Lecture 15 Globalization PDF

Updates Next week is Mid term Break: No discussion groups all week. Lecture on Thursday but NOT Tuesday Final Exam is on Dec. 12th at noon In person, closed book on Canvas Short identify/explain significance answers Essay Question Sample Exam o...

Updates Next week is Mid term Break: No discussion groups all week. Lecture on Thursday but NOT Tuesday Final Exam is on Dec. 12th at noon In person, closed book on Canvas Short identify/explain significance answers Essay Question Sample Exam on Canvas Globalization: Lessons & Theories Lecture 15 Outline I. Lessons of Crises of Globalization II. Theories of Globalization III. Benefits and Drawbacks of Globalization Loading… I. Lessons of Crises Interconnectedness central to problem ‘Web’ of connections means crisis cannot be isolated in one country or one firm: Asian financial crisis – ‘contagion’ Credit Crisis – systemic risk Opposite problem from Depression/Bretton Woods where solution was to create connections New media create intensified information Public and private (State/Market) divide blurred Cooperation necessary to resolve crises II. Theories of Globalization A. Globalization is good and all have benefited. Thomas Friedman, The Flat Earth, 2005 World is flat playing field and has shrunk in size due to communications/technology Loading… Global economy has grown/middle class in poorer countries B. Globalization is the Victory of Corporate Power: Globalization is generally bad David Korten When Corporations Rule the World, 1995. Globalization has caused Poverty for some/increasing inequality in the world Social disintegration Environmental Destruction II. Theories of Globalization C. Globalization benefits some more than others: Joseph Stiglitz: Globalization and Its Discontents 2003 /Globalization and Its Discontents Revisited 2018 Capital market liberalization not the answer in all markets Globalization benefits certain parties Excessive reliance on market fundamentalism Critical of IMF, US Treasury Hypocrisy of West Political Challenge of Globalization https://www.youtube.com/watch?v=h1EdTGsObaU https://www.youtube.com/watch?v=Gsq4o3KY9sE III. Benefits and Drawbacks of Globalization A. Benefits of Globalization Increase in overall wealth b/w 1950 - 2022 Income - World Bank Global GDP 1950 - $10 trillion 2022 - $123 trillion World Trade – 44x volume III. Benefits and Drawbacks of Globalization A. Benefits of Globalization Increase in overall wealth b/w 1950 - 2022 Income - World Bank Global GDP 1950 - $10 trillion 2022 - $123 trillion World Trade – 44x volume III. Benefits and Drawbacks of Globalization A. Benefits of Globalization Increase in overall wealth b/w 1950 - 2022 Income - World Bank Global GDP 1950 - $10 trillion 2022 - $123 trillion World Trade – 44x volume  III. Benefits and Drawbacks of Globalization A. Benefits of Globalization Increase in overall wealth b/w 1950 - 2022 Income World Bank Global GDP 1950 - $10 trillion 2022 - $123 trillion Global Trade 44x volume Vincente Fox: Former President of Mexico Benefits of NAFTA (free trade) for Mexico  III. Benefits and Drawbacks of Globalization A. Benefits of Globalization Decrease in Overall Poverty Loading…  III. Benefits and Drawbacks of Globalization A. Benefits of Globalization Decrease in Overall Poverty III. Benefits and Drawbacks of Globalization A. Benefits of Globalization (non-economic) Ease of travel, communication, information Exchange of Cultures International Democratization III. Benefits and Drawbacks of Globalization B. Drawbacks of Globalization Financial Crises Growing Inequalities Despite increase in wealth growing gap between rich and poor in world Persistence of the extremely poor Gap between rich and poor: Jeffrey Sachs Professor of Economics Columbia University Head, UN Millennium Development  Per capita income 1820 -1998 50,000 40,000 30,000 1998 1820 20,500 20,000 18,000 10,000 5,800 1,900 1,600 1,700 2,000 900 0 Africa Latin America Japan W. Europe Global Income Distribution, 2007 Constant U.S Dollars Global Gap:1% vs. 99% Oxfam/World Economic Forum– Global Wealth Inequality III. Benefits and Drawbacks of Globalization B. Drawbacks of Globalization Backlash of people who have not benefited Backlash against west Backlash within west Loss of blue collar jobs/income Radicalization of politics on left and right Negative implications for environment Globalized economy assumes perpetual growth Consumption of non-renewable resources ‘Addiction to oil’ goes global Increase in waste products Global warming/Climate change III. Benefits and Drawbacks of Globalization B. Drawbacks of Globalization Backlash of people who have not benefited Backlash against west Backlash within west Loss of blue collar jobs/income Radicalization of politics on left and right Negative implications for environment Globalized economy assumes perpetual growth Consumption of non-renewable resources ‘Addiction to oil’ goes global Increase in waste products Global warming/Climate change Conclusions Lessons Learned from Crises Theories about Globalization Good (Friedman) vs Bad (Korten) Unequal benefits (Stiglitz) Benefits: Increase wealth, decrease poverty, democratization Drawbacks: Crises, inequality, backlash, environmental impact