilateral

The Bretton Woods System

• The Bretton Woods System includes the World Bank, IMF, and GATT

Role of the World Bank

• It provides long-term loans for economic development especially for less developed countries and the reconstruction of war-torn countries in Europe
• It consists of two institutions:
• IBRD (International Bank for Reconstruction and Development)
• IDA (International Development Associations)
• Other institutions include the IFC, MIGA, and the International Centre for Settlement of Investment Disputes (ICSID)

The IMF's Purpose

• To encourage monetary cooperation
• To provide global financial stability
• To monitor pegged or fixed exchange rates
• To provide short-term loans to prevent devaluation and the state's fixed exchange rate in balance-of-payments deficits

Restructuring Post-Fixed Rates

• After the fall of fixed exchange rates, its role shifted to providing liquidity
• Focus then went to countries tied to major currencies
• IMF's Dominance

Conditionality

• In exchange for loans, countries need to adjust their economic policies for strong & effective measures

The General Agreement on Tariffs and Trade (GATT)

• Its main goal is to prevent trade wars caused by protectionist policies
• It was superseded by the World Trade Organization (WTO)
• Initially it was restricted to western nations

The World Trade Organization (WTO)

• It made a transition to a multilateral trade order
• It made a rules-based international trade order
• it is a legitimate multilateral institution with formal and diplomatic status

Key details of the WTO

• Detailed rules cover goods, intellectual property, investment, and services
• One of the most legalized international bodies, it has binding and automatic dispute settlement
• Power dynamics arise between powerful and weak states

International Monetary System

• The International Monetary System transitioned from fixed exchange rates to a dollar-gold standard, and to a floating exchange rate
• Gold Standard: unlimited convertibility of currencies into gold and high stability facilitated by trade among countries that eliminated forex fluctuations and risks
• Dollar-Gold Standard: the US dollar is the only currency convertible to gold; while other countries are fixed/pegged to the value of the dollar.
• Floating Exchange Rate: currencies depend on market supply and demand

Shift from Keynesianism to Neoliberalism

• Keynes (economist) posited that stimulus was needed to overcome the stagnation, demand-side crisis, of The Great Depression
• A rising unemployment and rampant inflation has brought about the Keynesian paradigm
• Neoliberalism centers around small governments, an unregulated market, and limited intervention
• It endorses Privatization, deregulation, less public spending, tax policies (supply side economics)

The Washington Consensus

• This entails the IMF-WB-US Treasury's prescriptions:
• Fiscal Discipline
• Reordering Public Expenditure Priorities
• Liberalizing Interest Rates
• Deregulation
• Property Rights

Global North and South

• It is a division of the globe into halves and economic inequalities
• The divisions are between rich and poor

The Brendt Line (1983)

• A map of how the Global North and South are divided

Great Flip

• Asian powers accounted for 60.7% of world's GDP in 1820
• In 1913, however the West was at 68.3%

More Economically Developed Countries (MEDCs)

• The Global North is generally categorized as more economically developed
• Stable economies and polities
• Quality education, accessible healthcare, and quality social services

Factors Contributing to MEDC Status

• Free market capitalism, and the use of economic liberalism
• inclusive and extractive institutions

Are the Northern Countries declining?

• the Northern countries may be facing a decline economically

2022 GDP in the North vs South

• There are economic differences between northern and southern countries

Global South

• this section goes into the Global South...

First, Second, and Third World

• There is a discussion on what it means to be countries in each of these economic states

Characteristics of the Global South

• The Global South is less economically developed LEDCs
• There are often weak governments a poor standard of quality of life

Origin of Poverty in the Global South

• Colonization plays a big part into their financial situation

Economic Extractivism

• The north is extracting resources co-opting people

More factors to consider in what is making them poor

• weak institutions
• internal conflicts

Future Prospects

• The Global North could decline as the South, and Asian countries might start to become even more prominent

The Future of Global Economics

• South-South cooperation will become more prominent
• The ASEAN countries and BRICS countries will become more powerful

Asian Regionalism

• Asian regionalism is a coming together, sharing history, and a collaborative action
• However it's foundationally rooted in economic integration

Benefits of Forming Regions

• Strength in numbers, working together

Asia’s Economy

Strengths

• Important world presence
• Rapid economic growth

Problems

• Still failing, human rights

For cooperation in Asia:

• Trade opportunity
• Financial opportunity
• Social and environmental concerns

Regional Organizations

• There is more on the regional organizations of Singapore and Asia
• There are economic numbers and statistics