WHAT is Globalization?

● Globalization is the intensification of worldwide social relations which links distant localities in such a
way that local happenings are shaped by events occurring many miles away and vice versa. (Anthony
Giddens)
● Globalization as a concept refers both to the compression of the world and the intensification of the
consciousness of the world as a whole. (Rolan Robertson)
● Globalization may be thought of as a process … which embodies a transformation in the spatial
organization of social relations and transactions … generating transcontinental or interregional flows
and networks of activity, interaction, and the exercise of power. (David Held)
● Globalization means the onset of the borderless world. (TOhmae)

The 5 “Scapes” of Globalization by (Arjun Appadurai)

As we have already established, globalization refers to the increasing pace and scope of
interconnections crisscrossing the globe. Anthropologist Arjun Appadurai has discussed this in terms of
five specific “scapes” or flows:
1. Ethnoscape refers to the flow of people across boundaries. While people such as labor migrants or
refugees travel out of necessity or in search of better opportunities for themselves and their families,
leisure travelers are also part of this scape.
2. Technoscape refers to flows of technology. Apple’s iPhone is just one example of how the movement of
technologies across boundaries can radically affect day-to-day life for people all along the commodity
chain.
3. Ideoscape refers to the flow of ideas. This can be small-scale, such as an individual posting her or his
personal views on Facebook for public consumption, or it can be larger and more systematic. Missionaries
provide a key example. Christian missionaries to the Amazon region made it their explicit goal to spread
their religious doctrines.
4. Financescape refers to the flow of money across political borders. Like the other flows discussed by
Appadurai, this phenomenon has been occurring for centuries. The Spanish, for example, conscripted
indigenous laborers to mine the silver veins of the Potosí mines of Bolivia. The vast riches extracted from
this region were used to pay Spain’s debts in northern Europe.
5. Mediascape refers to the flow of media across borders. In earlier historic periods, it could take weeks or
even months for entertainment and education content to travel from one location to another. From the
telegraph to the telephone, and now the Internet (and myriad other digital communication technologies),
media are far more easily and rapidly shared regardless of geographic borders.

Section 2: The G-World

Different Periods or Waves of Globalization
Five waves of globalization
1. The first wave of globalization is as old as human civilization. For more than five thousand years
human beings from different places have interacted, mostly through trade, migration, and conquest.
2. The second wave of globalization is closely associated with the Western European conquest of
Asia, Latin America, and Africa and the spread of capitalism to these areas.
3. The third wave of globalization, which began around 1870 and declined around 1914, was marked by
breakthroughs in technological development, the global production of primary commodities as well
as manufactured products, and mass migration.
4. The fourth wave of globalization, from 1945 to 1980, was spurred by the retreat of nationalism and
protectionism and the strengthening of internationalism and global cooperation, led by the United
States. The removal of trade barriers was selective, but institutions – such as the World Bank, the
International Monetary Fund, and the General Agreement of Tariff and Trade (GATT) – were formed
to encourage global trade and development.
5. The fifth wave of globalization, which is the current period, is characterized by unprecedented
interdependence among nations and the explosive growth of powerful actors.
Section 3: Theories of Globalization
Theories of Globalization

The World-System Theory (Immanuel Wallerstein)

In the 1950s, the dominant theory was modernization theory; its problem was that some countries were not
developing/ modernizing as predicted. This gave way to the development of the World System Theory
conceptualized by Immanuel Wallerstein (1976).

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Wallerstein contends that “globalization represents the triumph of a capitalist world economy tied together by a
global division of labor.” A world-system is a "multicultural territorial division of labor in which the production
and exchange of basic goods and raw materials is necessary for the everyday life of its inhabitants."

The division of the world into three great regions, or geographically based and hierarchically
organized tiers:
● The Core
● The Periphery
● The Semi-Periphery

• The first is the core, or the powerful and developed centers of the system, originally comprised
of Western Europe and later expanded to include North America and Japan.
• The second is the periphery, those regions that have been forcibly subordinated to the core
through colonialism or other means, and in the formative years of the capitalist world-system
would include Latin America, Africa, Asia, the Middle East and Eastern Europe.
• Third is the semi-periphery, comprised of those states and regions that were previously in the
core and are moving down in this hierarchy, or those that were previously in the periphery and
are moving up. Semi-peripheral states act as a buffer zone between core and periphery, and has
a mix of the kinds of activities and institutions that exist on them (Skocpol, 1977).

