LESSON 3

A History of Global Politics:

Creating an International Order
Learning Outcomes
At the end of this lesson, you should be able to:
• Identify key events in the development of
international relations;
• Differentiate internationalization from globalization;
• Define the state and the nation;
• Distinguish between the competing conceptions of
internationalism; and
• Discuss the historical evolution of international
politics.
The world is
composed of many
countries or states, all
of them having
different forms of
government.
• International relations – it deals with the study of political,
military and other diplomatic engagements between two or
more countries.
 “It is also known as international affairs or global politics, amongst
other course names” focuses on the political issues and foreign affairs
affecting the world today.

Internationalization – explores the deepening of interactions

between states.
 Does not equal globalization, although it is a major part of
globalization.
The Attributes of Today’s Global System
Four (4) Attributes of World Politics Today
1. There are countries or states that are independent and govern
themselves;
2. These countries interact with each other through diplomacy;
3. There are international or organizations, like the United Nations (UN),
that facilitate these interactions;
4. Beyond simply facilitating meetings between states, international
organizations also take on lives of their own.

The UN, for example, apart from being a meeting ground for presidents and
other heads of state, also has task-specific agencies like the World Health
Organization (WHO) and the International Labour Organization (ILO).
What are the origin of this
global system/ structure?
Evolution of the State
• Tribal State;
• Oriental Empire;
• Greek City States;
• Roman Empire;
• Feudal State;
• Nation-States.
Nation-State
• Nation-State concept is modern phenomenon in human
history; Moreover
• the modern theory of the state system was perfected only
when the concept of sovereignty was introduced into it.

Composed of two non-interchangeable terms:

• Not all states are nations
• Not all nations are states
Difference between nation and state
STATE – refers to a country and its government. It has four
attributes or characteristics

A state has a
structure of
government that
crafts various rules
Citizens the people follow
Sovereignty
Come from Latin word “superanus” meaning supreme. Therefore, sovereignty denotes
supreme power of the state.
- refers to internal and external authority of the state. In fact,
the modern theory of the state system was perfected only when
the concept of sovereignty was introduced into it.
Internally, no individuals or groups can operate in a given national
territory by ignoring the state.
- This means that the group (churches, corporations) have to follow the laws of the
state where they establish their parishes, offices or headquarters.

Externally, sovereignty means that a state policies and procedures

are independent of the interventions of the other states.
- Ex. US or China cannot pass laws for the Philippines and vice versa.
NATION
“imagined community”

• A large body of people united by common descent, history,

culture, or language, inhabiting a particular country or territory.
• Most nations strive to become states.
• If there are communities that are not states, they often seek
some form of autonomy within their mother-state, e.g.
 Quebec though belonging to the state of Canada has different laws
about language
 Scotland though part of the UK has a strong interdependence
movement led by Scottish Nationalist Party
 China, Hongkong, Taiwan (One Country, Two System)
 Bangsamoro Autonomous Region (Bangsamoro Organic Act)
• Nation and state are closely related because it is
nationalism that facilitates state formation.
• In the contemporary era, it has been the nationalist
movements that have allowed for the creation of nation-
states.
• States become independent and sovereign because of the
nationalist sentiment that clamors for this independence.
• Sovereignty, thus one of the fundamental principles of
modern state politics
Interstate System
• The origin of the present day concept of sovereignty can be
trace back to the Treaty of Westphalia.

What is Treaty of Westphalia?

• Was a set of agreements
signed in 1648 to end the
Thirty Years’ War between the
major continental powers of
Europe.
Europe after the Westphalia Treaties, 1698

[Link]
• The Thirty Years War (1618-48) devastated Europe. But it was
the Treaty of Westphalia ended the conflict.
• The treaty had a profound impact on the practice of
international relations.
• It embraced the notion of sovereignty — that the sovereign
enjoyed exclusive rights within a given territory.
Six results of the peace of Westphalia were the:
 the weakening of Austria and Spain,
 the strengthening of France,
 the independency of German princes from the Holy Roman
Emperor,
 the end to religious wars in Europe,
 the introduction of the peace summit,
 and the abandonment of Catholic rule over Europe.
INTERNATIONALISM – a system of heightened interaction
between various sovereign states, particularly the desire for
greater cooperation and unity among states and people.

