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CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818...

CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818 CSTC IT Center: 042 7192805 Atimonan Contact Number: 042 7171420 SCHOOL OF TEACHER EDUCATION Instructional Module in The Contemporary World Preliminaries I. Module Number 2 II. Module Title Introduction to the Study of Globalization III. Brief Introduction Globalization is the process of interaction between individual, corporations, and government around the world. Also, it seen by some as a complex and multifaceted phenomenon as a process of capitalist expansion involving the incorporation of local and national economies into a global, unregulated market economy. This also discusses the globalization process, condition, ideology and the impact of this in our Academe. Misconceptions about it also influences the globalization IV. Module Outcomes After studying this module, you are expected to: 1. identified the actors that facilitate economic globalization. 2. internalized and stated the things happened Post-World War II Economic System. 3. explained the role of international financial institutions in the creation of a global economy. 4. compared-and contrast the GATT and WTO 5. identify the underlying philosophies of varying definitions of globalization Lesson Number 2 Lesson Title The Global Economy 1. The Post-World War II Economic System 2. International Monetary Fund 3. GATT and WTO Brief Introduction of In this lesson you will with a more detailed understanding of the Lesson other important facets associated with Globalization as we embark on a fuller appraisal of the structures of Globalization. Susan Strange (as cited in Balaam & Dillman, 2014) defines the underlying foundations of the system of the international political economy into four structures: production and trade; money and finance; security; and knowledge and technology. She describes these structures as "webs" of complex arrangements constituted of rules, conventions, norms that govern and facilitate the interactions of state and non- state actors with each other (as cited in Balaam and Dillman, 2014, p. 15). Unit Two aims to introduce the reader to these structures that govern political and economic relations at the international level. The readers will be guided in learning on how institutions such as the IMF, WB, GATT/WTO, and the UN were created and transformed overtime at whose terms and whose expense, and which groups are trying to change these structures. Lesson Objectives At the end of this lesson, you are expected to: 1. Narrate a personal experience of globalization. 2. identified the factors that facilitate economic globalization.  CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818 CSTC IT Center: 042 7192805 Atimonan Contact Number: 042 7171420 3. internalized and stated the things happened Post-World War II Economic System. 4. explained the role of international financial institutions in the creation of a global economy. 5. compared-and contrast the GATT and WTO 6. identify the underlying philosophies of varying definitions of globalization Lesson Proper I. Getting Started Look at the table below. In what reason why they are the top countries in the world? (Write your answer in the question here.) ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ II. Discussion Globalization is a multidimensional phenomenon that has political, economic, and cultural characteristics. To dispense with the multifaceted nature of the globalization would be inappropriate; the same goes as to how it would be incorrect to dismiss the essential and crucial role that economic dimension plays in as much as it as a driving force of globalization (Benczes, 2014). Szentes (2003) defines economic globalization as "a process making the world economy an "organic system" by extending transnational economic processes and economic relations to more and more countries and by deepening the economic interdependencies among them" (p. 69). Benczes (2014) follows this definition and emphasizes that interpretation of the current trends in the world economy must be understood in the global context of an integrated world economy. Moreover, while the state does not remain as the sole unit of analysis; non-state actors such as international organizations, non-governmental organizations, and multinational or transnational corporations play significant roles in the international economic processes. This chapter will primarily discuss the concept of economic globalization, the actors that facilitate it and the modern global economic system it has built today. Factors Facilitating Economic Globalization 1. Trade Liberalization Countries can expand their markets, increase exports, and attract foreign investment by lowering trade obstacles and promoting free trade agreements. Economic integration and growth are aided by trade liberalization. 2. Technological Advancements Rapid developments in transportation, communication, and information technology have made cross-border trade and collaboration more accessible to businesses. Technology facilitates efficient products movement, information sharing, and the growth of global supply networks.  CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818 CSTC IT Center: 042 7192805 Atimonan Contact Number: 042 7171420 3. Financial Integration Financial market integration enables the free flow of capital across borders, allowing countries to attract investments, access international funds, and finance development projects. Financial integration improves economic stability and makes global trade and investment easier. 