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LESSON 2: STRUCTURES OF GLOBALIZATION

UNIT 1: The Globalization of World Economies

Introduction:

We learn that politics, culture, and economy are interconnected. This chapter will focus on
the economic area of globalization and how it came to be. This section will not only focus on the
the global history but apply the theories on the present situation, specifically with the global
pandemic we are experiencing. The discussion will provide how important the economy is. At the
same time the discussion will also focus on the matter of macro (global market) perspective and
micro perspective (community /individuals). The discussion will give the students a clear
understanding of the structure of the global economy and its consequences.

Learning Objectives:

By the end of this unit students must be able to:

1. Define economic globalization

2. Identify the actors that facilitate economic globalization

3. narrate the short history of global market integration in the twentieth century

4. Demonstrate critical thinking in comprehending contemporary realities in light of global

economic relationships.

5. And articulate stance on global economic integration

Sections of the Unit :

1. What is economic globalization?

2. Early historical traces of exchange up to present

3. Economic Globalization today

4. Economic Crisis into Social Crisis

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What is economic globalization?

According to Held et. Al (1999), globalization may be

thought of initially as the widening, deepening, and speeding up
of worldwide interconnectedness in all aspects of contemporary
social life. Globalization is best thought of as a multidimensional
phenomenon. It refers to the increasing integration of economies
around the world, particularly through the movement of goods,
services, capital and even people (labor) & knowledge
(technology) across borders.
In this discussion’s context these are the important terms
and concepts:
Internationalization- Extension of economic Activities.
Economic Globalization - Integration between dispersed activities. As defined by Szentes, ‘in
economic terms globalization is nothing but 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. Nation State is
still a relevant factor on globalization.
Globalization- Globalization is nothing but a process making the world economy an “organic
system”Globalization transforms the national economy into a global one.Globalization is an
effective manager of the national economy.

The International Monetary Fund (IMF) regards “economic globalization” as a historical

process representing the result of human innovation and technological progress (Claudio and
Abinales 2018). It is characterized by increasing integration of economies around the world
through movement and exchange of goods, services and capital. (Claudio and Abinales 2018).
Much like globalization, the definition of integration along with other consequences of it is
qualitative and subjective. Are the increase in Growth Domestic Product (GDP) and Foreign Direct
Investment (FDI) are good indicators of the increasing integration?
According to the United Nations Conference on Trade and development (UNCTAD), the
amount of FDIs flowing across the world was 57 billion US dollars in 1982, by 2015 that number
was 1.76 trillion dollars (Claudio and Abinales 2018). These dramatic increases in global trade
happened in the span of just a few decades.
Considering the increased speed in exchange and frequency of trading due to
technological advancements, the world is quickly evolving. From songs Compact Disks to MP3
format that you can download online. Physical exchange was gradually replaced or supplemented
by online virtual access. On the other hand, there is a cultural lag between not only nations but
also in the communities that belong to it. Internet connection is now considered as an essential
commodity especially now that everything that we do is now anchored to the world wide web. In
these trying times of the COVID-19 pandemic, access to the internet and personal priorities were
the problems of a poor student. The discrepancies between the rich and poor are still significant.
This chapter assesses economic globalization and examines who benefits and who is left out.

Early historical traces of exchange up to present

Gills and Thompson (2006) suggests that globalization processes have been ongoing
since Homo sapiens began migrating from the African continent ultimately to populate the rest of
the world. International Trading Systems is not new, the oldest known international trade was the
Silk Road – a network of pathways in the ancient world that spanned from China to what is now
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the Middle East and to Europe. Traders used the Silk Road from 130 BCE when the Chinese Han
Dynasty opened the trade to the West up until 1453 BCE when the Ottoman Empire closed it.

However, the Silk Road was not considered “global”

because it had no ocean routes that could reach the American
continent. According to historians Dennis O. Flynn and Arturo
Giraldez, “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.” Flynn and Giraldez, trace this back
to 1571 when the galleon trade was established, that connected
Manila in Acapulco. This was the first time that the Americas were
connected to Asian trading routes.

