AUG 14, 2024 LESSON

BSIT - Y1
Study Material by Rachel Heart U. Tambalila

THE CONTEMPORARY WORLD

“Analyze the different interpretations of globalization and its essential terms.”

GLOBAL POLITICAL ECONOMIC

Or also known as International Political Economy, it is commonly defined as
the interactions between nations. To elaborate, GPE or IPE is how countries
political decisions affect their economic relationships with each other.

INTERNATIONALIZATION
Focuses on building connections between countries, people, and cultures
within institutions by designing a product so that it may be readily consumed
Across multiple countries.

REGIONALIZATION
The process of dividing an area into smaller segments called regions.

ELABORATION….

Global Political Economy (GPE) - or International Political Economy (IPE)

It is an interaction and influence of markets on politics but also the influence of
policy on markets. This studies problems that arise from or affected by the interaction
of international politics and economics.

For example, If oil-producing countries such as Dubai, where oil is being imported
to the Philippines, if Dubai decides to cut production or import oil to the Philippines, oil
prices can rise around the world impacting economies.

Also, GPE has two category which are human welfare and state behavior.
Human welfare State behavior
Globalization International organization
International trade Multi
Monetary Finance/Financial Sovereign state

Anti-globalization - refer to the act of opposing trade deals among countries facilitated and
promoted by international organizations.

Globalization - constant changes that contributes to help a country making its citizens and
individuals residing in that area easier. For instance, technology helps us to connect
and interact with not merely the people around us but also people that are far from us.
One can now e-mail or message through messenger and Facebook in another country with
just a click away and get a reply.

So, globalization represents the many process that allow for the expansion and
intensification of global connections. It a process where from different countries becoming
more connected through exchanging of goods, services, ideas and cultures. Another
example for globalization is the widespread presence of our local fast-food chain in the
Philippines, Jollibee, where it is expanding globally with an intent of connecting Filipinos
scattered around the globe through our local food such as in the United Arab Emirates; yet,
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it does not only connect Filipinos to their roots but also provides an opportunity to share our
service, goods, and culture to other nationalities.

According to the best scholar that described the process of globalization, Manfred
Steger, globalization is the expansion and intensification of social relations and
consciousness across the world. (Steger, 2013)

What is expansion? It is multiplying and creating new connections beyond the geographic
boundaries. For example, social media connect people globally and generally. While
international group of non-governmental organization (NGOs) such as Saved the
Children connect a more specific group which are the children.

What is intensification? It is becoming more closely-knit and accelerating in the expansion

of its reach. For example, when Bangkok in Thailand was rain flooded in 2012, where
Honda make critical car parts production to its consumers resulted in a temporary ceased
in production. It negatively affected the Honda-USA that relied heavily on the parts
being imported from Thailand.

The negative effect of the flood to the sales and services of Honda-USA is an
acceleration but descending. They are not just connected but is also interdependent from
each other. So, globalization does not only multiply connections but also intensifies and
builds strong connections.

Globalism - is a belief that countries should work together as a single global community to
address shared challenges, promote mutual interest, and integrate economic markets
beneficial to everyone, spreading freedom and democracy throughout the world
(Steger, 2005).

For example, the Philippines participated in global health initiatives, such as efforts to
combat the COVID-19 pandemic with an organization like World Health Organization
(WHO).

By doing so, powerful people in our country and from other countries connect to
addressed their shared challenges and interest in helping countries to fight the spread of
Covid-19. Also, to help countries that needed financial assistance because of its loss in
monetary financial due to the lockdown, hindering individuals to go to their respective works
resulting in the increase of unemployment rate. By having this connection, we are able to
put to an end the spread of pandemic giving freedom to individuals to go to work and
gradually decrease the rate of unemployment.

Revenue - halin or gross profit

- total amount of money without expenses and taxes being subtracted.

Income - ginansya or net profit

- the amount of profit received after expenses and taxes are subtracted from
revenue.

So, for example, ug namaligya ka pastillas ug ang imong total sa raw materials kay 200.00
pesos tapos nakahimo ka ug 30 kabuok nga pastillas, gibaligya nimo ug tag 10.00 pesos
naa kay revenue or halin nga 300. (30x10=300). Tapos minus 200 para sa expenses nimo
naa kay ginansya or income nga 100.