“The powerful and wealthy "core" societies dominate and exploit weak and poor peripheral societies”

Theories of Global Capitalism

● The Transnational Practices (TNP) Leslie Sklair
This theory rejects both state-centrism (realism) and globalism (the end of the state); instead it is
convinced for the existence of a global system. TRANSNATIONAL PRACTICES (TNP) are
practices that cross-state boundaries but do not originate with state agencies or actors. It
operates in three spheres – the economic, the political, and the cultural-ideological. The whole is
the global system.

His theory involves the idea of the transnational capitalist class (TCC) as a new class that brings
together several social groups who see their own interests in an expanding global capitalist
system: the executives of transnational corporations; ‘globalizing bureaucrats, politicians, and
professionals’, and ‘consumerist elites’ in the media and the commercial sector (Sklair 2000).

● Emergent transnational state (TNS) apparatus William Robinson

Like Sklair, Robinson analyzes the rise of a Transnational Capitalist Class (TCC) as the class
group that manages these globalized circuits. However, in distinction to Scalar, for whom
state structures play no role in the global system, Robinson theorizes an emergent transnational
state (TNS) apparatus. This Transnational State (TNS) is a loose network comprised of
supranational political and economic institutions together with national state apparatuses that
have been penetrated and transformed by transnational forces.

● The Network Society (Manuel Castells)

A network society is a society whose social structure is made of networks powered by
microelectronics-based information and communication technologies. This new economy is:
(1) informational, knowledge-based;
(2) global, in that production is organized on a global scale; and
(3) networked, in that productivity is generated through global networks of interaction. The
Internet constructs a new symbolic environment, global in its reach, which makes “virtuality a
reality”.
Castells argues that globalization is a network of production, culture, and power that is constantly shaped by
advances in technology, which range from communications technologies to genetic engineering. Globalization
represents a new ‘age of information’. The central theme of this theory is the division of the world into those
areas and segments of population switched on to the new technological system and those switched off or
marginalized which he called digital divide.

● Time-Space Distanciation (Anthony Giddens)

Anthony Giddens
Giddens defines time-space distanciation as ‘the intensification of worldwide social relations
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 ● Global Risk Society (Anthony Giddens)
In Runaway World, Giddens provocatively argues that globalization has led to the creation of a
“global risk society.” Human social and economic activities, especially in modernity, produce
various risks such as pollution, crime, new illnesses, food shortages, market crashes, wars, etc., and societies
have become more responsible for managing these risks that their activities
intentionally or, more often than not, unintentionally produced.

● Theories of Global Culture

Tomlinson 1999; Nederveen Pieterse 2004
There are three main bodies of theory regarding the effects of globalization on local culture:
homogenization, hybridization and heterogeneity or polarization

1. Homogenization is the name given to the process whereby globalization causes one culture to
consume another. Homogenization theories see a global cultural convergence and would tend to
highlight the rise of world beat, world cuisines, world tourism, uniform consumption patterns and
cosmopolitanism (Appadurai).
2. Hybridization occurs when people mix cultural forms, genres or styles to create something new.
3. Heterogeneity approaches see continued cultural difference and highlight local cultural autonomy,
cultural resistance to homogenization, cultural clashes and polarization, and distinct subjective
experiences of globalization.

● The Global Village (Marshall McLuhan)

His insights were revolutionary at the time, and fundamentally changed how everyone has thought about
media, technology, and communications ever since. McLuhan chose the insightful phrase "global village" to
highlight his observation that an electronic nervous system (the media) was rapidly integrating the planet --
events in one part of the world could be experienced from other parts in real-time, which is what human
experience was like when we lived in small villages.
● The late Marshall McLuhan, a media and communication theorist, coined the term “global village” in
1964 to describe the phenomenon of the world’s culture shrinking and expanding at the same time due
to pervasive technological advances that allow for instantaneous sharing of culture (Johnson 192).

