Contemporary World - MNCs
3. Intensification and acceleration of social
Introduction and Defining Globalization
Globalization
- Inherently interdisciplinary
- Not “neoliberal Globalization”/ “market
globalism”
- Refers to the expansion and intensification of
social relations and consciousness across world-
time and world-space. (Steger)
Neo globalization- Policies desire to create a
framework for economy that makes it possible to raise
profits by minimizing costs of investments.
Laissez faire: Leave alone- economic system opposed to
any government intervention to business affairs.
Natural order- self-regulating against: minimum wages,
duties, trade restrictions and corporate taxes.
Free trade- government does not restrict market.
REGIONAL TRADE BLOCS
European union(EU)- custom union, single market and
now with a single currency
North American Free Trade Agreement (NAFTA)- USA,
Canada, and Mexico
Mercosur- custom union between Brazil, Argentina,
Uruguay, Paraguay, and Venezuela
South Asian Free Trade (SAFTA)- created in 2006 with
countries such as India and Pakistan
Pacific Alliance (2013)- a regional trade agreement
between China. Columbia, Mexico, and Peru
Trans-Pacific Partnership (TPP)- free trade agreement
negotiated during 2013
ATTRIBUTES OF GLOBALIZATION
1. Various forms of connectivity
- Diverse
- Enabled by various factors, pressures, media
- uneven
2. Expansion and stretching of social relations
- NGOs
- Friendship/relationships
- Government associations
exchanges and activities
- Snail mails to FB
- Live television
- Increased Travel
4. Occurs subjectively
- We think about the world
- Associate ourselves with global trends
- Sense of responsibilities
*the process is uneven
Understanding Globalization
Globalization- complex interrelated process, which
have in common the idea that relationships and
organizations have increasingly spread across the world.
(Fulcher and Scott)
3 key components
1. Destruction of distance
2. Stretching of relationships beyond national
boundaries
3. Growing awareness of the world
4. Increasing interdependence between different
parts of the world
Nation state- a political unit that has: (1) national citizen
(2) national territory (3) national administration
- Defined objectively with territorial boundaries
and administrative structure
Nation- a people with identity
- Members sense of commonality that
distinguishes them from others
- Community of sentiment with specific
sentiment of solidarity in the face of other
groups. (Max Weber)
- Imagined Community. (Benedict Anderson)
- Did not exist until the state had constructed a
national administration that stretched over its
territory, states unification of its citizens that
created the nation. (Giddens, 1985)
Nationalism- right to self-government through its own
independence.
- National unity and national identity should take
priority over membership
 - One is first a member of a nation before a
member of a family or religion
Development- becoming like West
- Economic Growth
UN Human Development Index:
1. Health and longevity
2. Knowledge and education
3. Standard of living
Theories of Development
1. Modernization theory
2. Dependency Theory
Globalization of Economic Relations
- 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.
4 Interconnected Dimensions
1. Goods and Services
2. Financial and capital markets
3. Technology and communications
4. Production
Internationalization- Extension of economic activities
Economic Globalization- integration between
internationally dispersed activities
Economic Globalization
- Process making the world economy an “organic
system”. (Szentes)
- Transforms the national economy into a global
one
- Effective manager of the national economy
International Monetary System (IMS)
- Rules, customs, instruments, facilities, and
organizations for affecting international
payments (Salvatore, 2007)
- Reflects economic power and interests
Gold Standard- functioned as a fixed exchange rate
regime
Bretton Woods System- international monetary regime
in the framework of united nations Monetary and
Financial conference in Bretton Woods, New
Hampshire.
- creation of International Monetary Fund and
World Bank
European Monetary Integration- wanted to put a
market where goods, services, capital, and labor can
move freely.
International Monetary Fund- was to promote
international financial cooperation and buttress
international trade. Safeguard the smooth functioning
of gold exchange standard by providing short-term
financial assistance in case of temporary balance of
payments difficulties.
Economic Monetary union (EMU)- is an umbrella term
for the group of policies
- aimed at converging the economies of member
states of the European union
Trade Policies- standard, goals, rules, and regulations
that pertain to trade relations between countries
- aim to boost international trade.
