November 6 2012
Chapter 27 Global informational capitalism -- Castells
• Information economy is global;
• World economy vs global economy (working in real time;
• Everything is not global: domestic production and investment important
and significant but influenced by the globalized core (financial markets,
international trade, trans-national production, science, technology, and
Definition of global economy
• An economy whose core components have the institutional, organizational,
and technological capacity to work as a unit in real time, or in chosen time,
on a planetary scale.
Global Financial Markets
• Capital markets interdependent: working in real time and staggering
volumes (1998: 1.5 trillion US daily);
• Speculative nature of currency exchanges;
• A number of factors affect financial markets – particular the crowd
• Globalization of financial markets backbone of the new global economy.
Globalization of markets for goods and services
• Major trends
◦ Sectoral changes (goods and services);
◦ Diversification and shifting to developing countries (knowledge
component and unequal exchange);
◦ Interaction of liberalization of global trade and regionalization (high tech
in the North);
◦ Network of trade relations between firms (firms concentrated in the
North with a few in developing countries, with China as an exception).
Globalization vs regionalization?
• Tension between liberalization and trading blocs formed by nation-states;
• But regionalization complements global trade;
• WTO and trade-related intellectual property right (TRIPS) – a new stage of
the information economy;
• Unit of trading: intra firm trading (1/3 of international trade), the state
remains a major provider of services (supporting economic players).
Internationalization of production
• FDI: Most from OECD countries but US is declining, concentration is
growing, and increasing diversification of production; Socioloth 360
November 6 2012
• The role MNC: account for 2