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Socsci 032 Midterm Compilation Notes
Socsci 032 Midterm Compilation Notes
GLOBAL ECONOMY
WORLD WAR II
- It is the economy of all humans of the world. - a global war that lasted from 1939 to 1945.
- International exchange of goods and services. - worsen the Great Depression.
- is the world economy or the worldwide economy. -
- one economic system BRETTON WOODS CONFERENCE
- is one giant entity - formally known as the United Nations Monetary and
- It is also the system of trade and industry across the world Financial Conference (UNMFC)
that has emerged due to globalization. - It was the gathering of all 44 Allied nations to regulate the
international monetary and financial order after the of
World War II.
DIMENSIONS OF GLOBAL ECONOMY
- Three (3) institutions:
1. Trade of goods and services INTERNATIONAL MONETARY FUND
2. Financial and capital markets - is an organization working to foster global monetary
3. Technology and communication cooperation, secure financial stability and etc.
4. Production - started: July 1944
- formal existence: 27 December 1945
Internationalization - Role of IMF:
- is about the extension of economic activities of nation Harry Dexter White
states across borders. - functioned more like a bank, making sure that borrowing
states could repay their debts on time.
Economic globalization John Maynard Keynes
- is functional integration between internationally dispersed - a cooperative fund to maintain economic activity and
activities. employment through periodic crises.
WORLD BANK
HISTORICAL BACKGROUND OF CONTEMPORARY GLOBAL - Is designed to finance projects that enhance the economic
ECONOMY development of member states.
- The International Bank for Reconstruction and
GREAT DEPRESSION Development, The International Development Association,
- is a sustained, a long-term downturn in economic activity The International Finance Corporation, The Multilateral
in on or more economies. Investment Agency, The International Centre Settlement
- CAUSES: of Investment Disputes.
Over Production - <sustainable development,= which attempted to reconcile
- High demand and prices economic growth and environmental protection in
- Demand and prices fall after war developing countries.
- Farmers could not pay back loans - its use of capital flows to developing countries as a means
Decrease in consumer spending of narrowing the income gap between rich and poor
- Rising prices, low wages countries.
- Overbuying on credit
- Uneven distribution of income (Rich got richer and poor GENERAL AGREEMENT ON TARIFFS AND
got poorer) TRADE
Over speculation - Postwar Trade System
- Stocks bought on the hope of quick profit - Served as forum for trade negotiations
- Buying on Margin
- High tariffs harm world trade
LIBERAL VS. PROTECTIONIST POLICIES
BUBBLE BURSTS
- Banks fail – people withdrew fund NEO-LIBERALISM
- Banks invested in stock market – could not repay loan - (Free market policies)
- 1933 – 11,000 of nation’s 25,000 banks had failed - Includes:
- Account not insured – millions lost their savings Liberalization
DOMINO EFFECT - Reduction of restrictions or barriers on the free exchange
of goods between nations.
People lose jobs
Deregulation
- Reduction and elimination of government power in a
Businesses close down particular industry.
or lay off -
Privatization
More people lose - The transfer of ownership, property, or business from the
jobs government to the private sector.
NEO-MERCANTILISM
- (Interventionist, protectionist policies)
- Includes:
Tariff and Non-tariff Barrier Imposition - merger of two or more companies that occupy similar
- These are restrictions imposed on movement of goods levels in the production supply chain.
between countries.
ADVANTAGES DISADVANTAGES
Tariff Barrier • Lower Costs •Tough transition change
- is a barrier to international trade. •Higher power in the market •Lack of competition
• Reduced competition
Non-tariff Barrier •Increased differentiation
- includes quotas, embargoes, sanctions, levies, and other
restrictions.
Vertical Integration
Tight State Regulation - Is a competitive strategy by which a company takes
- Includes: complete control over one or more stages in the
Economic Regulation production or distribution of a product.
- refers to rules that limit who can enter a business. Forward Vertical Integration
Social Regulations - Business activities are expanded to include control of the
- refers to the abroad category of rules governing how any direct distribution or supply of a company's products.
business or individual carries out its activities.
Backward Vertical Integration
Subsidies - Process in which a company purchases or internally
- funds provided by a government to enable firms to reduce produces segments of its supply chain.
prices
<The state makes wars, and war makes the state.= 4. ADOPTION IN UNITED NATIONS
- Article of 2(1) of the United Nations Charter : Based on the
- Charles Tilly principle of sovereign equality of all its members
- Article of 2(7) of the United Nations Charter: Nothing
contained in the present charter shall authorize the United
<Global Governance takes place without Global Government= Nations to intervene in matters which are within the
domestic jurisdiction of any state or shall require the
members to submit such matters to settlement under the
present charter.
RESULTS
- Under the terms of the peace settlement, a number of 5. GROWTH OF NATIONAL CONSCIOUSNESS
countries received territories or were confirmed in their - Number of states has grown enormously
sovereignty over territories. - Many changes in inter-state relations in the state system
- Ended the Thirty Years’ War (1618-1648) in the Holy
Roman Empire and the Eighty Years’ War (1568-1648) 6. INTERNATIONAL RELATIONS
between Spain and the Dutch Republic. - Treaty of Westphalia created an opening for nation states
to have a new conversation with each other, one where
FIVE PRINCIPLES IN POLITICS agreement could be made and power could be exchanged
logical and rational way.
