CONTEMPORARY WORLD PRELIM REVIEWER

LESSON 1
What is Globalization?

• Refers to the processes by which more people across large distance become connected in more
different ways.

• Deterritorialization is the process through which the constraints of physical space lose their hold on
social relations.

• It is an interaction of people and primarily an economic process of integration which has social and
cultural aspects as well

 The process by which capitalism expands across the globe as powerful economic actors seek
profit in global markets and impose their rules everywhere.

• Also known as Neoliberalism.

• Means different things to different people.

Korean Pentecostal missionary – new opportunity to spread the faith and convert lost souls abroad.
Dominican immigration in the U. S. – growing new roots while staying deeply involved in the home
village.

Chinese apparel worker – chance to escape rural poverty by cutting threads off designer jeans.
American executive – managing a far-flung supply chain to get products to stores.

global justice advocate – rules of global game that favor the rich North over the South poor

Theories of Globalization

• World-System Theory – a perspective that globalization is essentially the expansion of the capitalist
system around the globe. Capitalist world-system originated in the 16th century, when Europeans
traders established enduring connections with Asia, Africa and the America. The core of the system, the
dominant classes were supported by strong states as they exploited labor, resources, and trade
opportunities, most notably in peripheral areas. Central purpose is capital accumulation by competing
firms, which go through cycles of growth and decline.

 World Polity Theory – state remains an important component of world society, but primarily
attention goes to the global cultural and organization. All-encompassing world-polity and its
associated with world culture, which supplies a set of cultural rules or scripts that specify how
institution around the world should deal with common problem. Key elements is a general,
globally legitimated model of how to form a state. Carriers of global principles, these
organizations then help to build and elaborate world culture and world society further
  World Culture Theory – the world culture is indeed new and important, but less homogeneous
than world polity. Globalization is a process of relativization. World society thus consists of a
complex set of relationships among multiple units in the global field. Globalization compresses
the world into a single entity, and people necessarily become more and more aware of their
relationship to this global presence. Central importance to this process is the problem of
globality : how to make living together in one global system meaningful or even possible

Emergence of Globalization

• Globalization has been happening for a long time. (16th century Europe as
the original source.)
• Europeans established worldwide trade connections on their own terms,
brought their culture to different regions by settling vast areas, and
defined the ways in ways the different people were to interact with each
other.
• Late 19th century the period of intense globalization, when million
migrated, trade generally expanded and new norms and organization came
to govern international conduct.
• In the 20th century, the movement of people, goods and finance across
national borders was at least as free and significant as it is today.In the 2nd
half of 20th century was significant period of globalization in its own right.
• World War II gave globalization a new impetus. Obscured by Cold War
divisions, the transformation of world society – in terms of linkages,
institutions and culture and consciousness was nevertheless profound

GLOBALIZATION AND THE EXPANDING MARKET

• Expanding Market - is the process of offering a product or service to a wider section of an existing
market or into a new demographic, psychographic or geographic market. An economic system operating
along capitalist lines now encompasses most region of the world, and economic motivates always have
been important in creating global linkages, globalization takes place in many sphere for many reasons.
Economy may be a driving force in creating global change in some periods, but it effects depend on what
happens outside of world market

HOMOGENEOUS WORLD

• Certain activities or institutions become global, they must displace existing local variable activities and
institution. If there are more linkages, global institutions, and global values, presumably this means that
more people will have more in common

Reasons Why Globalization will not make the World Homogeneous

• General rules and models are interpreted in light of local circumstances. Regions respond to similar
economic constraints in different ways; countries still have great leeway in structuring their own
policies; the same television program means different things to audiences; such as McDonald's adopts
its menu and marketing to local tastes.

• Growing similarity provokes reactions. Advocates for many cultures seek to protect their heritage or
assert their identity. (action of indigenous people to claim their right to cultural survival.

• Cultural and political differences have themselves become globally valid. The notion that the people
and countries are entitled to their particularity of distinctiveness is itself part to global culture. the
tension between homogeneity and heterogeneity is integral of globalization

Is Globalization Harmful?

