ECON GLOBALIZATION

-        PYLE

: Involves a wide variety of processes, opportunities, and problems related to the spread of economic activities among countries around the world

ECONOMIC GLOBALIZATION

-        The irreversible trend behind ideas of development and progress.

ECONOMIC GLOBALIZATION

-        It is a historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders.

  DICKEN:

-      It is a functional integration between internationally dispersed activities.

SZENTES:

In economic terms, globalization is nothing but a process making the world economy an organic system by extending transnational economic processes and economic relations to more and more countries and by deepening the economic interdependencies among them

ROLE OF ECONOMIC GLOBALIZATION

It is the driving force behind a nation state’s productive activities and level of marketization

ROLE OF ECONOMIC GLOBALIZATION

 Essential in a nation’s ability to yield the maximum potential of its resources.

ROLE OF ECONOMIC GLOBALIZATION

The success of a nation’s economic development is dependent on its ability to globalize.

ANDRE GUNDER-FRANK and BARRY GILLS

They contend that the connected world stretches back at least 5,000 years.

gunder-frank

even claims that there was a single global economy with a worldwide division of labour and multilateral trade from 1500 onward

JOHN HOBSON

- globalization existed as early as the 6th century – “as significant flows of goods, resources, currencies, capital, institutions, ideas, technologies and peoples, flowed across regions”

SAMUEL ADSHEAD

- a continuous world history began with the creation of the largest contiguous land empire in history, the Mongolian Empire that existed during the 13th and 14th centuries.

PETER FRANKOPAN

- his popular book on the silk roads, he claimed that there already was a connected world during what Westerners use to call the Middle Ages and that its centre was in Central Asia.

central asia

according to frankopan, where was the center of the connected world

JANET ABU-LUGHOD

- she assumed the existence of a network of globally interconnected trade before the early modern age (1450s-1850s).

ADAM SMITH

- he considered the discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, as the two greatest and most important events recorded in the history of mankind. (INVISIBLE HAND)

KARL MARX

- according to him, world trade and world market date from the 16th century, and from then on the modern history of capital starts to unfold.

DENNIS FYLNN and ARTURO GIRALDEZ

They claim that globalization began in 1571, when Manila became a Spanish stronghold connecting the Atlantic and the Pacific. 

 

They focused strongly on global trade flows, in particular of bullionPIERRE and HUGUETTE CHAUNU

PIERRE and HUGUETTE CHAUNU

They suggest that between 1500 and 1650 the Carrera de las Indias, the sea routes over the Atlantic Ocean that connected the different parts of the Spanish Empire, established the first outline, however rough, of a world economy (Vries 2017).

IMMANUEL WALLERSTEIN

-        First modern world system in 15^th – 16^th century.

IMMANUEL WALLERSTEIN

-        It is a world-system not because it encompasses the whole world but because it is larger than any juridically-defined political unit.

IMMANUEL WALLERSTEIN

It is a ‘system’ because it is largely self-contained and the dynamics of its development are largely internal.

IMMANUEL WALLERSTEIN

-        It is a ‘world-economy’ because the basic linkage between the parts of the system is economic

core

-        a free system composed of skilled labor; produces goods with high value in strong states

PERIPHERY

: production of less-value goods but are needed in everyday life; produced by unfree but unskilled and renumerated labor; weaker policies and governments who are export-based.

semi- periphery

lies between core and periphery but in a series of dimensions

THE GREAT DIVERGENCE

- pertains to structural patterns of unequal change as reflected in social division of labor and global inequalities

O’ROURKE & WILLIAMSON

defines globalization as the integration of international commodity markets.

O’ROURKE & WILLIAMSON

argued that the absence of transport costs and trade barriers will create a perfectly integrated global commodity markets.

commmodity price convergence

argued that the absence of transport costs and trade barriers will create a perfectly integrated global commodity markets. WILL LEAD TO WHAT

INTERNATIONAL MONETARY SYSTEMS

international exchange rate

IMS

refers to the rules, customs, instruments, facilities, and organizations effecting international payments

is to facilitate cross-border transaction, especially trade and investment

main task of IMS

19th century

the big bang of globalization

The BRETTON WOODS SYSTEM

adopting an adjustable peg system, the gold exchange standard (which was based on US dollar since it is the only convertible currency of the time)

The BRETTON WOODS SYSTEM

establishment of two international institutions: a) the International Banks for Reconstruction and Development (IBRD) and b) the International Monetary Fund.

Jamaica Accords/Agreement.

‘In 1976, countries met to formalize a floating exchange rate system as the new international monetary system’ (International Business, v.1.0). This came to be known as the

globally integrated market

a process referring to the expansion of international firms/markets under a single system or management through consolidated marketing functions.

KOHLS AND UHL

CAPITALISM

NEOLIBERALISM

Drivers of market integration

neoliberalism as an economic principle

“free-market competition”

neoliberalismas an economic principle

Deregulation of financial markets and unabated free trade.

neoliberalism as an economic principle

Increasing volume of international trade, FDI and general international capital movements.

neoliberalism as an economic principle

Increasing amounts of assets and liabilities of each country with the economic reset of the world.

neoliberalism as a policy model

modern policy model anchored on eliminating price controls, lowering trade barriers and deregulating capital markets.

neoliberalism as a policy model

Privatization reduces state power to direct capital and market flows.

accumulation by dispossession

neoliberalism promotes

capitalism

Production, labor, profit

capitalism

Privatization, capital accumulation

capitalism

market competition and wage labor

Suez Canal

transport revolution and intensive technological change

The Great Depression and new protectionism

(led to cross-border transactions

GLOBAL/INTERNATIONAL TRADE

Anchored on the import and export of goods and services across international boundaries

Raising living standards

Provides employment

Changes in wage and labor systems

Goods diversification, signature products (i.e. cocoa farmers)

GLOBAL CORPORATIONS/MNCs

Refers to any company that operates in at least a country other than the country where it originated.

economies of scale
economies of scope

MNC operations often attain ______, through mass producing in external markets at substantially cheaper costs, or _______, through horizontal expansion into new geographic markets.

GLOBAL CORPORATIONS/MNCs

Governed by the laws and local contexts where they are located.

Foreign direct investments (FDI)

an investment made by a firm or individual in one country into business interests located in another country

Foreign direct investments (FDI)

takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company

The gold standard

Started at the dawn of the 19th century (the big bang of globalization) and was also the major force behind the beginning of the first modern international monetary system or regime.

The gold standard

Enriched by UK being the predominant global economy during that time through adopting the gold mono-metallism system.