McLuhan's second best known insight is summarized in the expression "the medium is the
message", which means that the qualities of a medium have as much effect as the information it
transmits.

● McDonaldization (George Ritzer)

McDonaldization theory is defined as “the process whereby the principles of the fast-food
restaurant are coming to dominate more and more sectors of American society and the world”
(Ritzer, 1993:19).
The Four Main Dimensions of McDonaldization
1. Efficiency - The optimum method of completing a task. The rational determination of the best mode of
production. Individuality is not allowed.
2. Calculability - Assessment of outcomes based on quantifiable rather than subjective criteria. In other
words, quantity over quality. They sell the Big Mac, not the Good Mac.
3. Predictability - The production process is organized to guarantee uniformity of product and
standardized outcomes. All shopping malls begin to look the same and all highway exits have the same
assortment of businesses.
4. Control - The substitution of more predictable non-human labor for human labor, either through
automation or the deskilling of the workforce.

● Glocalization (Roland Robertson)

Roland Robertson’s concept of glocalization suggests that the global is only manifest in the local.
● GLOCALIZATION means that ideas about home, locality and community have been extensively spread
around the world in recent years, so that the local has been globalized, and the stress upon the
significance of the local or the communal can be viewed as one ingredient of the overall globalization
process (Robertson 1995).

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 ● “Disjuncture and Difference in the Global Cultural Economy” by Arjun Appadurai (1990)
Landscapes or Dimensions of Cultural Flows
• Mediascapes are about the flows of image and communication.
• Ethnoscapes are concerned with the flows of individuals around the world.
• Ideoscapes deal with exchanges of ideas and ideologies.
• Technoscapes refer to flows of technology and skills to create linkages between
organizations around the world.
• Financescapes relate to the interactions associated with money and capital.
Appadaurai uses the suffix SCAPE to connote the idea that these processes have fluid,
irregular, variable shapes.

GLOBALIZATION

This introductory lesson gives the learners the basic concepts of globalization that lead them to create their
own definition with the use of their own concept maps to see the interrelation of an environment, economy,
culture, beliefs and communication among each other.

It is innate for humans to grow and seek comfort for themselves. They can find greener pastures and
experience the improvements brought about by technology, transportation and communication. They come to
places where they can exchange goods, produce and settle. In Aldama, P. K. R. (2018), Nayan Chanda (2007)
remarked that it is our basic human needs to make our lives better that made globalization possible.

● The first “wave” of globalization was felt with the breakthroughs of railroads, telegraph and
telephone, steamships and the increasing global economic cooperation after centuries of European
colonization and trade activity. World War I had a catastrophic effect on the globalization trend.
● This was followed by postwar protectionism, the Great Depression, and World War II. In the
mid-1940s, after World War II, the United States led efforts to revive international trade and
investment establishing their ground rules. This was the start of the second wave of globalization.
The process continues on and on among the countries involved in globalization (Brazalote, et al.,
2019).

According to Chanda, commerce, religion, politics, and warfare may lead people toward a better life, in
which these can be linked to the four aspects of globalization_ adventures, conquest, missionary work, and
trade.

Concepts of Globalization
Specialists in different fields of social sciences defined globalization based on their expertise. Steger
(2013), referred to it as the “expansion and intensification of social relations and consciousness across
world-time and world space.” He introduced the four attributes of globalization:
(1) globalization has various forms of connectivity such that it can be economic, political, or cultural;
(2) it allows for the expansion and stretching of social relations;
(3) it intensifies and accelerates social exchanges and activities; and
(4) it occurs worldwide

Some scholars argue that globalization is a process while others describe it as an ideology.

For McGrew (1990) “globalization is a process in which individuals and organizations in one part of the globe
are affected by the activities, affairs and convictions on another part of the globe.” It is something that is
comprised of multiple sameness and interconnectedness that go beyond the nation-states.

Freeden (2003) advances that “globalization denotes a range of processes under one unwieldy epithet. In part
its conceptual difficulty to handle or control arises from the fact that global flows occur in different physical and
mental dimensions.”

