Studied by 2 peopleGlobalization
Refers to the integration of economies, societies, and cultures across the world through the exchange of goods, services, ideas, and people. It is driven by advancements in technology, transportation, and communication.
Economic Liberalization
Refers to the process of removing government regulations and restrictions on economic activities, such as trade, investment, and production. It is aimed at promoting free market principles and increasing economic efficiency.
Globalization + Economic Liberalization
The two concepts are closely related, as globalization often requires economic liberalization to facilitate the flow of goods, services, and capital across borders.
Proponents of Globalization and Economic Liberalization argue…
Proponents of globalization and economic liberalization argue that they lead to increased economic growth, job creation, and higher standards of living. They also promote competition, innovation, and efficiency.
Critics of Globalization and Economic Liberalization argue…
Critics, however, argue that globalization and economic liberalization can lead to job losses, income inequality, and environmental degradation. They also argue that they can undermine national sovereignty and cultural diversity.
Conflicts of Globalization and Economic Liberalization - Job Losses
The removal of trade barriers has led to the outsourcing of jobs to countries with lower labor costs, resulting in job losses in developed countries.
Conflicts of Globalization and Economic Liberalization - Income Inequality
Globalization has led to the concentration of wealth in the hands of a few, leading to income inequality.
Conflicts of Globalization and Economic Liberalization - Environmental Degradation
The pursuit of economic growth has led to environmental degradation, including climate change, deforestation, and pollution.
Conflicts of Globalization and Economic Liberalization - Cultural Homogenization
Globalization has led to the spread of Western culture, resulting in the loss of cultural diversity.
Conflicts of Globalization and Economic Liberalization - Political Instability
Economic liberalization has led to the weakening of state control over the economy, resulting in political instability in some countries.
International Monetary Fund (IMF)
Works to foster global monetary cooperation and the stability of the international monetary system
189 members (UK, Russia, China, Mexico, Nigeria, Iran)
The World Bank
Provides a financial and technical assistance for developing countries to reduce poverty and support economic development
189 members (UK, Russia, China, Mexico, Nigeria, Iran)
The World Trade Organization (WTO)
Helps develop rules of trade between nations with the goal of insuring that trade flows smoothly and freely
164 members (UK, Russia, China, Mexico, Nigeria)
Why do countries choose to join these international economic organizations?
To increase access to global trade → WTO for Russia and China
To be accepted into the international community → WTO for Russia
To gain easier access to markets → WTO for all member countries
To grow their economy/grow per capita GDP → IMF for Mexico and WTO for China
Multinational Corporations (MNCs)
A corporation that has facilities and assets in at least one country other than its home country
Increasingly dominate global markets
What challenges or conflicts do MNCs create for course countries?
Conflict over labor and pay
Challenges with environmental damage
Conflict over land rights
Conflict over taxation
Neoliberalism
Seeks to transfer the control of economic factors from the public sector to the private sector by reducing government involvement in the economy and promoting free-market capitalism
What conflicts does neoliberalism provoke within states?
Increased demands on government by civil society groups
Protests by students and disenfranchised groups
Arrests of protestors and impositions of social media restrictions
Empowerment of once-marginal nationalist and populist groups that blame the government for changes in culture and economic conditions
Global Market Forces
This refer to the economic and financial factors that affect the world economy.
The increasing globalization of the world economy has led to the emergence of global market forces.
Political responses to global market forces refer to the actions taken by governments to regulate and manage the impact of these forces on their economies.
Types of Political Responses - Protectionism
This involves the use of trade barriers such as tariffs, quotas, and subsidies to protect domestic industries from foreign competition.
Types of Political Responses - Deregulation
This involves the removal of government regulations and restrictions on businesses to promote competition and efficiency.
Types of Political Responses - Fiscal Policy
This involves the use of government spending and taxation to influence the economy.
Types of Political Responses - Monetary Policy
This involves the use of interest rates and money supply to influence the economy.
Types of Political Responses - International Cooperation
This involves the collaboration between governments to manage the impact of global market forces on their economies.
Examples of Political Responses
The United States' imposition of tariffs on Chinese goods to protect domestic industries.
The European Union's regulations on data privacy to protect consumers and promote competition.