Important concept: International Monetary System (IMS)-Rules,

customs, instruments, facilities, and organizations for affecting
international payments (Salvatore, 2007).Reflects economic power and interests.

Galleon trade was part of the age of mercantilism. Mercantilism was thus also a part of
the global trade but with multiple restrictions. A more open trade system emerged in 1867, when
the United States and other European nations adopted the gold standard at an international
monetary conference in Paris. Mainly, the goal is to establish a common system that would allow
more efficient trade. The countries established a common basis for currency prices and a fixed
exchange rate system – all based on the value of gold.

The gold standard, despite being the simpler trade, is a very restrictive system, as it
compelled countries to back their currencies with fixed gold reserves. During World War I, many
countries were forced to abandon the gold standard, when they depleted their gold reserves.
Since European countries had low gold reserves, they adopted floating currencies that were no
longer redeemable in gold.

Returning to a pure standard became more

difficult as the Great Depression came in the 1920s and
extended until up to the 1930s. This depression was the
worst and longest recession ever experienced by the
Western world. Some economists argued that this was
largely caused by the gold standard, since it limited the
amount of circulating money and therefore, reduced
demand and consumption.

Economic historian Barry Eichengreen argues

that the recovery of the United States began when they
abandoned the gold standard and the US government
was able to free up money to spend on reviving their
economy. At the height of World War II, other
industrialized countries, other industrialized countries
followed suit.
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Though more indirect versions of the gold standard were used until the 1970s, the world
never returned to the gold standard of the early 20th century. Now, the world operates using what
is called the fiat currencies – currencies whose value is determined by their cost relative to other
currencies. This system allows governments to freely and actively manage their economies by
increasing or decreasing the amount of money as they see fit.

Economic Globalization Today

Exports make national economies grow. In the past, the countries who benefited most
from the free trade were the advanced nations that were producing and selling industrial and
agricultural goods. The United States, Japan, and the member-countries of the European Union
were responsible for 65 percent of global exports, while developing countries only accounted for
29 percent. More countries opened up their economies to take advantage of the increased free
trade, which results in higher percentages accumulated by the developing countries. The trade
liberalization has altered the dynamics of the global economy.

In the recent decades, economic globalization has spiked in global growth rates, partly as
a result of the increased exports. According to the IMF, the global per capita GDP rose over five-
fold in the second half of the 20th century.

Yet, economic globalization remains an uneven process, with some countries,

corporations, and even individuals are benefitting a lot more than others.
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Economic Crisis into Social Crisis

(Atkinson et.al 2015)

Karl Marx reiterated that capitalist societies are more

prone to economic crises and that this will worsen over time,
which will lead to workers’ revolution. But why is it that when a
society falls in a crisis, a different change in the political climate
often follows?

This question was posed by Jurgen Habermas in the

early 1970s. Habermas was intrigued by the relationship
between capitalism and crises.

He also suggests that traditional Marxist theories of crisis

tendencies are not applicable to some Western late-capitalist
societies. The reason is because these societies have become
more democratic and have changed significantly because
welfare-state policies, such as free healthcare provision. Also,
collective identities have fragmented and there is increased
individualization, and fewer class-based conflicts.

Although the economic cycles of prosperity and recession

continue, policy
measures by nation-
states have enabled
them to avert major
crises. Unlike earlier
capitalist societies,
under state-regulated
late-capitalism, the
primary site of crisis
and conflict has shifted
to the cultural and
political spheres. The crisis of modern Western society is,
according to Habermas, one of legitimation. Legitimacy has
become the focal concern because the state, as manager of
the “free market” economy, has simultaneously to solve
economic problems, ensure democracy, and please the voters. If the public feels government
policies are unfair, it withdraws its support for the government. The state therefore has the difficult
task of balancing the pursuit for capital with maintaining mass support. In other words, state
policies must favor business and property owners while appearing to represent the interests of
all. This means the conditions exist for government institutions to suffer a large-scale loss of
legitimacy.