Appadurai (1996) proposed five dimensions of global cultural flow namely: ethnoscapes, technoscapes,
mediascapes, financescapes and ideoscapes. These landscapes are created due to movements of people,
technologies, information through media, money and commodities and political ideas.
A number of scholars define globalization as a multidimensional group of social procedures that build ,
accelerate, and intensify worldwide interactions while at the same time nurturing in people an increasing
consciousness of deepening linkages between the local and far-off.
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However, Stegger (2005) uses the term globality to mean globalization as a condition. For him, globality
denotes “ future social conditions characterized by thick economic, political and cultural
interconnectedness and global flows that make currently existing political borders and economic
barriers irrelevant.”

In some cases, globalization is defined as an ideology to imply as a system of widely shared ideas,
patterned beliefs, guiding norms and values and ideals accepted as truth by some groups. Steger (2014) uses
the term globalism to mean globalization as an ideology.

He then identifies five core claims of globalism. Steger(2014)

● First, globalization is about the liberalization and global integration of market;

● Second, globalization is inevitable and irreversible,
● Third, nobody is incharge of globalization;
● Fourth, globalization benefits everyone; and
● Fifth, globalization furthers the spread of democracy in the world.

Globalization can also be defined differently depending on someone else’s expertise, experience and
perspective. For political scientists, globalization serves as a challenge to nation-states. The strengthening of
regional blocks like the EU, ASEAN and UN is gaining stable ground. Similarly, the emergence of global
political norms is evident- for instance, the norm that each country is entitled to the exploitation of human
natural resources for its own growth.

For economists, globalization implies an increase of free trade, global economic organization and regional
trade blocks. The expansion of free trade allows governments not to restrict the importation of products nor
impede the export of local products. On the other hand, for culture and communication experts, globalization
refers to the concept of a global village. Through globalization, the world has become a borderless world.
Communication technology makes the world shrink.

McLuhan (1964) believes that media has connected the world in ways that created a global village. More
so, globalization is referred to as cultural imperialism. It is a notion that there is a better culture or some
cultures are superior than others. In cultural globalization therefore, the spread of cultural culture ( e.g. music,
art, literature, fashion etc.) flows from dominant to non-dominant culture or from developed to developing
nations.

From the different competing concepts of globalization, there is now a need to come up with a working
definition that is academic, unbiased and grounded on an interdisciplinary approach. One objective working
definition is that of Steger’s (2013): “Globalization refers to the expansion and intensification of social
relations and consciousness across world-time and world space.”

Attributes of Globalization

From this definition four attributes of globalization can be drawn.

● First, globalization has various forms of connectivity such that it can be economic, political or
cultural.
● Second, globalization allows for expansion and stretching of social relations which can be
observed in the existence of non-governmental organizations that operate in the local, regional and
international setting.
● Third, globalization intensifies and accelerates social exchanges and activities. Live telecast, use
of email and social media are proof of these attributes.
● Fourth, globalization occurs worldwide. Every person is a global citizen because he thinks
about the issues of the world. For instance, teenagers associate themselves with global trends like
K-pop and imitate how they dress up, dance or even talk.

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The Global Economy
● Global economy is the worldwide economic activity between various countries that are considered
intertwined, thus, can affect other countries negatively or positively. It is all the economies of the
world which we consider together as one economic system, that is, a giant entity or a system of trade
and industry across the world that has emerged due to globalization (BusinessDictionary.com., n.d.).
● The International Monetary Fund (2008) defined globalization as the increasing integration of
economies around the world, particularly through the movement of goods, services, and capital across
borders. Shangquan (2000) defined economic globalization as the expanding interdependence of
world economies through the growing scale of cross- border trade commodities and services, flow of
international capital, and wide and rapid spread and technology. The Philippines now is doing a
cross-boarder trading with the US, China and Australia. doing a cross-boarder trade means that a
company from one country establishes and takes part in a business in another country for production of
goods or services.

When we think of global economy, it usually means the economy of the world and they can be used
interchangeably. However, The global economy is measured separately from national economies, while the
economy is simply an aggregate of all the separate countries’ measurements (Cooney, 2017). He considers
that “the global economy is really nothing more than the fact that the banking industry and some very large
companies have expanded to the point where they don’t really have any national loyalty.” He explained that
banks hold no national allegiance because their only interest anywhere is to make a profit. The giant
multinational corporations’ operations are global, yet, their national claims are hollow. Their national allegiance
forms part of a marketing strategy in their home countries.