• Globalization may be harmful to the well-being (fears) of individuals, countries and cultures :If the
market is the driving force - it is bound to exacerbate (worsen) inequality by creating winners and losers.
If makes world homogeneous - many cultures are in troubles. Loss of local autonomy may mean that the
more people will be vulnerable (defenseless) to economic swings, environmental degradation, and
epidemics

Interdisciplinary Understanding of Globalization

• Political Scientist

Political activity increasingly takes place at the global level. Under globalization, politics can take place
above the state through political integration schemes such as the European Union, the ASEAN
integration where Philippines is involved though intergovernmental organizations such as the IMF, the
WB, and the WTO. Political activity can also transcend national borders through global movements and
NonGovernmental Organization (NGO)Civil society organizations act globally by forming alliances with
organizations in other countries, using global communication system, and lobbying international
organizations and actors directly, instead of working through their national governments

 Economist

Integration through international trade of markets in goods and services as reflected in variety of
possible measures (direct measures of barriers such as tariffs and transport costs, trade volumes and
price related measures).foreign direct investment, increased trade in intermediate product,
international outsourcing of services like the call center industry, and international movement of
persons like our OFWs. Include the international spread of ideas, from consumer tastes (like Coke and
Hershey's) to intellectual ideas like technology patents and management principles and accounting
standards

 Sociologist

An on-going process that involves interconnected changes in the cultural and social spheres.it involves
the spread and diffusion of ideologiesvalues, ideas, norms, beliefs and expectations - that foster, justify
and provide legitimacy for economic and political globalization fueled by globally integrated
communication systems like social media, media coverage of the world's elite and their lifestyles, the
movements of people around the world via business and leisure travel, and the expectations of these
travelers that the host societies will provide amenities and experiences that reflects their own cultural
norms

• Historian

Historian follow rather than lead the way. Globalization is not new as a phenomenon but the word itself
took hold only recently which records shows first use in English in 1930 and shows that usage soared
suddenly in 1990's. Globalization defined most succinctly as the interconnection of places far distant
from each other. Globalization is still too much entangled with world history, global history and
transnational history

Market Globalization

• an idea that reflects the concepts of globalization

• seeks to endow globalization with free market norms and neoliberal meanings

endow - to empower

Five Core Claims of Market Globalism

• Globalization is about the liberalization and global integration of markets

• is anchored in the neo-liberal ideal of the self-regulating market as the normative basis for a future
global order

• vital functions of free market - its rationality and efficiency, as well as its alleged ability to bring about
greater social integration and material progress - can only be realized in a democratic society that values
and protects individual freedom.

• the more you let market forces rule and the more you open your economy to free trade and
competition, the more efficient your economy will be.

• Globalization means the spread of free-market capitalism to virtually every country in the world

• Globalization is inevitable and irreversible.

• Globalization reflects the spread of irreversible market forces driven by technological innovations that
make the global integration of national economies inevitable.

• Market Globalism is almost intertwined with the deep belief in the ability of markets to use new
technologies to solve social problems far better than any alternative course. Governments, political
parties, and social movements had no choice but to adjust to the inevitability of globalization.

• since the emergence of a world based on the primacy of market values reflects the dictates of history,
resistance would be unnatural, irrational and dangerous

 Nobody is in charge of globalization.

 • Liberal concept of the self-regulating market.
 • The link between globalization-market and the adjacent idea of leaderlessness is simple : if
the undisturbed working of the market indeed preordain a certain course of history, then
globalization does not reflect arbitrary agenda of a particular social class or group.
• Globalists are not in charge in the sense of imposing their own political agenda on people.
rather, they merely carry out the unalterable imperatives of a transcendental force much larger
than narrow partisan interest.
• like the market-globalist rhetoric of historical inevitability, the portrayal of globalization as a
leaderless process seeks to both depoliticize the public debate on the subject and demobilize
global justice movements

• Globalization benefits everyone.

• The adjacent idea of benefits for everyone is usually unpacked in material terms such as economic
growth and prosperity.

• When linked to globalism's peripheral concept, progress, the idea of benefit for everyone taps not
only into liberalism's progressive worldview, but also draws on the powerful socialist vision of
establishing an economic paradise on earth - albeit in the capitalist form of a worldwide consumerist
utopia.