Taxation - It is the imposition of compulsory charge on individuals or entities by

governments.
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Taxes - to raise revenue for the government spending in infrastructures, roads, and other
projects or programs the government mandate for the betterment of its country and to its
citizens.
- 20k above or 22k has a 0.08 or 8% rate of tax.

Great depression - long term period of economic recession where it resulted from the
biggest and longest economic crash of the Unites State in 1929 and ended after the WW2
in 1946. It last for 17 years.

Recession - temporary economic decline where the trade and economic activity is
reduced.

Economic Recession - long and severe recession in an economy or market.

Gross domestic product - the gross national product excluding the value of net income
earned abroad.

Black Wednesday - on September 16, 1992 was the collapse in the pound that forced
Britain to withdraw from the European Exchange Rate Mechanism (ERM). The ERM goal
is to stabilize European currencies in preparation for Economic and Monetary Union
(EMU).

Inflation - quantitative measure of the rate at which the average price in an economy
increases.

Percentage - indicates an decrease in the purchasing power of a nations currency.

Inflation rate - the percentage of increase in the price.

Supply - total amount of a specific good or service that is available

Demand - consumer’s desire and choice

Hoarding - purchase of large quantities to benefit from the future price increases.

Price - monetary value of a good, service, or resource. It is the amount or cost.

Law of Supply - if the price increases the quantity also increases, and vice versa.

Law of Demand - if the price increases the demand decreases, and vice versa.

Monopoly - It refers to when a company and its product offerings dominate a sector or
industry.

Monopolies can be considered an extreme result of free-market capitalism in that absent

any restriction or restraints, a single company or group becomes large enough to own all or
nearly all of the market (goods, supplies, commodities, infrastructure, and assets) for a
particular type of product or services.

An exchange rate is the value of a country's currency vs. that of another country
or economic zone.

Devaluation - the deliberate downward adjustment of the value of a country's money

relative to another currency, group of currencies, or currency standard.
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Depreciation - a measure of the decrease in the market value of an asset over time from
influential economic factors. This form of depreciation usually pertains to real estate, which
can lose value for several reasons such as the addition of unfavorable construction in close
proximity to a property, road closures, a decline in the quality of a neighborhood, or other
negative influences.

International Monetary Fund (IMF). An international organization that aims to promote

global economic growth and financial stability, encourage international trade, and reduce
poverty.

World Bank - an international organization dedicated to providing financing, advice, and

research to developing nations to aid their economic advancement. The bank
predominantly acts as an organization that attempts to fight poverty by offering
developmental assistance to middle- and low-income countries.

Expenditure - Represents a payment with either cash or credit to purchase goods or

services.

Public Enterprise - The economic system that is based upon the principle of companies
being owned by the government and not by people and businesses. Its aim is to generate
income while providing services to the public.

Consumer. An individual who pays some amount of money for the thing required to
consume goods and services. As such, consumers play a vital role in the economic system
of a nation. Without consumer demand, producers would lack one of the key motivations to
produce: to sell to consumers.

GDP (Gross Domestic Product). The total monetary or market value of all the finished
goods and services produced within a country's borders in a specific time period. As a
broad measure of overall domestic production, it functions as a comprehensive scorecard
of the country’s economic health (also known as Real GDP).

Nominal GDP. GDP evaluated at current market prices. Therefore, nominal GDP will
include all of the changes in market prices that have occurred during the current year due to
inflation or deflation.

GDP Per Capita. A metric that breaks down a country's GDP per person. It is calculated by
dividing GDP over a country’s population. GDP per capita is a universal measure globally
for gauging the prosperity of nations. Worldwide it is used by economists alongside GDP to
analyze the prosperity of a country and its economic growth.

Human Development Index (HDI). A statistic developed and compiled by the United Nations
to measure and various countries' levels of social and economic development. It is
composed of four principal areas of interest: mean years of schooling, expected years of
schooling, life expectancy at birth, and gross national income per capita. This index is a tool
used to follow changes in development levels over time and to compare the development
levels of different countries.