Factors that Facilitate Economic Globalization

● There are many points of view to consider regarding different factors that facilitate economic
globalization, the so-called actors of globalization. The most renowned agents are the multinational
corporations (MNCs), state, non-government organizations (NGOs), intergovernmental
organizations (IGO), government, and activist groups. On the other hand Boyer and Drache
(1996), in Brazalote, et al. (2019), believe that it is still the nation-state that rules over the national
economy. According to Brodie (1996), the government are the ‘midwives” of globalization. In other
words, that nation-states are still relevant despite assuming a global perspective and act as mediators
between the effect of globalization and the national economy (Brazalote, et al.,2019).

The Modern World System

● The world –system is composed internally of a variety of social structures and member groups. It
is a largely self-contained system with a set of boundaries and a life span that does not last forever.
The modern-world system is also known as the modern capitalist world economy which relies on the
economic domination. It is the economic forces that pull the people, state, and societies together
toward the field of worldwide economic transactions (Aldama, 2018).

Immanuel Wallerstein (2004) analyzes the modern –world system centers on the broad economic entity
with an extensive division of labor that is not limited to political or cultural boundaries. The range of
economic tasks in the world-system is not evenly distributed throughout the world-system. According to
Wallerstein, in part, this is the consequence of ecological considerations. For the most part, it is a function of
the social organization of work which magnifies and legitimizes the ability of some groups within the system to
exploit the labor of others, that is, to receive a larger share of the surplus.
In the past, what held the world together was the political and military domination and it was called
world empire. In an empire, the political structure tends to link culture with occupation, in a world-economy,
the political structure tends to link culture with spatial location. In a world-economy the first point of political
pressure available to groups is the local (national) state structure. Cultural homogenization tends to serve
the interests of key groups and the pressures build up to create cultural-national identities (Wallerstein,
2004).
It is evident that in the modern-world system that there is inequality among all countries. Wallerstein (2004)
presented the features of the modern capitalist world-economy by dividing the world into three
categories, thus creating the worldwide division of labor: There are advantaged areas of the
world-economy--what we have called the core-states. In such states, the creation of a strong state machinery
coupled with a national culture, a phenomenon often referred to as integration, serves both as a mechanism to
protect disparities that have arisen within the world-system, and as an ideological mask and justification for the
maintenance of these disparities.
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 Aside from the core-state, there are some peripheral areas. According to Wallerstein (2004),
peripheral states because one characteristic of a peripheral area is that the indigenous state is weak,
ranging from its nonexistence (that is, a colonial situation) to one with a low degree of autonomy (that is, a
neo-colonial situation).

There are areas which are called semi-peripheral which are in between the core and the periphery
on a series of dimensions, such as the complexity of economic activities, strength of the state machinery,
cultural integrity, etc. Some of these areas had been core-areas of earlier versions of a given
world-economy. As a result of the changing geopolitics of an expanding world-economy, some had been
peripheral areas that were later promoted.

The semi-periphery is a necessary structural element in a world-economy. It is not a residual

category nor an artifice of statistical cutting points. Areas in this category play a role parallel to that played,
mutatis mutandis, by middle trading groups in an empire. In these middle areas (like middle groups in an
empire) partially deflect the political pressures which groups primarily located in peripheral areas might
otherwise direct against core-states and the groups which operate within and through their state machineries.
On the other hand, the interests primarily located in the semi-periphery are located outside the political
arena of the core-states, and find it difficult to pursue the ends in political coalitions that might be open to them
were they in the same political arena.

“The division of a world-economy involves a hierarchy of occupational tasks, in which tasks requiring
higher levels of skill and greater capitalization are reserved for higher-ranking areas. Since a capitalist
world-economy essentially rewards accumulated capital, including human capital, at a higher rate than “raw”
labor power, the geographical mal-distribution of these occupational skills involves a strong trend toward
self-maintenance. The forces of the marketplace reinforce them rather than undermine them. And the absence
of a central political mechanism or government for the world-economy makes it very difficult to intrude
counteracting forces to the mal-distribution of rewards” (Wallerstein, 2004).

