Globalization Lecture Week 3

Globalization

• Globalization is defined as the widening, deepening, and speeding up of worldwide interconnectedness.
• It's described as the emergence and operation of a single, worldwide economy.
• Globalization encompasses more than just economics, impacting social and political spheres.
• It's often viewed alongside modernization, Westernization, or liberalization.
• Today, the global economy is considered a "grand narrative" connecting politics and economics.
• Globalization is measured by trade and financial activity patterns. It's a process, not a condition.
• There's debate on the best indicators to assess globalization, with some indicators viewed as inappropriate.

Lecture Plan

• The lecture will discuss what globalization is.
• It will examine the factors driving globalization.
• The importance of globalization will be explored.
• The impact of the pandemic on globalization will be analyzed.
• The lecture will explore the implications of the war in Ukraine for globalization.

Evidence of Globalization: Trade

• Global trade has significantly increased in the last four decades, but remains concentrated among OECD countries and a few East Asian and BRIC economies.
• Regional specializations and barriers still exist.
• Trade levels were higher during the period 1870-1914, compared to percentages of GDP.
• Global trade experienced a sharp drop in 2009, but recovered quickly.
• The pandemic interrupted trade in some ways, causing supply chain issues and price increases.
• Changes in preferences and Chinese lockdowns influenced outsourcing and other significant global trade developments.
• Questions arise about whether there's a shift towards deglobalization.

Evidence of Globalization: Finance

• Financial markets have shown significant growth and activity since the 1960s, especially in the foreign exchange market.
• The global financial services market is also expanding.
• Globalization is qualitatively different than in prior periods.
• Restrictions on capital flows and mobility have decreased compared to earlier periods.
• Foreign ownership of asset classes like equities, bonds, etc. has dramatically increased recently.
• The 2008 financial crisis caused a collapse in financial activity that took time to recover.

Evidence of Globalization: Migration

• The main pattern of migration is from South to North, largely urban.
• A large portion of 1970 migration was concentrated in 23 countries, reduced to 28 countries by 2000.
• Remittances and personal financial transfers are significant aspects of international migration.
• Present day migration is more controlled compared to the period 1870-1914.
• Global migration growth has been significant since 2000 based on UN reports.
• Migration is an urban phenomenon and increasingly gender-balanced.
• Globalization has been politicized in recent years due to crises such as the migrant crisis in 2015, Brexit, and the election of Trump. Also impacted by Covid-19.

KOF Index of Globalization

• The KOF Index measures globalization's economic, social, and political dimensions.
• It also provides sub-indices for various types of flows and proximity.
• Data has been collected on 207 countries annually from 1970-2010.

Globalists and Sceptics

• Globalists see the new era of globalization as confirmed by patterns in international trade, finance, investment, and labor. However, they note the uneven nature of globalization primarily concentrated in OECD countries.
• Sceptics argue that globalization is exaggerated and isn't the sole global force. They also note regionalism and highlight past eras in history where similar phenomena occurred.

The Causes of Globalization

• Identifying the precise causes of globalization is challenging.
• Economic globalization can be analyzed through "thick" (technology being a prime driver), or "thin" (trade liberalization) arguments.

Technology

• Modern communication infrastructures have shrunk the world and facilitated a global economy.
• The information revolution has contributed to the rise of post-industrial economies.

The Economic Logic

• Orthodox economics explains globalization through market dynamics, competition, comparative advantage, and multinational corporations.
• Radical economics argue that globalization stems from the inherent tendencies of capitalism to overproduce, requiring new markets and sources of profit.

Politics

• Neo-liberalism (deregulation, privatization, liberalization) is seen as a key force in globalization.
• The rise of the United States as a global power.
• Changes in relative global power dynamics related to the United States.
• The possible impact of digital commerce and BRICS economies.

Discussion Questions

• The lecture's discussion section will focus on fundamental causes of globalization.
• It will examine if globalization is primarily a political project, rather than strictly economic.
• The lecture will discuss the transition towards potential deglobalization.

Interrogating Globalization

• The lecture features an Irish Times podcast interview with Lionel Barber on globalization.
• Various sources and experts will detail aspects of globalization.

This quiz covers key concepts and definitions of globalization, including its economic, social, and political dimensions. It also explores factors driving globalization, the effects of the pandemic, and implications of global events such as the Ukraine war. Test your understanding of globalization's multifaceted nature and its current relevance.