Purchasing Power Parity (PPP). An economic theory that allows the comparison of the
purchasing power of various world currencies to one another. It is a theoretical exchange
rate that allows you to buy the same amount of goods and services in every country.
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Retrenchment. A term used to describe when a business decides to significantly cut or
scale-back its activities. Retrenchment might occur when one or more of the following
happen to a business: reduce output & capacity; job losses/redundancy; product/market
withdrawal.

Globalization– The process by which companies or other organizations develop

international influence or commence operations on an international scale. Manfred
Steger also described globalization as expanding and intensifying social ties and
consciousness throughout the world.
Economic Globalization – refers to the expansion and intensification of different economic
aspects in the society. Through a rapid increase in the cross-border movement of
goods, services, technology and money, the economic interdependence of national
economies around the world is growing.
Cultural Globalization – refers to the expansion and intensification of different cultural
aspects in the society. Cultural globalization refers to the transmission across the world
of concepts, meanings, and values in such a way that social ties are expanded and
intensified.
Political Globalization – refers to the expansion and intensification of different political
aspects in the society. his structure involves national governments, their political and
intergovernmental bodies, as well as elements of global civil society separate from the
government, such as international non-governmental organizations and organizations
of social movements.

The Rise of Globalization

Globalization is the engagement and convergence mechanism between individuals,
corporations, and governments worldwide. Since the 18th century, globalization has
intensified due to developments in technology for transportation and communication. This
rise in global interactions has caused international trade and the exchange of ideas and
culture to develop. Globalization is mainly an economic phenomenon combined with social
and cultural aspects of contact and integration.

Globalization economically includes goods, services, data, technology, and the capital's
economic resources.The expansion of global trade liberalizes the exchange of goods and
funds through economic activities.The elimination of cross-border trade barriers has made it
more possible to build global markets.

Four basic aspects of globalization were established in 2000 by the International

Monetary Fund (IMF):
 Trade and transactions;
 Capital and investment movements;
 Migration and movement of people; and
 The dissemination of knowledge.

The International Monetary Fund (IMF) finds economic globalization a historic

phenomenon that reflects the outcome of human innovation and technical processes. It is
characterized by the increasing integration of economies around the world through the
cross-border movement of goods, services, and capital. The following the changes bought
by globalization.

The oldest known trade route was known as the Silk Road (a network of pathways in the
ancient world that spanned from China to what is now the Middle East and Europe which
was discovered by the Venetians). Even though the Silk Road was considered international
but it was not truly global because it had no ocean routes that could reach the American
continent.
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Galleon Trading System – also known as barter trade where people exchange their
product with another product.

It started before the 13th century when other countries around the world were seeking
various territories (usually on board the “galleons”) and trading their goods. This started
fine, but as time goes by, other products became less valuable than others, but as time
goes by, other products became less valuable than others, especially during spice
discovery (the most valuable resource in that time). As an effect, other countries are no
longer trading their products to other countries prompting others to exploit the situation.
Thankfully the Gold Standard came into being.

Gold Standard System – a system that utilizes gold as the primary means to exchange or
buy products.

It is a monetary system which directly links the value of a currency to that of gold. A
country on the gold standard cannot increase circulating money without also increasing its
gold reserves. Because the global supply of gold is only slowly growing, theoretically being
on the gold standard would hold government over-spending and inflation in check. Before
the Bretton Woods system, the dollar-to-gold fixed rate is $20.69 but due to the Great
Depression in 1929, many investors started to redeem dollars for its gold value. It did work
in 1931. The US treasury was concerned that the US might run out of gold, so it asked
Congress to raise its interest rates that increased the dollar’s value and made it more
valuable than that gold.

Bretton Woods System – this is also known as the Landmark Agreement.

The major powers signed the Bretton-Woods Agreement in 1944, making the United
States dollar the official global currency. The U.S. defended the gold price at $35 per
ounce. In 1971, President Nixon had ordered the Fed not to respect the value of the dollar
in gold. That meant that foreign central banks could no longer exchange dollars for U.S.
gold, basically taking the dollar off the gold standard. Nixon sought to end stagflation, a
mixture of inflation and recession. But inflation was caused by the dollar's rising power, as it
had now replaced the British sterling as a global currency.

