CWORLD

Contemporary World

  • Definition of Contemporary

    • Origin: medieval Latin term "Contemporarius"

    • Meaning: "with or together" (Con) and "time" (tempus, tempor)

    • Refers to the present or modern time, or someone living at the same time as another

  • Eras

    • Modern Era: 1500 to 1945

    • Contemporary Era: from 1950s to the present or post-WWII years

  • Importance of Studying the World

    • Interaction with the world through media, internet, and global consumption habits

    • Helps in overcoming parochialism and understanding oneself better

Globalization

  • Course Outcomes

    • Understanding globalization and its interpretations

    • Describing global economic, political, social, and cultural systems

    • Analyzing contemporary drivers of globalization

    • Assessing effects of globalization on nation-states and social units

    • Examining global issues in relation to Filipinos and the Philippines

    • Identifying ethical implications of global citizenship

  • Understanding Globalization

    • Processes leading to integration and interconnectivity globally

    • Incorporation of people into a single world society

    • Creation of a "Borderless World" with intensified economic interactions

  • Homogeneity and Heterogeneity

    • Homogeneity

      • Quality of being all the same or of the same kind

      • Linked to cultural imperialism and McDonaldization

    • Heterogeneity

      • Quality of being diverse in character or content

      • Associated with cultural hybridization

  • Cultural Imperialism

    • Methods used by one country to control another politically, economically, and territorially

    • Examples: British Empire, Spanish influence in the Philippines

  • McDonaldization

    • Refers to homogenization and standardization due to globalization and capitalism

    • Examples: Efficiency, Predictability, Control in various sectors

  • Cultural Hybridization

    • Blending elements from different cultures

    • Examples: Glocalization, Creolization, Amalgamation

  • Glocalization

    • Customizing products or services for local markets

    • Blend of globalization and localization

  • Creolization

    • Creation of new cultures through mixing

    • Examples in language and religion

  • Amalgamation vs. Absorption

    • Amalgamation: Uniting separate organizations to form a larger group

    • Absorption: One company taking over another, becoming the sole owner

This note covers the concepts of contemporary world, globalization, homogeneity, heterogeneity, cultural imperialism, McDonaldization, cultural hybridization, Glocalization, Creolization, and Amalgamation vs. Absorption.

Global Business Amalgamations

  • Exxon and Mobil merged to form ExxonMobil

  • Phillips and Conoco merged to form ConocoPhillips

  • Boeing absorbed McDonnell Douglas

  • Continental Airlines merged with United

  • Sprint merged with Nextel

Theories of Globalization

World System Theory

  • Focuses on the world as a unit

  • Divides countries into core, semi-periphery, and periphery regions

  • Core includes high-income developed states like the USA and Japan

  • Semi-periphery includes middle-income semi-industrialized states like South Korea

  • Periphery includes low-income dependent states like African countries

Transformationalism

  • Globalization reflects increased interconnectedness in political, economic, and cultural matters

  • Globalization is a complex two-way process

  • Culture exchange is not one-way but mutual between the West and developing world

Network Society

  • Technologistic approach to globalization

  • Emphasizes digital connectivity and empowerment through the internet

  • Generation Z plays a significant role in the network society

Liberalism

  • Emphasizes welfare and freedom

  • Focuses on the interdependence between state and non-state actors

  • States are no longer central actors in world politics

Political Realism

  • Focuses on state power, national interest, and power struggles

  • States are inherently acquisitive and self-serving

  • Emphasizes the uneven nature of globalization

Marxism

  • Focuses on class conflict between bourgeoisie and proletariats

  • Emphasizes production, distribution, and social emancipation

  • Criticizes wage exploitation in low-cost labor countries

Constructivism

  • Globalization is constructed through symbols, language, and interpretation

  • International relations are socially constructed

  • Focuses on how social actors construct their world

Postmodernism

  • Emphasizes relativity, subjectivism, and individuality

  • Critiques universalist notions of reality, morality, and truth

Feminism

  • Focuses on the subordination of women to men

  • Highlights the marginalization and violation of women in global communication

  • Women are generally poorer than men regardless of education or location

Eclecticism

  • Draws upon multiple theories without rigidly adhering to a single paradigm

Origins and History of Globalization

  • Globalization is a complex concept beyond international trade

  • Interconnectedness allows countries to specialize and rely on imports efficiently

  • Globalization has evolved over centuries from the Silk Road to modern eras

  • Silk Road established global trade in the 1st century BC with luxury goods from China to Rome

  • Trade routes reemerged in the medieval era under Mongol control

Conclusion

  • Understanding global business amalgamations and theories of globalization is crucial for comprehending the interconnected world and its historical evolution.

