Lesson 1

Globalization

 It usually pertains to the integration of national markets to a wider global market signified by an increase in free
trade.
 A process refers to a larger phenomenon that cannot simply be reduced to how global markets have been
integrated.
 ANTI-GLOBALIZATION in 1998 refers to the act of opposing trade deals among countries facilitated and
promoted by international organizations such as the World Trade Organization (WTO).

Manfred Steger

 He described globalization as “the expansion and intensification of social relations and consciousness across
world-time and world-space.”
 According to him GLOBALIZATION represents the many processes that allow for the expansion and
intensification of global connections.
 EXPANSION refers to “both the creation of new social networks and the multiplication of existing connections
that cut across traditional political, economic, cultural, and geographic boundaries.”
 INTENSIFICATION refers to the expansion, stretching, and acceleration of these networks. Not only are global
connections multiplying, but they are also becoming more closely knit and expanding their reach.
 “Globalization processes do not occur merely at an objective, material level but they also involve the subjective
plane of human consciousness.”
 Steger posits that his definition of globalization must be differentiated with an ideology he calls GLOBALISM.
 GLOBALISM is a widespread belief among powerful people that the global integration of economic markets is
beneficial for everyone as it spreads freedom and democracy across the world.

Arjun Appadurai

 “There are multiple globalization.”

 According to him GLOBALIZATION occurs on multiple and intersecting dimensions of integration which he calls
“scapes”.
1. Ethnoscapes refers to the global movement of people.
2. Mediascape is about the flow of culture
3. Technoscape refers to the circulation of mechanical goods and software.
4. Financescape denotes the global circulation of money
5. Ideoscape is the realm wherein political ideas move around.

Lesson 2

The Silk Road

 The oldest known international trade route.

 It had a network of routes that connected different parts of the ancient world from China to what is the Middle
East today and to Europe
 It was called such because silk was the most profitable product traded.
 The Han dynasty of China opened trade to the West in 130 BCE, and traders utilized the Silk Road regularly. This
continued until the Ottoman Empire closed it in 1453 BCE.
 It was not exactly “global”, as it did not include routes to the American continents.

Dennis Flynn and Arturo Giraldez

  They state that “globalization began when all-important populated continents began to exchange products
continuously, both with each other directly and indirectly via other continents, and in values sufficient to
generate crucial impacts on all trading partners”.
 They trace this back to 1571 with the establishment of the GALLEON TRADE that connected Manila in the
Philippines and Acapulco in Mexico.

Galleon Trade

 It was the first time that the Americas were directly connected to Asian trading routes.
 It took place during the age of Mercantilism.

Mercantilism

 Monetary reserves refer to countries competing with one another to sell more goods to increase their country’s
income.
 These regimes, particularly the monarchies applied various ways to defend their products from competitors who
sold goods at cheap prices. They imposed high tariffs, prohibited colonies from trading with other countries,
limited trade channels, and subsidized exports.
 It is also a trade system that has multiple restrictions.

The Gold Standard

 The United Kingdom, The United States, and other European nations adopted this.
 Its purpose was to establish a common system that would enable more efficient trade and, at the same time,
prohibit the isolationism of the mercantilist era.
 From the 1920s until the 1930s, a global economic crisis occurred called the Great Depression. This significantly
depleted government resources, which led to the difficulty of going back to a pure standard. It was considered
the worst and longest experienced by the West.
 According to Barry Eichengreen, an economic historian, the United States began to recover when it abandoned
the gold standards.
 Today, the world economy operates based on Fiat Currencies- currencies that are not backed by precious metals
and whose values are determined by their cost relative to other currencies. It allows governments to freely and
actively manage their economies by increasing or decreasing the amount of money in circulation as they see fit.

International Monetary Fund (IMF)

 Regards “economic globalization” as a historical process representing the result of human innovation and
technological progress.
 According to the IMF, the value of trade (goods and services) as a percentage of world GDP increased from 42.1%
in 1980 to 62.1% in 2007.
 Increased trade also means that investments are moving all over the world at faster speeds.

The World Bank

 Owned by 189 countries.

 Its role is to reduce poverty by lending money to the governments of its poorer members so that they can
improve their economies and the standard of living of their people.
 Since 1947, The World Bank has funded over 12,000 development projects via traditional loans, interest-free
credits, and grants.

United Nations Conference on Trade and Development (UNCTAD)

 The amount of foreign direct investments flowing across the world was US$ 57 billion in 1982. By 2015, that
number was $1.76 trillion.
  Supercomputers can execute millions of stock purchases and sales between different cities in a second
through a process called High-frequency Trading.

