The Contemporary World PDF

spread of World Capitalism. THE CONTEMPORARY (Wallerstein) WORLD b.​ Global Capitalism Atty. Rafael Bautista | 2nd Year, 2nd Semester -​ Tend to...

spread of World Capitalism. THE CONTEMPORARY (Wallerstein) WORLD b.​ Global Capitalism Atty. Rafael Bautista | 2nd Year, 2nd Semester -​ Tend to see globalization as a novel stage in evolving system of World TOPIC OUTLINE: Capitalism – “Capitalist I.​ Globalization: Definitions, Theories, Globalization” and Ideology c.​ The Network Society of School of II.​ The Global Economy III.​ The Global Interstate System Thought I. Globalization: Definitions, Theories, -​ Capitalism does not fuel and Ideology globalization but technology and Globalization technological change as the -​ The growing interdependence of the underlying cause of globalization. world’s economies, cultures, and (Castell) populations, brought about by d.​ Space Time and Globalization cross-border trade in goods and -​ The conceptual essence of services, technology, and flows of globalization is “time-space investment, people, and information distanciation”: which Giddens -​ Interconnectedness of human defines as the “intensification of beings brought about by worldwide social relations which link technological changes, modern distant localities in such a way the transportation and communication local happenings are shaped by technology events occurring many miles away -​ A concept that “refers both to the and vice-versa.” compression of the world and the e.​ Transnationality and intensification of consciousness of Transnationalism the world as a whole”. (Robertson, -​ Transnational processes and 1992) practices are defined broadly as the -​ The compression of time and space multiple ties and interactions and the annihilation of distance (Economic, political, social, and (Harvey, 1989) cultural) that link people, -​ Process of interaction and communities and institutions across integration among people, the borders of nation-states. companies and governments of -​ Transnationalism is an umbrella different nations, a process driven by concept encompassing a wide international trade and investment variety of transformative processes, and aided by information technology. practices and developments that (Sunny Levin Institute) take place simultaneously at a local Theoretical Paradigms and global level. a.​ World Systems f.​ Global Culture -​ Views globalization not as a recent -​ Emphasize the rapid growth of the phenomenon but as virtually mass media and resultant global synonymous with the birth and cultural flows and images in recent decades evoking the image  famously put forth by Marshal ​ Context-bound responsiveness to McLuhan of the “global village”. broad range of political issues: Common Ground Relevance of the concept to political -​ In the absence of a generally issues accepted definition, Steger explains ​ Produce effective conceptual that GLOBALIZATION has been DECONSTATION CHAINS commonly understood either as a Ability to Produce Effective Conceptual PROCESS, a condition or an Deconstation Chains IDEOLOGY. (Sterger, Ideologies of -​ Freeden considers ‘deconstation’ a Globalization) crucial process in the formation of Process thought systems because it specifies -​ As a process, globalization is viewed the meanings of the core concepts as a multidimensional set of social by arranging them in a “pattern” or processes that create, multiply, “configuration” that links them with stretch, and intensify worldwide other concepts in a meaningful way. social interdependencies and -​ According to Sterger, “effective exchanges while at the same time decontestation structures can thus fostering in people a growing be pictured as a simple semantic awareness of deepening chain whose conceptual links connections between the local and convey authoritative meanings that the distant. (Steger, 2005: 13) facilitate collective decision making.” Condition -​ Small concept - Individual Concept - -​ Sterger used the term “Globality” to Other Concepts - System - Ideology signify a future social condition -​ Sterger refers to them as characterized by thick economic, “ideological claims” (also called political, and cultural “Core Claims”) endow thought interconnections and global flows systems with specific meanings that that make currently existing political benefit particular social groups. borders and economic barriers Sterger’s 6 Core Claims (Deconstation irrelevant. Claims) Political Ideology -​ Globalization is about the -​ In support of his view that Liberalization and Global Integration globalization is a political belief of Markets system that benefits a certain class, -​ Globalizations is Inevitable and Sterger used the line of reasoning of Irreversible another globalization scholar, Michel -​ Nobody is in charge of Globalization Freeden, by following the letter’s 3 -​ Globalization benefits everyone in Criteria in determining an ideology, the long run namely: -​ Globalization further the Spread of ​ Degree of uniqueness and Democracy morphological sophistication: The -​ Globalization requires a global war distinctiveness and complexity of the on terror concept II. The Global Economy capital across borders. The term Globalization in Economics sometimes also refers to the 1.​ Trade and Transactions movement of people (labor) and 2.​ Capital and Investment movements knowledge (technology) across 3.​ Migration and movement of people international borders. (IMF, 2008). 4.​ Dissemination of knowledge -​ In economic terms globalization is Globalization and its Impact on nothing but a process making the Economic Growth world economy an “organic system” ​ Benefits by extending transnational economic -​ Foreign direct investment processes and economic relations to -​ Technological Innovation more and more countries and by -​ Economies of scale deepening the economic ​ Risks interdependencies among them. -​ Inequitable distribution (Szentes. 2003: 69) -​ Threat to sovereignty When did Globalization start? -​ Interdependence -​ Frank and Gills (1993) Major Goals of Macroeconomics -​ Fernan Braudel (1973) International Trade -​ The breakthrough came only in the -​ Is the process by nations who export nineteenth century and import goods, services and Going beyond simple economics financial capital. -​ Economic systems must he -​ International trade is vital to analyzed within the context of overall economic growth because it social system of a country and, expands a nation’s consumption indeed, within an international, possibilities. global context as well. Economic Basis of Trade -​ “Social system” — the 1.​ Different nations are endowed with interdependent relationships various kinds and amount of natural between economic and resources noneconomic factors. 2.​ The production of varied goods and Development services require different -​ Amartya Sen (1998 Nobel laureate combinations of economic resources in economics) argues that the and also particular technology “capability function” is what really 3.