Japan's monetary policy to stimulate economic growth.
The G20's cooperation to manage the impact of the 2008 financial crisis.
Purpose of Government Response to Market Forces
The government has a crucial role in regulating and responding to market forces to ensure that the economy functions efficiently and effectively.
The main purpose of government response to market forces is to achieve economic stability and social welfare.
How the Government Can Respond to Market Forces
Fiscal policy - the use of government spending and taxation to influence the economy. For example, during a recession, the government may increase spending to stimulate demand and boost economic growth.
Monetary policy - the use of interest rates and money supply to influence the economy. For example, the central bank may lower interest rates to encourage borrowing and investment.
Regulation - the use of laws and regulations to control market forces. For example, the government may regulate monopolies to prevent them from abusing their market power.
Handling of Market Forces - UK
Although the UK has a mixed economy, the private sector plays a vital role in the nation's economy. In contrast to other course countries, the UK is the country that most privatizes its national resources although there is a certain level of regulation.
Handling of Market Forces - China
In comparison to other nation, China is the country that least privatizes its natural resources. In China there are Special Economic Zones (SEZs) which are regions along its east coast that have a more "liberal" handling of the economy. That means that government regulations in those areas are looser because the government wants to promote growth there.
Handling of Market Forces - Mexico
Mexico's economy relies on its abundance of oil. One of the largest companies of the country is the oil company PEXEM, which stands for Petróleos Mexicanos. In recent years the government has made efforts to privatize sectors of the company to increase competition within the Mexican oil and natural gas market.
Handling of Market Forces - Nigeria
In the 1970s a great amount of oil was found in Nigeria leading to the creation of the Nigerian National Petroleum Corporation (NNPC). This is a state-owned company and it is crucial for Nigeria's economy. Although it is controlled by the government, the NNPC has engaged in joint activities with other nations to extract and produce oil. There is still space for the Nigerian government to fulfill its national goals, but contributing with other countries has also led to economic growth.
Handling of Market Forces - Russia
Under the government of Vladmir Putin there have been some instances of nationalization or re-nationalization. For instance, Yukos, an oil company, was integrated into the state-owned company Rosneft, after the company's founder was accused of fraud and corruption. Putin has also limited foreign direct investment in the country.
Handling of Market Forces - Iran
The lack of transparency of state-owned enterprises in Iran is detrimental to its economy. The country is still reliant on oil as its main economic activity, but it its trying to stray away from it. Nevertheless, its struggle to integrate in the International market after the imposition of sanctions only furthers its economic challenged.
Reasons that Governments Respond to Global Market Forces
To improve domestic economic conditions
To respond to domestic demands
To control or influence domestic political debates in order to maintain or increase their own power
To extend national influence regionally or internationally
How has the economic ideology of the Chinese Communist Party (CCP) changed since 1979?
Expanding the socialist market economy
Expanding privatization
Expanding foreign direct investment
Incorporating legal protections for private property
Expanding global international influence
Why has the CCP changed its ideology?
To maximize economic growth
To reduce income inequality and poverty
To balance economic development
To deal with a slowing economy
To ensure legitimacy of CCP
To exercise greater international influence
To reduce social unrest
How has the Mexican government responded to economic globalization?
Participation in NAFTA (regional bilateral trade agreement)
Liberalization of the economy
Privatization of industries
Legislation that is more friendly to foreign business
Diversification of the economy
Creation of maquiladoras and export promotion zones
How have Mexican citizens responded to economic globalization?
Chiapas movement in southern Mexico
Teacher protests in Oaxaca over PAN’s pro-business policy in 2006
Election of pro-business party PAN in 2000 and 2006
Creation of international unions
Economic Interdependence
Globalization has led to increased economic interdependence among nations. This has made it difficult for nation-states to control their economies and protect their domestic industries. The rise of multinational corporations has also made it difficult for governments to regulate their activities.
Loss of Control over Borders
Globalization has led to the free movement of goods, services, capital, and people across borders. This has made it difficult for nation-states to control their borders and regulate the flow of people and goods. This has led to concerns about national security and the ability of governments to protect their citizens.