Spice Routes (7th – 15th Centuries)

  • Spices like cloves, nutmeg, and mace were traded from the Maluku islands of Indonesia.

  • Spice trade was conducted via ships, strengthening the connection between East and West.

Age of Discovery (15th – 18th centuries)

  • European merchants sought new trade avenues during the "Age of Discovery."

  • The Americas were discovered, introducing goods like potatoes, tomatoes, coffee, and chocolate to Europe.

Expansion of Trade Routes (15th – 18th centuries)

  • Trade routes expansion led to more accessible exclusive goods like spices.

  • Scientific discoveries during the "Scientific Revolution" furthered trade in knowledge and goods.

Globalization W.1 (19th CENTURY – WWI)

  • The industrial revolution popularized inventions like the steam engine.

  • Inventions like the cotton gin, assembly lines, and electricity eased goods production, fueling international trade.

Globalization During the World Wars

  • World Wars led to countries closing borders, slowing globalization.

  • Reconstruction and the Great Depression affected global trade between the wars.

Globalization in the Modern Era

  • General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO) lowered tariffs and oversaw trade.

  • Free trade institutions like the European Union eroded nationalist trade agendas.

Globalization Today?

  • COVID-19 pandemic impacted globalization by disrupting manufacturing and transportation.

  • Rise of protectionism and weaknesses exposed by the pandemic threaten globalization's future.

Conclusion

  • Globalization has shaped economies, societies, and cultures worldwide.

  • Understanding globalization's theories and history is crucial for leveraging its opportunities.

The Globalization of Economy

  • Economic globalization is the integration of economies through the movement of goods, services, capital, labor, and technology across borders.

  • It encompasses dimensions like trade, financial markets, technology, communication, and production.

Glimpses from the global economy

  • Examples include the Internet's proliferation, tramp shipping, and the foreign exchange market.

  • Tramp shipping provides convenient and economic transportation for goods needed in industrial societies.

Drivers of Globalization

  • Decline in barriers to the free flow of goods, services, and capital since World War II.

  • Technological change has been a significant driver of globalization.

Declining Trade and Investment Barriers

  • After World War II, advanced industrial nations committed to removing barriers to international trade and investment.

  • Average tariff rates on manufactured products have decreased over the years.

Effects of Lowering Trade Barriers

  • Lowering trade barriers has increased the volume of world trade.

  • It has facilitated the integration of global markets and production.

The Role of Technology

  • Technology, like the World Wide Web, has transformed globalization.

  • Computers moving money globally and Silicon Valley's economic impact showcase technology's role in globalization.

Silicon Valley

  • A region on the San Francisco in California known for the miniaturized electronics industry.

  • Most devices in Silicon Valley are made of semiconductors like silicon.

  • Companies in Silicon Valley

    • Major companies include Apple, Google, Facebook, Wells Fargo, Visa, and Chevron.

  • Internet Usage Growth

    • Figure showing Internet Users per 1000 People from 1990 to 2003 for Japan, United States, European Monetary Union, and the World.

Globalization Trends

  • Globalization is the acceleration of trends over the last 10,000 years.

  • Rise of agriculture 10,000 years ago led to rise of empires and nation-states

  • Science and ‘enlightenment’ after 1600 produced global trade and empires

  • Free trade and tech after 1945 produced present-day globalization.

Economic Globalization

  • Early Capitalist Ideas

    • Free Market Economy - Adam Smith

      • Discusses Adam Smith's ideas on economic globalization from "The Wealth of Nations" in 1776.

      • Market is “free” from state control

    • Division of Labor

    • Competition

Economic Globalization

  • Economies are increasingly linked together

    • Examples like NAFTA, the EU, and the WTO.

