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Commit Sociology - Globalization.docx

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Department
Sociology
Course
SOC101Y1
Professor
Christian O.Caron
Semester
Winter

Description
- Globalization = process that makes it easier for things like goods and ideas to travel around the world at an unprecedented pace (7) - Time-space compression = we are no longer slowed down by long distances and time differences (7) - Digital divide = some people have more access to technology than others (8) - Top-down globalization = the extension of capitalism globally as a result of the neoliberal policies and programs authorized by international financial authorities such as the World Bank and implemented by national governments – organized by elites or corporations with little democratic input (9) - Neoliberalism = economic policies that became prominent in the late 1970s that advocate a retreat from state regulation, individual responsibility, privatization, and less respect for labour and the environment, and faith in capitalism (9) - Neoliberalism has its roots inAmerican hegemony, since the IMF and World Bank are headquartered there (10) - Globalization from below = projects seeking greater democracy, equality, and sustainability in the globalization politics that are generally opposed to neoliberalism and US hegemony (10) - These groups support some types of globalization, like the expansion of human rights laws, but oppose the casualties of typical globalization, such as the environment (10) - Financial capital = money used for investment, trading, etc. (11) - Financial capital has grown much faster than production and trade in a globalized economy (11) - 98% of global trade is speculative (ex. in foreign currencies) rather than in physical goods and services (11) - Traders move around billions of dollars to profit from miniscule changes in currency rates, which has been labelled “casino capitalism” since they can win or lose lots of money in short periods (11) - The rise of casino capitalism comes from financial deregulation in global markets (11) - The problem with casino capitalism is that it makes financial markets unstable, since money floods into markets in periods of optimism, which creates a financial bubble that drives markets up (11) - The bubble bursts when investors realize that things are way too expensive relative to their value, which causes an outflow of capital and recession (11) - This is what happened with the real estate market in the US when inexpensive mortgages luredAmericans into the housing market (11) - House prices rose and people borrowed more and more money against the value of their homes (11) - Then when people had to renew their mortgages at higher interest rates, many of them couldn’t afford it and were foreclosed (11) - With more houses on the market, prices began to fall, and some financial institutions didn’t have enough money on hand to continue operating (11) - Because financial institutions globally had invested heavily in US debt, some financial institutions around the world went bankrupt, while governments had to lend money to keep other banks afloat (11) - Global corporations can also produce more products than people can afford to purchase, and this overproduction can lead to a recession (11) - To solve problems of overproduction, corporations sometimes merge to cut down on operating costs or lay off many workers (12) - Some corporations have begun lending money and others have diversified their products in order to be more versatile (12) - Corporations’profits are often much larger than the GDP of countries (12) - Corporate tax rates are diminishing in many countries so that they will stay in those countries instead of moving production to a cheaper place (12) - Critics of neoliberalism wonder whether the role of the state has been replaced by “global governance” (15) - Because of pressure to meet demands of the IMF, World Bank, and WTO, critics argue that states have become less oriented towards meeting the needs of their citizens (15) - The result is a democratic deficit where average citizens are unable to influence decisions to the degree that institutions such as the IMF can (15) - The IMF was established after World War II to maintain the stability of the international monetary system (15) - IMF loans are conditional on the lending government following a package of reforms known as poverty reduction strategies (16) - IMF reforms require countries to deregulate capital markets, remove price subsidies, decease social spending, increase exports, and privatize state-run industries (16) - If a country refuses to adopt this reform package, it can find itself shut out of international lending circles and unable to service its debt (16) - The World Bank was established after World War II to make loans to help postwar reconstruction (16) - Most loans were made to poor countries and were often tied to large development projects (16) - As a condition for the loans, the World Bank required tha
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