What is Globalization?

• Giddens (1990)- “intensification of worldwide social relations which link distant localities in
such a way that local happening is shaped by events stirring many miles away and vice
versa”.
• Robertson (1992)- refers both to the compression of the world and the intensification of
consciousness of the world as a whole…”
• Harvey (1989) - as the compression of time of space and the eradication of distance
• Sunny Levin Institute- The Sunny Levin Institute looks at globalization as a process of
interaction and integration among the people, communities, and governments of different
nations, a process driven by international trade and investment and aided by information
technology. The said process has then effects on the environment, on culture, on political
systems, on economic development, and on every human well-being in societies around the
world.
Globalization as a condition
• Is also referred to by scholars as globality.
• Scholte (2008) refers to globality as social condition characterized by trans-planetary
connectivity and supra-territoriality.
• In terms of trans-planetary relations, globality is about the establishment of social links
between people located at different places of our planet. Here our planet is not treated as a
collection of geographical units but as a social space or an arena of social life.
Globalization as an ideology
• Steger (2005), following the line of reasoning of globalization scholar Michael Freeden,
explains that globalization exists in people’s consciences because it consists of a set of
coherent and complementary ideas and beliefs about the global order.
• In other words, globalization is a political belief system that benefits a certain class.

LESSON 2: GLOBALIZATION AND ITS IMPACT ON THE POLITICAL AND ECONOMIC

WORLD
The globalization literature suggests that there are two major branches of research: (1)
those studying specific problems or issues as they relate to globalization; (2) those studying
the concept of globalization itself – theorizing the very nature of the process. Both areas
entail a great deal of theorizing in order to make sense of the various phenomena
comprising globalization.

1. World Systems Paradigm

 Immanuel Wallerstein - globalization viewed not as a recent phenomenon
but virtually synonymous with the birth and spread of world capitalism.
- the appropriate unit of analysis for macro-social inquiry in the modern
world is neither class, nor state/society, or country, but the larger
historical system, in which these categories are located.
- 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
 worldsystem would include Latin America, Africa, Asia, the Middle East
and Eastern Europe. Third is the semi-periphery, compromised of
those states and regions that were previously in the periphery and are
moving up.
- centrality and immanence of the inter-state system and inter-state
rivalry to the maintenance and reproduction of the world-system. The
world-system paradigm does not see any transcendence of the nation-
state system or the centrality of nation-states as the principal
component units of a larger global system.
2. Global Capitalism Paradigm - globalization has its own unique features that
distinguish it from earlier periods. They focus on new global production and financial
system; both are seen to have superseded earlier national forms of capitalism.
- emphasize the rise of processes that cannot be framed within the
nation-state/inter-state system, which lies at the core of the world-
system theory and most traditional macro-social theories.
- Sklair (2000, 2002)- the theory of the global system which espoused
the transnational phenomena. the TCC has emerged as a new class
that brings together several social groups who see their own interest 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).
- Robinson (2003, 2004) have advanced a related theory of global
capitalism involving three planks: transnational production,
transnational capitalists and a transnational state. For him,
globalization creates new forms of transnational class relations across
borders and local communities, in ways quite distinct from the old
national class structures and international class conflicts and alliances.
3. The Network Society School of Thought - In its simplest explanation this paradigm of
globalization does not describe to the contention that capitalism fuels globalization.
Instead, it puts forth the premise that technology and technological change are the
underlying causes of the several processes that comprise globalization.
- Manuel Castells “The Rise of the Network Society (1996, 1997,
1998), which features his technologistic approach to globalization. He
advanced the notion of the “new economy” as (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.
4. Space, Time and Globalization
 Anthony Giddens - time-space distanciation
- time-space distanciation ‘as the intensification of
worldwide social relations which occurring many miles away and vice bversa’ – social
relations are ‘lifted out’ from local contexts of interaction and restructured across time and
space.
- consequences of globalization, not about the reality of
globalization, thus, “globalization is fundamentally social, cultural, (and) political, not just
economic" (Giddens, 2000).
 Saskia Sassen’s The Global City (1991)
 Roland Robertson - ‘glocalization’
5. Transnationality and Transnationalism - transnationalism generally refers to an
umbrella concept encompassing a wide variety of transformative processes,
practices and developments that take place simultaneously at the local level and
global level. Transnational processes and practices are defined broadly as the
multiple ties and interactions – economic, political, social and cultural – that link
people, communities and institutions across the borders of nation-states.
- Transnational perspectives provide deeper understanding into a
number of globally contingent social, economic, and political
processes including social movements, governance and politics,
terrorism, political violence, and organized crime among others.
6. Global Culture paradigm - a group of human beings whose members identify with
each other, on the basis of distinctiveness measured by combinations of cultural,
linguistic, religious, behavioral and/or biological traits.