The principle maybe divided into two broad categories:

• Liberal Internationalism
• Socialist Internationalism
Liberal Internationalism
Immanuel Kant – first major thinker of liberal
internationalism, he likened states in a
global system to people living in a given
territory.
• He said that, states, like citizens of countries
must give up some freedom and establish a
continuously growing state consisting of various
nations which will ultimately include the nations
of the world.
• He imagined a form of global government
Liberal Internationalism

• Jeremy Bentham – who coined the

word “international” advocated the
creation of international law that would
govern the interstate relations
- He believed that objective global legislators
should aim to propose legislation that
would create the greatest happiness of
all nations taken together.
English philosopher
Liberal Internationalism

• Guiseppe Mazzini – the first thinker to

reconcile nationalism with liberal
internationalism in the 19th century.
- He believed in a Republican government (without
kings, queens and hereditary succession) and
proposed a system of free nations that cooperated
with each other to create an international system.
- For him, free independent states would be the
basis of an equally free, cooperative international Italian Politician
system.
- He believes that free, unified nation-states should
be the basis of global cooperation.
Liberal Internationalism

• Woodrow Wilson (US President (1913-1921)

- He saw nationalism as a prerequisite for
internationalism.
- He forwarded the principle of self-
determination – the belief that the world’s
nations had a right to a free and sovereign
government.
- He hoped that these free nations would
become democracies, because only by
being such would they be able to build a
free system of international relations based
on international law and cooperation.
Liberal Internationalism

Woodrow Wilson (US President (1913-1921) continued

• He became most notable advocate for the creation of the

League of Nations (an international organization before the
United Nation).
• He was awarded the Nobel Peace Prize in 1919.
• Unfortunately, the league of nations was unable to hinder
another war from breaking out, the onset of the world war 2.
• On one side of the war were the Axis Powers:
• Hitler’s Germany
• Mussolini’s Italy
• Hiroshito’s Japan
• It was in the midst of this war between the Axis Powers and the
Allied Powers:
• United States Holland
• United Kingdom Belgium
• France

• Despite its failure the league gave birth to some of the more
task-specific international organizations that are still around until
today:
- World Health Organization
- International Labour Organization
• The league was the concretization of the concept of
liberal internationalism
• From Kant, it emphasizes the need to form common
international principles
• From Mazzini, it enshrines the principles of cooperation and
respect among nation-states.
• From Wilson, it called for democracy and self-determination.
• these ideas would re-assert themselves in the creation
of the United Nations in 1946.
Socialist Internationalism
- A union of European socialist and labor parties established in Paris in 1889.

Karl Marx – one of Mazzini’s biggest

critics who was also an
internationalist but he did not
believe in nationalism.
- He believed that any true form of
internationalism should deliberately
reject nationalism which rooted people in
domestic concerns instead of global
ones.
- He placed a premium on economic
equality. German philosopher economist,
historian, sociologist, political theorist,
journalist and socialist revolutionary
Karl Marx continued

- He did not divide the world into

countries, but into classes.

 Capitalist class – the owners of

the factories, companies and
other means of production.
 Proletariat class included those
who did not own the means of
production but instead worked for
the capitalists.
Karl Marx continued

- Together with Friedrich Engels they

opposed nationalism because they
believed it prevented the unification of
the world’s workers.
- Instead of identifying with other
workers, nationalism could make
workers in individual countries identify
with the capitalists of their countries. German Philosopher, historian, communist,
social scientist, sociologist, journalist and
businessman
Achievement of Socialist Internationalism
 Declaration of May 1 as Labor day
 Creation of International Women’s Day
 Initiated the campaign for an 8-hour workday
Activity: A Historical Global Politics:
Creating an International Order