• Television, radio and internet frequently place existing economic, political, and social realities within a
neo-liberal framework; sustaining the claim that globalization benefits everyone through omnipresent
affirmative images, websites, banner advertisements, and sound bites

 Globalization furthers the spread of democracy in the world.

• Links globalization and market to adjacent concept of democracy, which also plays a significant
role in liberalism, conservatism, and socialism.
• Globalists tend to treat freedom, free trade, and democracy as synonymous

Globalization Experience
• no one experiences globalization in all its complexity but globalization is significant insofar as
it reshapes the daily lives of billion of people.
• Experiencing globalization, does not mean that some abstract, impersonal force overwhelms
individuals.
• People participate and respond in different ways.they can shape, resist, absorb, or try to avoid
globalization.
• They can seek opportunity in it, feel the harm of it, or lament the power of it.
• Globalization is a central reality; for others, it is still on the margins of their lives.in short no
experience of globalization.
• Formation of a new world society does not involve all people in the same way, and it does not
create the same texture in everyone's life.
• But there are some commonalities in the global experience of globalization.to one degree of
another, globalization is real to almost everyone.it envelope everyone in new institution.
• It poses a challenge, in the sense that even marginally affected groups must take a stance
toward the world
From Laissez Faire To Neoliberalism
• Laissez faire
is the belief that economies and businesses function best when there is no interference by the
government. It comes from the French, meaning to leave alone or to allow to do. It is one of the
guiding principles of capitalism and a free market economy.
Neoliberalism - a theory of political economic practices that proposes that human well-being
can best be advance by liberating individual entrepreneurial freedoms and skills within an
institutional framework characterized by a strong private property rights, free markets and free
trade

The Role of the State in Neoliberalism

• To create and preserve an institutional framework appropriate to such practice.
• To guarantee, for example the quality and integrity of money set up those military, defense,
police, and legal structures and functions required secure private property rights and to
guarantee, by force if need be, the proper functioning of markets.
• If markets do not exists (in areas such as land, water, education, health care, social security or
environmental pollution) then they must be created, by the state, if necessary.
• State interventions in markets must be kept to a bare minimum.
• The state cannot possibly possess enough information to secondguess market signals (prices)
and because powerful interest group will inevitably distort and bias state intervention
(particularly in democrats) for their own benefit

Characteristics of Neoliberalism
• Government must limit subsidies
• Make a reform to tax laws in order to expand tax base
• Reduce deficit spending
• Limit protectionism
• Open markets
• Removal of fixed exchange rates
• Back deregulation
• Privatization

Privatization
• It is the process of transferring an enterprise or industry from the public sector to the private
sector.
• Some of the government owned and controlled corporations were already transferred from
public to private sector: Philippine Airlines (PAL)Philippine Long Distance Corporation
(PLDT)Manila Electric Company (Meralco)Manila Waterworks and Sewerage System (MWSS)
now Maynilad Water Services and Manila Water Company
The Global Economy
• Economic Globalization
It is the increasing integration of economies around the world particularly through the
movement of goods, services and capital across borders. It is the movement of people and
knowledge across international borders.

Economic Globalization vs Internationalization

• The latter is about the extension of economic activities of nation state across borders while
the former is functional integration between internationally dispersed activity.
• Economic globalization is rather a qualitative transformation that just a quantitative change.
• Economic term globalization is nothing but a process making the world economy an organic
system by extending transnational economic process and economic relations to more and more
countries and deepening the economic interdependence among them.

Interconnected Dimensions of Economic Globalization

• The globalization of trade of goods and services
• The globalization of financial and capital markets
• The globalization of technology and communications
• The globalization of production

Economic Globalization Phenomenon

• Silk Road
The best known example of archaic globalization, which connected Asia, Africa and Europe.
Adopting Fernand Braudel’s innovative concept of long duration, i.e. slow moving, almost
imperceptible, framework for historical analysis. World system analyst identify the origin of
modernity and globalization with the birth of 16th century long-distance trade

The International Monetary System

• The most central area in international economy (important transactions in the international
economy all depend on the availability of money and credit.)The IMF's primary purpose is to
ensure the stability of the international monetary system— the system of exchange rates and
international payments that enables countries (and their citizens) to transact with each other. Is
a system that forms rules and standards for facilitating international trade among the nations in
the world

