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Lesson Eight

The document discusses various topics related to global economics including the impact of COVID-19, definitions of economic terms, types of global inequality, different economies associated with economic globalization, the legacy of colonialism, and Wallerstein's model of the world economic system.

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33 views

Lesson Eight

The document discusses various topics related to global economics including the impact of COVID-19, definitions of economic terms, types of global inequality, different economies associated with economic globalization, the legacy of colonialism, and Wallerstein's model of the world economic system.

Uploaded by

jenina
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter VIII

Global Economy Thug of War


Economy defined
The term economy comprises the wealth and resources of a country or region, especially in terms of the
production and consumption of goods and services. Economic globalization, however, refers to the
widespread international movement of goods, capital, services, technology and information. According to
Sam Kim (2020), Bloomberg News Reporter: Covid-19 pandemic has shaken economies of the world.
Asian stocks declined as virus spread increases. Death surpassed 500,000. US and Japan economies still
suffer recession. Political globalization intensify inter-dependence of national, regional, and local
economies across the world through cross border movement of goods, services, technologies and capital.

Global economy defined

Global economy is one giant economic system where all of the economies of the world work together.
Economic development has helped millions of people get out of extreme poverty in the past but the
challenge of the future especially in this time of Covid-19 pandemic stays. We need to ponder first thinking
everything in the light of our family’s survival. To lift up the poor while at the same time keeping the planet
livable is a daunting task. Most of the modes are to be facilitated with distance. But we need to be much
closer to God. Our overarching guidepost shall be reckoned with John 10:10 which says: The thief cometh
not, but for to steal, and to kill, and to destroy: I come that you might have life, and you will have it more
abundantly. Globalization and inequality are closely related. We can see how different nations are divided
between the North and the South, developed and less developed. These differences mainly reflected one
key aspect of inequality in this contemporary world, that is, global economic inequality. Ritzer lamented in
2015: at the global level, whites are disproportionately in the dominant North, while blacks are primarily
in the South; although this is changing with South to North migration. Students of this subject the
Contemporary World have to keep themselves aware of this trend. Free college education is the only ladder
which could help a lot to emancipate their families in the bondage of poverty. At this stage, all of them
should be conscious of how the world has been divided. First world countries such as, Canada, United
States, Western Europe, developed parts of Asia are regarded as rich countries; while countries in the
Caribbean, Latin America, South America, Africa, and other parts of Asia which include the Philippines
are regarded as poor countries.

Two (2) Types of Global Inequality

1. Wealth Inequality- refers to the net worth of the country. Speaks about distribution of assets.
Economics usually look at income using the gross domestic product (GDP). Billions of pesos were
allotted by government for programs like: Pantawid Pamilya, Pantawid Pasada, and others were
provided just to augment what was most needed by the marginalized sectors.

2. Income Inequality- is the new earning that are constantly being added to the pile of a country’s wealth.
Filipinos are versatile, resilient, articulate, witty, and intelligent. The mere fact that different sects of
religious denominations which are present in our society and how these are prospering, that would only
mean that income if to be spent for works of propagating these religions is easily given and shared.
Voluntariness therefore is inherent in all of us

Two (2) Types of Different Economies Associated with Economic Globalization


1. Protectionism- means a policy of systematic government intervention in foreign trade with the objective
of encouraging domestic production. This encouragement involves giving preferential treatment to
domestic producers and discriminating against foreign competitors. Trade Protectionism means protecting
one’s economy from foreign competition by creating trade barriers. Tariffs are required fees on imported
goods and services or resources as well as exports.
2. Trade Liberalization or Free Trade- refers to agreements and technological advances in transportation
and communication. In this situation goods and services move around the world more easily than ever.
International/Global trade has created new opportunities for people to sell their products and labors in a
global market place. Fair trade is the concern for social, economic, and environmental well-being of
marginalized small producer (Downie, 2007). As defined by International Fair Trade Association products
like coffee, bananas, cotton, wine, tea, and chocolate have been exchange in light of “fair trade”.

Legacy of Colonialism
1. Colonialism- means that foreign power maintains political, social, economic, and cultural domination for
an extended period. May refer also to more than three hundred (300) years of Spanish domination, decades
of American occupation and Japanese invasion of our country. These events were also worth revisiting
because other countries were colonized only once in their history. But for us Filipinos we almost allowed
ourselves became dominated for three times?
2. Neocolonialism- continued dependence on more industrialized nations for managerial and technical
expertise by former colonies. There was a time in our history where the Fall of Bataan was being celebrated
or commemorated. Both countries which caused that war, that is, United States and Japan were represented.
This only shows how grateful Filipinos are as friends. We could easily forget. Unfortunately, we could not
achieve what we should get because of such continued dependence. We need breed of Filipinos who would
dream of our dreams and make it happen.

The World Economic System


This history of colonialism inspired American Sociologist Immanuel Wallerstein model what he called
capitalistic world economy. According to Wallerstein, the world economic system is divided into a
hierarchy of three (3) types of countries:
1. The Core- countries which are dominantly capitalist. Core countries have high levels of industrialization,
urbanization, are capital intensive, have high wages and high technology production. Core countries exploit
both semi-peripheral and peripheral countries. Examples are United States, Japan and Germany.
2. The semi-peripheral- countries which are less developed than core nations but more developed than
peripheral nations. They are the buffer between the core and peripheral countries. Mexico, Brazil, India,
Nigeria and South Africa are examples. In economic integration this can be illustrated using Hershey’s
chocolate. The company which produced Hershey’s is based in the United States, but they grow and produce
in other country like Ghana to increase profits. Citizens were given jobs in minimum wage based on their
laws how cheap the labor wage is does not concern the company because their chief concern is the raw
materials or the cocoa bean coming from them, get it processed to be sent to the United States where they
are sold at commercial price. Please take notice that the word exploited was not used. While its popularity
allowed it to be sold at a commercial price. The rightful share from the farmers, to the workers, and
including the seller were given. We could not just say that capitalism fails in this stage because the means
of production deliver what it should deliver as product, that is, the Hershey’s chocolate. It stands out because
of its integrity and nothing else. However, we should learn from this illustration especially on account of
dealings or negotiations.
3. Peripheral- most African countries and low income countries in South America which are mostly
dependent on core countries and are less industrialized. They usually have low literacy rates and lack
consistent internet access. Peripheral countries generally provide labor and materials to core countries.

Important Terms to Remember


1. Non-tariff barriers- are method of limiting imports without charging a tax on goods coming into a
country.
2. Preferential trade agreement- is when a group of countries deals to reduce tariff, give preferential access
to certain products from the participating country.
3. Economic and monetary union- is a common market that uses a common or single currency.
4. Leapfrogging- idea that countries can skip straight to more efficient and cost-effective technologies that
were not available in the past.
5. Gross national product- total value of the goods and services produced by the people of a nation during
a specified year. It includes the money earned by the Overseas Filipino Workers (OFWs)
6. Per Capita Income- average income earned per person. Is equal to the total income divided to its total
population.
7. Sanctions- occurs when a country bans all trade activities from another country.
8. Ad Valorem- tariff that depends on the original price of the product, usually it is 10% of the original
price of the product that is being imported.
9. Stagflation- persistent high inflation combined with high unemployment and stagnant demand in
country’s economy (low GDP with a high inflation).
10. Gross domestic product- measures the total outputs of the country.

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