• Refer to the Classwork Section of our

Google Classroom
LESSON 2

The Globalization of World

Economics
Learning Outcomes
At the end of this lesson, you should be able to:
• define economic globalization;
• identify the actors that facilitate economic
globalization;
• narrate a short history of global market
integration in the twentieth century; and
• articulate your stance on global economic
integration.
GLOBALIZATION
across
Expansion & Social Relations world‐time and
Intensification & Consciousness world‐space

Multidimensional
phenomenon, creating
economic, political,
cultural and even
technological forms of
connectivity.
Lesson 2: The Globalization of World Economics

ECONOMIC GLOBALIZATION
- refers to the expanding interdependence of world
economies.
This is attributed to the following:
1. growing scale of cross-border trade commodities and
services;
2. flow of international capital; and
3. wide and rapid spread of technology.
Foreign Direct Investment (FDI)
• a type of investment in which a company establishes a
business in another country for production of goods and
services and still takes part in the management of that
business.
Example
- Toyota Philippines
- CNN Philippines
FLOW OF INTERNATIONAL CAPITAL
1. Foreign Portfolio Investment
- the entry of foreign funds into a country where foreigners
deposit money in a country’s bank or make purchases in the
country’s stock and bond markets, sometimes for
speculation
FLOW OF INTERNATIONAL CAPITAL continued

2. Trade Flow
- is the buying and selling of goods and services
between countries;
• this is the amount of goods that one country sells to other country
minus the amount of goods that a country buys from other country;
• this measures the balance of trade.
[Link]
FLOW OF INTERNATIONAL CAPITAL continued

3. External Assistance
- all official resources (loans, grants, technical assistance,
guarantees or other assistance) which the recipient can
use or otherwise benefit from in pursuit of its objectives.

4. External Commercial Borrowing (ECB)

- are commercial loans made by non-resident lenders in
foreign currency to Philippine borrowers; they are used
widely to facilitate access to foreign money by Philippine
corporations and public sector undertakings.
Lesson 2: The Globalization of World Economics

ECONOMIC GLOBALIZATION (IMF)

• is a historical process representing
the result of human innovation and
technological progress.
• It is characterized by the increase
integration of economies around the
world through the movement of
goods, services, and capital across
borders.
• Independent international
organization;
• A cooperative of 185
member countries.
- The member countries are the
shareholders of the cooperative, providing
the capital of the IMF through quota
subscriptions.

In return, the IMF provides its members with macroeconomic

policy advice, financing in times of balance-of-payments need,
and technical assistance and training to improve national
economic management.
[Link]
According to the IMF
• the value of trade (goods and services) as a percentage
of world GDP increased from 42.1% in 1980 to 62.1% in
2007.
1980 - 42.1%
20% for 27 years
2007 - 62.1%

• Increased trade also means that investments are moving

all over the world at faster speeds.
According to the United Nations Conference on Trade
and Development (UNCTAD),
• the amount of foreign direct investments flowing across the
world was
1982 US$ 57 Billion 57,000,000,000
2015 1.76 Trillion 1,760,000,000,000
1,703,000,000,000 (33 yrs.)

• These figures represented a dramatic increase in global trade in

the span of just a few decades. It has happened not even after
one human lifespan!
• Apart from the sheer magnitude of commerce, we should also
note the increased speed and frequency of trading.
• These days, supercomputers can execute millions of stock
purchases and sales between different cities in a matter of
seconds through a process called High Frequency Trading.

What is High-Frequency Trading (HFT)?

High-frequency trading (HFT) is a program

trading platform that uses powerful computers to transact
a large number of orders in fractions of a second. It uses
complex algorithms to analyze multiple markets and
execute orders based on market conditions. Typically, the
traders with the fastest execution speeds are more
profitable than traders with slower execution speeds
(investopedia).
• Ten years ago, buying books or music indicates acquiring
physical items (e-commerce).
• Today, a book can be digitally downloaded same with music,
you can purchase and download from iTune.

