Globalization: Lesson 1 - Contemporary World

CONTEMPORARY WORLD REVIEWER LESSON 1-4\ \ **LESSON 1\ Globalization** is the **interconnectedness** o**f the world\'s economies, societies, and cultures.** It\'s a complex and multifaceted process that has reshaped our world in profound ways. - it is a hard concept to define as it is redundant to...

CONTEMPORARY WORLD REVIEWER LESSON 1-4\ \ **LESSON 1\ Globalization** is the **interconnectedness** o**f the world\'s economies, societies, and cultures.** It\'s a complex and multifaceted process that has reshaped our world in profound ways. - it is a hard concept to define as it is redundant to other terms such as **internalization, liberalization, universalization, and westernization.** **Globalization is [transplanetary] spread of connections between people.** - is the **increasing integration of economies, societies, and cultures across national borders.** It encompasses the flow of goods, services, capital, people, and information across the globe. **TYPES OF GLOBALIZATION** **1.Economic Globalization -** The integration of national economies into a global market, driven by trade, investment, and financial flows. **2.Political Globalization** - The growing influence of International organizations and the spread of democratic values and institutions. **3.Social Globalization --** The **interconnectedness** of societies through migration, cultural exchange, and the spread of ideas and information. **4.Cultural Globalization** - The convergence of cultures through the exchange of ideas, values, and practices, leading to a globalized popular culture. **DRIVERS OF GLOBALIZATION\ 1. TECHNOLOGY -** Advances in communication and transportation technologies have facilitated the movement of goods, services, and information across borders. **2. TRADE LIBERALIZATION -** The reduction of trade barriers, such as tariffs and quotas, has encouraged increased trade and investment between countries. **3. ECONOMIC LIBERALIZATION** - The adoption of market-oriented economic policies has led to the growth of multinational corporations and international financial markets. **4. POLITICAL COOPERATION -** International agreements and organizations, such as the **World Trade Organization and the International Monetary Fund**, have promoted global economic integration. **Economic Aspects of Globalization** **Globalization** has had a profound impact on the global economy, leading to increased trade, investment, and economic growth. **\*Benefits** Increased trade has led to lower prices for consumers and a wider variety of goods and services. It also creates new jobs and opportunities for businesses. **\*Challenges** **Globalization** has also led to job losses in some sectors, particularly manufacturing, as companies relocate to countries with lower labor costs. It can also increase inequality within and between countries. **Social and Cultural Impacts of Globalization** - **Globalization** has led to the convergence of cultures, facilitated by the exchange of ideas, values, and practices. **1.CULTURAL EXCHANGE** - globalization has led to the spread of popular culture, including music, fashion, and food, across borders. **2.MIGRATION -** The **movement of people across borders** has increased cultural diversity in many countries. **3. SOCIAL CHANGE - Globalization** has also contributed to social change, including the rise of new social movements and the growing awareness of global issues. **Political Implications of Globalization** -**Globalization** has also had significant political implications, influencing the power dynamics between states and the rise of international institutions. **Increased Interdependence --** nations become more reliant on each other for trade, investment, and security. **Rise of International Organizations** -- Organizations like the United Nations and the World Trade Organization play a more significant role in global governance. **Challenges to National Sovereignty --** Globalization raises questions about the limits of national sovereignty as global issues, such as climate change and financial crises, require international cooperation. **Environmental Considerations in Globalization** -**Globalization** has both **positive** and **negative** impacts on the environment, posing challenges related to resource consumption, pollution, and climate change. **1.Resource Consumption** **-Globalization** has increased the demand for natural resources, leading to deforestation, depletion of fossil fuels, and other environmental problems. **2.Pollution** **Globalization** has also contributed to pollution, as the production and transportation of goods and services generate waste and greenhouse gas emissions. **3. Climate Change** **Global warming and climate change** are significant environmental challenges exacerbated by globalization, driven by increased energy consumption and carbon