Globalization (pge W05)

Globalization I. Globalization Defined II. Sources of Globalization III. Eras of Globalization IV. Questions for a Globalized Economy

WTO Protest, Seattle 1999

I. Globalization Defined ► Globalization : the expanding scale, growing magnitude,

speeding up and deepening impact of transcontinental flows and patterns of social interaction (Held and McGrew, Globalization/Anti-Globalization, p. 1) ► (Economic) Globalization: “…(the) integration of

national economies into the international economy through trade, direct foreign investment…short-term capital flows, international flows of workers and humanity generally, and flows of technology…” (Bhagwati, p. 3)

The Definition Refined ►Globalization encompasses:

ƒ Internationalization (trade & investment) ƒ Liberalization (freeing markets) ƒ Universalization (cultural interchange)…or… ƒ Westernization (Western cultural dominance) ►Globalization as “Deterritorialization”

Which is the Real World?

II. Sources of Globalization ► Internationalization of Economic Activity

ƒ Trade & Finance ► Global Liberalization

ƒ Domestic and International ► Technological Changes

ƒ IT Revolution (Speed and Cost) ► Improvements in Transportation

ƒ EX: Containerized Shipping ► Globalized Production Structures

ƒ ‘Stateless Corporations’ (DaimlerChrysler)

Growth in World Trade

Growth in Global Investment 3000

Figure 3: World Gross FDI and World GDP Growth, 19802002 FDI

Index (1980 = 100)

2500 2000 1500 1000

World GDP

500 0 1980

1985

Source: UNCTAD, FDI Database

1990

1995

2000

Growth in Foreign Exchange Figure 2: Growth of World Foreign Exchange and World GDP, 1980-02 700 600

1980 = 100

500

Foreign Exchange

400 300 200

World GDP

100 0 1980

1985

1990

Source: IMF, International Financial Statistics

1995

2000

Costs of Information Technology

Death of Distance Call Centers in India

Transportation Costs Transportation Costs Index 120 100 Air Travel 80 60 Shipping 40 20 0 1920

1930

1940

1950

1960

1970

1980

1990

III. Levels of Globalization ► A. Eras of Globalization

ƒ ƒ ƒ ƒ

First Era of Globalization (about 1850-1914) Interwar Period (1920-1939) Cold War Era (1945-1989) Second Era of Globalization (1989-Present)

► Differences of Current Era of Globalization

ƒ Trade ƒ Finance ƒ Technology

The Second Era of Globalization Begins The Destruction of the Berlin Wall

…and the (World Wide) Web goes out.

The walls come down…

Tim Berners-Lee

IV. Questions for a Globalized Economy ► Does globalization enrich the many or the few? ► Does it help or harm workers? the environment? ► Is it a source of freedom or a barrier to freedom? ► What role for the governments? ► Is globalization inevitable?

Overall, is globalization a positive or a negative development????