This lesson aims to trace how economic

globalization came about. It will also assess
this globalization system, and examine who
benefits from it and who is left out.
International Trading
Systems
The Silk Road
(130 BCE-1453 CE)
• Economic globalization can be
traced from the time when there
was economic movement in
Asia, Africa, Europe through the
Silk Road a network of trade
routes that connected the East
particularly China and the West.
 It was called as such because one of the most profitable
products traded through this network was silk, which was
highly prized especially in the area that is now the
Middle East as well as in the West (today’s Europe).
SILK ROAD
• Historically, these routes led to the
discovery of the Philippine island
when Portuguese and Spanish
envoys search for spices.
• In the contemporary period, foreign
expatriates come to the country to
(130 BCE-1453 CE) manage their company’s foreign
subsidiaries.
International Trading System

So when did full economic globalization begin?

Dennis O. Flynn and Arturo Giraldez believed that the age of

globalization began when

“all important populated continents began to exchange

products continuously – both with each other directly and
indirectly via other continents – and in values sufficient to
generate crucial impacts on all trading partners.”
Four interconnected dimensions of
the economy:
1. Globalization of trade of goods and services – this is
demonstrated in the establishment of the WTO that
eases trade among countries.
• WTO established in 1995 ensures that trade flows as
smoothly, predictably and freely as possible.
• China as a major supplier and exporter of
manufactured goods that has affected the
world economy
• Business process outsourcing (BPO)
companies in the Philippines
Four interconnected dimensions of the
economy continued…

2. Globalization of financial and capital markets – this

is evident in the liberalization of financial and capital
markets

2.1 Foreign companies set up subsidiaries in the

country because:
 cheap labor cost;
 English proficiency; and
 customer service skills
2.2 This is seen in cross-listing of shares on one or
more foreign stock exchange, cross-hedging and
diversification of portfolio and round-the-clock
trading world wide.
2.2.1 Cross-listing of shares - is when a firm
lists its equity shares on one or more
foreign stock exchange in addition to its
domestic exchange.
2.2.2 Cross-hedging – is used to manage risk by
investing in two positively correlated securities
that have similar price movements. The
investor takes opposing positions in each
investment in an attempt to reduce the risk of
holding just one of the securities.

2.2.3 Round-the-clock trading – happening or

done all day and all night.
Four interconnected dimensions of the
economy continued…

3. Globalization of technology and communication –

emphasizes that various transactions and interactivities
that transpire instantly due to the internet and
communication technology.
Four interconnected dimensions of the
economy continued…
4. Globalization of production – is best illustrated by the
existence of multinational corporations and transnational
corporations.
• Multinational corporation has an international identity as
belonging to a particular home country where they are
headquartered. (ex. Coca cola)
• Transnational company – is borderless as it does
not consider any particular country as its base,
home or headquarters.
• The world economy is no longer controlled by the nation-
states but it must be seen from a global context – the
reliance and integration of world economies.
- In the Philippines, the price movements of imported fuels are
affected by Tax Reform for Acceleration and Inclusions (TRAIN
law) excise tax on fuels but foreign exchange rate.

- At the same time this exchange rate is affected by the global

market and the international economy’s interest rate.
Agents of Interdependencies of Global Economy
- view on who and what the actors that facilitate economic globalization:

1. Nation-state – as manager of the national economy is

being redefined by globalization.
• Can still act as the buffer to negative effects of globalization.
• It can also be midwives of globalization – it means that the nation-
states are still relevant despite assuming a global perspective and
act as mediators between the effects of globalization and the
national economy.

• Government policies and regulations either permit or deny the smooth

connection among world economies.
• The trade war between China and US, each government imposes high
tariffs on goods and services which affects trade the rest of the world.
Agents of Interdependencies of Global Economy continued...

2. Global corporations – Filipino consumers for instance

prefer to consume and avail of global product and
services (ex H&M; Uniqlo; Accenture; Amazon; Alibaba;
FedEx) thus transforming national economy into a global
one.
• San Miguel Corporation and Jollibee Foods Corporation are good
illustrations of this effect.
• TNC’s are the main driving force of economic globalization
accounting for two-thirds of the world’s exports.
Agents of Interdependencies of Global Economy continued...