emissions. **4. Sustainability** **Globalization** presents an opportunity to promote sustainable practices and reduce the environmental impact of economic activity. **Challenges and Criticisms of Globalization** **1.Inequality - Globalization** can exacerbate inequality between countries and within countries, as some groups benefit more from globalization than others. **2. Cultural Homogenization -** Globalization can lead to the spread of Western culture and values, which can threaten the cultural diversity of other nations. **3.Loss of National Sovereignty -** Globalization can limit the ability of national governments to regulate their economies and protect their citizens from the negative impacts of globalization. **Opportunities and Benefits of Globalization** **1.Economic Growth -** Increased trade and investment can lead to economic growth and job creation in developing countries. **2.Social Progress -** Globalization can promote social progress by spreading democratic values, human rights, and education. **3.Cultural Exchange -** Globalization fosters cultural exchange and understanding, promoting tolerance and respect for diversity. **LESSON 2: THE GLOBALIZATION OF WORLD ECONOMICS** **(IMF) INTERNATIONAL MONETARY FUND** - regards "economic globalization" as a historical process representing the result of human innovation an technological progress. **IMF vs. WB (World Bank)** **\*IMF is not a bank** and does **not** intermediate between investors and recipients. These resources come from **quota subscriptions, or membership fees**, paid in by the IMF's 189 member countries. **Its [primary mission to ensure monetary stability around the world.]** **\***The **World Bank** is an **[investment bank,]** intermediating between investors and recipients, borrowing from the one and lending to the other. **Economic globalization** According to the United Nations (as cited by Shangquan, 2000), **economic globalization** refers to the increasing interdependence of world economies as a result of the growing scale of cross- border trade of commodities and services, flow of international capital and wide and rapid spread of technologies. **\*Mercantilism -- an economic** practice by which **governments** used their economies to increase state power at the expense of other countries. It also a system of global trade with multiple restrictions. -Countries following **mercantilism** aim to **export more than they import,** believing that accumulating wealth through trade will strengthen their nation. **\*Specialization** - is when a country focuses on producing a few goods or services that it can make efficiently. **\*Comparative advantage** - when a country produces goods or services at a lower opportunity cost than others, meaning it gives up less to produce those goods. It encourages countries to trade based on what they can produce most efficiently compared to others. **\*GATT (General Agreement on Tariffs and Trade)\ -international agreement** created in 1947 to reduce tariffs and other trade barriers between countries, making international trade easier and more open. **\*International trade** boosts economic growth by allowing countries to access new markets and sell their products abroad. -is the process and system when goods, commodities, services cross national economy, and boundaries in exchange for money or goods of another country (Balaam and Veseth, 2008). -exchange of goods, services, and capital across national borders. **Gross Domestic Product (GDP) -** is the value of the finished domestic goods and services produced within a nation\'s borders. **Gross National Product (GNP)** - is the value of all finished goods and services produced by a country\'s citizens, both domestically and abroad. **Trade theories** **1.Descriptive theory -** It deals with the natural order and movement of trade. -addresses the questions of which product to trade, how much product to offer and produce, and which country to trade in the absence of government restrictions. **2.Prescriptive theory** - This theory **views government to have participation** in deciding which countries to alter the amount, composition and direction of goods. The pressing question describing descriptive theory is **"Should the government control trade?"** **Silk Road -** the oldest known **international trade route** but it is **not truly "global".