INTRODUCTION TO

GLOBALIZATION
 What is GLOBALIZATION?

...refers to the existence of free exchange of goods,

services, culture, and even people, between and among
countries
...countries opened their doors to highly skilled workers
and professionals
• Jan Aart Scholte (2005), points out that
globalization refers to gradual processes of
‘relative deterritorialization’ that facilitate
the growth of ‘supraterritorial’ relations between
people.
Globalization advocates..

• the deregulation of markets (freeing corporations from much government

regulation will encourage capitalists to invest more)

• the liberalization of trade (it can cut the costs of trade, making imported
goods relatively cheaper (free trade)

• the privatization of state-owned enterprises ( privatizing industries (such as

petroleum and mining) and services (such as transportation and health care)
can reduce the prices of commodities and services)

• the dissemination of ‘American values,’

• and, after 9-11, the support of the global War on Terror under US
leadership
 History
• Modern globalization was jumpstarted on October 30,
1947 by 20 nations that signed the General Agreement on
Tariffs and Trade (GATT) which primarily aims to
regulate international trade

• 1995 GATT was supplanted by the World Trade

Organization signed by 124 nations

• WTO describes itself as the "only global international

organization dealing with the rules of trade between
nations.."
ASPECTS OF GLOBALIZATION

• INDUSTRIAL GLOBALIZATION
• FINANCIAL GLOBALIZATION
• ECONOMIC GLOBALIZATION
• POLITICAL GLOBALIZATION
• INFORMATIONAL GLOBALIZATION
• CULTURAL GLOBALIZATION

GLOBALIZATION is a MULTIDIMENSIONAL phen

 ASPECTS OF GLOBALIZATION

INDUSTRIAL GLOBALIZATION ...Worldwide production

Asia is home to more Adidas factories than any other continent.

According to the Adidas Group, 27 percent of all the company’s
factories are located in China. China has 337 factories, followed
by India with 99, Indonesia with 79 and Vietnam with 76.
 ASPECTS OF GLOBALIZATION

...development of worldwide
FINANCIAL GLOBALIZATION financial markets
...better access to external financing

...establishment of a global
common market
ECONOMIC GLOBALIZATION ...interdependence of world
economies
...movement of goods between
national borders
 CONCEPTIONS OF
GLOBALIZATION
ECONOMIC GLOBALIZATION
"...the closer integration of national economies through trade
and financial flows as well as cross-border migration of people.
As national economies open up and lower their external
barriers, they become more exposed and more vulnerable to
global forces and influences."
-United Nations Conference on Trade and Development (UNCTAD)

This definition covers what the European Union (EU) calls

as the four freedoms:
FREE MOVEMENT OF GOODS/ PRODUCTS, SERVICES, CAPITAL/INVESTMENT,
AND PERSONS
 ...creation of international
POLITICAL GLOBALIZATION organizations

created to avoid obstacles/ conflicts between countries

...to smoothen the process of trade between countries of
different economic standing

APEC IMF OPEC WTO

• In Held's view, neither the old Westphalian
system of sovereign nation-states nor the
post-war global system centred on the
United Nations offers a satisfactory solution
to the enormous challenges posed by political
globalization

• reduced control of national governments over economic policy

• issues pertaining to the principle of state sovereignty, the growing
impact of intergovernmental organizations, and the prospects for
global governance.
 ...increase in information flows
INFORMATIONAL between geographically remote
GLOBALIZATION locations
...advancement of technology
 ...sharing of ideas, attitudes, and
CULTURAL GLOBALIZATION values across national borders
...rise of an increasingly
homogenized global culture
• The American sociologist George Ritzer (1993),
for example, coined the term ‘McDonaldization’
to describe the wide-ranging process by which
the principles of the fast-food restaurant are
coming to dominate more and more sectors of
American society, as well as the rest of the
world.
• global diffusion of American values, consumer
goods, and lifestyles as ‘Americanization’

• "cultural imperialism"
• Often referred to as ‘hybridization’ or
‘creolization’, the processes of cultural mixing
are reflected in music, film, fashion, language,
and other forms of symbolic expression.
 International Trade

...exchange of goods and services between countries

...trade takes place between two or more nations
 Effects of International Trade

...gives rise to a world economy ..prices, supply, and demand

are affected by global events

Example:
..political change in Asia could result in an increase in the
cost of labor, thus increasing the manufacturing costs for
American sneaker company based in Malaysia
 Effects of International Trade

...gives consumers and countries the opportunity to be

exposed to goods and services not available in their own
countries
 Effects of International Trade

...increased efficiency in the use of resources (labor, technology,

or capital)

"Specialization in International Trade"

...a country produces goods that they can efficiently produce while the
items that they cannot produce are obtained by trading with other
countries
 "Comparative Advantage"