1. The principle of state sovereignty
2. The principle of legal (equality) of states
3. The principle of non-intervention of one states in CHALLENGES
international affairs of another.
4. International law and diplomacy. GLOBALIZATION
5. Reason of state replaced religion. - Migration of human activities
- Integration of National economies through trade,
IMPACT OF PEACE OF WESTPHALIA investment, capital flow, labor, migration, and technology
- Results from the removal of barriers between national
1. EMERGING OF WESTPHALIA
economies to encourage the flow
- Emerging of Westphalia
- Globalized the world economy
- Reduction of role played by religion
- Led economic decision-making away from local control
i. Pope of Head of Catholic Church
- States are becoming less Westphalian in terms of legal
ii. Emperor Head of HRE
power to intervene in countries (European Union, UN, &
- Rise of Nation States
International Criminal Court)
- Birth of an International system based plurality of
- Emphasizes the interdependence of states
International States
- Views solving socio-economic and political problems
- Recognizing no superior authority over them
require collective efforts and restrictions of state
- CONCEPT OF NATION STATE:
sovereignty.
1. Permanently exist
- IGO’s (Intergovernmental Org); intertwining the political
2. Corporate entities in their own right
economic affairs of nation states around the globe. Enroch
3. Separate from the rules who governed them at
on the concept of sovereignty.
any time
Introduces wider webs of transnational governances, new
-
Development of law of nations(govern
supranational institutions, new technologies and etc
interstate)
- Not in line with the conception of the Treaty of Westphalia - Obvious case of dominant countries acting forma place of
which aims to enable governments control resources and power that allows for strategic positioning economically
people in a way to determine its economic fortunes and politically
- Challenge to the treaty of Westphalia as the border
changes are able to devalue state borders in terms of
emphasizing supranational or sub national entries. CONCLUSION
TWO APPROACHES
Outside-in View
- Globalization as an exogenous process that is making a
profound impact on state affairs market
SOFT LAW
GLOBAL CONFERENCE
- to rules that are neither strictly binding in nature nor
- Global forum/meeting of people and organizations
completely lacking legal significance.
that discuss global governance.
- refers to guidelines, policy declarations or codes of
- Bringing the together the world’s largest network.
conduct which set standards of conduct.
- are not directly enforceable.
PRIVATE CONFERENCE
UN General Assembly resolutions - Exercise of political power by private actors –
Codes business and civil-society organizations –to produce
Standards decisions that have abiding effects.
- Establish enforceable intellectual property rules for
INTERNATIONAL ORGANIZATIONS music, software, harmonization standards, and
- established by a treaty or other instrument governed sanitation regulation.
by international law and possessing its own
international legal personality ACTORS OF GLOBAL GOVERNANCE:
World Bank
STATES
World Trade Organization
IGO’s
World Health Organization
NGO’S
NGOS EXPERTS
- Non-Governmental Organization GLOBAL POLICY NETWORKS
- a non-profit, citizen-based group that functions MNC’s
independently of government.
THREATS AND CHALLENGES:
- TWO BROAD GROUPS OF NGO
Operational NGOs TERRORISM
- Focus on development projects. - The unlawful use of force or violence against persons
Advocacy NGOs or property to intimidate or coerce a Government.
11 September Attacks
GLOBAL NORTH AND GLOBAL SOUTH
September 11, 2001
hijacked 4 commercial planes, 3000+ were killed
- Broadly considered a socio-economic and political
divide.
Bali Bombings
October 12,2002 THE NORTH
202 people were killed (88 Australians, 38 Indonesians,
and other people from other nationalities) - The North is home to all the members of the G8 and
Mumbai Attack to four of the five permanent members of the United
November 26, 2008 Nations Security Council.
more than 160 people including 18 police officers were - Mostly covers the West and the First World, along
killed. with much of the Second World, while the South
Mumbai Railway Bombings largely corresponds with the Third World.
July 11, 2005 - may be defined as the richer, more developed region
209 people were killed, 700 injured and the South as the poorer, less developed region,
many more factors differentiate between the two
global areas.
PROLIFERATION OF WEAPONS OF MASS
DESTRUCTION
- 95% of the North has a functioning educational
system.
Chemical
- one quarter of the world population—controls four-
- nerve agent, such as VX or Sarin, or mustard gas.
fifths of the income earned anywhere in the world.
Biological 90% of the manufacturing industries are owned by
- using a bacteria or virus and located in the North.
Nuclear - implies development as opposed
- Atomic bombs, hydrogen bombs - The north becomes synonymous with economic
Radiological development and industrialization
- Dirty bomb - Northern countries are using most of the earth
resources and most of them are high entropic fossil
ENVIRONMENTAL DEGRADATION fuels. Reducing emission rates of toxic substances is
central to debate on sustainable development but
- Product of man’s action
this can negatively affect economic growth.
Global Warming
Climate Change
Ozone Layer Depletion THE SOUTH