After two World Wars, the world leaders worked to establish a global economic structure
that would guarantee a regional peace that lasted longer. They claimed that setting up a
network of global financial institutions to foster economic interdependence and stability was
one of the ways to achieve this aim (Claudia and Abinales, 2018). And this was the birth of
the Bretton Woods System which opened during the Political and Financial Conference of
the United Nations in 1944.

The Bretton Woods system was largely influenced by the ideas of British economist John
Maynard Keynes (Father fof Macroeconomics) who believed that economic crises did not
occur when a country did not have enough money, but when money was not spent, and
thus the government had to revitalize markets with capital infusions. This active role of
governments in spending management served as the anchor for what would be called a
global keynesian system (Claudio and Abinales, 2018).

Global Keynesianism - tryin to manage the economy as a whole,instead of just focusing in

one country.
DISADVANTAGE: Governments poured money into their economies allowing people to
purchase more goods & Prices of products increased. ADVANTAGE: Increase demand for
products
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General economic growth
Businesses expands and new businesses arises and reduced unemployment

Financial Institutions and international policies that were created because of the Bretton
Woods System:
 International Bank for Reconstruction and Development (IBRD) or World Bank
(WB) - help develop the economies of countries by giving loans and advice. This is part
of WB.
 International Monetary Fund (IMF) - global financial doctor thus helps the countries
having economic problems. Thus, it helps stable and trade with each other.
 General Agreement on Tariffs and Trade (GATT) - international agreement to reduce
the taxes on goods they trade from each other to be easier to buy and sell across
borders.

EFFECTS OF GLOBAL KEYNESIANSIM

The idea was that if rates increase, companies would profit more, and have more resources
to employ employees. Keynesian economists felt all of this was a trade-off essential for
economic growth.

The Downfall of the Bretton Woods System:

In the early 1970's, the Petroleum Exporting Countries Organization (OPEC) imposed an
"oil embargo" as a sanction on the US government for its assistance to the Israeli military
during the Yom Kippur War. These affected oil-reliant Western countries.
The United States stopped linking the dollar to gold in order to end “stagflation”.

Fiat System – refers to the market system that we are following today.

Global Monetary System (The Fiat System)

A system in which money is the purchasing power storage medium, and a barter substitute.
Every dollar bill, euro, yen, gold ingot, or whatever currency you choose, allows you to buy
things as needed or desire arises, making the barter system (trading one service or product
for another) largely out of date.

Fiat money is a currency issued by the government that is not backed by a tangible asset
like gold or silver but by the government that issued it. The value of fiat money is derived
from the supply-demand relationship and the issuing government's stability, rather than the
value of a commodity backing it as is the case with commodity money. Most modern paper
currencies, including the U.S. dollar, euro, and other major global currencies, are fiat
currencies. Fiat money only has value because the government holds that value, or
because two parties agree on its value in a transaction. Historically, governments would
mint coins from a valuable physical commodity, such as gold or silver, or print money from
paper that could be redeemed for a set amount of a physical commodity. Fiat money is
inconvertible and can't be made redemptive. The word "fiat" comes from the Latin and is
often translated as the "will be" or "let it be done" decree.

The evolution of international market

Unfortunately, higher interest rates have made loans too costly and have driven many
businesses out. They have also created deflation, as a stronger dollar can buy more with
less. Companies are cutting costs to keep prices low and stay competitive. That further
exacerbated unemployment and turned the recession into a depression.

By 1932, speculators turned again to gold in capital. As the prices of gold increased, people
were hoarding the precious metal, sending prices even higher. In April 1933, President
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Franklin D. Roosevelt banned private possession of gold coins, bullions, and certificates to
prevent the theft of gold.