4. Government Policies: Government policies are critical in advancing economic globalization. Foreign direct investment, entrepreneurship, and innovation are encouraged by pro-market policies, business-friendly legislation, and investment incentives. Governments also take part in international organizations and negotiate trade treaties in order to improve economic unity. 5. Global Cooperation and Institutions: The presence of global organizations and international collaboration give a platform for countries to interact, resolve trade disputes, and develop common norms and laws. Organizations such as the World Trade Organization (WTO) and the International Monetary Fund (IMF) promote fair trade and global economic stability. Understanding the Underlying Philosophies of Varying Definitions of Globalization Globalization is a complicated idea that has spawned various discussions and disagreements among academics, decision-makers, and people all over the world. Exploring the underlying ideas that influence the many definitions of globalization is crucial to developing a thorough knowledge of this phenomenon. This textbook page tries to give a general overview of the many philosophies and perspectives on globalization. 1. Economic Perspective: Globalization is sometimes defined in economic terms as the integration and interdependence of economies across borders. Proponents of this viewpoint contend that globalization leads to more commerce, investment, and economic prosperity. They think that open markets and the removal of trade obstacles lead to better efficiency and prosperity. This viewpoint is based on the neoliberal philosophy, which emphasizes the value of individual freedom, market competitiveness, and limited government action. 2. Cultural Perspective: The idea, value, and cultural practices that travel between countries are the subject of the cultural viewpoint on globalization. Globalization, according to supporters of this perspective, encourages intercultural harmony and cultural diversity. They hold that the enrichment and preservation of regional traditions might result through the sharing of cultural experiences. This viewpoint is consistent with the cosmopolitan ideology, which emphasizes the value of multiculturalism, inclusivity, and global citizenship. 3. Political Perspective: Globalization is defined in political terms as the greater interconnection and influence of global institutions and players. Supporters of this viewpoint say that globalization improves global governance and collaboration. They believe that international organizations such as the United Nations and the World Trade Organization have an important role in tackling global concerns. This viewpoint is influenced by the liberal internationalist ideology, which emphasizes the necessity of collective action, diplomacy, and the rule of law in global affairs. Conclusion We can critically evaluate and discuss this complicated issue when we are aware of the underlying ideas that underlie the many definitions of globalization. It is crucial to understand that these viewpoints don't conflict with one another and frequently overlap in real-world situations. We may acquire a more comprehensive understanding of the effects of globalization on societies, economies, and people if we examine it from economic, cultural, and political angles. Post-World War II; Economic System Significant changes were made to the world economy following the end of World War II. The world's nations were committed to reviving their economies and setting up a secure global financial system. This resulted in the creation of numerous economic organizations and policies that helped to define the post-war period. We shall examine the internalized and proclaimed features of the post-World War II economic system in this part. 1. Internalized Features a) Capitalism:  CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818 CSTC IT Center: 042 7192805 Atimonan Contact Number: 042 7171420 During this time, capitalism was the dominant economic philosophy. It placed a strong emphasis on the pursuit of profit and private resource ownership. Entrepreneurship, market competition, and the creation of wealth were all promoted by capitalism. This economic system offered chances for development and innovation. b) Market Economy: A market economy served as the cornerstone of the post-World War II economic system. People had the freedom to choose how much to produce, consume, and invest, and supply and demand set the pricing for goods and services. The market economy sought to properly distribute resources and encourage economic expansion. c) Free Trade: The post-World War II economic system relied heavily on international trade. Countries aimed to improve trade ties and lower trade restrictions. To advance free trade and negotiate trade agreements, organizations like the General Agreement on Tariffs and Trade (GATT) were founded. As a result, international trade increased and economies came together. 2. Declared Features: a) Bretton Woods System: The Bretton Woods Conference, held in New Hampshire, USA, in 1944, brought together officials from 44 countries to create a stable monetary system. The International Monetary Fund (IMF) and the World Bank were both founded as a result of the conference. While the World Bank concentrated on providing loans for post-war reconstruction and development programs, the IMF focused on maintaining exchange rate stability and offering financial support to member nations. b) Marshall Plan: The Marshall Plan was put into action by the United States in 1948 to help war-torn Europe rebuild economically. Billions of dollars were allotted as part of this strategy to offer financial support, technical aid, and resources to repair infrastructure, boost output, and support economic stability. Transatlantic cooperation and the revitalization of European economies were both greatly aided by the