Social gaps among different areas in the ongoing process of a world-economy tend to develop
because of the technological advances which make it possible to expand the boundaries of a
world-economy. The structural role in the world-economy of some particular regions of the world may change
to their advantage, even the disparity of reward between different sectors of the world-economy as a whole
may also widen. There is a distinction between a peripheral area of a given world-economy and the external
arena of the world-economy, in which, the external arena of one century often becomes the periphery of the
next--or its semi-periphery. Core-states can become semi-peripheral and semi-peripheral can become
peripheral.

Economic Globalization: Does it unite or divide the world?

With the nation-states, global corporations and international monetary systems as leading actors, the
world is now confronted with ongoing debates as to whether economic globalization unites or divides the
world. Benczes (2014) believes that economic globalization fosters universal economic growth and
development. For one, globalization allows a worldwide distribution of incomes. For instance, raw materials
needed for certain products may come from other nation-states. Also economic globalization reduces
poverty (World Bank 2002) Lastly, globalization creates mutual dependence between developing and
developed countries. Developing countries rely on developed countries for employment while the latter relies
on the former for raw materials and labor.

On the other hand some experts believe that economic globalization even divides the world further. First, it is
observed that the sources of goods and services are exploited. And since poor countries depend on
industrialized ones for employment,they usually compensate their labor with cheap costs. Second, economic
globalization does not benefit all nations. Third, Wallerstein (2005) claims that capitalism created the different
levels of wages in the economic arena of world systems leading to inequality according to expertise,
experience and skills.

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Market Integration

Global market integration is a long term system that happened through the establishment of a global
economy that includes a one line trading and commerce process. The existence of trade and exchange
internationally were already there before the 20th century globalization and already been practiced. The
shipping and navigation developments helps cities and countries to extend the range of their trade and
technology pattern according to Harvey (1990). This becomes an obvious improvement in shipping and
navigation aspect in the history. Colonialism and imperialism promote economic interrelationship among
countries where there is the evidence of equity, corporate ownership, management subsidiaries and
central head quarters that supply and distribute goods and services.

The global market integration started when the big American conglomerates began to emerge such
as the International Telephone and Telegraph, Avis Rent a Car, Continental Banking, Sheraton Hotels, and
Hartford Fire Insurance (American History, 2018). Later, Japan and Europe came into the limelight. Japanese
global automobile corporations like Toyota, Nissan, and Isuzu have been established. These companies
became the primary global suppliers of trucks for the Japanese military (Dower,1992). A French
multinational automobile manufacturer, the Renault automobiles also contributed in the provision of
transportation during the post-war military operations. A great breakthrough, as well as further development in
the international trade was observed because of these global American, Japanese, and European global
corporations.

International Financial Institution

Almost all countries in the world faced great challenges to restore their economic status after the second
World War. In lieu of unsuccessful League of Nations, the United Nations which was established on October
24, 1945, took initiative to restore international order and promote international cooperation. In 1944, two
government-sponsored international financial institutions were established during the Monetary and
Financial Conference held at Bretton Woods, New Hamsphire (US). They were the International
Monetary Fund and the World Bank. The IMF helps to foster global monetary cooperation, secure financial
stability , facilitate international trade and also grants financial assistance and loans to developing countries.
(imf.org/en/About). The World Bank is an intergovernmental institution which aims to end extreme
poverty and promote shared prosperity in a sustainable way (worldbank.org).

The five other organizations which belong to the WB group are:

● International Bank for Reconstructions and Development,
● International Development Association,
● International financial corporation,
● Multilateral Investment Guarantee Agency, and
● International Center for Settlement and Investment Disputes.

In the earlier part of 1960s, some regional development banks were also established such as the Asian
Development Bank (ADB) and the African Development Bank (AfDB) to foster sustainable development in
their respective member countries.

The international financial institutions (IFIs) play a major role in the social and economic
development programs of nations with developing or transitional economies. The IFI’s role includes advising
on development projects, funding them and assisting in their implementation.