    • WTO aims to facilitate trade between nations.

    • Only global international organization dealing with the rules of trade between nations

    • Goal: help producers of good and services, exporters and importers conduct their business

  • Multinational Corporations

    • Historical example: Dutch East India Company.

    • New examples: Nike, Wal-Mart, Royal/Dutch Shell.

    • 1602 company of Dutch merchants and independent trading companies

    • Spice trade monopoly in East Asia

    • Power to colonize territories and enslave indigenous people

  • Global Corporations Function

    • Global corporations are referred to as multinational, transnational, international, or global companies.

    • Multinational corporation - any business with productive activities in 2 or more countries

    • Ex. Nike, Wal-Mart, Royal/Dutch Shell

How do Global Corporations Function?

  • The contemporary global corporation is simultaneously and commonly referred to either as a multinational corporation (MNC), a transnational corporation (TNC) , an international company, or a global company

  • International companies are importers and exporters without investments outside their home country.

  • Multinational companies have investments in other countries but lack coordinated product offerings in each country. They are more focused on adapting their products and services to each individual local market

  • Global companies are present in many countries and market products locally.

  • Transnational companies have foreign investments but delegate decision-making to individual foreign markets.

Globalization of Production of Goods and Services

  • Example of Vizio TV production involving multiple countries.

    • Designed in a small office in California

    • Assembled in Mexico

    • Panels for S. Korea, electronic components from China and microprocessors in USA

  • Outsourcing service activities to low-cost nations.

Globalization of Markets

  • Shift from country-specific companies to global brands like Nintendo, Starbucks, and McDonald's.

Growth of Regional Trading Alliances

  • Regional Trading Alliances

    • ASEAN - Association of Southeast Asian Nations

    • EU - European Community

    • NAFTA - North American Free Trade Agreement

    • AEC - African Economic Community

    • APEC - Asia Pacific Economic Cooperation

    • AU - African Union

    • EAEU - Eurasian Economic Union

European Union

  • Started in 1957 with six nations, now has 27.

  • Introduced the common currency Euro.

  • Brexit

    • United Kingdom of Great Britain and Northern Ireland (UK) formally withdrew from the EU in March 2017.

    • Its currency Sterling Pound now has a higher value than the Euro and US Dollar in terms of peso exchange

      • Pound- 66

      • Euro- 56

      • USD- 51

Changing Roles in Global Economy

  • In the 1960s

    • The U.S. dominated the world economy and the world trade picture

    • U.S. multinationals dominated the international business scene

    • About half the world-- the centrally planned economies of the communist world-- was off limits to Western international business

  • Today, much of this has changed.

    • In the early 1960s, the U.S. was the world's dominant industrial power accounting for about 40.3% of world manufacturing output

    • By 2007, the U.S. accounted for only 20.7%

    • Other developed nations experienced a similar decline

Economic Globalization in Africa

  • Challenges like poverty, brain drain, debt, and income disparities in African countries.

  • Little Industry and Technology

  • Can economic globalization can help reduce poverty?

  • "Brain Drain"

  • Debt (IMF loans) AF countries can't even pay back interest

  • 300 million pple live on less than $1/day

  • 48% pple in sub-Saharan AF in extreme poverty (less than 750 calories/day)

  • 2001 Index for Foreign Investment in Africa was "0"

  • Gap between rich and poor increasing

Global Problems: Economic Inequities and Labor Servitude

  • Issues of economic inequities and labor servitude.

  • Causes of poverty

    • Resource distribution and access

    • Income opportunities limited

    • Education opportunities limited

  • Forced labor

    • Slavery still exists

    • Child labor still common

  • Uneven Distribution of Resources

    • Advocacy against exploitation in Africa.

    • Focus on gender equality and fair trade practices.

    • Unequal resource distribution leading to poverty.

    • Limited income opportunities and education disparities.

  • Income Opportunities

    • Need for addressing income inequality globally.

    • Top 1% controls a significant portion of the world's wealth.

  • Education Disparities

    • Educational opportunities vary based on social class.

    • Challenges in access to quality education for all.

