The Contemporary World (Unit I - Unit II)

PASADONG MIDTERMS CUTIE!

Globalization

Process in which people, ideas, and goods spread throughout the world, spurring more interaction and integration between the world’s cultures, governments and economies

Globalization

process of interaction and integration among people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology

International industrial and financial business structure

Defining feature of globalization

Free-Market Economic System

A system many government have adopted in years after the WW2

Technology

Principal driver of globalization

International Monetary Fund

Who said that globalization is the growing economic interdependence of countries worldwide

Globalization

Expansion and intensification of social relations and consciousness across world time and world space

Economic, Political, Technological, Cultural, Religious, Ecological Dimensions

Dimensions involved in globalization (EPTCRE)

Characteristics or Qualities of Globalization

1. Involves both the creation of new social networks and the multiplication of existing connections that cut across traditional, political, economic, cultural, and geographical boundaries

2. Reflected in the expansion and stretching of social relations, activities, and connections

3. Involves the intensification and acceleration of social exchanges and activities

4. Do not occur merely or an objective, material level but they also involve the subjective plane of human consciousness.

TRUE

TRUE or FALSE

Globalization involves both the macro-structures of a global community and micro-structures of global personhood.

Prehistoric Period

Pre-Modern Period

Early Modern Period

Modern Period

Contemporary Period

Historical Periods of Globalization (PPEMC)

Prehistoric Period

Contacts among hunters and gatherers who were spread around the world where geographically limited. Globalization was severely limited

Pre-Modern Period

Invention of writing and wheel. Invention of wheel in addition to roads made the transportation of people and goods more efficient while writing facilitated the spread of ideas and inventions.

Early Modern Period

Period between the Enlightenment and the Renaissance. European Enlightenment project tried to achieve a universal form of morality and law. Capitalist World System

Modern Period

Innovations in transportation and communication technology, population explosion, and increase in migration led to more cultural exchanges. Process of industrialization also accelerated.

Contemporary Period

Creation, expansion, and acceleration of worldwide interdependencies occurred in a dramatic way and it was a kind of leap in the history of globalization

Economic, Political, Cultural, Religious, Ideological

Dimensions of Globalization (EPCRI)

Economic Globalization

Extensive development of economic relations across the globe as a result of technology and the enormous flow of capital that has stimulated trade in both sources and goods

Property Rights

Regulatory Rights

Institutions for Macro-economics

Stabilization

Institutions for social influence

Institutions for conflict managements

Major sources of Economic Growth across the countries (PRISII)

Political Dimensions

Enlargement and strengthening of political interrelations accross the globe

Principle of state of sovereignty

Increasing impact of various intergovernmental organization

Future shapes of regional and global governance

Political Issues that Surface in Political Dimension

Cultural Dimension

The increase in the amount of cultural flows across the globe. Cultural interconnections are at the foundations of contemporary globalization.

Individualism and consumerism

Dominant cultural characteristics of our age

Cultural diversity

Results hybridization which is a constructive interaction process between global and local characteristics which is often visible in food, music, dance, film, fashion, and language

Religion

Personal or institutionalized set of attitudes, beliefs, and practices relating to or manifesting faithful devotion to an acknowledged ultimate reality or deity.

Jihadist Globalism

Religious response to the materialist assault by the ungodly West in the rest of the world

8

How many are the principles that summarize the Roman Catholic Teachings

1. Universal Human Rights

2. Social nature of the human person

3. Common good

4. Solidarity

5. Preferential option of the poor

6. Subsidiary

7. Justice

8. Integral Humanism

Roman Catholic Teaching of Globalization

Commutative Justice

Distributive Justice

Social Justice

Three categories of justice

Commutative Justice

terms of contracts and other promises on both personal and social level

Distributive Justice

Ensures basic equity in how both the burden and goods of society are distributed

Social Justice

creation of the conditions in which the first two categories of justice can be realized and the common good identified and defended

Ideology

System of widely shared ideas, beliefs, norms, ad values among a group of people

1. Globalization is about the liberalization and global integration of markets

2. Globalization is inevitable and irreversible

3. Nobody is in charge of globalization

4. Globalization benefits everyone

5. Globalization furthers the spread of democracy in the world

Ideological Claims of Advocates of Globalism

Social Stretching

Process of emergence of gigantic and virtually identical shopping malls in all continents to cater consumers who can afford commodities all over the world

Economic Globalization

increasing interdependence of the world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies

Economic Globalization

According to the International Monetary Fund, this is a historical process, the result of human innovation and technological progress.

Rapid Growth of Information and Marketization

Two Major Driving Forces for Economic Globalization

Trade of goods and services

Financial and capital markets

Technology and communication

Production

Dimensions of Economic Globalization

Economic Globalization

Functional Integration between internationally dispersed activities

Transnational Corporations

Main driving forces of economic globalization. A corporation that has a home base but is registered, operates, and has assets or other facilities in at least one other country at one time

Silk Road

Best known example of archaic globalization which started in western China, reached boundaries of the Parthian empire, and continued towards Rome.