If citizens sense that the government is just and benevolent, then they will show support. If,
however, they feel that policies are not in their interests, people will respond with political apathy
or even large-scale discontent and protests. Given a threat to the status quo, a government may
try to appease its citizens with short lived social welfare measures.
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SECTION 2: STRUCTURES OF GLOBALIZATION

UNIT 2: Global Politics & Contemporary Global Governance

Introduction:

Governance and Government are usually expressed as synonyms in most dictionaries,

indicating the authority exercised by an institution, state, or organization. However, governance,
unlike the objectively defined institution of the government, is defined more as the process of
exercising political, economic, and administrative authority to manage national or international
affairs. It ensures the distribution of power to manage public resources and provide solutions for
existing problems. In this lesson, we focus on how connectivity or integration of countries occur
in globalization and shed light in the discussion of international order and world government. It
puts United Nation as the main platform for the integration of world leaders in terms of politics,
economy, and military affairs. The principal institution in charge of the process of governance is
the United Nations- founded in 1945 in the wake of the Second World War. The institution was
established to limit future conflicts that bring catastrophic global consequences that endanger the
innate rights and dignity of men. The United Nations' primary mandate is to preserve global
security and settle international legal issues that jeopardize the sovereignty of some Nation
States.

Learning Objectives:

By the end of this unit students must be able to:

1. Analyze the dynamics of global politics and governance
2. Explain the drivers of global governance
3. Understand the process of governance and how it influences the relationship of
Nation States.
4. Examine the implications of established universal principles to the manner of national
governance.

Sections of the Unit:

1. The Interstate System and Internationalism
2. Global governance and the United Nations

As discussed briefly in Lesson 1, the state and nation are different but highly related to
each other. A state is independent and has sovereignty over its territory while nation is a
population having shared culture, history, territory and more. Sovereignty is a power to control its
state externally (its relationship to other sovereign state) and internally (its relationship to
citizens and other governing bodies).

Politics’ Premise

1. There are countries or states that are independent and govern themselves
2. These countries interact with each other through diplomacy
3. There are international organizations, like the UN, that facilitate these interactions (such
as UN)
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4. International organizations has its own focus on specific sector (ILO, WHO, UNICEF)

The global politics recognize that nation states are sovereign but they opt to participate in the
global community as these international organizations tend to organize interactions between
countries to avoid conflicts.

The International State System

The concept of sovereignty (present-day) can be traced back to Treaty of Westphalia (1648), a
set of agreements to end the Thirty Years’ War between the major continental powers of Europe
(Claudio & Abinales, 2018). A long brutal war between the Catholics and Protestant. The birth of
interstate system avoided wars in the future by recognizing state sovereignty. From then on, state
begins to grow in power. It started in Europe and spread to the rest of the world. Europeans
experienced fast development necessary (tax systems and military power) to spread influence
and power around the world. The expansion of the Interstate system began in Europe, spread
globally through imperialism, resulting in over two hundred states and most existing in poverty.

Internationalism
The internationalism is the desire for greater unity among states and people. It comes in two
different forms:

Liberal Internationalism – it offers Socialist Internationalism - the greatest

orderliness and protection, without a happiness of all nations taken together.
form of world government, international
system would be chaotic.

● Immanuel Kant – likened states in a ● Karl Marx – economic equality

global system ● Joseph Stalin – Communist
● Kant imagined a form of global International Bureau
government.
● Jeremy Bentham – creation of
international law for inter-state
relations.
● Giuseppe Mazzini – system of free
nations that cooperated with each
other to create an international system
● Woodrow Wilson – prominent
advocate for the creation of the
League of Nations.
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The liberal advocates for participative global community where integration for politics and
economy is highly encourage while the socialist advocates for economic equality. They do not
problematize the divided nations as it is not a problem for them, their main concern is the
economic division of people. For the post-war period, liberal internationalism would once again
prosper and the best evidence to this is the United Nations as the center of global governance.
The first attempt to build a global system is the creation of League of Nations at the end of World
War I. American President Woodrow Wilson is highly associated in the formation of League of
Nations. Although he was advocating for the formation of it, he was not able to join the league the
moment it was formed due to opposition of the Senate.

