Lesson 1: Globalization

1. Definition of Globalization:

- Term describing increasing connectedness and interdependence of world cultures and economies.

- Trade and technology contribute to a more connected and interdependent world.

- Capitalism expands globally as powerful economic actors seek profit in global markets.

2. Brief History of Globalization:

- The Silk Road (50 B.C.E. - 250 C.E.) exemplifies early global trade routes.

- Technological advances played a key role, such as metallurgy, transportation, and increased
agricultural production.

- Exchange of ideas, products, and customs occurred, including the spread of religious beliefs and
technological secrets.

3. Deterritorialization:

- Process of mapping Indigenous people out of their home territories into confined spaces.

- Example: Spanish colonization in the Philippines deterritorialized the spiritual leaders ("Babaylans")
through the spread of Catholicism.

4. Neoliberalism:

- Policy model encompassing politics and economics favoring private enterprise.

- Economic actors seek profit in global markets and impose rules globally.

- Associated with austerity policies, potential dangers to democracy, worker's rights, and sovereign
nation's self-determination.

5. Homogeneity and Heterogeneity:

- Homogeneity: Increasing sameness in the world due to cultural, economic, and political expansion.

- Example: Introduction of Christianity by Spaniards in the Philippines.

- Heterogeneity: Creation of various cultural practices, economies, and political groups due to the
interaction of elements from different societies.
 - Counter to "cultural imperialism," associated with "cultural hybridization."

6. Theories of Globalization:

- World System Theory:

- Globalization as the expansion of the capitalist system.

- Core, Semi-periphery, and Periphery countries with economic relations.

- World Polity/World Social Theory:

- States embedded in a global cultural and organizational environment.

- World polity supplies cultural rules, and states modify traditions accordingly.

- World Culture Theory:

- Global culture is new and important but less homogenous than suggested.

- Globalization is a complex mixture of homogenization and heterogenization.

Lesson 1.2: Interrogating Globalization

1. Economic Globalization:

- Complex global process expanding the market economic system worldwide.

- Corporate-driven process involving transnational exchange of products, services, technologies, and

- Definition: Increasing interdependence of national economies through cross-border trade,

2. Pros and Cons of Economic Globalization:

- *Pros:*

- Boosts global economic growth.

- Consumers get access to diverse products and services.

- Local businesses access international consumers.

- *Cons:*

- Widens wealth inequality.

- Can harm domestic industries.

3. Flows in the Age of Globalization:

- *1.) Trading:*

- International trading enabled by fiscal payments, involving private and central banks.

- Increase in world trade, particularly in manufactured goods.

- *2.) Capital Movement:*

- Increase in capital flows to poor countries during the 1990s.

- Categories include commercial loans, official flows, and foreign direct investment (FDI).

- *3.) Movement of People:*

- Migration for better employment opportunities.

4. Foreign Direct Investment (FDI):

- Strategy for contributing funds and resources to establish business units in foreign countries.

- Pros include diversifying portfolios and providing technology to developing countries.

- Cons involve potential lack of moral attachment and unsuitability for strategically important
industries.

5. Factors Foreign Investment Looks For:

- Open economy, above-average growth, environmental stability, skilled and cheap labor, exchange rate
stability, government support, and high return on investment.

6. Cultural Globalization:

- Refers to increasing contact between people and their cultures, including ideas, values, and ways of
life.

- Linked to globalization of lifestyles, music, media, fashion, food, knowledge, science, and technology.

7. Political Globalization:

- Enlargement of the international political system and its establishments.

- Political decision making transcends national boundaries.

8. Assumptions behind the Pursuit of Globalization and Critiques:

- *Assumption:* Poor countries will benefit from borrowed funds.

- *Critique:* Borrowing comes with conditions (Structural Adjustment Programs - SAPs)

- *Assumption:* Poor countries need to catch up with rich countries through economic integration.

- *Critique:* Unequal exchanges and underdevelopment make catching up difficult.

9. Impact of Tariff Reduction:

- *Assumption:* Removal of tariffs and quotas eases global trading.

- *Critique:* Reduction of tariffs in the Philippines since the 1980s led to unfair competition, affecting
local industries and causing massive unemployment.