3. International monetary system (IMS) - refers to the

internationally agreed rules, conventions and institutions
for facilitating international trade, investment and flow of
capital among nation-states.

Historically there are three global IMS:

3.1. Gold Standard – functions as a fixed
exchange rate regime with gold as the
only international reserve and
participating countries determine the
gold content of national currencies.
International monetary system (IMS) continued

3.2 Bretton Woods System – the US dollar was the only

convertible currency. Thus it was agreed by 44 countries to
adopt the gold-exchange standard.
The Bretton Woods System

Shortly after the Bretton

Woods, various countries also
committed themselves to
further global economic
integration through the

General Agreement on
Tariffs and Trade (GATT)
in 1947.

• Main purpose of GATT was to reduce tariffs

and other hindrances to free trade.
International monetary system (IMS)

3.2 Bretton Woods System continued

Two Financial Institutions were established:

1. International Bank for Reconstruction and Development (IBRD)
– now known as the WORLD BANK, is responsible for post-war
reconstructions.

2. International Monetary Fund (IMF) – aims to promote

international financial cooperation and strengthen
international trade. Global lender…
Two types of international financial institutions:
1. Intergovernmental;
2. Private (nongovernmental).

The World Bank is an intergovernmental institution.

The World Bank’s objectives:
1. Aims to end extreme poverty
2. Promote shared prosperity in a sustainable way
3. Helps project lending
4. Establishes structural reforms
5. Provides support and technical assistance
6. Helps design modern and durable social safety nets for the benefits
of both developed and developing nations
7. It provides international capital
The World Bank Group consists of five organizations:
[Link]

• International Bank for Reconstruction and Development

• International Development Association
• International Financial Corporation
• Multilateral Investment Guarantee Agency
• International Center for Settlement and Investment Disputes
These organizations facilitate the granting of loans and
financial assistance to developing countries.
NB: In the Phil. we have the Central Bank.
What is a Central Bank?
- It is a financial institution given privileged control over the production
and distribution of money and credit for a nation or a group of nations.

[Link]
BSP Notes and Coins - Overview

• The BSP has the exclusive power and authority to issue

the national currency.
• BSP’s notes and coins are issued against, and in
amounts not exceeding, the assets of the BSP.
• All notes and coins issued by the BSP are fully
guaranteed by the government and are considered
legal tender for all private and public debts.

[Link]
• The IMF is also an intergovernmental
institutions (IO-International Org)
with the following objectives:
1. Works to foster global monetary
cooperation
2. Secure financial stability
3. Facilitate international trade
4. Grants financial assistance and
loans to developing countries
International monetary system (IMS) continued

3.3 European Monetary System (EMS) – came after the

collapse of the Bretton Woods System. It was successful in
the stabilization process of exchange rates.
- it prompted the foundation of a new European Economic and
Monetary Union (EMU).

- the development of international trade and trade policy is also a

form of such economic integration.
- flow of goods must be voluntary but restricting it might affect the
relationship between and among states.
- with the actors of economic globalization, the world is
confronted with ongoing debates as to whether economic
globalization unites or divides the world.
• Today, the world economy operates based on what
are called fiat currencies
• currencies that are not backed by precious metals and
whose value is determined by their cost relative to their
currencies.

• This system allows governments to freely and actively

manage their economies by increasing or decreasing
the amount of money in circulation as they see fit.
Economic globalization fosters universal economic
growth and development like:
• globalization allows a worldwide distribution of income
- one country needs nation-states to produce or provide raw materials
• globalization reduces poverty
- foreign countries need workforce that lead to OFW working to support
their families.
• globalization creates mutual dependence between
developing and developed countries
- some developing countries rely on developed countries for
employment and income while the latter relies on the former
for raw materials and services like labor.
Some observers of economic globalization believe
that it divides the world further because:
• one might observe that the sources of goods and services
are exploited.
- some even destroy nature without doing anything to rehabilitate it.

• economic globalization does not benefit all nations.