Protectionism- safeguards the best interest of its trade
and citizens.
World System Theory
World Economy
- large geographic zone
- division of labor
- exchange of basic goods
- flow of capital and labor
Capitalism- economic system based on the private
ownership of the means of production and their
operation for profit.
Capitalist System- only when the system gives priority
to the endless accumulation of capital.
World economy and capitalist system
- efficacy of the division of labor
- capitalist system cannot exist within any
framework except that of a world economy.
World System Theory – Argues that there are 3 kinds of
states that would explain why global inequality exists.
1. Core- benefit the most from the capitalist
economy.
- Exploits other countries for labor and raw.
2. Semi-periphery- either core countries in decline
or peripheries improving.
- Mixture of both.
3. Periphery- lacking strong government,
controlled by other states.
- Provide labor and raw materials to core
countries.
Monopoly
- 1 Seller
- High barrier to entry
- No competition
Quasi-monopoly
- Limited competition
Patent- form of intellectual property that give the
owner the legal right to exclude others from making,
using, selling, and importing an invention for a limited
period of years, in exchange for publishing an enabling
public disclosure of invention.
- Imposed regulations stop small enterprises
from entering the competitive market.
Kondratieff Cycle of Nikolai Dmitrijewitseh Kondratieff
- Long duration economic cycle of capital goods
expansion that plays at over a period of about
50 years and underlies the usual boom-bust
cycle characteristics of a capitalist economy.
4 Phases of Kondratieff Cycle
1. Spring – new innovation
2. Summer - stock prices boom, large inflation
3. Autumn – consumers accumulate massive
4. amounts of credit
5. Winter – high employment, corporate
bankruptcies, falling stock prices
Proletarians- wage workers that have no alternative
means od supply because they are landless.
Household- families, common residences or friends
5 kinds of Income that household seeks
1. Wage income
2. Household income in subsistence activity
3. Petty commodity consumption
4. Rent
5. Transfer payments
Proletarian household- seeks absolute minimum wage.
Semi-proletarian household- below the minimum
wage.
Classes – members of status groups and identities.
Status Groups – ascribed labels and we are born into
them.
Why Can’t People Feed Themselves?
Minority of Nations – Prioritize agricultural and
industrial revolution
Majority of Nations – remained primitive and
underdeveloped
Colonialism – reason why people can’t feed themselves.
(Lappe Moore)
- Destroyed the already and initially built cultural
patterns odf production and change.
Colonial Mind – The Colonizers see agricultue in the
subjugated lands as primitive and backward.
John Stuart Mill – Colonies should not be thoght of as
civilizations or countries, but as agricultural
establishments whose sole purpose is to supply the
larger community to which it belongs to.
How did colonialism ag=ffect the inability of people to
feed themselves?
1. Forced peasant production – cash crops were
grown under the threat of guns.
a. Taxation – colonial technique to force
farmers to grow cash crops.
b. Marketing Boards – set up by the
givernment to regulate the buyingh and
selling of a certain community.
2. Plantations – direct takeover of the land either
by colonizing gorvernment or by private foreign
interests.
- “divorse of agriculture from nourishment”
3. Suppressing Peasant Farmers
4. Suppressing Peasant Competition
 Histroy of Global Politics
Internationalism – a system of heightened interaction
betweek various sovereign states, partocularly the
desire for greater cooperation and unity among states
and people.
Internationalism’s 2 Categories
1. Liberal Internationalism
o Immanuel Kant – Global Government
o Jeremy Bentham
-international
- creation of international laws
Panopticun
- External control
- Internal control – constant observation acted as
a control mechanism. A conciousness of
constant surveillance is internalized.
