Globalization (PGE W05)

8/14/2019 Globalization (PGE W05)

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WTO Protest, Seattle 1999TO Protest, Seattle 1999


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I. Globalization Defined. Globalization Defined Globalizationlobalization : the expanding scale, growing magnitude,the expanding scale, growing magnitude,

speeding up and deepening impact of transcontinentalspeeding up and deepening impact of transcontinentalflows and patterns of social interactionflows and patterns of social interaction (Held and(Held and

McGrew,McGrew, Globalization/AntiGlobalization/Anti--GlobalizationGlobalization, p. 1), p. 1)

(Economic) GlobalizationEconomic) Globalization:: (the) integration of(the) integration ofnational economies into the international economynational economies into the international economy

through trade, direct foreign investmentthrough trade, direct foreign investmentshortshort--termterm

capital flows, international flows of workers andcapital flows, international flows of workers andhumanity generally, and flows of technologyhumanity generally, and flows of technology

(Bhagwati, p. 3)(Bhagwati, p. 3)


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The Definition Refinedhe Definition RefinedGlobalizationlobalization encompasses:ncompasses:

Internationalization (nternationalization (trade & investment)rade & investment) Liberalization (freeing markets)iberalization (freeing markets) Universalization (cultural interchange)niversalization (cultural interchange)orr Westernization (Westernization (Western cultural dominance)stern cultural dominance)

Globalization aslobalization as Deterritorializationeterritorialization


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Which is the Real World?Which is the Real World?


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II. Sources of GlobalizationII. Sources of Globalization

Internationalization of Economic ActivityInternationalization of Economic Activity

Trade & FinanceTrade & Finance

Global LiberalizationGlobal Liberalization

Domestic and InternationalDomestic and International

Technological ChangesTechnological Changes IT Revolution (Speed and Cost)IT Revolution (Speed and Cost)

Improvements in TransportationImprovements in Transportation

EX: Containerized ShippingEX: Containerized Shipping

Globalized Production StructuresGlobalized Production Structures

Stateless CorporationsStateless Corporations (DaimlerChrysler)(DaimlerChrysler)


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Growth in World Traderowth in World Trade


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Growth in Global Investmentrowth in Global InvestmentFigure 3: World Gross FDI and World GDP Growth, 1980-

2002

FDI

WorldGDP

0

500

1000

1500

2000

2500

3000

1980 1985 1990 1995 2000

Source: UNCTAD, FDI Database

Index

(1980

=

100)


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Growth in Foreign Exchangerowth in Foreign ExchangeFigure 2: Growth of World Foreign Exchange and World

GDP, 1980-02

ForeignExchange

World

GDP

0

100

200

300

400

500

600

700

1980 1985 1990 1995 2000

Source: IMF, International Financial Statistics

1980

=

100


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Costs of Information TechnologyCosts of Information Technology


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Death of Distanceeath of DistanceCall Centers in Indiaall Centers in India


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Transportation Costsransportation CostsTransportation Costs Index

Shipping

Air Travel

0

20

40

60

80

100

120

1920 1930 1940 1950 1960 1970 1980 1990


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III. Levels of GlobalizationII. Levels of GlobalizationA. Eras of Globalization. Eras of Globalization

First Era of Globalization (about 1850irst Era of Globalization (about 1850-1914)914) Interwar Period (1920nterwar Period (1920-1939)939) Cold War Era (1945old War Era (1945-1989)989) Second Era of Globalization (1989econd Era of Globalization (1989-Present)resent)

Differences of Current Era of Globalizationifferences of Current Era of Globalization Traderade Financeinance Technologyechnology


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The Second Era ofhe Second Era ofGlobalization Beginslobalization Begins

The Destruction of the Berlin WallThe Destruction of the Berlin Wall

Tim BernersTim Berners--LeeLee

The walls

come down

and the (World Wide)Web goes out.


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IV. Questions for a Globalized EconomyIV. Questions for a Globalized Economy

Does globalization enrich the many or the few?Does globalization enrich the many or the few?

Does it help or harm workers? the environment?Does it help or harm workers? the environment?

Is it a source of freedom or a barrier to freedom?Is it a source of freedom or a barrier to freedom?

What role for the governments?What role for the governments?

Is globalization inevitable?Is globalization inevitable?

Overall, is globalization a positive orverall, is globalization a positive ora negative development????negative development????

Globalization (PGE W05)

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