...enables companies to concentrate on manufacturing goods where they

have a distinct comparative advantage (David Ricardo, 1917)
 Effects of International Trade

...it can encourage the opportunity of foreign direct investment

(FDI) which is the amount of money that individuals invest into
foreign companies

For the receiving government, FDI is:

• a means by which foreign currency and expertise can enter the country
• It raises employment levels
• Growth in the GDP
For investors:
• Offers company expansion and growth, which means higher revenues
FREE TRADE VS. PROTECTIONISM
 FREE TRADE

...a laissez-faire approach

...policy to eliminate discrimination against imports and exports
...opposite of trade protectionism or economic isolationism
 PROTECTIONISM
...refers to government actions and policies that restrict or restrain
international trade to ensure that markets function properly
Intention: protect local businesses and jobs from foreign
competition

...can be implemented in the ff ways:

1. Tariffs
2. Import quotas
3. Product standards

Critics argue that over the long term, protectionism often hurts the people.
Why?
...Slows economic growth
...Pushes up prices
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

SUPPORTERS OF GLOBALIZATION CLAIM THAT:

• Globalization is inevitable
• Nobody is in charge of globalization
• Globalization benefits everyone
• Globalization furthers the spread of democracy in the
world
• Globalization requires war on terror
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

SUPPORTERS OF GLOBALIZATION CLAIM THAT

GLOBALIZATION HAS THE FOLLOWING EFFECTS:
• multiculturalism and multilingualism
• cultural and educational exchanges
• migration
• global cooperation (Faster mobilization of aid during
crises)
• can stimulate employment
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION
Supporters of globalizations subscribe to the capitalist and neoliberal ideologies.

Capitalism
• dominant economic system/framework
• Premised on the "profit motive"
• Claims that seeking profit is the most basic aim of any individual or entity in
the world
• Eg. This explains why governments allow mining even where the
ecosystem is vulnerable
Neoliberalism
• Builds on the profit motive by asserting that for capitalism to thrive, markets
should be free from government intervention, claiming that "free markets
and free trade will set free the creative potential and the entrepreneurial
spirit which is build into the spontaneous order of any human society, and
thereby lead to more efficient allocation of resources"
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

CRITIQUES OF GLOBALIZATION:

• "Predatory capitalism Capitalism becomes predatory

when it prioritizes the maximization of profit over
safeguarding the well-being of people and the
environment."
Karl Marx's classic book Das Kapital emphasizes that "the aim of
capitalist production, is to extract the greatest possible amount of surplus-
value, and consequently to exploit labour-power to the greatest possible
extent"

Capitalists or the bourgeoisie

Workers or the proletariat

• For Marx, capitalism can lead to the maximization of

profits even at the expense of workers (exploitation and
minimum wage) and the environment
• This became more explicit because of globalization
• Globalization allows firms to shift all or part of its
operations to countries where wages are low, in a process
called outsourcing
• Sweatshop
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

CRITIQUES OF GLOBALIZATION CLAIM THAT

GLOBALIZATION HAS THE FOLLOWING EFFECTS:
• linguistic hegemony of English
• cultural homogenization (big corporations such as
McDo, Nestle, Pixar, Marvel, Disney dominate markets
in many countries because of their enormous financial
power)
• Influence?...Cultural globalization
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

CRITIQUES OF GLOBALIZATION CLAIM THAT

GLOBALIZATION HAS THE FOLLOWING EFFECTS:
• tax injustice (countries compete for foreign investments
and are forced to lower corporate tax rates thereby
reducing the expected government income which can
be used for social services)
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

CRITIQUES OF GLOBALIZATION CLAIM THAT

GLOBALIZATION HAS THE FOLLOWING EFFECTS:
• Racism and anti-migrant sentiment (as corporations
in many first world countries hire more migrants to
save on wages)
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

Critiques believe that globalization is more favorable to

developed countries because:
• ...developed countries' investments in developing
countries earn profits which the former typically
repatriate, rather than reinvest in the latter
• ..developed countries control multilateral financial
institutions such as the IMF, World Bank, and even
the biggest private banks
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

Critiques believe that globalization is more favorable to

developed countries because:

• the bulk of price of the developing countries' main exports

(raw materials and semi-manufactured goods) is lower
than the bulk price of their typical imports from developed
countries (technology/ machinery and high-value
products)
 PHILOSOPHIES AND IDEOLOGIES
OF/ON/AGAINST GLOBALIZATION

Critiques believe that globalization is more favorable to developed

countries because:
• the migration of workers and professionals from developing
to the developed countries depletes the former's human
resources which they need to free themselves from poverty
and dependence
• the education system of developing countries is aligned with
the needs of developed/capital-rich countries which are also
typical destinations of migrant workers from the developing
nations