CORDILLERA CAREER DEVELOPMENT COLLEGE

Buyagan, Poblacion, La Trinidad, Benguet

College of Teacher Education
CCDC VISION CCDC MISSION
Deliver quality education and
The center of quality services through holistic, accessible,
education for and inclusive learning experiences
culturally diverse and sustaining culturally sensitive and
global learners. responsible global citizens and
leaders.
SOC SCI 1: THE CONTEMPORARY WORLD

CHAPTER 1: INTRODUCTION TO GLOBALIZATION

What is Globalization?

 It is a term used to describe the increasing connectedness and interdependence of the world-easier and
faster transfer of capital, goods, services, information and people across national borders.
 Global movement towards integration of the economy, finance, commerce and communication.
 Goods, services, capital and information flow across seamless national borders.
 Opening up local and nationalistic perspectives to a broader view of interconnectedness and
interdependent world with free transfers of capital, goods, and services across national borders.
 Globalization’s concept is complex and multifaceted as the definitions deal with economic, political or
social dimension. (It affects all aspects of the society)
 4 Main Dimensions/Types of Globalization
a. Economic- increasing cross-border trade in goods, services and financial capital.
b. Political- increasing international governance
c. Technological- increasing speed of technological diffusion across the global economy
d. Cultural/Social- increasing movement of knowledge, culture and people across borders
 Globalization could bring either integration and/or fragmentation, things flow easily in a global world,
hindrances or structural blocks are also present. Some view it as a positive phenomenon but some see it
as occurring through and with regression, colonialism and destabilization (disadvantages of
globalization).

Causes of Globalization
 Globalization driving force is technology progress.
a. Improved Communications
- The development of communication technologies such as internet, email and mobile phones have been
vital to the growth of globalization because they help MNCs to operate throughout the world.
- The development of satellite TV channels and online applications provided a worldwide marketing
avenue for international product.
b. Improved Transportations
- Allowed easy mass movement of goods throughout the world.
c. Free Trade Agreements
-No or minimum trade barriers among countries. Example of trade barriers are tariffs, quotas, licenses and
standardization (product are produced in accordance with a set of guidelines), all seeking to make foreign
goods more expensive or available in a limited supply.
d. Global Banking
- Modern communication technologies allow vast amounts of capital o flow freely and instantly throughout the
world.
e. Growth of Multi-National Corporations (MNC’s)
-MNC refers to a company that operates in more than one country (McDonalds, MicroSoft, etc..)
-MNCs produce goods and services in a massive scale throughout the world.

Positive Impacts (Advantage)

a. Living conditions have improved
b. Increased in understanding cultures
c. More Jobs (Opportunities Abroad)
d. Reduce cost of goods (competition, more products/ increased in production)

Negative Impacts (Disadvantage)

a. Increased in inequality and income disparity
b. Destruction of Environment
c. Neglect of Human rights (child labors, low salary, no labor protections)

The World Systems Theory

The World Systems Theory was developed by sociologist Immanuel Wallerstein. It is an approach to world
history and social change that suggests that there is a world economic system in which some countries benefit
while others are exploited.
The main characteristics of this theory are as follows:
 This theory emphasizes the social structure of global inequality.
 According to the World Systems Theory, the world is divided into three types of countries or areas:
core, periphery, and semi-periphery.

a. Core Countries
These are dominant capitalist countries that exploit peripheral countries for labor and raw materials. They
are strong in military power and not dependent on any one state or country. They serve the interests of the
economically powerful. They are focused on higher skill and capital intensive production. Core countries
are powerful, and this power allows them to pay lower prices for raw goods and exploit cheap labor, which
constantly reinforces the unequal status between core and peripheral countries. The first core region was
located in northwestern Europe and made up of England, France, and Holland. Today, the United States is
an example of a core country. The U.S. has large amounts of capital, and its labor forces are relatively well
paid.

b. Periphery Countries
These countries fall on the other end of the economic scale. These countries lack a strong central
government and may be controlled by other states. These countries export raw materials to the core
countries, and they are dependent on core countries for capital and have underdeveloped industry. These
countries also have low-skill, labor-intensive production, or, in other words, cheap labor. Periphery
countries are commonly also referred to as third-world countries. Eastern Europe and Latin America were
the first peripheral zones. An example from today is Cape Verde, a chain of islands off the west coast of
 Africa. Foreign investors promote the extraction of raw materials and the production of cash crops, which
are all exported to core countries.

c. Semi-Periphery Countries
These countries fall in the middle of the economic spectrum. These countries share
characteristics of both core and periphery countries. These are core regions in decline or periphery regions
attempting to improve their economic position. These countries are sometimes exploited by core countries,
but they also may exploit periphery countries themselves. For example, India is largely dependent on core
countries for capital, but India has a growing technology industry and an emerging consumer market.

Pespectives or Theories of Globalization

1. The World Economy Theory (Hyperglobalisationism)
 Hyperglobalists define globalization as the process by which the capitalist world-system spreads across
the entire globe, creating a single world market. (Creating new relationship between nations)
 World economy is controlled by the market place.
 Globalization weakens the power of the government.