Global Economy - Summary of Learning Objectives:

1. Definition and Reasons for International Trade:

- International trade involves the exchange of goods, commodities, and services across national
boundaries.

- Reasons for engaging in international trade include the use of excess capacity, cost reduction, access
to cheaper supplies, addition to product line, risk reduction, and as a foreign policy tool.

2. Theories and Perspectives on International Trade:

- Descriptive theory addresses questions of what to trade, how much to produce, and which countries
to trade with in the absence of government restrictions.

- Prescriptive theory involves government participation in deciding which countries to trade with and
altering the amount, composition, and direction of goods.

- Three perspectives on international trade: Economic Liberals (focus on free trade and individual
preferences), Mercantilists (emerged from 1500-1800, emphasizing higher exports), and Structuralists
(core states have absolute advantage through unequal exchange).
3. Economic Systems:

- Market Economy: Decision-making by private individuals, based on supply and demand, encourages
competition and innovation.

- Command Economy: Central planning body dictates decisions, with government controlling
production quantity and consumer behavior.

- Mixed Economy: Combination of market and command systems, with some sectors directed by
private individuals and others by the government.

4. Domestic and Foreign Economic Policies:

- Seven government policies affecting a country's relationship with the global economy:
Macroeconomic policies (monetary and fiscal), Microeconomic policies, Governance policies, Exchange
rate policies, Trade policies, Foreign capital investment policy (including FDI), and Migration policies.

5. Transnational Corporations (TNCs):

- Movement of ideas, capital, investments, technology, and people influenced by TNCs.

- TNCs operate in different countries, competing in regional and global markets.

- TNCs are powerful economic institutions due to their global influence in investment and network
distribution.

Lesson 2: "The Globalization of World Economics/The Global Economy"

1. Economic Globalization:

- Defined by the International Monetary Fund (IMF) as a historical process resulting from human
innovation and technological progress.

- Characterized by increasing integration of economies worldwide through the movement of goods,

- Trade value as a percentage of world GDP increased from 42.1% in 1980 to 62.1% in 2007, indicating
heightened global trade.

2. International Trading Systems:

- The Silk Road, dating back to 130 BCE, was an ancient network connecting China to the Middle East
and Europe.
 - The Galleon Trade, starting in 1571 between Manila and Acapulco, marked the direct connection of
the Americas to Asian trading routes.

3. Evolution of Economic Systems:

- The gold standard, adopted in 1867, fixed exchange rates to gold but became restrictive during World
War I and the Great Depression.

- The Bretton Woods System, after World War II, pegged currencies to the U.S. dollar and gold.

- Fiat money replaced the gold standard, allowing governments to actively manage their economies.

- Stagflation, characterized by slow growth, high unemployment, and inflation, emerged as an

- Neoliberalism, the Washington Consensus from the 1980s to the early 2000s, advocated minimal
government spending and privatization.

4. Economic Globalization Today:

- Despite the global financial crisis, closing national economies to world trade is not a viable solution.

- Exports drive national economic growth, with developing countries accounting for 29% of global
exports, and advanced nations for 65%.

- Economic globalization remains uneven, with transnational corporations benefiting more than
governments.

- The "race to the bottom" refers to countries lowering labor and environmental standards to attract
foreign investors.

5. International Financial Institutions (IFIs):

- Global interconnectedness extends from extraction to disposal of goods and services.

- IFIs, like the International Monetary Fund (IMF), support a country's economic growth through
financial assistance and cooperation.

6. Challenges and Criticisms:

- The beneficiaries of global commerce are primarily transnational corporations, more focused on
profits than assisting social programs.

- The "race to the bottom" involves countries lowering standards to attract foreign investors, impacting
workers' interests and environmental protection.
 - Governments may weaken environmental laws to attract investors, affecting ecological balance and
depleting finite resources.

7. Global Economy and International Monetary Fund (IMF):

- Denotes the interconnectedness of economies worldwide.

- The IMF, with 183 member countries, promotes international monetary cooperation, exchange
stability, economic growth, and financial assistance for balance of payments adjustments.