​ Various nations have different matters for status as a specializations that make their poor/non-poor person. products highly differentiated -​ Economic growth cannot be sensibly Economic Globalization treated as an end in itself. -​ Economic globalization is a historical Development has to be more process, the result of human concerned with enhancing the lives innovation and technological we lead and freedoms we enjoy. progress. It refers to the increasing -​ Contemporary globalization is, integration of economies around the however, considered to be a myth world, particularly through the (Bairoch, 1993) not just because it is movement of goods, services and not without precedents. More  concerns have been raised with -​ Relations between US and Central regard to its impact on the worldwide America distribution of income. Capitalism Fuels World Economy -​ According to Wallerstein, capitalism, ​ Old Concept ‘a historical social system’ (1983: -​ Capitalism is the existence of 13), created the dramatically persons or firms producing for sale diverging historical level of wages in on the market with the intention of the economic arena of the world changing a profit system. Thus, growing inequality, ​ Capitalism Today along with -​ A system gives priority to the economic and political dependence are not endless accumulation of a capital: it independent at all from economic means that people and firms are globalization. accumulating capital in order to World Economy accumulate still more a capital, a -​ Large geographic zone within which process that is continual and there is a division of labor and hence endless significant internal exchange of basic -​ Contemporary globalization is essential goods as well as flows of equated primarily with TNCs capital and labor. -​ The capitalist system therefore -​ A defining feature of a world ensures that the economic status economy is that it is not bounded by quo is maintained. a unitary political structure. -​ Capitalist system requires a very -​ Rather, there are many political units special relationship between inside the world economy, loosely economic producers and the holders tied together in our modern world of political power. system in an interstate system. -​ Capitalists need a large market and -​ Examples: EU as a trading block, need a multiplicity of states, so that APEC, ASEAN they can gain the advantages of -​ North Korea is supposed to be working with states but also can isolated but it has continued to be a circumvent states hostile to their player in the global economy trading interests in favor of states friendly to with China, India, France, and the their interests. Only the existence of Philippines a multiplicity of states within the -​ What unifies the global economic overall division of labor assures this system most is the division of labor possibility. -​ Although the economic global -​ Ex: MNCs/TNCs based in countries system has some common cultural that are basitions of democracy like patterns, called geoculture. US and Western European states (eg.US-Central America; continue to work with China and Australia-Pacific Islands) It does other states even with poor human mean that neither political nor rights record to maintain the cultural homogeneity is to be capitalist system - it ensures that the expected or found in a division of labor is undisturbed world-economy. III. The Global Interstate System State -​ “Is a community of persons more or less numerous, permanently occupying a definite portion of territory, having a government of their own to which the great body of inhabitants render obedience, and enjoying freedom from external control.” (De Leon & De Leon) Interstate United Nations -​ “A system of unequally powerful and -​ The United Nations is an competing states in which no single international organization founded in state is capable of imposing control 1945. on all others, These states are in -​ Currently made up of 193 Member interaction with one another in a set States, the UN and its work are of shifting alliance and wars, leading guided by the purposes and to a restructuring of balance of principles contained in its founding power.” Charter. Neoliberalism -​ The UN has evolved over the years -​ “The intensification of the influence to keep pace with a rapidly changing and dominance of capital. Values world. market exchange capable of acting -​ But one thing has stayed the same: as a guide to all human action. it remains the one place on Earth Emphasizes the significance of where all the world’s nations can contractual relations in the gather together, discuss common marketplace. Social good will be problems, and find shared solutions maximized by maximizing the reach that benefit all of humanity. and frequency market transactions.” Post World War II Economic Systems Economic Sovereignty -​ The Bretton Woods Conference -​ “The power of national governments (formally known as the United to make decisions independently of Nations Monetary and Financial those made by other governments.” Conference), held at New Reality Bites Hampshire, USA in July 1944, -​ Realistically speaking, as the world marked the birth of a new becomes more interconnected international economic framework. through politics, trade and -​ Delegates from 44 countries agreed communications, the role of states on the creation of two international and governments are also shifting. economic organizations: -​ Thus, national and local policies are International Monetary Fund (IMF) not only based on local context but and World Bank (WB). These two also international and global were called the Bretton Woods realities. institutions.  -​ It also included a third entity, the barriers as witnessed during the General Agreement on Tariffs and interwar period. Trade (GATT) which served as the -​ While it was effective in liberalizing primary global trade organization. trade, GATT was unable to address -​ These institutions were known as the expansion of trade in services, the Keystone International Economic investment and intellectual property. Organizations (KIEOs). -​ It was also incapable of providing a International Monetary Fund strong and efficient system for -​ The role of the IMF is to promote dispute settlement. global monetary cooperation and -​ GATT was eventually superseded by international financial stability. a more formal World Trade -​ The institution, created in 1945, was Organization (WTO) in 1995 that designed to monitor the system of managed to address these issues. pegged or fixed exchange rates. -​ In this system, the official exchange rate of currencies was related to the gold and U.S. dollar. (Cohn, 2011) -​ The IMF provide short-term loans to prevent devaluation and retain the state’s fixed exchange rate in instances of the temporary balance of payment deficits. World Bank -​ The World Bank (WB), in comparison to the IMF, was created to grant long term loans for the economic development of less developed countries and reconstruction of war-torn countries in Europe. -​ The WB is made up of two institutions: 1.​ International Bank for Reconstruction and Development (IBRD) provides lending to middle-income and credit-worthy low- income countries. 2.​ International Development Association (IDA)- grants loans to lowest income countries. GATT and WTO -​ The purpose of GATT was to avoid trade wars by raising protectionist