Neoliberalism:
 Developed by Friedrich Hayek and Milton Friedman.
 The proponents argued that the practice of the government to pour money into their
economies caused inflation by increasing demand for goods without necessarily
increasing supply.
 They also argued that economic intervention by governments distorts the proper
functioning of the market.
 It is commonly correlated with economic liberalization policies, including privatization,
deregulation, globalization, free trade, inflation and government spending cuts, with a
view to increasing the role of the private sector in the economy and society.
 Its characteristics were adopted and reflected in the policy introduced by the United
States Congress known as the Washington Consensus.
 Neoliberalism is an economic and political philosophy that advocates for free-market
capitalism and minimal government intervention in the economy. Emerging in the late
20th century, particularly during the 1980s.
 Neoliberalism argues that free markets, rather than government regulation, are the
most efficient way to allocate resources and drive economic growth. It believes that
competition leads to innovation and better services.
 Neoliberalism encourages open markets and global trade. It supports reducing trade
barriers and promoting free trade agreements to integrate national economies into the
global economy.
 It emphasizes personal responsibility and self-reliance over state support, arguing that
individuals should rely more on their own efforts rather than government assistance.

THE GLOBAL FINANCIAL CRISIS AND THE CHALLENGES OF NEOBERALLISM

 It came under significant strain during global financial crisis of 2007-2008 when the
world experienced the greatest economic downturn since the Great Depression. The
Crisis can be tracked back to the 1980s when the United States systematically removed
various banking and investments restrictions.
 Regulations continued to decrease into the 2000s which as leading to a looming crisis.
Government officials failed to regulate risky investments in the US housing market in
their efforts to promote the free market. Taking advantage of "cheap housing loans,"
Americans began building houses that were beyond their financial capacities.
 To mitigate the risk of these loans, banks that were lending houseowners' money
pooled these mortgage payments and sold them as "mortgage-backed securities"
(MBSs). One MBS would be a combination of multiple mortgages that they assumed
would pay a steady rate.
 Since there was so much surplus money circulating, the demand for MBSs increased
as investors clamored for more investment opportunities. In their haste to issue these
loans, however, the banks became less discriminating. They began extending loans to
families and individuals with dubious credit records-people who were unlikely to pay
their loans back. These high-risk mortgages became known as sub-prime mortgages.
 Financial experts wrongly assumed that, even if many of the borrowers were individuals
and families who would struggle to pay, a majority would not default. Moreover, banks
thought that since there were so many mortgages in just one MBS, a few failures would
not ruin the entirety of the investment.
 As a result, MBSs were quickly resold, as banks and investors wanted to get rid of their
disastrous assets. This risky cycle came to a breaking point in September 2008, when
big investment banks such as Lehman Brothers went bankrupt, wiping off large
investments. The crisis spread beyond the United States since many investors were
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foreign governments, corporations, and individuals. The loss of their money spread like
wildfire back to their countries.
 These series of interconnections allowed for a global multiplier effect that sent ripples
across the world. For example, Iceland's banks heavily depended on foreign capital; so
when the crisis hit them, they failed to refinance their loans. Three of Iceland's largest
commercial banks have defaulted because of this credit crunch. Iceland's debt climbed
by more than seven times between 2007 and 2008.

TYPES OF ECONOMIC GLOBALIZATION

 Global Supply Chains: Modern production processes often involve multiple countries.
Components are sourced from different locations, assembled in yet another country,
and sold globally. For instance, an automobile might be designed in Germany,
manufactured in South Korea, and sold worldwide. This interconnected production
network demonstrates the complexity of global trade and the benefits of specialization.
 Online Marketplaces: Platforms like Amazon, Alibaba, and eBay facilitate international
trade by allowing businesses and consumers to buy and sell products across borders.
E-commerce has revolutionized retail by providing access to global markets and
enabling small businesses to reach international customers.
 Digital Payment Systems: Technologies like PayPal, Stripe, and cryptocurrencies
facilitate cross-border transactions, making it easier for individuals and businesses to
engage in international commerce.
 Direct Investments: Companies invest in operations abroad by establishing or
acquiring businesses in other countries. This can include opening new manufacturing
plants, acquiring local firms, or expanding service operations. For example, American
tech companies investing in technology hubs in India or Chinese companies building
infrastructure projects in Africa.
 Emerging Markets Investment: Investors target emerging markets to capitalize on
growth opportunities. This includes investing in local businesses, government bonds,
and infrastructure projects in developing countries.
 Innovation Sharing: Technology developed in one country can be adopted and utilized
globally. Innovations in information technology, renewable energy, and healthcare often
spread quickly, driving global progress.
 Internet and Communication Technologies (ICT): The rise of the internet and digital
technologies has transformed global business and communication. Companies use
digital platforms for marketing, sales, and customer service, while individuals benefit
from access to information and services worldwide.
 Workforce Movement: Workers migrate to other countries in search of better job
opportunities, higher wages, and improved living conditions. This mobility supports
global labor markets and addresses skill shortages in different regions.