Different institutions operate independently, however, they share common goals such as: to reduce
global poverty and improve people's living conditions and standards; to support sustainable economic, social
and institutional development; and to promote regional cooperation and integration. The IFIs provide loans,
credits and grants to national governments to fund specific projects for economic and socially sustainable
development. They also provide technical and advisory assistance to their borrowers and conduct extensive
research on development issues. Furthermore, they also lend directly to non-sovereign guaranteed (NSG)
actors. These include sub-national government entities, as well as the private sector.

Canada is a partner and shareholder in the World Bank, which is the major global IFI, and in several
regional development banks. This membership permits Canadian firms and individuals to compete for
procurement opportunities in bank-funded projects and programs.
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Attributes of global corporations

The global corporations as the international financial institutions play a crucial part in the growth of
the global economy, as well as, the social and economic development of the transitional countries .

According to Iwan (2012),

Contemporary global corporation is simultaneously and commonly referred to as:

● multinational corporation (MNC),
● transnational corporation (TNC),
● international company, or a global company.

He distinguished one from the other.

International companies are importers and exporters, typically without investment outside of their
home country;

Multinational companies have investment in other countries, but do not have coordinated
product offerings in each country. They are more focused on adapting their products and services to
each individual local market.

Global companies have invested in and are present in many countries. They typically market their
products and services to each individual local market.

Transnational companies are more complex organizations which have invested in foreign
operations, have a central corporate facility but give decision-making, research and develop (R&D) and
marketing powers to each individual foreign market.

Neubauer (2014) identifies the common attributes of these global corporations:

(a) they serve as an agent of desired economic development,
b) they are considered as an economic prominence, and
(c) they are identified as a very powerful entity that can create a crisis.

They can make their consumer products available in many parts of the world and hit their target of economic
development; for example the Nesle. Some TNCs and MNCs were only able to reach their global annual
growth target by exploiting the environment. In 1997, there was an Asian financial crisis wherein the global
corporation put chaos to the economy of the region by controlling the foreign direct investments. At that time,
more infrastructure projects were done, big corporations spending depended on bank borrowings, the real
estate values increased, and the government became more aggressive.

Lesson 4: Global Interstate System

Globalization and the Government
The governments of the states were instruments for globalization. It is the government that sets policies
for or against tariffs, calls to carry out naval expeditions, and promotes economic enterprises that lead to a rise
of technological advancements which manifest globalization. However, there are some who argue that
governments are far less able to control their own politics without concern for the outside world, and that
“government matters less and less in a global economy. Instead of being directors, nation-states become
simply other actors on the global stage.
According to Osland (2003) globalization has both positive and negative impacts to the
government.
The following positive impacts are:
● increased economic development benefits to some governments.
● Increased jobs and expanded infrastructure benefit to some countries; transfer of modern management
techniques into the business sector.
● Greater interdependence among trading and investment partners may deter war.
● Proliferation of nongovernmental organizations (NGOs) to counter- balance, thus, decreased
governmental power.

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On the other hand, the negative impacts are:
● increased power of multinational enterprises (MNEs) to regulate business at the expense of
government power, sovereignty, and ability.
● externalization of some MNEs costs to countries; competition for factories and foreign direct investment
(FDI) resulting in too many concessions to MNEs by some governments; influence of some MNEs to
local government policy like threatening to leave if demands are not met; fewer taxes paid by MNEs to
the governments where tax rate is lowest, depriving their own country of revenue; and decrease social
benefits that may affect stability.

According to Stiglitz (2007), “a government’s inability to control the actions of individuals or companies
is limited by international agreements affecting the right of sovereign states to make decisions. A
government that wants to ensure that banks lend a certain fraction of their portfolio to underserved areas, or to
ensure that accounting frameworks accurately reflect a company’s true status, may find it unable to pass the
appropriate laws. Signing on to international trade agreements can prevent governments from regulating the
influx and outflow of hot, speculative money, even though capital market liberalization can lead to economic
crises”.
Simply put in another way by Brazalote and Leonardo (2019), the following are the impacts of
globalization on governments:

(1) It imposes a forced choice upon nation states. They are confronted with the dilemma to conform with the
neo-liberal ideas and free-market principles of deregulation, privatization and free trade or run the risk of being
left behind in terms of development. The government can put in policies, yet receiving pressures from the
global corporations because the policies should be in consonance with the principles of free- trade. For
example, in 1999, the Association of Southeast Asian Nations (ASEAN) established the ASEAN Free Trade
Area (AFTA) in order to encourage the member-states to deepen their commitments in investment trade and
industrial collaboration to increase the region’s economic activities.