Misconceptions about Globalization

a. Globalization as internationalization
b. Globalization as liberalization
- Liberalization is commonly understood as the removal of barriers and
restrictions imposed by national governments so as to create an open
and borderless world economy.
c. Globalization as universalization and westernization
- Universalization denotes a process of spreading various objects,
practices, and experiences to the different parts of the planet. Hence,
there is globalization when things, values, and practices have spread
worldwide. This interpretation of globalization entails homogenization
of culture, politics, economy, and laws. As homogenization progresses,
globalization destroys several indigenous cultures and practices. If
Western modernity spreads and destroys local cultures, this variant of
universalization is known as Westernization, neocolonialism,
Americanization, or McDonalidazation.

LESSON 3: THE GLOBAL ECONOMY

- the result of the development of an economy that rises above borders

and is free moving between the different nation states of the world. A
direct result of an economy that defies borders or governments is that
it has openly called into question not only how much room
governments have to maneuver but how much they can affect such an
economy in the future.
a. Principle of absolute advantage – supposed there are two countries, A and B,
producing only two commodities, potatoes and clothes. Let us assume that given the
raw materials, the productivity of labor in producing potatoes and clothes determines
the quantity of commodities actually produced. How will trade occur? In general,
trade between the two countries will likely take place of country A can produce one
good more efficiently than country B and country B can produce the other good more
efficiently than country A. Consider table 2.1

b. Principle of comparative advantage - David Ricardo took Adam Smith’s theory one
step further by exploring what might happen when one country has an absolute
advantage in the production of all goods. Smith’s theory of absolute advantage
 suggests that such a country might derive no benefits from international trade. In his
1817 book Principles of Political Econo my, Ricardo showed that this was not the
case. According to Ricardo’s theory of comparative advantage, it makes sense for a
country to specialize in the production of those goods that it produces most efficiently
and to buy the goods that it produces less effi ciently from other countries, even if
this means buying goods from other countries that it could produce more efficiently
itself.

The advantages of trade

International trade brings a number of valuable benefits to a country, including:
• The exploitation of a country’s comparative advantage, which means that trade
encourages a country
to specialize in producing only those goods and services which it can produce more
effectively and
efficiently, and at the lowest opportunity cost.
• Producing a narrow w range of goods and services for the domestic and export market
means that a
country can produce in at higher volumes, which provides further cost benefits in terms of
economies
of scale.
• Trade increases competition and lowers world prices, which provides benefits to
consumers by raising
the purchasing power of their own income, and leads a rise in consumer surplus.
• Trade also breaks down domestic monopolies, which face competition from more efficient
foreign
firms.
• The quality of goods and services is likely to increases as competition encourages
innovation, design
and the application of new technologies. Trade will also encourage the transfer of
technology
between countries.
• Trade is also likely to increase employment, given that employment is closely related to
production.
Trade means that more will be employed in the export sector and, through the multiplier
process,
more jobs will be created across the whole economy.
The disadvantages of trade
Despite the benefits, trade can also bring some disadvantages, including:
• Trade can lead to over-specialization, with workers at risk of losing their jobs should world
demand
fall or when goods for domestic consumption can be produced more cheaply abroad. Jobs
lost through
such changes cause severe structural unemployment.
• Certain industries do not get a chance to grow because they face competition from more
established
foreign firms, such as new infant industries which may find it difficult to establish
themselves.
• Local producers, who may supply a unique product tailored to meet the needs of the
domestic market,
may suffer because cheaper imports may destroy their market. Over time, the diversity of
output in
an economy may diminish as local producers leave the market.

LESSON 4 MARKET INTEGRATION

The Bretton Woods Conference in July 1944, formally known as the United Nations
Monetary and Financial Conference, marked the birth of a new international economic
framework. Delegates from 44 countries convened in Bretton Woods, New Hampshire,
United States and agreed on the creation of two international economic organizations:
International Monetary Fund (IMF) and World Bank or the International Bank for
Reconstruction and Development. These institutions are known as the Bretton Woods
Institutions.

- International Monetary Fund (IMF) - to promote global monetary

cooperation and international financial stability.
- created in 1945