2. The Regional Bloc Theory (Global Sceptism)

 The theory suggest that globalization is the result of growing regional blocs (e.g. ASEAN, EU, etc).
 Globalization process is separated and regionalized, world is not becoming a single market.
 It views globalization as a strategy to extend capitalism to other part of the world, which sometimes
result in violent process.
 Require strong nation-state to facilitate trade and regulate running of global economy.

 Internationalization- Process of increasing the enterprise of a certain local company in the international
market, expansion of the client base of a local business in the global or international market, results
include increasing influence of the enterprise of local market and influence globalization

 Regionalization- Refers to regional concentration of economic flows, societal integration within a region
and often undirected process of social and economic integration
3. The Third Way Theory (Transformationalism)
 Global economy is undergoing significant qualitative changes that redefine relationships between
governments, firms and communities.
 It looks for ways of transforming the power of the nation-state to cope with the pressure of globalization.

Hyper-globalist Sceptics Transformationalism

Globalization defined as Reordering of the Internationalization and Reordering of inter-
framework of human regionalization regional relations and
action action at a distance
Globalization driven by Capitalism and States and markets Combined forces of
technology modernity
Globalization results in A global civilization, a Regional blocs, state- Greater global
global free market controlled interconnectedness and
internationalization, transformation of world
possible clash of political institutions
civilizations
Nation-state power Declining or eroding Reinforced or enhanced Reconstituted or
reconstructed

Metaphors Of Globalization

In order for us to understand the concept of globalization, we will utilize metaphors. Metaphors make use of one
term to better understand another term. The state of matter (the solid and liquid) will be used to elaborate more
about globalization.

1. Solidity
The epochs that precede today’s globalization paved way for people, things, information, and places to harden
over time. Consequently, they have limited mobility (Ritzer, 2015). The social relationships and object
remained where they were created. Solidity also refers to barriers or make difficult movement of things.
Furthermore, solids can either be natural or man-made. Examples of natural solids are landforms and bodies of
water. Man-made barriers include Great Wall of China and the Berlin Wall. An imaginary line such as the nine-
dash line use by People’s Republic of China in their claim to the South China Sea is an example of modern
manmade solid. Obviously, these examples still exist. However, they have tendency to be melt. This should not
be taken literally, like an iceberg melting. Instead, this process involves how we can describe what is happening
in today’s global world. It is becoming liquid.

2. Liquidity
Liquid, as state of matter, takes the shape of its container. Moreover, liquids are not fixed. Liquidity, therefore,
refers to the increasing ease of movement of people, things, information, and places in the contemporary world.
Zygmunt Bauman’s ideas were the ones that have much to say about characteristic of liquidity. First, today’s
liquid phenomena change quickly and their aspects, spatial and temporal, are in continuous fluctuation. This
means that space and time are crucial elements of globalization. In global finance, for instance, changes in the
stock market are matter of seconds. Another characteristic of liquid phenomena is that their movement is
difficult to stop. For example, videos uploaded on YouTube or Facebook are unstoppable once they become
viral, the so-called Internet sensations become famous not only in their homeland but also to the entire world.
Finally, the forces (the liquid ones) made political boundaries more permeable to the flow of people and things
(Cartier, 2001). This bring us what Ritzer (2015) regarded as the most characteristics of liquid: it “tends to melt
whatever stands in its path (especially solids)”. The clearest example is the decline, if not death, of nation-state.

 Liquidity and solidity are in contrast interaction. However, liquidity is the one increasing and proliferating
today. Therefore, the metaphor that best describe globalization is liquidity.

CHAPETR 2: STRUCTURES OF GLOBALIZATION

(A. Economic Globalization; B. Market Integration; C. The Global Interstate System; D. Contemporary Global
Governance)

A. ECONOMIC GLOBALIZATION
-International mobility of individuals, capital, technology, goods and services.
-Refers to how different countries and regions have become interdependent across the globe.
-Increasing interdependence of 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 technology.
-The phenomenon have several interconnected dimensions such as:
a. globalization of trade of goods and services
b. globalization of financial and capital markets
c. globalization of technology and communication
d. globalization of production

Two Types of Economy in Economic Globalization

1. Protectionism- “A policy of systematic government intervention in foreign trade with the objective of
encouraging domestic production. This encouragement involves preferential treatment to domestic producers
and discriminating against foreign competitors.

2. Trade Liberation- A free trade is a pact between two or more nations to reduce barriers to imports and
exports among them. Under free trade policy, goods and services may be bought or sold across international
borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

Modern World System

There are two broad categories that describe the impact of globalization: market globalization and production
globalization (Levitt, 2001).
1. Market globalization is the decline in barriers to selling in countries other than the home country. This change
will make it easier for your company to begin selling products internationally, since lower tariffs keep consumer
prices lower and fewer restrictions when crossing borders makes it easier for a company to enter a foreign
market. It also means that companies must consider other cultures when developing their business strategies and
potentially adjust the product and marketing messages if they aren't appropriate in the target country. This may
not be an issue in the camera industry, but a hamburger company entering India would definitely need to revisit
their product and strategies to be successful.