Marshall Plan. c) Welfare State: To combat social and economic inequality, many nations implemented welfare state policies. These laws attempted to offer their residents social security, health care, education, and other crucial services. In order to secure a just distribution of wealth and combat poverty, the welfare state was established. The post-World War II economic system included internalized components like capitalism, the market economy, and free trade. In addition, factors like the Marshall Plan, Bretton Woods System, and the implementation of welfare state policies helped countries' economies recover and thrive. To understand the historical setting and subsequent economic advancement in the post-war era, it is essential to appreciate the dynamics of this economic system Role of International Financial Institutions in the Creation of Global Economy IFIs, or international financial institutions, are essential to the development and operation of the world economy. We shall examine the importance of IFIs and how they support the growth and stability of the international financial system in this chapter. Section 1: What are institutions of international finance? Organizations known as IFIs were founded by a number of nations to advance global economic cooperation and offer member nations financial support. These organizations include the World Bank, the Regional Development Banks, and the International Monetary Fund (IMF). They seek to promote economic growth on a global scale, combat poverty, and maintain financial stability. Section 2: Functions of International Financial Institutions 2.1 Offering Financial Assistance One of the main duties of IFIs is to offer member nations financial support when they are struggling economically. This support could take the shape of loans, grants, or technical know-how. IFIs help member nations address balance of payments concerns, finance infrastructure projects, and carry out economic reforms by providing financial assistance. 2.2 Fostering Economic Stability IFIs are essential for fostering economic stability on both a national and international scale. To create policies and strategies that uphold macroeconomic  CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818 CSTC IT Center: 042 7192805 Atimonan Contact Number: 042 7171420 stability, manage inflation, and encourage sustainable growth, they closely collaborate with member nations. IFIs provide countries with advice and experience to help them manage economic crises and avert financial collapse. 2.3 Facilitating Trade and Investment Global Trade and Investment are two more areas where international financial institutions are active. They assist members in enhancing their trade infrastructure, lowering trade barriers, and promoting a favorable business environment. IFIs aid in the expansion of international trade and economic integration by easing cross-border transactions and encouraging investment. Section 3: Impact of International Financial Institutions on the Global Economy 3.1 Poverty Reduction and Sustainable Development IFIs place a high priority on these issues in their daily activities. In order to combat poverty, enhance infrastructure, support inclusive economic growth, and address healthcare, education, and healthcare disparities, they offer member nations financial resources and technical assistance. IFIs support a country's long-term growth by making infrastructural and human capital investments. 3.2 Crisis Management and Financial Stability IFIs are essential for delivering urgent aid and regulating financial markets during economic crises. They provide technical know-how to restore economic stability as well as financial assistance to nations having trouble with their balance of payments. They also assist in debt restructuring. IFIs help to maintain general economic stability by reducing the effects of financial crises. International Monetary System The International Monetary System is “a set of general rules, legal norms, instruments and institutions shaping payment conditions in foreign trade (international scale)” (Mikita, 2015). It is brought by the multilateral international agreements of trading participants, facilitated by international financial organizations. The Gold Standard adopted by England in 1816, being the first country to industrialize, was the first international monetary system (Mikita, 2015). It would later be joined by European countries and the United States. It functioned as a fixed exchange rate regime where countries determined the gold content of their national currencies which would define the fixed exchange rates (Benczes, 2014). The primary features of the gold standard were the unlimited convertibility of currencies into gold and high stability facilitated by trade among countries that eliminated exchange rate fluctuations and risks (Mikita, 2015). The system maintained the equilibrium of the trade balance automatically. The deficit in balance-of-payments due to gold reserve outflows would result in the fewer money supply in the domestic market, causing a decline in domestic prices. This is beneficial to exporting cheaper goods but not on imports of higher priced goods, which then contributes to the balance. This can be derailed by financial policies of raising interest rates to promote capital inflow and to maintain the gold reserves at a fixed level, reversing the downward pressures on prices and influencing demands for imports and exports (Mikita, 2015). The Gold Standard was also non-inflationary because the issuance of money is dependent on a state's gold resources. Price fluctuations would occur due to gold outflows or discovery of gold mines. This, however, also served as the primary weaknesses of this fixed exchange rate system are limited cash flow and