** **-Ancient trade route linking China with the West,** that carried goods and ideas between the two great civilizations of Rome and China. **1571**- galleon trade happens and this is the first time that Americas were directly connected to Asian trading routes. **16^th^ to 18^th^ century --** the **galleon trade** was part of the edge of mercantilism. **Mercantilism -- an economic** practice by which **governments** used their economies to increase state power at the expense of other countries. It also a system of global trade with multiple restrictions. Countries, primarily in Europe, competed with one another to sell more goods as a means to boost their country's income (called monetary reserves later on). **Focuses of Trade Policy in International Trade** **1.TARRIF -** a tax imposed by the government of a country or by a supranational union on imports or exports of goods **2.TRADE BARRIERS -** refers to any regulation or policy that restricts international trade, especially tariffs, quotas, licenses etc. **3.SAFETY -** Ensure that imported products in the country are of high quality. Inspection regulations laid down by public officials ensure the safety and quality standards of imported products. **1867 -** Open trade system emerged during this time, when, following the lead of the United Kingdom, the United States and other European nations **adopted the gold standard** at an international monetary conference in **Paris.** **WORLD WAR 1** - Countries depleted their gold reserves to fund their armies, many were forced to abandon the gold standards. Since European countries had low gold reserves, they **adopted floating currencies** that were no longer redeemable in gold. **Great depression -** refers to global economic crisis which started during **1920s** and extended up to the **1930s.** End of using gold standards were until as late as the **1970.** The world economy today us **fiat currencies** **1973-1974 -** During this time, the **stock market crashed.** U.S. stopped linking dollars to gold. This resulted on Keynesian economics could not have predicted- a phenomenon called **stagflation.** **Stagflation** decline in economic growth and employment **(stagnation)** takes place alongside a sharp increase in prices **(inflation).** **Friedrich Hayek & Milton Friedman -** They argued that the governments' practice of pouring money into their economies had caused inflation by increasing demand for goods without necessarily increasingly supply. **Neoliberalism -** emphasizes free markets **(1980s onwards).** **Washington Consensus -** dominated global economic policies from the **1980s** until early **2000s**, it advocates pushed for minimal government spending to reduce government debt. They also called for the **privatization of government-controlled services like water, power, communications, and transport,** believing that the **free market can produce the best results.** **\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*** **LESSON 3: MARKET INTEGRATION** **Market integration** is a metric that explains **how closely related different markets are to one another.** It occurs when prices in different markets follow the same patterns over the time. **How market integration is related to Globalization?** **-**market integration provides an increase in financial and economic efficiency that leads to higher economic growth. We often think of **economy** as something that covers a **wide variety of financial aspects like employment, Gross Domestic Product (GDP) or the stability of stock markets.** **(IFI) International Financial Institutions** An **international financial institution** is a [financial institution] that has been [established] (or chartered) [by more than one country], and hence are subjects of international law. Its **owners** or shareholders are generally national **governments**, although other international institutions and other organizations occasionally figure as shareholders. **Bretton Woods system key elements** -expression of currency in terms of gold or gold value to establish a par value **(Boughton, 2007)** -the establishment of an overseer for these exchange rates; thus, the **International Monetary Fund (IMF) was founded.** **(GATT) The General Agreement on Tariffs and Trade** -It was established in **1947 \[Goldstein et al., 2007).** GATT was a forum for the meeting of representatives from 23 member countries. It focused on trade goods through multinational trade agreements conducted in many rounds of negotiation. However, "it was out of the Uruguay Round (1986-1993) that an agreement was reached to create the World Trade Organization (WTO)" (Ritzer, 2015). **(WTO) World Trade Organization** -an independent multilateral organization that became responsible for trade in services, non-tariff-related barriers to trade, and other broader areas of trade liberalization. **The International Monetary Fund (IMF) and the World Bank** **-** institutions aimed to help the economic stability of the world, they were started by countries. **-IMF** and the **World Bank** were designed to complement each other. -The **IMF's main goal** was to help countries which were in trouble at that time and who could not obtain money by any means. Perhaps, their economy collapsed or their currency was threatened**. IMF**, in this case, served as a lender or a **last resort**. **The Organization for Economic Cooperation and Development (OECD)** **-**It