  • Modern Slavery

    • Persistence of modern slavery worldwide.

    • Need for awareness and action against slavery.

  • Child Labor

    • Ongoing issue of child labor globally.

Wallerstein’s World System Theory

  • International trade led to the creation of a capitalist world economy.

  • Social system based on wealth and power extends beyond individual states.

  • World system arranged in core, semi-periphery, and periphery based on influence.

    • Core: Strongest nations producing advanced products.

    • Semi-periphery: Industrialized Third World nations.

    • Periphery: Nations exporting raw materials and agricultural goods.

Causes of the Industrial Revolution

  • Transformed Europe from domestic to capitalist industrial system.

  • Shifted manufacturing from homes to factories for large-scale production.

  • Urban growth with factories clustering in regions with cheap coal and labor.

England and France

  • Industrial Revolution began in England due to the need for innovation.

  • France did not need to transform its system due to a larger labor force.

  • Max Weber linked Protestant beliefs to industrial success in England.

Industrial Stratification

  • Industrialization raised living standards but led to exploitation of cheap labor.

  • Marx's bourgeoisie versus proletariat concept.

  • Weber's model of wealth, power, and prestige in socioeconomic stratification.

Poverty on the Periphery

  • Capitalism in the periphery displaced local landowners for cheap labor.

  • Example in Bangladesh where British colonialism increased stratification.

Economic Integration

  • Three levels: Global, Regional, Bilateral.

  • Global: GATT and WTO promoting free trade.

  • Regional: NAFTA for preferential treatment.

  • Forms include Free Trade Area, Customs Union, Common Market, Economic Union.

Globalization and Politics

  • World system theory explains the interconnectedness and global culture.

  • European imperialism and colonialism shaped the modern world system.

  • Economic integration benefits resource allocation and efficiency.

Nation and State

  • State refers to a country and government.

  • Nation is a group bound by common culture.

  • Not all states are nations, and vice versa.

  • Effect of nationalism on the Westphalian order and national consciousness.

Treaty of Westphalia and Westphalian System

  • Treaty signed in 1648 to end Thirty Years War and 80 Years War

  • Involved major continental powers of Europe: Roman Empire, Spain, Dutch Republics

  • Westphalian System provided stability until challenged by Napoleon Bonaparte

Napoleon Bonaparte and Napoleonic Code

  • Implemented Napoleonic Code in conquered countries

  • Code abolished birth privileges, promoted freedom of religion, and meritocracy in government

Concert of Europe

  • Alliance of Great Powers (UK, Austria, Russia, Prussia)

  • Aimed to restore monarchial, hereditary, religious privileges post-French Revolution

French Revolution

  • Period of social and political upheaval in France and colonies (1789-1799)

  • Overthrew monarchy, established republic, led to dictatorship under Napoleon

  • Influenced decline of absolute monarchies, rise of republics and liberal democracies

Internationalism and Principles

  • Attempt to transcend interstate system for increased relations

  • Two principles: Liberal Internationalism and Socialist Internationalism

Liberal Internationalism

  • Based on common international principles from Emmanuel Kant

  • Advocated for perpetual peace through universal democracy and cooperation

Socialist Internationalism

  • Karl Marx's ideology of workers' unity transcending nations

  • Achievements include 8-hour working day, International Women's Day, Labor Day

Soviet Union and Proletarian Internationalism

  • First self-declared socialist state

  • Embraced proletarian internationalism and world revolution

  • Dissolved in 1991, leading to 12 independent republics

Internationalism and Globalization

  • Internationalism is a crucial aspect of globalization

  • Facilitated by International Organizations like the UN promoting global norms and policies

United Nations and Global Governance

  • Created to preserve peace post-war, reflecting postwar balance of power

  • Security Council maintains peace and security, with Permanent 5 having veto power

  • Global Governance refers to processes creating international order

Sources of Global Governance

  • Treaties, international NGOs, transnational corporations influence global governance

  • NGOs lobby states for certain behaviors, corporations impact labor laws and trade policies

Challenges of United Nations

  • Limits due to respecting state sovereignty

  • Influence curtailed if states refuse to cooperate

  • Security issues pose significant challenges