curbed economic development (Cohn, 2011). World War I marked the dissolution of the classical gold standard and the shift to paper money that is not tied to gold reserves and whose exchange rate was determined by the supply and demand in the foreign exchange market. Military spendings of states could not be backed up by gold reserves anymore (Mikita, 2015). An attempt to return to the modify the gold started was held in a 1922 conference in Genoa. The new international monetary system was named the “Gold Bullion Standard." In this standard, bank notes were exchangeable for gold bullion of fixed weight, therefore involving only the exchange of large sums of money. The system failed to facilitate the free convertibility of currencies to golds and it collapsed in 1931 with the outbreak of Great Depression in the 1930s (Mikita, 2015). The first symptoms of the economic crisis were the Great Crash or the Wall Street Crash of 1929, of stock market prices which delivered a wave of bankruptcies, a decrease in trade and production, and unemployment in the United States, also hitting hard cities around the world. The period of the 1930s interwar period would increase intensity beggar-thy-neighbor policies, trade protectionism, competitive devaluation, rigid capital controls among states. The harsh impacts of these policies to the society steered economic policy toward state interventionism, with primary  CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818 CSTC IT Center: 042 7192805 Atimonan Contact Number: 042 7171420 objectives of increasing employment, income and production based on Keynesian principles of state intervention. In the Bretton Woods Conference of 1994, 44 countries agreed in creating a new international system that would prevent the chaos that occurred during the interwar period. The Bretton Woods System was established, an adjustable-peg system that is also known as the dollar-gold standard or gold- exchange standard, with the US dollar as the only convertible currency that is considered to be as good as gold. The Bretton Wood System was largely influenced by the ideas of British economist John Maynard Keynes who believed that the economic crises occur not when the country does not have enough money, but when money is not being spent and, thereby, not moving. When economies slow down, according to Keynes, governments have toe reinvestigate markets with infusion of capital. The active role of government in managing spending served as the anchor for what would be called a system of global Keynesianism. With the shift from a pegged-system to a floating one, MU allows flexibility among member states to determine their exchange rates or tie them to major currencies such as the dollar or the SDR. The IMF also allows a managed float system where central banks are allowed to intervene to address the fluctuations in the exchange rate by buying and selling currencies. However, countries are not allowed to manipulate their currencies to achieve short-term gains at the expense of other economies. Table 1 The World’s Largest Economics Based on the data from the International Monetary Fund, 2018 Country Value (in Trillions) 1. United State 20.4 2. China 14 3. Japan 5.1 4. Germany 4.2 5. United Kingdom 2.94 6. France 2.93 7. India 2.85 8. Italy 2.18 9. Brazil 2.14 10. Canada 1.8 Source: IMF as cited in Smith (2018) General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) The purpose of the GATT was to avoid trade wars by raising protectionist barriers as witnessed during the interwar period. The forum was created years after the Bretton Woods due to the refusal of the U.S. to sign the Havana Charter that would create an International Trade Organization (ITO) at par with that of the IMF and GATT. The agricultural sector in the US feared for losses that may be brought by the ITO and pressures in the US Congress resulted to the failure of reaching an agreement, thus resulting to the informal GATT. States who took part in the GATT were "contracting parties" instead of formal members due to the nature of the agreement as a provisional treaty (Cohn, 2011: 23). While it was effective in liberalizing trade, GATT was unable to address the expansion of trade in services, investment, and intellectual property. It was also incapable of providing a strong and efficient system for dispute settlement. GATT was eventually superseded by a more formal World Trade Organization (WTO) in 1995 that managed to address these issues. The establishment of a global economic order was heavily influenced by the Western developed countries. The South, comprising of less developed economies, were marginalized while the Soviet Union refused to participate, with attempts to create an alternative economic framework and institutions. Less developed economies The South and the Soviet Union, however, gradually became integrated into the liberal economic order at the end of the twentieth century. Conclusion: The establishment of a global economy that promotes sustainable growth, financial stability, and international collaboration depends heavily on international financial institutions. IFIs support member  CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818 CSTC IT Center: 042 7192805 Atimonan Contact Number: 042 7171420 nations in overcoming economic obstacles and fostering inclusive growth through their financial aid, policy recommendations, and technical know-how. For students to fully grasp the complexity of the global economy and the mechanics underlying its operation, an understanding of IFIs is a prerequisite. Comparing and Contrasting the GATT and WTO In order to lower trade obstacles, such as tariffs and quotas, between member nations, the General Agreement on Tariffs and Trade (GATT) was founded in 1947. GATT concentrated on