Golden Age of Globalization

Relative peace, free trade, financial and economic stability

International Monetary System

System that forms rules and standards for facilitating international trade among the nations

Gold

Believed to guarantee a non-inflationary, stable economic government, a means for accelerating international trade and the gold standard functioned as a fixed exchange rate regime with it as the only international reserve

Gold Standard

System of backing a country’s currency with its gold reserves

Great Depression

Reason why gold standard failed in 1931

730 representatives of 44 nations

Who met at Bretton Woods, New Hampshire, United States to create a new international monetary system called the Bretton Woods System

Bretton Woods System

Aim to create a stabilized international currency system and ensure monetary stability where since United States held most of the world’s gold, nations would determine the values of their currencies in terms of dollar

European Monetary Integration

Refers to a 30-year long process that began at the end of the 1960s as a form of monetary cooperation intended to reduce the excessive influence of the US dollar on domestic exchange rates

European Monetary System

Arrangement between several European countries which links their currencies in an attempt to stabilize the exchange rate

European Financial Stability Mechanism

European Financial Stability Facility

Financial Assistance of the International Monetary Fund

Three-pillar financial rescue program

European Financial Stability Mechanism

Permanent fund created by the European Union to provide emergency assistance to member states within the Union.

European Financial Stability Facility

organization created by EU to provide assistance to member states with unstable economies

Special Purpose Vehicle

The EFSF is a ______ managed by the European Investment Bank

International Trade

Exchange of goods, services, and capital across national borders. Multi-million dollar activity, central to the Gross Domestic Product

Specialization and Comparative Advantage

Two key concepts in the economics of international trade

Trade Policies

Regulations and agreement of foreign countries that defined standards, goals, rules, and regulations that pertain to trade relation between countries

Tariffs

taxes or duties paid for a particular class of imports or exports

Trade Barriers

Measures used by governments and public authorities to make imported goods or services less that the locally produced ones

Safety

Ensures the imported products in the country are of high quality

National Trade Policy

Bilateral Trade Policy

International Trade Policy

Types of Trade Policies

National Trade Policy

safeguards the interest of its trade and citizens

Bilateral Trade Policy

used to regulate the trade and business relations of two countries

International Trade Policy

upheld the interests of both the developed and developing countries. Defines the international trade policy under their charter like the Organization for Economic Cooperation and Development, World Trade Organization, and International Monetary Fund

Trade Policy and International Economy

sound trade policies for market changes, establishment of free and fair trade practices and expansion of possibilities for booming international trade

World Trade Organization

deals with the global rules of trade between nations with the main function of ensuring the trade flows smoothly, predictably, and freely

Outsourcing

Search for a partner and relation-specific investments that are governed by incomplete contracts

Market Integration

Refers to how easily two or more markets can trade with each other

Stock Market Integration

stock market in different countries trend together and depict same expected risk adjustment returns

Financial Market Integration

Between countries facilitated by a common currency and the elimination of technical, regulatory and tax differences to encourage free flow of capital and investment across borders

Global Corporation

A business that operates in two or more countries

Chief Financial Officers

Tasked to balance the opportunities with the challenges of operating in multiple encvironments

Financing

Risk Management

Capital Budgeting

Functions created by Chief Financial Officers through exploiting their internal capital markets

Foreign Direct Investment

Investment made by a company or individual in one country to businesses in another country

Brazil, Russia, India, China (BRIC)

Four economies that Golden Sachs predicted to be the most dominant on 2050

Brazil, Russia, India, China, and South Africa (BRICS)

Five fastest growing emerging markets as of 2011

General Agreement on Trade in Services (GATS)

First multilateral agreement covering trade inservices

General Agreement on Tariffs and Trade (GATT)

Similar principle with GATS that deals with trade in goods

Max Webber

Social theorist that define state as compulsory political organization with a centralized government that maintains monopoly of the legitimate use of force within a certain country

Hedley Bull

State is an independent political communities that possesses government and asserts sovereignty in terms of particular portion of earth’s surface and particular segment of the human population

Nation

Imagined political community and imagined as both inherently limited sovereign

Golden Straitjacket

Coined by Thomas Friedman to illustrate the forcing of states into policies that suit the preferences pf investment houses and corporate executives

Neoliberalism

Intensification of the influence and dominance of capital. Elevation of capitalism.

Economic Sovereignty

The power of national governments to make decisions independently of those made by other governments

International Legal Sovereignty

acceptance of a given state as a member of the international community

Westphalian Sovereignty

One sovereign state should not interfere with the domestic arrangements of another

Interdependence Sovereignty

Capacity and willingness to control the flow of people, goods and services in and out of the country

Domestic Sovereignty

Capacity of a state to implement policies within its teritory

European Integration

Process of industrial, political, legal, economic, social, and cultural integration of states wholly or partially in Europe

European Union

International organization comprising 28 European counties governing common economic, social, and security policies

Economic Integration

Group of countries strive to increase their level of welfare

Stages of Economic Integration

Preferential Trading Area

Free Trade Area

Customs Union

Common Market

Economic Union

Economic and Monetary Union

Complete economic integration

Preferential Trade Areas

agreement of reducing or removing tariffs barriers on selected products imported within geographical regions or areas

Free Trade Agreements or Preferential Trade Agreements

eliminates import tariffs and quotas between signatory countries

Common Market

One major step towards economic integration

Economic Union

trading bloc that has both common market between members and common trade policy towards non-members

Complete Economic Integration

final stage of economic integration where member states forego independence of both monetary and fiscal policies