The International Monetary System

• Functions
1. Current account surplus
A current account surplus indicates that the value of a country's net foreign assets (i.e.
assets less liabilities) grew over the period in question, and a current account deficit
indicates that it shrank. Both government and private payments are included in the
calculation. When credits exceed debits, the country enjoys a current account surplus,
 meaning that the rest of the world is in effect borrowing from it. A current account surplus
increases a nation's net assets by the amount of the surplus. Capital accounts

2. Capital accounts
The capital account is part of a country's balance of payments. It measures financial
transactions that don't currently affect a country's income, production, or savings. Their
value is based on what they are expected to produce in the future. is the part of the balance
of payments which records net changes in a country's financial assets and liabilities
3. Balance of payments
The difference in total value between payments into and out of a country over a period.
These transactions consist of imports and exports of goods, services and capital, as well as
transfer payments such as foreign aid and remittances. is the record of all international
financial transactions made by a country's residents. A balance of payments deficit means
the country imports more goods, services and capital than it exports. It must borrow from
other countries to pay for its imports. The main body of the balance of payments therefore
informs us about a state’s over-all position in terms of financial assets and liabilities
4. Statistical discrepancy
It is equal to gross domestic product less gross domestic income. These two measures are, in
principle, the same. The difference reflects less than perfect source data. is the difference
between demand and supply in national accounts. Even though by definition the items
should be equal in the national economy, they usually deviate from one another due to
deviation In statistical sources and they are not forced to be equal in the Finnish system of
accounts
5. Change in Reserve Requirements
The reserve requirement is the proportion of customers' deposits a bank is required by the
Fed to hold in reserve without loaning out required reserve ratio is sometimes used as a tool
in monetary policy, influencing the country's borrowing and interest rates by changing the
amount of funds available for banks to make loans with

• Current account surplus

• Capital accounts
• Balance of payments
• Statistical discrepancy
• Change in Reserves Requirements
• The total of a country’s account, capital account, statistical discrepancy and change of
reserves = zero – balance of payment

Central Bank
• A central bank, reserve bank, or monetary authority is an institution that manages a state's
currency, money supply, and interest rates. Each country has a central bank (oversees the
monetary system the country
Four Monetary Regime
• Classical gold standard (1870 – 1914)
• Gold exchange standard
• Bretton Woods system (1944-1973)
• Non-system of floating and fixed exchange rate – 1973 to present

Global Actors in Economic Globalization

• International Government Organization (IGO)
• International Non-Government Organization
• Multinational Corporation