Michel Foucault
- Philosophical Historian
- The nature of Power in Society
- Knowledge is a form of power
Knowledge/Power
- Modern Democratic state
- System to regulate citizens
- Internalized coercion
- Surveillance – threat of dicipline, internalization
of reality.
o Giuseppe Mazzini
- Believed in republican Government
- Leaders are not chosen by royal blood
- Supreme power is held by the people
- Elected representative of people
- Proposed: system of nations that cooperate
with each other to create international system
- Global cooperation
o Woodrow Wilson
th
- 28 president of the United States
- Nationalism as prequisite for internationalism
- Self-determination – world’s nation have a right
to a free and sovereign government
Origin of sovereignty
Treaty of Westphalia
- Used to end the 30 year war
- Avert war
Napoleonic Wars
- Bonaparte believed in the spread of the
principles of the French Revolution:
Liberty, Equality, Fraternity
Napoleonic Code
- Freedom of religion
- Promoted meritocracy in government service
Battle of Waterloo
- Anglo and prussian army defeated napoleon in
1815.
*not all nations are state and all states nations
Axis power – Germany, Italy, Japan
Allied Power – US, UK, France, Holand, Belgium
Ultranationalist – imstinctive disdain for
internationalism and preferred to violently impose their
dominance over other countries
2. Socialist Internationalism
o Karl marx
- Did not believein natyionalism but believed in
true form of internationalism
- Divide the world by classes
Socialist revolution - overthrow the state through
revolution
Joseph Stallin – Dissolved the communist International
In 1943 and stablished the communist information
bureu.
Government and Citizens in a Globally Interconnected
World of States
The state – Jurisdictional claims over land and people
and dates back to ancient modek of political
community.
The Nation – Organic ties that hold groups of people
together and inspire senses of loyalty and belonging.
Economic interdependence – System by which many
companies are economically dependent upon each
other.
Labor Specialization – When so many products are
produced in one nation, jobs become more specialized.
Globalization – is hpw countries are coming together as Historic Rise of the Global Corporations
one big global economy, making international trade
International Companies – importers amd exporters
easier
without FDI
Global Free Market Capitalism – economic system
Multinational Companies – They adaot their hometown
wherein provate individuals or business who own
products and services
capital goods were able to voluntarily exchange their
products subject to the law of supply and demand Transnational Companies – decision making is within
without government intervention. the individual foreign market
Thomas Friedman – “as your country puts on the 2 Types of Commodity Chains
golden Straitjacket two things tend to happen: Economy
Grows, politics Shrink” 1. Producer-Driven Commodity Chain- are formed
and found in industries where the producers of
Golden Straitjacket – rewarded by investment capital specific product control their own
from the international financial markets. 2. Buyer-driven Commodity Chain – are retailers
or brand name merchansdisers who establish
Electronic Herd – made up of faceless stock who now
and control global production
spread their factories around the world.
State owned corporation – full weight of state
European Union – A political and economic union of 2
ownership is seen to give such corporations unfair
member states that are located primarily in Europe.
competitive advantages.
1. The European Court of Justice
Foreign Direct Investment – Internalization controls
2. The European Court of human Rights
more than half of its stock
- Freedom of expression
- Freedom of religion Non-equity modes of production (NEMS) –
- Protection from discrimination externalization , contract manufacturing, service
outsourcing, contract farming
The Rise of International law and Universal principles
Types of Emerging Global Corporation
International Criminal Court – formation of courts
represented and important expansion of public 1. Result of growing national power host country
accountability beyond states 2. Firms focused on replicating consumer
pathways
Transgovernmental Networks
General Agreement on Trade in Services (GATS) – first
- Anne Marie Slaugher: “ the state is not
set of multilateral rules covering internationla trade in
disappearing it is disaggregating”
services
- Improves the competence and regulatory
effectiveness of governments General Agreement on Tariffs and Trade (GATT) – set
of multilateral trade agreements aimed at the abolition
Transnational Activism
of quotas and the reductiom of tariff duties.
- The mobilization of collective claims by actors
Corporate Social Responsibilities (CSR) – self-regulatory
located in more than one country
pattern that ha been brought to global corporatiom in
Boomerang Pattern of Infuence an effort to render them more accountable across the
range of their many and varied stakeholders.
- International relations collective action theory
that creates a framework for how an advocacy
movement travels from one country to another
through different actors.