Introduction to Globalization PDF

Introduction to Globalization  NEOLIBERALISM “NEO” which means new or revived Proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills characterized by strong private property rights, free markets, and free trade....

Introduction to Globalization  NEOLIBERALISM “NEO” which means new or revived Proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills characterized by strong private property rights, free markets, and free trade. Power and wealth are concentrated within transnational corporations  NEOLIBERALISM Self – regulating market is a core assumption in classic liberalism (Munck, 2005) Efficient allocation of resources is the most important purpose of an economic system, and the most efficient way to allocate resources goes through market mechanisms.  NEOLIBERALISM FREE MARKET - with little or no government control - Free to be an investor or entrepreneur - Price is determined by the seller - Free to own, buy, and sell  NEOLIBERALISM FREE TRADE - two or more nations agreed to reduce import and export barriers among them. - If policies were created, goods and services can be bought and sold across international borders with little or no government control with regards to tariffs, quotas and subsidies  FREE TRADE Creates strong competition in the international market thereby affecting local or domestic industries Protectionism refers to actions or policies that allow the government of a country to promote domestic or local producers, and thereby boost its own production of goods and services by imposing tariffs or otherwise limiting foreign goods and services in the marketplace.  NEOLIBERALISM Privatization is the transfer of state owned properties or businesses to the private sector. - Financial constraint on the part of the government - Ex. PAL in 1992, PLDT in 1995 Introduction to Globalization  Trade one of the most important factors that started the cross- border relationship among nations. involves transfer or exchange of goods and services from one person to another or one country to another  Silk Roads ancient network of trade routes that connect the east and the west have been useful to carry out goods and services Silk is one of the most common products for trading at that time  Silk Roads 1st century BC - Luxury products from China started to appear in Rome. They got there after being hauled for thousands of miles along the Silk Road. Trade had stopped being a local or regional affair and started to become global (Vanham, 2019). Silk and spices added to the intercontinental trade between Asia and Europe.  Silk Roads The value of these exports was tiny, in relation with the total income of the economy, yet many middlemen were involved to get the goods to their destination. Global trade links were established Silk road served as the key to people’s movements and open the doors for trans-border relations among countries  16th century Europeans was recognized worldwide by building trade connections on their own terms, bringing their culture to different regions by settling vast areas, and defined the ways in which different people were to interact with each other. The main focus of the Islamic trade and international trade in the Middle Aged was spices.  16th century Mace. Nutmeg, Cloves  16th century These spices were extremely expensive and in high demand, not only in Indonesia but also in Europe. Silk, they remained a luxury product, and trade remained relatively low volume. During this period, colonization took place in different parts of the world.  First wave of globalization (19th century) This marked the period of intense globalizations, when millions migrated, trade greatly expanded, and new norms and organizations came to govern international conduct. Great Britain had started to dominate the world both geographically, through the establishment of the British Empire, and technologically, with innovations like the steam engine, the industrial weaving machine and more.  First wave of globalization (19th century) It was the era of the First Industrial Revolution. This period is characterized by machine manufacturing and industries. During these times, cities grew as people shifted from farming/agriculture to industry and commerce.  First wave of globalization (19th century) Some of the advantages of this period are; Invention of machines to spin and weave cloth. Steam engine was widely used as a source of power. Using of coal in smelting and refining iron. Construction of railways.  First wave of globalization (19th century) However, the Industrial revolution also had a downside for it brought poverty along with progress. Some of the disadvantages are; Technical change threw people out of work. The cities were polluted. The provision of education was limited. Worker’s housing condition was poor.  First wave of globalization (19th century) Trade grew on average 3% per year, for about a century. That growth rate drove exports from a share of 6% in the early 19th century, to 14% in the eve of WW I. People could order through telephone the goods and services it wants while sipping tea and lying on bed.  First wave of globalization (19th century) While Britain was the country who benefited most from globalization, as it had the most technology and capital, other countries did benefitted too, by exporting goods. For instance, the invention of the refrigerated cargo ship or ―reefer ship in the 1870s, allowed countries like Uruguay and Argentina, to enter the golden age of globalization. They started to mass export meat, from cattle grown on their vast lands. Other countries, too, started to specialize their production in those fields in which they were most competitive.  Lesson Proper Technology is always evolving, it is never regressive.