Effects of Economic Globalization on Developing Countries

• Increased Standard of Living
• Access to New Markets
• Decreased Employment

LESSON 4
Market Integration
•International Financial Institution (IFI)
•World Bank (WB)
•International Monetary Fund (IMF)
•European Investment Bank (EIB)
•Islamic Development Bank (IDB)
•Asian Development Bank (ADB)
•European Bank for Reconstruction and Development (EBRD)CAF-
•Development Bank of Latin America
•Inter-American Development Bank Group (IADB)
•African Development Bank (AfDB)
•Asian Infrastructure Investment Bank (AIIB)
•EU : The Benefits of Euro
•Benefits of single currency:
•EU : A Union of Human Rights and Equality
•One of the EU’s main goal is to promote human rights both internally and around the world.
•Core values of EU:
•Human dignity
•Freedom
•Democracy
•Equality
•The rule of law
•Respect for human rights
 Asian Integration
•Established on August 8, 1967 in Bangkok Thailand
•Founding members
•Indonesia
•Malaysia
•Philippines
•Singapore
•Thailand
•Additional members
•Brunaijoined on January 7, 1984; Vietnam on July 28, 1985;
Lao PDR and Myanmar on July 23, 1997 and Cambodia on April 30, 1999
•ASEAN : ASEAN ECNOMIC COMMUNITY (AEC) 2025
•Established in 2015, Kuala Lumpur, Malaysia adopting AEC Blueprint (ASEAN 2025) provides
broad directions through strategic measures for the AEC from 2016 –2025:
•ASEAN Community Vision 2025
•ASEAN Political Security Community 2025
•ASEAN Socio-Cultural Community
•ASEAN : ASEAN ECNOMIC COMMUNITY (AEC) 2025
•It aimed towards achieving the vision of having an AEC by 2025 that is
•highly integrated and cohesive;
•competitive, innovative and dynamic;
•with enhanced connectivity and sectoral cooperation;
•More resilient, inclusive, and people-oriented, people-centered community, integrated with
global economy.
•ASEAN : ASEAN ECONOMIC COMMUNITY (AEC) 2025
•Regional Economic Integration
•Offering opportunities in the form of huge market of US$2.6 trillion;
•Over 62 million people;
•3rdlargest economy in Asia;
•7thlargest economy in the world
 Five interrelated and mutually reinforcing characteristics:
•Highly Integrated and Cohesive Economy
•Competitive, Innovative and Dynamic ASEAN
•Enhanced Connectivity and Sectoral Cooperation
•Resilient, Inclusive, People-Oriented, and People-Connected ASEAN
•Global ASEA
•ASEAN Free Trade Area (AFTA)
•Established the following in lowering of inter-regional tariffs:
•Common Effective Preferential Tariff (CEPT) –0-5% tariff range for 99% of the products listed
(Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand)
•80% of products listed (Cambodia, Laos, Myanmmarand Vietnam)
•Average tariff for ASEAN-6 is now 1.51% (from 12.76%
Asian Integration Four Pillars
•Single Market and Production Base –the region as a whole must become a single market and
production base to produce and commercialize goods and services anywhere in ASEAN.
•Competitive Economic Region –the region must emphasize on the competitive ness of its
production and capacity for export, as well as the free competition inside of its frontiers.
•Equitable Economic Development –to receive benefits of the AEC, the people and business of
ASEAN must be engaged into the integration process of AEC.
•ASEAN’s integration into a globalized economy –ASEAN must not be isolated but an integral
part of the global economy

Asian Economic Community

•5 Core Principles ASEAN Single Market and Production Base:
•Free flow of goods
•Free flow of services
•Free flow of investment
•Free flow of capital
•Free flow of skilled labor

Economic Policy in the Era of Globalization

•Main Messages
•Economic policy is critical.
•Unions need to: change the way they view economic policy
.•increase engagement with policy

Economic Policy in the Era of Globalization

•The Importance of Economic Policy
1. Historically, unions adopted “service” model
2. Old model no longer sufficient.
3. Unions need to engage economic policy
4. Successfully engaging economic policy means engaging union movement from TOP to
BOTTOM.
5. 1950s/1960s unions did not need to do this kind of activity; ruling paradigm favored them.
That has changed a lot

Understanding Neo-liberal Economic Policy

•Globalization dominates economic policy debate
•Need to view as part of “neo-liberal” policy agenda.
•The “Neo-liberal” Box
•Globalization & Outsourcing
•Rediscovering Economics
•Political Challenge
The Global Interstate System
•State
•Interstate System
effectively act and interact with one another on the global or world system.
•State–a system of centralized rule that succeeded in subordinating all other institutions and
groups, temporal and spiritual (Heywood 2011). Emerged in 15thand 16thcentury in Europe
.•Within its borders, it is expected to maintain its unchallengeable power of its possessed
sovereignty

State
•State begun to interact with other state and institution beyond its boundaries
.•International Relations (International Studies or International Politics) –interaction and
behaviour that occur across boundaries of states.
•Expected results to intensification of relationship among nation-states which may either
increase, decrease or transform states than its usual position

The Global Interstate System

State
•The relation of states have been the center of discipline, its nature and focus has been
significantly changing over time particularly under the realm of globalization.
•Globalization–as a widening, intensifying, speeding up and growing impact of worldwide
interconnected.
•Not all process of globalization occurs on the level of state as this extends to the politics and
the political patterns of international relations and organization which are equally important to
what states and other political actors do

•Qualifying elements of statehood:

•Defined territory
•Permanent population
•Effective government, and
•Capacity to enter into relations with other state

State and Sovereignty

•Sovereignty–supreme power or authority
•Internal Sovereignty –state’s authority within
•External Sovereignty –relationship of states to other states and international actors as its
establishes state’s capacity to act as an independent and autonomous entity in world affairs.
•UN guarantee equal protection in international relations that is according to the principle of
sovereign equality

State and Globalization

•Globalization as a process is more than simply growing connections or interconnectedness
between states.
 •Instead of looking at the interdependence or internationalization between nation-states, the
concept of globalization presents a dramatic shift leading to the organization of human affairs –
from the world of discreet but interdependent nation-state to the world as a shared social
space.