Washington Consensus:
 Pushed for minimum budget spending to reduce public debt;
 Called for the privatization of government-controlled services such as water, electricity,
communications and transport, believing that the free market can deliver the best
possible results;
 Pressured governments, particularly in the developing world, to cut tariffs and open up
their economies, arguing that these are the fastest ways to make progress;
 Understands that such sectors, which they branded as "shock therapy" for long-term
economic development, will be affected and die along the way.

Stagflation - pagstop sa gold standard. A phenomenon paghuman sa Bretton System

Stagnation - walay up and down, stagnant.

Traditional Loaning - excepted nga mamayad. Dili e baligya ang utang sa laing bangko
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Mortage banked securities (MBS) - e baligya sa laing bangko ang utang.

Internationalization refers to the process of expanding business, education, or other

activities across national borders, often on a case-by-case basis. Globalization, however,
involves a more comprehensive and interconnected integration of economies, cultures, and
systems worldwide, leading to a more unified global network.

To understand the origins of systems, we must first consider what we mean by a "country"
or nation-state—a concept that is relatively modern and has evolved from smaller group
identities throughout history.

A NATION is a group of people who share a common identity, often through language,
culture, or history, and who may or may not have their own governing body. A STATE,
however, is a political entity with defined borders, a government, and sovereignty
recognized by other states. While a nation is about collective identity, a state is about
political authority and governance.

THE 4 ESSENTIAL ELEMENTS OF A STATE

1. People
2. Territory
3. Government
4. Sovereignty

Global system – An economic and political construct in which capita, management,

employment, knowledge, natural resources and organizations are fully internationalize.

FOUR MAIN CHARACTERISTICS OF POLITICAL SOVEREIGNITY

 First characteristic “Recognize Sovereignty (EACH STATE HAS THE ULTIMATE
AUTHORITY OVER ITS TERRITORY) ;
 second characteristic “Understand Diplomacy (CAN ESTABLISH ALLIANCE AS
WELL AS TO RESOLVE DISPUTES) ;
 third characteristic “Value International Organizations ( HELPING MANAGE
INTERNATIONAL CONFLICTS),
 fourth characteristics “Appreciate Broader Roles ( AGENCIES WORK GLOBALLY TO
ADRESS ISSUES THAT INDIVIDUAL STATES MAY NOT BE ABLE TO TACKLE
ALONE. ex, (WHO).

The theory of the interstate system holds that all states are defined through their
relationship to other states or through participation in the world economy, And that divisions
divided the world into a core, periphery and semi- periphery.

The concept of modern sovereignty originates from the 1648 Treaty of Westphalia,
which ended the Thirty Years' War by establishing that states should not interfere in each
other's domestic affairs. This system provided stability in Europe until Napoleon
Bonaparte's campaigns in the early 1800s, which sought to spread revolutionary ideals
across the continent. After Napoleon's defeat in 1815, the Concert of Europe restored the
Westphalian system and reinforced state sovereignty, maintaining peace and the old
order until World War I.

The Westphalian system, established by the Peace of Westphalia in 1648, primarily

functioned to create a framework for sovereign states and maintain order in Europe after
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the Thirty Years' War. Its key functions included: sovereignty, Territorial Integrity, and
legal equality.

The Westphalian system ensured stability in Europe until Napoleon Bonaparte challenged it
by spreading the French Revolution’s ideals of liberty, equality, and fraternity. Overall, the
Westphalian system laid the foundation for modern international relations and the state-
centric order that continues to influence global politics today.