THE BRETTON WOODS SYSTEM

 The Bretton Woods System was inaugurated to prevent past catastrophes from happening again and impacting
international connections
 It was influenced by the idea of Maynard Keynes. The British economist believes that a country experiences
economic crises not when it does not have sufficient funds: rather, it happens when money is not being spent;
thus, moved.
 According to him when economies slow down, governments have to reinvigorate markets with infusions
of capital. This managing economic crises became the foundation for what would be called a system of
Global Keynesianism.
 Delegates at Bretton Woods agreed to create two financial Institutions:
1. International Bank for Reconstruction and Development (IBRD) or the World Bank.
 Responsible for funding post-war reconstruction projects.
2. International Monetary Fund (IMF)
 The Global Lender of last resort to prevent individual countries from spiraling into credit crises.
 Shortly after Bretton Woods, In 1947 General Agreement on Tariffs and Trade (GATT).
 Its main objective was to reduce tariffs and other hindrances to free trade.
 From the mid-1940s-early1970s, Global Keynesianism was at its successful point. As the Governments spend
more money this will allow consumers to buy more which increases the demand and eventually increases the
cost of the products eventually resulting in businesses making more money for expansion and lower
unemployment. According to Keynesian economists, these were necessary trade odds for economic progress.
 In the early 1970s, the price of oil rose sharply as a result of the Organization of Arab Petroleum Exporting
Countries (OAPEC) imposition of embargo in response to the US and other countries resupplying the Israeli
military with the needed arms during the Yom Kippur War. Arab countries used the embargo to stabilize their
economic growth. This affected the Western economies that were reliant on oil. To make matters worse, the
stock markets crashed from 1973-1974 after the US stopped linking the dollar to gold, effectively ending the
Bretton Woods System. This results in Stagflation, in which a decline in economic growth and employment
(stagnation) takes place alongside a sharp increase in prices (inflation).

NEOLIBERALISM AND ITS DISCONTENTS

 Friedrich Hayek and Milton Friedman argued that the government's practice of pouring money into their
economy has caused inflation by necessarily increasing supply.
 Friedman used this economic turmoil to challenge the consensus around Keynes's ideas. What emerged was a
new form of economic thinking- Neoliberalism- from the 1980s onward, it became the codified strategy of the
United States Treasury Department, World Bank, IMF, and World Trade Organization (WTO) – a new organization
founded in 1955 to continue the tariff reduction under the GATT. The policies they forwarded came to be called
the Washington Consensus.
 1980s-early 2000s, the Washington Consensus controlled the global economic policies:
 Government expenditure should be kept to a bare minimum to minimize debt.
 Advocate Privatization of government-run services such as water, electricity, communications,
and transportation.
 They pressure governments particularly in the developing world, to reduce tariffs and open up
their economies.
 Ronald Reagan of the US and Margaret Thatcher of the UK, justified their cuts in government expenditures by
comparing national economics to homes. Thatcher presented herself as a mother who controlled expenditures
to lower the national debt. Despite this neoliberal politicians experienced initial success, but the Washington
Consensus flaws became apparent. Post-communist Russia is a great example.
  THE GLOBAL FINANCIAL CRISIS AND THE CHALLENGE TO NEOLIBERALISM
 The 2008 Global Financial Crisis (GFC) served as a major turning point in the economic and political
landscape, raising significant challenges to the dominant economic ideology of the time: neoliberalism.
 Since Neoliberalism generally advocates for:
 Minimized government intervention in the economy
 Free markets and deregulation
 Privatization of state-owned enterprises
 Fiscal responsibility and balanced budgets
 Globalized trade and investment
 These principles gained widespread adoption in the decades leading up to the GFC,
shaping economic policies across the globe.
 The crisis, triggered by the collapse of the US housing market and the subsequent failure of major
financial institutions, exposed several weaknesses associated with neoliberal practices:
 Deregulation of the financial sector: Critics argued that lax regulations on complex financial
instruments and risky lending practices contributed significantly to the crisis.
 Income inequality: The crisis disproportionately impacted low-income individuals and
communities, highlighting the existing wealth gap exacerbated by neoliberal policies focused on
individual responsibility and market solutions.
 Limited government intervention: The crisis exposed the limitations of relying solely on market
forces to self-correct, necessitating significant government intervention through bailouts and
stimulus packages.
 These factors led to widespread criticism of neoliberalism, suggesting its overreliance on
market self-regulation and its disregard for potential systemic risks and social
inequalities.
 The GFC served as a significant challenge to the dominance of neoliberalism, exposing its limitations and
prompting a reevaluation of its underlying assumptions. While its influence persists, the crisis has
opened the door for broader discussions about alternative economic models and the role of government
in ensuring financial stability and social well-being.
 ECONOMIC GLOBALIZATION TODAY
 Economic globalization remains an uneven process, with some countries, corporations, and individuals
benefiting a lot more than others.
 The beneficiaries of global commerce have been mainly transnational corporations (TNCs) – they are
concerned more with profits than with assisting the social programs of the governments hosting them.
 The phrase “race to the bottom” refers to the practice of countries decreasing their labor standards,
especially worker protections, to entice international investors looking for big profit margins at the
lowest possible cost.
 International policymakers, therefore, should strive to think of ways to make trading deals fairer.
 Government must also continue to devise ways of cushioning the most damaging effects of economic
globalization while ensuring that its benefits accrue for everyone.

Lesson 3

 Scholars are studying International Relations.

 When they explore the deepening of interactions between states, they refer to the phenomenon of
Internationalization.
 Internationalization is not equal to globalization; however, it is a major part of globalization. It is important to
study this as a facet of globalization because states/governments are key drivers of global processes.