increasing economic cooperation and freer commerce. The World Trade Organization (WTO) took the place of GATT in 1995. The WTO is a global body that deals with international trade regulations. It offers a forum for talks, resolves trade disputes, and keeps track of trade policies globally. Membership: GATT was founded with 23 members and later expanded to 128 countries. The WTO, on the other hand, has a larger membership, with 164 members as of this writing. The WTO's increased membership indicates how intertwined the world economy is becoming. Scope and Coverage: GATT's primary objective was to control international trade in products. It attempted to lower tariffs and other trade restrictions on goods. The WTO, on the other hand, deals with a wider array of trade-related topics, such as services, intellectual property rights, and the trade in agricultural goods. Legal Framework: The GATT functioned as a set of guidelines without a clear institutional framework. The member nations consulted one another and reached consensus when making decisions. The WTO, on the other hand, has a formal legal structure. It has put in place accords that give a more thorough and enforceable foundation for global commerce, like the General Agreement on commerce in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Dispute Settlement Mechanism: The WTO's effective dispute resolution process is one important advancement it has made. Despite having a dispute settlement procedure, GATT lacked tools for enforcement and was less effective. The Dispute Settlement Body (DSB) of the WTO enables member nations to settle trade disputes through a formal and binding procedure. In essence, increasing global trade and lowering trade barriers are shared goals of the GATT and the WTO. However, the WTO has extended its membership, broadened the scope of its operations, and developed a more complete legal system. Additionally, it has improved the dispute resolution process, ensuring a more efficient resolution of trade disputes. Keynesianism to Neoliberalism Keynesianism is an economic theory named after John Maynard Keynes, a British economist. It arose in the early twentieth century as a reaction to the Great Depression. Government intervention in the economy, according to Keynesian economists, is required to stabilize and stimulate economic growth. They advocated for higher government spending, lower taxes, and the use of monetary policies to keep inflation and unemployment under control. During the post-World War II era, Keynesian economics gained popularity as governments sought to rebuild their economies and ensure stability. The focus was on maintaining full employment, promoting economic equality, and regulating the financial sector to prevent crises. This period saw the rise of the welfare state and increased government involvement in economic affairs Keynesianism Crisis Keynesian economics face serious problem in the 1970s. High inflation, slow growth and growing unemployment characterized by global economy. Critics claimed that Keynesian method, with its emphasis on the government involvement had resulted in inefficiencies and crowded out by private investment Additionally, a series of oil price shocks further undermined the Keynesian model. The reliance on government spending and deficit financing to stimulate the economy became increasingly unsustainable. This crisis of Keynesianism paved the way for the emergence of a new economic theory known as neoliberalism.  CSTC COLLEGE OF SCIENCES TECHNOLOGY AND COMMUNICATION, INC. CSTC College Bldg. Gen. Luna St. Maharlika Hi-way, Pob. 3, Arellano Sub. Sariaya Province of Quezon R4A Registrar’s Office: 042 3290850 / 042 7192818 CSTC IT Center: 042 7192805 Atimonan Contact Number: 042 7171420 The Rise of Neoliberalism The economic ideology of neoliberalism argues for open markets, low government interference, and individual liberty. It rose to prominence in the 1980s as a result of policies implemented by politicians such as Margaret Thatcher in the United Kingdom and Ronald Reagan in the United State. The importance of deregulation, privatization, and diminishing the role of the state in economic activities is emphasized by neoliberalism. It emphasizes free trade, open markets, and competition as economic growth factors. By allowing market forces to determine resource allocation, neoliberal policies attempt to promote efficiency, production, and innovation. Neoliberalism, critics contend, has resulted in increased income disparity, diminished social safety nets, and the erosion of workers' rights. However, supporters say that it has boosted economic growth and raised living standards in a number of countries. The shift from Keynesianism to neoliberalism represented a substantial shift in economic thought and policy approaches. Whereas Keynesianism was concerned with government intervention and economic stability, neoliberalism was concerned with free markets and individual liberty. Understanding the concepts and forces that created this change is critical for understanding today's economic situation. V. References Aldama (2018). The Contemporary World. Sampaloc Manila, Rex Book Store, Inc. Ambidda et. al (2019). The Contemporary World. Mandaluyong City, Books Atbp. Publishing Corp. Brown (2014). Globalization Theories. Khan Academy. Retrieved from: https://www.khanacademy.org/test-prep/mcat/society-and- culture/demographics/v/globalization-theories Coronacion et al. (2019). Convergence a college textbook in contemporary world. Mandaluyong City, Philippines: Books Atbp. Publishing Corp. Claudio et al. (2018.) The contemporary world. Quezon City, Philippines: C & E Publishing, Inc. SSRN Electronic Journal (2020). DOI: 10.2139/ssrn.3562570. 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