Emergence of Global Governance
Globalization has led to the emergence of global governance institutions such as the World Trade Organization, International Monetary Fund, and World Bank. These institutions have the power to influence the policies of nation-states and limit their sovereignty.
Cultural Homogenization
Globalization has led to the spread of Western culture and values around the world. This has led to concerns about the loss of cultural diversity and the erosion of traditional values and beliefs.
Environmental Challenges
Globalization has led to increased environmental challenges such as climate change, deforestation, and pollution. These challenges require global cooperation and coordination, which can limit the sovereignty of nation-states.
Responses to Globalization Challenges - Government Policies
Governments can respond to globalization challenges by implementing policies that protect their economies and citizens.
For instance, they can impose tariffs and quotas on imported goods to protect local industries and jobs.
They can also regulate the flow of capital and labor to prevent exploitation and ensure fair competition.
Responses to Globalization Challenges - International Cooperation
Globalization challenges require international cooperation to address them effectively.
Countries can work together to establish global standards and regulations that promote fair trade, protect the environment, and ensure social justice.
International organizations such as the United Nations, World Trade Organization, and International Labor Organization play a crucial role in facilitating such cooperation.
Responses to Globalization Challenges - Corporate Responsibility
Corporations can respond to globalization challenges by adopting responsible business practices that promote sustainable development and social responsibility.
They can ensure that their operations do not harm the environment, respect human rights, and promote fair labor practices.
They can also invest in local communities and support social development programs.
Responses to Globalization Challenges - Civil Society Activism
Civil society organizations such as non-governmental organizations, labor unions, and consumer groups can respond to globalization challenges by advocating for social justice, environmental protection, and human rights.
They can raise awareness about the negative impacts of globalization and pressure governments and corporations to adopt responsible policies and practices.
Responses to Globalization Challenges - Individual Actions
Individuals can respond to globalization challenges by making conscious choices about their consumption patterns and lifestyles.
They can support local businesses and products, reduce their carbon footprint, and promote social justice by supporting fair trade and ethical products.
Economic Liberalization
This refers to the process of removing government regulations and restrictions on economic activities.
It involves reducing the role of the state in the economy and allowing the market to operate freely.
The main objective of economic liberalization is to promote economic growth, increase efficiency, and improve the standard of living.
Features of Economic Liberalization - Deregulation
The removal of government regulations and restrictions on economic activities.
Features of Economic Liberalization - Privatization
The transfer of ownership and control of state-owned enterprises to private individuals or companies.
Features of Economic Liberalization - Trade Liberalization
dThe removal of trade barriers such as tariffs, quotas, and other restrictions on imports and exports.
Features of Economic Liberalization - Fiscal Discipline
The reduction of government spending and the implementation of sound fiscal policies to control inflation and stabilize the economy.
Features of Economic Liberalization - Financial Liberalization
The removal of restrictions on the flow of capital and the liberalization of financial markets.
Advantages of Economic Liberalization - Increased Competition
Economic liberalization promotes competition, which leads to increased efficiency, innovation, and productivity.
Advantages of Economic Liberalization - Foreign Investment
Economic liberalization attracts foreign investment, which can help to finance economic growth and development.
Advantages of Economic Liberalization - Consumer Choice
Economic liberalization provides consumers with a wider range of goods and services to choose from, at lower prices.
Advantages of Economic Liberalization - Economic Growth
Economic liberalization can lead to increased economic growth, which can create jobs and improve the standard of living.
Disadvantages of Economic Liberalization - Inequality
Economic liberalization can lead to increased inequality, as some individuals and companies may benefit more than others.
Disadvantages of Economic Liberalization - Unemployment
Economic liberalization can lead to job losses in certain sectors, as companies may move production to countries with lower labor costs.
Disadvantages of Economic Liberalization - Environmental Degradation
Economic liberalization can lead to environmental degradation, as companies may prioritize profits over environmental concerns.
Disadvantages of Economic Liberalization - Economic Instability
Economic liberalization can lead to economic instability, as financial markets become more volatile and susceptible to crises.