WHAT’S INTERNATIONALISM?
 Internationalism is a political principle that advocates for greater cooperation and unity
among nations.
 Internationalism comes in different forms but the principle can be divided into two broad
categories: liberal internationalism and socialist internationalism.

 Liberal internationalism is a theory in international relations that the role of

international institutions, cooperation between nations, and the promotion of liberal
principles are keys to achieving global peace, stability and prosperity.

 Ones of the prominent thinkers of liberal internationalism are the late 18th century
German philosopher Immanuel Kant, British philosopher Jeremy Bentham, the 19th
century Italian patriot Giuseppe Mazzini, and the 20th century United States President
Woodrow Wilson.

 Immanuel Kant likened states in a global system to people living in a given territory. He
argues that similar to people living in a country that is governed by laws to prevent
lawlessness, so why not the same principle is applied to states? He thinks that an
international system without a form of world government would be chaotic.

 Jeremy Bentham (coined the word “international” in 1780), advocated the creation of
“international law” that would govern inter-state relations.

 Giuseppe Mazzini believes in a Republican government and proposed a system of

free nations that cooperated with each other to create an international system. Mazzini
believes that free, unified nation-states should be the basis of global cooperation.

 Woodrow Wilson saw nationalism as a prerequisite for internationalism. Because of

his faith in nationalism, he forwarded the principle of self-determination (the belief that
the world’s nations had a right to a free and sovereign government). He hoped that
these free nations would become democracies because only by being such would they
be able to build a free system of international relations based on international law and
cooperation.

WHAT IS SOCIALIST INTERNATIONALISM?

 Socialist internationalism is a political principle that advocates for global solidarity
among socialist countries, workers and movements. This concept argues that the
working class has common interests across countries and should unite to fight for
socialism on a global scale.

 Karl Marx, a German socialist philosopher, was an internationalist but did not believe in
nationalism. He felt that any authentic version of internationalism should purposefully
reject nationalism, which rooted individuals in domestic problems rather than global
ones. He also emphasized economic equality, dividing the world into classes rather
than countries which are called the capitalist class (owners of factory, firms, or any “any
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means of production”) and the proletariat class (the people who worked for the capitalist
class and don’t own the means of production).

 Karl Marx and his co-author, Friedrich Engels, believed that in a socialist revolution
seeking to overthrow the state and the economy, the proletariat “had no nation”. Hence,
their now-famous battle cry, “Workers of the world, unite! You have nothing to lose but
your chains.” They opposed nationalism because it prevented the unification of the
world’s workers and that it might make the workers identify with the capitalists of their
countries instead.

 Socialist International (SI), was a union of European socialist and labor parties
established in Paris in 1889. SI’s achievements included the declaration of May 1 as
Labor Day, the creation of International Women’s Day as well as the successful
campaign for an 8-hour workday. However, SI collapsed during World War I but
managed to reestablished itself in 1951.

 Union of Soviet Socialist Republics (USSR) is a new state after the revolutionary
government led by the Bolshevik Party and its leader, Vladimir Lenin, overthrew and
replaced Czar Nicholas II in the so-called Russian Revolution of 1917.

 Bolsheviks, the members or believers of the Bolshevik Party, did not believe in
obtaining power for the working class through elections. Rather, they exhorted the
revolutionary “vanguard” parties to lead revolutions across the world, using methods of
terror if necessary. Today, parties like this are referred to as the Communist parties.

 Communist International (Comintern) was established by Vladimir Lenin in 1919 to

encourage socialist revolutions across the world. The Comintern served as the central
body for the Communist parties all over the world.

 Joseph Stalin, Lenin’s successor, dissolved Comintern in 1943 to appease his allies,
as USSR join the Allied Powers in 1941, as they, the United States and the United
Kingdom, were untrustful of the Soviet Union in their fight against Hitler’s Germany.

 Communist Information Bureau (Cominform) is the re-established Comintern by Stalin

after the war. Like Comintern, it assisted in the direction of several communist parties
that had come to power in Eastern Europe.

 For the postwar period, however, liberal internationalism would once again be
ascendant with the rise of the United Nations as the center of global governance being
the best evidence.