Chapter 19 What is Globalization.docx

Chapter 19 - Globalization What is Globalization?  Globalization: worldwide exchange of money, goods, and services, socio-cultural changes that occur with increasing trade and human contact o Entanglement of diverse cultures and economies o Responsible for severing social arrangements based on geographic location as result of accelerating transnational flows of people, images and information o Continuation of international economic integration Origins of Globalization  International trading existed between Western Europe and China over 700 years ago  Wallerstein (1976) o Because early empires spent most resources on supporting large military, couldn’t afford being a global empire o True emergence came from capitalism  16 century o Western European nations developed economic systems based on market principles  Goods and services produced and exchanged for profit o England, feudal system of agricultural production replaced with commercial enterprises  Colonizing: political, economic, and cultural domination of countries in Asian, Africa and Americans by European countries th starting in 16 century  Giddens (2003) o Globalization is different in 1970s than prior  Today’s is more about knowledge and service Globalization Today  Power of individual nation states determine own economic, political, and cultural destinies is declining Defining Global Stratisfication  Occurs when society organizes people into hierarchical system according to social class  First world is assumed to be best; gold standard country  Second World describe countries of former Soviet Union o Command economy: state manages production and distribution of goods o countries were cut off from rest of the world until fall of Berlin Wall  used rarely  developed: wealthy, industrialized countries  undeveloped countries: countries with poor economies, problematically implies lack of economic talent or exposure  underdeveloped countries: countries that have yet to be industrialized or have been intentionally restricted in development by developed nations  developing countries: considered to be on the road of industrialization Global North  wealthy industrialized countries in northern hemisphere o referred to first world  rule: democratic and technologically advanced, high standard of living, experience very low population growth  well educated, have access to health care and clean water, exist within stable political structures  colonization allowed countries in Global North to dominate and alter existing economic, political and cultural structures in colonies for own gain Global South  poor countries of world that are largely located in South America and Africa  many emerged at end of colonial rule and decided not to follow path of Western capitalism or socialism as practiced in former Soviet Union o attempted to achieve development and prosperity through method between capitalism and socialism  former colonies lacked financial, industrial and technological infrastructure necessary to develop own vibrant and competitive economies  colonization and globalization constricted dependence to achieve Global North’s own ends  newly industrialized countries: poor countries that are beginning to industrialize Factors Contributing to Globalization Technological Change  most important innovations is development of container shipping o shipping lines had economic clout to require producers to package goods to fit in standardized containers  emergence of cost-effective worldwide air travel was instrumental in promoting social and cultural exchange Political Change  collapse of Soviet union influenced rapid pace of globalization  globalization enhances spread of globalization but also spreads ideal of democracy Economic Change  expanding trade and emergence of international banking Chapter 19 - Globalization  co-operative international monetary system developed to promote trade and help protect global economy from future financial crisis  International Monetary Fund o Promotes international monetary stability, foster economic growth, provide temporary financial assistance to poor countries o International cooperation necessary to avoid repeating disastrous policies that led to Great Depression o Create global economy which countries would participate in common economic exchange through trade and investment  Built on premise that barriers must be removed through privatization, deregulation, lowered tariffs and economic liberalization o Gross domestic product: total market value of all final goods and services produced in country in given year  World Banking o Created to help rebuild Europe after Second World War o Began to pay attention to needs of newly liberated colonized countries in Global South o Operated under assumption that building infrastructure best way to help poor countries achieve economic growth and prosperity o Charges interests on loans  Restrict freedom of recipient nations to determine how best to spend their funds since nations are focused on making interest payments at expense of local needs  Negative affect on people in Global South  World Trade Organization o Goal was to promote fair trading practices between nations o Challenge: how to manage subsidized farming around the world o Creates an unfair advantage, where farmers can sell products on market for less than what they cost to produce  Transnational Corporations o Large company based in one country with overseas operations in 2+ countries o Strategic decision making based on economic goals, with little or no regard for national boundaries o Roles can’t be overemphasized