Goals of Economic Liberalization
To remedy undesirable economic circumstances → rising unemployment or reduced productivity
To remedy undesirable external situations → Trade deficits (importing more than they’re exporting) or decreasing demand for raw materials like petroleum and natural gas
Neoliberal Economic Policies
Removal of barriers and restrictions on what internal and external actors can do
Consequences of Neoliberal Economic Policies
Reduction in inflation
Increase in national income
Growing inequality in wealth distribution
Political corruption (Nigeria)
Environmental pollution (China)
Urban sprawl
Uneven economic development
Poor infrastructure
Regional migration (Mexico: South/North, and Rural/Urban; China: East/West and Rural/Urban)
International Organizations
These are created by multiple countries to promote cooperation and address global issues.
United Nations (UN)
The UN is an intergovernmental organization that was established in 1945 to promote international cooperation and prevent conflicts between countries. It has 193 member states and is headquartered in New York City.
World Trade Organization (WTO)
The WTO is an international organization that was established in 1995 to promote free trade and reduce barriers to international commerce. It has 164 member countries and is headquartered in Geneva, Switzerland.
International Monetary Fund (IMF)
The IMF is an international organization that was established in 1944 to promote international monetary cooperation and facilitate international trade. It has 190 member countries and is headquartered in Washington, D.C.
Supranational Organizations
These are created by multiple countries to delegate some of their sovereignty to a higher authority. These organizations have the power to make decisions that are binding on their member states.
European Union (EU)
The EU is a political and economic union of 27 member states located primarily in Europe. It was established in 1993 and has its own institutions and decision-making processes.
African Union (AU)
The AU is a continental union of 55 member states located in Africa. It was established in 2002 and has its own institutions and decision-making processes.
North Atlantic Treaty Organization (NATO)
NATO is a military alliance of 30 member countries located primarily in North America and Europe. It was established in 1949 to provide collective defense against potential security threats.
UKs Adaptation of Social Policies
The UK has a welfare state system that provides social security to its citizens.
The government provides benefits such as healthcare, education, and housing to those in need.
The UK has adapted its social policies to address issues such as poverty, unemployment, and inequality.
The government has implemented policies such as the National Living Wage and Universal Credit to support low-income families.
Russia’s Adaptation of Social Policies
Russia has a social welfare system that provides benefits such as healthcare, education, and pensions to its citizens.
The government has implemented policies to address issues such as poverty and unemployment.
The government has also implemented policies to support families, such as the Maternity Capital program which provides financial support to families with children.
China’s Adaptation of Social Policies
China has a social welfare system that provides benefits such as healthcare, education, and pensions to its citizens.
The government has implemented policies to address issues such as poverty and inequality.
The government has also implemented policies to support families, such as the Two-Child Policy which allows families to have two children instead of one.
Iran’s Adaptation of Social Policies
Iran has a social welfare system that provides benefits such as healthcare, education, and pensions to its citizens.
The government has implemented policies to address issues such as poverty and unemployment.
The government has also implemented policies to support families, such as the Family Support Law which provides financial support to families with children.
Mexico’s Adaptation of Social Policies
Mexico has a social welfare system that provides benefits such as healthcare, education, and pensions to its citizens.
The government has implemented policies to address issues such as poverty and inequality.
The government has also implemented policies to support families, such as the Prospera program which provides financial support to families in need.
Nigeria’s Adaptation of Social Policies
Nigeria has a social welfare system that provides benefits such as healthcare, education, and pensions to its citizens.
The government has implemented policies to address issues such as poverty and unemployment.
The government has also implemented policies to support families, such as the Conditional Cash Transfer program which provides financial support to families in need.
What are Social Welfare Policies?