- there is an uneven experience among lunch.
• claims that capitalism created the different levels of
wages in the economic arena of world systems.
- it leads to inequality according to expertise, experience
and skills.
Economic globalization affects all nations and citizens
through the increasing integration of economies around
the borderless world.
What is Globalization?
Learning Outcomes

At the end of this lesson, you should be able to:

 agree on working definition of globalization for the
course;
 differentiate the competing conceptions of
globalization; and
 narrate a personal experience of globalization.
What is Globalization?
Global Experiences
Singapore Laksa noodle
Vietnamese Spring Rolls
Anti-globalisation protests
 The definition of globalization begin with the pictures how
concrete the phenomenon is.

 It shows how globalization operates at multiple, intersecting

levels.

 The spread of Filipino TV into Malaysia suggests how fast the

popular culture has proliferated and criss-crossed all over
Asia.

What other hints of globalization did you find in the pictures?

What is Globalization?
An economic phenomenon?
A social phenomenon?
A cultural phenomenon?
• Globalization refers to the expansion and intensification
of social relations and consciousness across world-time
and world-space. It is a multi-dimensional phenomenon
involving economics, politics, culture, ideology,
environment, and technology.

- the best scholarly definition provided by Manfred

Steger (2013).
Steger notes that “globalization do not occur merely at an objective, material level
but they also involve the subjective plane of human consciousness”.

People begin to feel that the world has become a smaller place and distance has
collapsed from thousands of miles to just a mouse-click away, like email a friend
in other country, watch cable TV across the globe.

Steger notes that globalization is different with an ideology he calls globalism. If

globalization represents the many processes that allow for the expansion and
intensification of global connections, globalism is a widespread belief among
powerful people that the global integration of economic markets is beneficial for
everyone, since it spreads freedom and democracy across the world. It is a
common belief forwarded in media and policy circles.

When activists and journalists criticize “globalization” they are criticizing some
manifestations of globalism.
• Expansion refers to “both the creation of new social
networks and the multiplication of existing
connections that cut across traditional political,
economic, cultural and geographic boundaries.

Ex. Social media, NGOs

• Intensification refers to the expansion, stretching, and

acceleration of these networks.

• Ex. London Stock Exchange, US Stock Market

What is Globalization?
• Globalisation is the integration of economies through
markets across frontiers (Martin Wolf)
• Globalisation is the “death of distance” – (Frances
Cairncross)
• “The international integration of markets for goods,
labour and capital” (Niall Ferguson, Historian).
• The movement towards the expansion of economic
and social ties between countries through the spread
of corporate institutions and the capitalist philosophy
that leads to the shrinking of the world in economic
terms.
Examples of Globalization
• The Internet
• Selling local products (ex. Jollibee) in the global market
(Hongkong,Brunei, USA etc.)
• Attending lectures by a American professor teaching in an
American University via a web-conference.

People in different parts of the world:

• Wearing Made in China clothes
• Driving Made in Japan cars
• Sipping Australian Wine while watching the
LIVE telecast of a soccer match in Germany
Multiple Globalizations
Anthropologist Arjun Appadurai explain the different kinds of
globalization occur on multiple and intersecting dimensions of integration
that he calls “scapes”.

Ethnoscape – refers to the global movement of people

Mediascape – is about the flow of culture.
Technoscape – refers to the circulation of mechanical goods and software.
Financescape – denotes the global circulation of money
Ideoscape – is the realm where political ideas move around.

Although they intersect, the various scapes have differing logics. They are
distinct windows into the broader phenomenon of globalization.
Appadurai’s argument is simple:

- there are multiple globalizations.

- if one does not agree that globalization can be divided into
the five scapes, it is hard to deny Appadurai’s central thrust of
viewing globalization through various lenses.
The expansion of world trade
World Exports of Goods and Services
Export volumes measured at constant 2000 US dollars (trillion)
2.50

2.25

2.00
2000 USD (thousand billions)

1.75

1.50

1.25

1.00

0.75

0.50
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01
02 03 04

Source: Reuters EcoWin

“The World is Flat”

“The ability to click,

connect and
collaborate”
(Thomas Friedman)