2. Production globalization is the sourcing of materials and services from other countries to gain advantage
from price differences in different nations. For example, you might purchase materials and components for your
cameras from multiple countries and then assemble the product in yet another international location to reduce
your costs of production. This change should lead to lower prices for consumers since products cost less to
produce. It also impacts jobs, since production may shift from one country to another, usually from more
developed countries to less developed countries with lower average wage rates.

At present, there is an obvious change in businesses, a state known as globalization of business, as changes in a
business from a company associated with a single country to one that operates in multiple countries occur.

What, then, are the effects of globalization?

The primary effects of globalization include the following:

1) Distributed Operations wherein companies may locate facilities in multiple countries. There are many
reasons to spread out operations, including: (a) reduced labor or production costs in the country where a plant is
located, and (b) reduced distribution costs due to locating a plant nearer to the customers. For example, a
company with sales in Europe may build a production facility in Europe as well so that goods do not have to be
shipped over the ocean from the U.S. or Asia.
2) Changes in location wherein companies may locate their firms in new places, both to reduce labor and
production costs and to take advantage of free trade zones. In a free trade zone, goods can travel freely between
countries and no tariffs are charged when crossing borders. This helps keep prices lower than if the goods were
shipped in from another area.
3) Increasing complexity — although multiple locations and distributed operations may lead to reductions in
cost, it also causes increasing complexity in management of the interactions between the facilities.

 The Modern World System is focused on the concept of economic integration.

ECONOMIC INTEGRATION
Economic integration involves agreements between countries to permit, to varying degrees, the flow of capital,
labor, goods, and services across their respective international borders (Tovias, 1994). It is an arrangement
between different regions that often includes the reduction or elimination of trade barriers, and the coordination
of monetary (consists of the decisions made by a government concerning the money supply and interest rates)
and fiscal policies (the use of taxation and government spending policies to affect the overall business activity).
The aim of economic integration is to reduce costs for both consumers and producers and to increase trade
between
the countries involved in the agreement.

Types Of Economic Integration

1. Free Trade Agreements
Most efforts at economic integration occur today through the use of free trade agreements, which are
agreements entered into between countries regarding specific trade issues, such as reduction of tariffs (a type of
tax on imported or exported goods and services) and quotas (nontariff barriers between countries) that limit
imports. Trade agreements can be bilateral (between two countries) or multilateral (between several countries).
Countries that are not a party to the agreement will be subject to higher tariffs and other trade barriers.

2. Free Trade Areas

A free trade area eliminates barriers to trade among the members such as tariffs and quotas. Members of a free
trade area make their own policies concerning trade with other countries outside of the free trade area. You
should note that a free trade area may be limited to specific types of goods and services. The best example of a
free trade area is NAFTA, the North American Free Trade Agreement.

3. Customs Union
A customs union is formed by countries that not only eliminate trade barriers between the members but also
have a unified trade policy with countries outside of the union. For example, a customs union will establish a
common tariff that is applied to all imports coming into each member country. The tariff revenues may be split
among the members, according to a formula agreed to by the members. An example of a customs union is the
Andean Community consisting of Bolivia, Colombia, Ecuador, and Peru.

4. Common Market
A common market has all of the characteristics of a customs union but also eliminates barriers to the movement
of capital, labor, and technology. Restrictions on immigration, emigration, and foreign investment between
members are lifted. Mercosur (short for Mercado Común del Sur (or Common Market of the South) is a South
American group of nations that is an example of a common market.

5. Economic Union
The highest level of economic integration occurs in economic unions. In addition to all of the economic
integration features found in common markets, members of an economic union must be able to maintain
consistency with monetary policy, fiscal policy, and tax policy. An economic union also uses a common
currency. It should be noted that an economic union requires that member states give up a significant amount of
their independent sovereignty. The European Union is an example of an economic union.

*In other words, the more integrated economies become, the fewer the trade barriers are, and the more
economic and political coordination there is between countries.

Impact of Globalization on Developing, Transitional and Developed Countries

Globalization affects growth in different countries differently.
a. Developing Countries- nations with weak industrial base where people have a lower life expectancy, less
education and less income.
b. Transitional countries- emerging from different type of economy towards a market-based economy.
c. Developed countries- lot of industrial activities and people where generally of high incomes

Compiled by: Ms. Shevene A. Laruan

References:

Lobo, J, Maliban, N, & Mesinas, M. (2019) The Contemporary World. Books Atpb. Publishing Corp.

Claudio, L & Abinales, P. (2018) The Contemporary World. C & E publishing, Inc.

Brazalote, T & Leonardo, R. (2019) The Contemporary World. C &E publishing, Inc.

Aldama, P. (2018). The Contemporary World. Rex Book Store Inc.

Nery I.C. (2018). Contemporary World. JTCA Publishing