Government policies that provide programs or services designed to improve the lives of citizens
Many social welfare policies are focused on helping citizens who are at or below the poverty line
Provide an economic and societal safety net for the public
To provide programs, government revenue needs to be spend. Typically the more social welfare programs offered, the greater the tax burden
Can help promote regime legitimacy to show government cares for citizens and provides them with necessary services
Social Welfare Examples
Direct relief via cash payments
Public schools and education programs to improve literacy and access
Public health care and programs
Public housing
Food distribution
Support for elderly
Pension plans
Social Welfare Policies in the UK
National Health Service (NHS)
Key part of social welfare system of the UK
Great civic pride in the NHS
Debate point between Conservative and Labour
Public Housing
Increased urbanization has created more of a demand for public housing assistance
Education
More emphasis on publicly funded schools in changing economy. Citizens used to not need as much school to get a union or manual labor job. As those jobs have dried up, more need to compete for 21st century jobs
Programs for Elderly
Pensions programs for elderly and retirees are important because of the aging population of the UK
Politicians who threaten to reduce these plans could face major loss of votes because of the large elderly and soon-to-be elderly population
Social Welfare Policies in Iran
Social welfare programs in Iran are poorly run and are very inefficient
Iran does not tax its citizens very much because the massive oil revenues allow the government to operate its budget
The oil revenue being connected to the government causes major corruption and contributes to the poor social services
Fluctuating oil market can create inconsistent government revenue and prevent the government from providing high-level services
NGOs in Iran contribute to social welfare programs
One common type are bonyads
These are charitable organizations often designed to help the less fortune
They receive oil money to carry out their services and are often sponsored by the most powerful families in Iran
Lack of oversight has led to many bonyads being corrupt and not helping citizens as much as they could
Impact of Industrialization and Economic Development - Increased Productivity
Industrialization has led to increased productivity through the use of machinery and technology. This has allowed for the production of goods on a larger scale and at a faster rate.
Impact of Industrialization and Economic Development - Urbanization
Industrialization has led to the growth of cities as people moved from rural areas to urban centers in search of work. This has led to the development of new industries and the growth of service sectors.
Impact of Industrialization and Economic Development - Improved Living Standards
Economic development has led to improved living standards for many people around the world. This includes access to better healthcare, education, and housing.
Impact of Industrialization and Economic Development - Environmental Impact
Industrialization and economic development have also had a negative impact on the environment. This includes pollution, deforestation, and the depletion of natural resources.
Impact of Industrialization and Economic Development - Globalization
Economic development has led to increased globalization as countries trade goods and services with each other. This has led to increased competition and the growth of multinational corporations.
Impact of Industrialization and Economic Development - Inequality
Economic development has also led to increased inequality within and between countries. This includes income inequality, access to education and healthcare, and the concentration of wealth in the hands of a few.
Solutions to the Impacts of Industrialization - Implementing Sustainable Practices
One solution to the negative impacts of industrialization is to implement sustainable practices. This includes reducing waste, conserving energy, and using renewable resources. Companies can adopt sustainable practices by investing in green technologies, such as solar panels and wind turbines, and by implementing recycling programs.
Solutions to the Impacts of Industrialization - Regulating Industrial Activities
Governments can regulate industrial activities to ensure that companies are not harming the environment or human health. This can be done through laws and regulations that limit pollution and require companies to follow certain standards. Governments can also provide incentives for companies that adopt sustainable practices.
Solutions to the Impacts of Industrialization - Educating the Public
Educating the public about the impacts of industrialization can help to raise awareness and encourage people to take action. This can be done through public campaigns, school programs, and community events. By educating people about the importance of sustainability, we can create a culture of environmental responsibility.
Solutions to the Impacts of Industrialization - Investing in Research and Development
Investing in research and development can lead to new technologies and innovations that can help to mitigate the negative impacts of industrialization. This includes developing new materials that are more sustainable, creating new methods for reducing waste, and finding new ways to conserve energy.
Solutions to the Impacts of Industrialization - Encouraging Collaboration
Collaboration between governments, companies, and communities can help to address the negative impacts of industrialization. By working together, we can develop solutions that are effective and sustainable. This can include partnerships between companies and local communities, as well as collaborations between governments and non-governmental organizations.
Environmental Issues in China
Air pollution due to heavy use of coal, smog in cities, river system pollution, soil contamination
Environmental Issues in Iran
Air pollution, smog in Tehran, oil pollution in Persian Gulf
Environmental Issues in Mexico
Air pollution, smog in Mexico City, deforestation
Environmental Issues in Nigeria
Oil spills in Niger River Delta, deforestation, air pollution, lack of clean water
Environmental Issues in Russia
Air pollution, water pollution, nuclear waste
Environmental Issues in the UK
Air pollution, soil contamination, pollution to coastal waters and marine life
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