Global Governance
Governance is the action or the manner of governing. In the contemporary global governance,
there is no one organization that various states are accountable to follow and more likely no
organization can militarily force a state to follow the global rules. But there are, somehow, existing
general behavior of states such as following navigational route and recognizing respective
territorial boundaries. If they would not, it will be a global concern. Maintaining the international
order is by following the global norms despite the lack of holistic single world government. Global
governance is the different intersecting processes that create this order.

Sources of Global Governance

International Organizations refers to international intergovernmental organizations or groups that

are primarily made up of member states (e.g. United Nations). IOs can become influential as an
independent organization. They are merely a union of various state interests and that is where
the conflict occurs.
Powers of IOs (from Michael Barnett and Martha Finnemore):
• Power of Classification (e.g. urban vs. rural in which affects the salary rate, and land
value of a place)
• Power to fix meanings (e.g. setting the spread of the virus from outbreak to pandemic
in which the countries rely their response)
• Power to diffuse norms (e.g. declaring the use of mask as not important if you are
not exposed to an infected person)
IOs can create great good or great harm. They can promote relevant norms such as
environmental protection and human rights while turning an eye to the communities that challenge
their beliefs.

The United Nations

It was not perfect but so far it achieved its primary goal of preventing another global war.

Five Active Organs:

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1. The General Assembly

2. Security Council
3. Economic and Social Council
4. Trusteeship Council
5. International Court of Justice

The General Assembly

● ”main deliberative policymaking and representative organ”

● annually elects GA President to serve a one-year term
● all member states (currently at 193) have seats in the GA.
● Philippines played a prominent role when Carlos P. Romulo was elected (1949-
1950)
● Although GA is the most representative organization, Security Council is
considered to be the most powerful

Security Council

➔ Consists of 15 member states

➔ GA elects 10 of these 15 to two-year terms
➔ Other 5 (sometimes referred to as permanent 5 (P5)) are China, France, Russia, United
Kingdom & United States

Security Council’s P5

• Each country holds veto power over the council’s decisions. It only takes one veto vote
from a P5 member to stop an SC action dead in its tracks.
• Russia has threatened to veto any SC resolution against Syria
• United States sought to Iraq in 2001, claiming that Saddam Hussein had weapons of mass
destruction (WMS) that threatened the world. UN vetoed the resolution for intervention. There
were no WMS.

IOs can be an effective tool in meddling global problems but it can also turn it backs on the major
global issues of today if it has conflict of interest in dominant countries. That is why this
contemporary governance is not an end point, and UN was never perfect governing body for
global community, but it is recognized because of its eminent role. International institutions like
the UN are always in precarious position in global governance. We knew that they are composed
of several sovereign states which makes them a collective group, but they are also an organization
with their own rationalities and agendas creating conflict on their own interests.

SELF TEST 3

Instruction: In this section of the module, your general knowledge and understanding of
the subject so far will be tested. Please answer each question using the following format-
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Arial 11, single-spaced. Indicate the Self Test #_ and write your name ( Last Name, First
Name , M.I) and your Course and Section .

• Search for more UN activities/decisions and discuss its advantages and

disadvantages.
• Supplementary reading/material (optional):
o Esmaquel II, Paterno (2016) “Philippines wins case vs China” Rappler
https://www.rappler.com/nation/137202-philippines-china-ruling-case-west-
philippine-sea
o Santos, Matikas (2016) “PH win arbitration case over South China Sea”
Inquirer.Net https://globalnation.inquirer.net/140358/philippines-arbitration-
decision-maritime-dispute-south-china-sea-arbitral-tribunal-unclos-itlos
o Williams, Robert D. (2016) “ Tribunal Issues Landmark Ruling in South China
Sea Aritration” Lawfare https://www.lawfareblog.com/tribunal-issues-
landmark-ruling-south-china-sea-arbitration

Event Advantages Disadvantages

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