(2) It establishes economic and political integrations. For example, the establishment of the European Union
(EU) and the North American Free Trade Agreement (NAFTA) . The EU has single currency and monetary
system among 17 states, parliament with legislative powers.

As globalization brings about business opportunities and new technologies, activists seek to further ensure that
governments held accountable for their domestic and international actions. Globalization has allowed activism
that challenges rights abuses, usually committed by the state. With the United Nations, international actors
came together and work on international legal treaties, thus, state sovereignty was reduced through
agreements demanding respect of human rights law. The states frequently violate treaties and conventions,
however, some enforcement some mechanisms were made such as having the International Criminal Court
and exposure to media.

With the rise of political globalization, the international human rights norms also increased. There are
many human rights activists who demanded the state to live up to its role as the protector of its population.

Institutions that Govern International Relations

The General Agreement on Tariffs and Trade ~GATT! and the World Trade Organization ~WTO! have been
touted as premier examples of international institutions, but few studies have offered empirical proof of This
article comprehensively evaluates the effects of the GATT0WTO and other trade agreements since World War
II Our analysis is organized around two factors: institutional standing and institutional embeddedness We show
that many countries had rights and obligations, or institutional standing, in the GATT0WTO even though they
were not formal members of the agreement ie.

We also expand the analysis to include a range of other commercial agreements that were embedded with the
GATT0WTO+ Using data on dyadic trade since 1946, we demonstrate that the GATT0WTO substantially
increased trade for countries with institutional standing, and that other embedded agreements had similarly
positive effects Moreover, our evidence suggests that international trade agreements have complemented,
rather than undercut, each other.

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 Internationalism vs Globalism

Internationalism is the state of being international, or happening in and between many countries:
the belief that countries can achieve more advantages by working together and trying to understand each other
than by arguing and fighting wars with each other.

Internationalism is the very antithesis of nationalism. Perhaps because of this, an awareness of

internationalism shines a light upon nationalism and helps us to better understand the continued appeal of
nationalism within the global political realm.

Internationalism is based upon the view that world peace may be advanced when nations put aside their
rivalries. Nations should work together to find common ground and build a safer and more stable world. This is
in part a recognition that nations acting alone cannot solve the multiple problems they face. Issues that face
the nation-state are increasingly trans-national (such as environmental pollution and the drugs trade) and
thereby necessitate a multilateral (or bilateral) response.

Moreover, the only means by which one can resolve complex and multi-faceted issues is to tackle the cause of
the problem from an international perspective. For instance, the issue of illegal asylum seekers may require a
co-ordinated multilateral approach from an alliance of countries. It may even justify the use of military action in
areas of the world associated with terrorist groups (such as the Af-Pak border).

Several well-established organizations within the field of international relations seek to provide a forum in
which nations may co-operate. Some of those organizations can play a major role within global relations, and
in doing so; their actions can greatly undermine national sovereignty.

International organizations such as the United Nations (UN), NATO and the International Monetary Fund (IMF)
bring nations together to advance shared goals and common interests. International organizations may even
consist of supranational institutions such as the European Commission and the European Court of Justice. In
the EU, supranational institutions exist above the nation-state and have the authority to impose decisions
binding upon all the member states.

Internationalism also seeks to generate a belief in cosmopolitanism in which the world may be said to consist
of a single community. Cosmopolitan notions emphasize the need to think beyond national borders, reach out
to others and ultimately go beyond the confines of nationalism itself. We should therefore accept a sense of
duty towards fellow humans regardless of their nationality. However, one of the major weaknesses of
cosmopolitanism is the negligible impact of international law. The national sovereignty of powerful countries
(notably the United States) has greater political power than measures taken by international bodies.

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