is highly influential, despite the group having little formal power. This emanates from the member countries' resources and economic power. -It **aims** to promote policies to make the world richer, freer, fairer, and more stable, not only for members but also for non- member countries. **(OPEC) Organization of Petroleum Exporting Countries** -In **1960**, the **Organization of Petroleum Exporting Countries (OPEC)** was originally comprised of Saudi Arabia, lraq, Kuwait, Iran, and Venezuela. **-OPEC** was formed because member countries wanted to increase the price of oil, which in the past had a relatively low price and had failed in keeping up with inflation. -Main purpose is to ensure that the price of oil remains at a price that is satisfactory to member countries. **(EU)European Union** **-The European Union (EU) is made up of 28 member states.** Most members in the Eurozone **adopted the euro as basic currency** but some Western European nations like the Great Britain, Sweden, and Denmark **did not.** **(NAFTA)North American Free Trade Agreement** -The **North American Free Trade Agreement (NAFTA)** is a trade pact between the United States, Mexico, and Canada created on **January 1, 1994** when **Mexico joined the two other nations.** It was first created in **1989 with only Canada and the United States as trading partners**. **LESSON 4: THE GLOBAL INTERSTATE SYSTEM** **The Interstate System -** The **origins of the present-day concept of Sovereignty** can be traced back to the Treaty of Westphalia, which was a set of **agreements signed in 1648** to end the thirty years' war between the major continental powers of Europe. -The latter believed in spreading the principles of the **French Revolution** - liberty, equality and fraternity to the rest of Europe. **Effects of Globalization to Governments** -One of the **key aspects of state sovereignty** is the **government**. It is a group of people who have the ultimate authority to act on behalf of a state. 1.**First**, **globalization** is seen to impose a forced choice upon nation-states. 2\. **Second** is the **establishment of economic and political integrations.** One good example is the European Union (EU) and the **North America Free Trade Agreement** (NAFTA). 3\. **The third effect** of **globalization** is the establishment of international laws and principles. 4\. The **fourth effect** is the rise of **transnational activism (TNA).** Such happens when activist groups of nation-states connect with their counterparts in other states. **INSTITUTIONS THAT GOVERN INTERNATIONAL RELATIONS** **UN** (UNITED NATION) and **NATO** (North Atlantic Treaty Organization) **WTO** (World Trade Organization) and **NAFTA** (North American Free Trade Agreement) **ASEAN** (Association of Southeast Asian Nations) **(EU)**European Union **(NGOs)** Non-Governmental Organizations **Peace Treaties and Military Alliances: The UN and NATO -** Global politics entails relationship of countries and different governments and nongovernmental organizations, The United Nations (UN) is one of the leading political organizations in the world where nation-states meet and deliberate. it **functions in four areas**: **military issues, economic issues, environmental issues, and human protection.** It is made up of close to **200 countries** from **around the world, 193 member states to be exact.** **(United Nations, 2011)** **Global Economic Associations: The WTO and NAFTA** **- WTO** which was created with the **goa**l of **increasing free trade.** Countries, therefore, can buy and sell goods from one another without placing takes on imports or tariffs. In addition, **tariffs** are used to protect businesses and companies inside their country. **Global Economic Associations: The WTO and NAFTA** **- NAFTA.** This is an economic treaty between the **United States, Canada, and Mexico** in which the **three countries** **trade freely without taxing each other.** **Association of Southeast Asian Nations (ASEAN)** **Established in 1967, now has 10 member states.** Its aims are to: 1\. accelerate economic growth, social progress and cultural development in the region; promote regional progression; 2\. advance peace and sustainability; **European Union (EU)** **An IGO with 28- state members was established in** 1993. Its goals are 1\. to promote peace, its values, and well-being of its citizens; 2\. offer freedom, security and justice without internal borders; 3\. uphold sustainable development; **Non-Governmental Organizations (NGOs)** \- Another example of an **international organization that was developed out of war** is the **Red Cross (Red Crescent in Muslim countries)**. **NGOs are not tied to any country.** This allows them to **operate freely throughout the world.** -They provide emergency relief such as food, water, and medical supplies for those whose homes or towns have been destroyed by disaster or war.