 Globalization represents the process of deterritorialization : when social, political and economic
activities are increasingly stretched across the globe and making geography and distance posing
relative significance.
•Is a historical process involving a fundamental shift or transformation in the special scale of
human social organization that links distant communities and expands the reach of power
across regions and continents.

Shifting from International Politics to Global Politics

•In international politics, state sovereignty became the fundamental organizing principles. The
growing interdependence between states; its very idea presumes that the state remain discrete
national units with clearly demarcated borders.
•Global politics is a process in which the very distinction between the domestic and the external
breaks down. The growing number of complex political issues has eventually acquired a global
character which in effect, extend actually or potentially to all parts of the world

 Events and the following significant changes t a shift of paradigm

•New actors on the world stage
•Because of globalization, it impossible to regard state as the only significant actors in world
stage. New key players have come to exert influence and identified as transnational corporation
(TNCs), non-government organization (NGOs) and a range of non-state institutions

 Events and the following significant changes t a shift of paradigm

•2. Increased interdependence and interconnected
•As globalization results to a substantial growth in cross-border or transnational, flows and
transaction (movement of people, goods, money, information, etc.) the phenomenon also
increased the relation among states with growing interdependence and interconnectedness.
•Problem and issues that are global in nature are impossible to resolve by any states alone,
except for a powerful states

3. The trend towards global governance

•Since 1945 a new framework of global governance has been recognized
.•The establishments of international organizations (ex. IMF, WB, UN, WTO, EU, etc). The
increase of member states reflects a growth of states who profess commitments to human
rights and rule of law

Liberalization -barrier or restriction

Privatization- transferring an enterprise or industry
Globalization- mirrors the spread irreversible market forces driven by technological innovations
that make the global integration of national economies

Globalists- they are not in charge in the sense of imposing their own political agenda on people

Government- the system or group of people governing an organized

Xi Jinping- Top leader of china

Vladimir putin-Second longest serving europhian president

Outsourcing-Purchase of raw materials and standardized intermediate goods. Production of

certain goods

1).Communication infrastructure
- spread of ideas culture and information around the globe which considered as another
contributing factor
2) Global cultural flow
-multiple interconnectedness of individuals and organization
3)Protectionism
- restraining acts that trades between states and methods such as tariff
4)Frictional employment
-it is called to the situation when workers leave their job to find a better one
5)Reduce government controls and restrictions -statement true about liberalization
6) external trade-
7) state -system of centralized rule
8 ) balance of payments- difference of total value between payments into and out of country
9) external sovereinity- relationship of state to other state and international actors as its
establish state capacity
10) secondary sector- economic system that transform raw material into manufactured
11) UN- international org. Aiming to maintain international peace and security
12) WB- international financial institution that provides loans and grants
13) security council- main body responsible for peace and security of 193 member state
14) international court of justice- principal judicial organ that settles legal disputes between
state
15) secretariat- international staff
16) general assembly- policy making organ
17) trusteeship council- supervision for 11 trust territories
18) Brexit -name given to UK departure from european union
19)George Bush -the us president during 9/11 terrorist attack
20) Joe Biden-current us president won against donald trump
21) Antonio Guterres-current secretary general of UN
22)roosevelt/churchill/stalin -at the yalta conference
23)diversification -downfall for certain companies because they can spread across too many
areas
24)horizontal integration -competitive strategy that can create economies of scale
25) backward vertical integration- company moving back or upstream
26) forward vertical integration-involves company moving further down the value chain
27)treaty -binding agreement between EU member countries
28)negative integration -integration that reduces non tariffs and tariff barrier
29)Napoleon bonaparte -during the french revolution the westhalian system
30)global character -an effect of the growing numbers of complex political