GLOBALIZATION
WHAT IS
GLOBALIZATION?
Refers to the increased flow of trade,
people, investment, technology, culture,
ideas among countries and creates a more
integrated and interdependent world
Globalization has been around since the
15th century when European exploration &
colonization created global empires &
markets, but most historians and
economists agree that today is special by
the extent of interdependence and the
speed by which it has occurred.
DRIVERS OF GLOBALIZATION
• Two factors underlie
globalization
▫ “Decline in barriers to the free flow of
goods, services, and capital” that has
occurred since the end of World War II
▫ Technological change
DECLINING TRADE AND
INVESTMENT BARRIERS
• During the 1920s and ‘30s, many
nations erected formidable barriers to
international trade and
foreign direct investment
• Advanced industrial nations of the
West committed themselves after
World War II to removing barriers to
the free flow of goods, services, and
capital between nations.
AVERAGE TARIFF RATES ON
MANUFACTURED PRODUCTS
1913 1950 1990 2002
France 21 % 18 % 5.9 % 4.0 %
Germany 20 % 26 % 5.9 % 4.0 %
Italy 18 % 25 % 5.9 % 4.0 %
Japan 30 % -- 5.3 % 3.8 %
Holland 5% 1% 5.9 % 4.0 %
Sweden 20 % 9% 4.4 % 4.0 %
UK -- 4% 5.9 % 4.0 %
US 44 % 14 % 4.8 % 4.0 %
THE ROLE OF
TECHNOLOGY
Lowering of trade barriers made
globalization possible;
Technology has made it a
transforming movement
• “World Wide Web” has exploded in last 20 years
• Computers can move money around world =
“finance capital”
• Silicon Valley is 9th largest economy in world!
GLOBALIZATION IS ACCELERATION OF
TRENDS OF THE LAST 10,000 YEARS
People lived for 250,000 years in hunter-gatherer bands
Rise of agriculture 10,000 years ago led to rise of empires and
nation-states
Science and ‘enlightenment’ after 1600 produced global trade
and empires
Free trade and tech after 1945 produced present-day
globalization
ASPECTS OF GLOBALIZATION
1. ECONOMIC
2. CULTURAL
3. POLITICAL
THESE ASPECTS ARE ALL INTERCONNECTED!
*********************
ECONOMIC GLOBALIZATION
Economies Are Increasingly Linked Together
EX: NAFTA (MX, CA, US), The EU, WTO (World Trade
Organization)
Creation of Global Institutions:
World Trade Organization (WTO)--responsible for policing the world
trading system and ensuring that nations adhere to the rules established
in WTO treaties
In 2008, 151 nations accounting for 97% of world trade were
members of the WTO
International Monetary Fund (IMF)--maintains order in the
international monetary system, provides loans
ECONOMIC GLOBALIZATION
MULTI-NATIONAL
CORPORATIONS
OLD: Dutch East India
Company
1602 company of Dutch
merchants & independent
trading companies
Spice trade monopoly in East
Asia
Power to colonize territories
& enslave indigenous people
Indonesia & South Africa
ECONOMIC GLOBALIZATION
Multinational Corporation--any business with productive
activities in 2 or more countries.
NEW: Nike, Wal-Mart, Royal/Dutch Shell
Top 100 multinationals are all US-owned companies!
Royal/Dutch Shell: global group of energy and
petrochemical companies, operating in more than 140
countries and territories, employing more than 112,000
people
GLOBALIZATION OF
PRODUCTION & . . . SERVICES
Vizio flat panel TV is
designed in a small office in California
assembled in Mexico
From
panels made in South Korea
electronic components made in China
microprocessors made in the U.S.
Increasingly companies are using modern communications
to outsource service activities to low-cost nations
Example: Customer Service calls routed to India
GLOBALIZATION OF
MARKETS
In the past, each country had
its own companies in many industries and its own products
I never saw Japanese media (and I saw little non-US media) in
college
Now today everyone knows…
Nintendo
Starbucks
Coca-Cola
Ikea
McDonald’s
Samsung
GROWTH OF REGIONAL TRADING ALLIANCES
(SHARED POLITICAL AND ECONOMIC INTERESTS
TO PROMOTE TRADE)
ASEAN (Association of Southeast Asian Nations) 1967
EC (European Community) 1967
EU (European Union) 1993
NAFTA (North American Free Trade Agreement) 1994
AEC (African Economic Community) 1991
EUROPEAN UNION
Began in 1957 with six
nations; now 27
Intended to integrate the
European economy
Common currency – the Euro
THE CHANGING ROLES OF COUNTRIES
IN THE GLOBAL ECONOMY
In the 1960s:
The U.S. dominated the world economy and the world trade
picture
U.S. multinationals dominated the international business
scene
About half the world-- the centrally planned economies of the
communist world-- was off limits to Western international
business
Today, much of this has changed.
In the early 1960s, the U.S. was the world's dominant industrial
power accounting for about 40.3% of world manufacturing
output
By 2007, the U.S. accounted for only 20.7%
Other developed nations experienced a similar decline
CULTURAL GLOBALIZATION
McArabia Kofta
CULTURAL GLOBALIZATION
Consumerism – People want more than they need
Cultural lines have become blurred as world becomes more connected -
(cultural imperialism)
“Americanization” or “McDonaldization” threatens local cultures
•Hollywood movies
•Disneyland
•Starbucks
•Dominance of the English language
AMERICANIZATION OR MCDONALDIZATION
Pepsi in Russian
WESTERN CONSUMERISM
SPREADS
Iran’s Islamic answer to Barbie and Ken:
Sara and Dara
GLOBAL INTERACTIONS IN
CULTURE
Sports
--Baseball in Japan
--Football (soccer) and the World Cup
*spread around the world via the British
*Colonial nationalists emphasized playing
football to generate a national identity
Art
--Other cultures represented in Western art, such as
African sculpture in Pablo Picasso’s pieces and
Japanese woodblock printing influence in
Impressionism
POLITICAL GLOBALIZATION
GLOBAL INSTITUTIONS
United Nations (UN)—global association of countries
that work to facilitate international peace and
security, friendly relations among nations,
cooperation in solving international problems and
respect for human rights.
World Bank—fights poverty by promoting economic
development among developing countries
Whose interests do the UN & World Bank represent?
THE GLOBALIZATION DEBATE
Pro Con
Destroys manufacturing
Lower prices for goods
jobs in wealthy nations
and services
Wage rates of unskilled
Economic growth
in advanced countries
Increase in consumer decline
income
Outsourcing
Creates jobs (for many)
Companies move to
Countries specialize in countries with fewer
production of goods and labor and environment
services that are regulations
produced most Loss of sovereignty
efficiently
Homogenized cultures
GLOBAL PROBLEMS:
DEMOGRAPHIC
20th century had a vast increase in the
population b/c of advances in ag, industry,
science, medicine
Reducing birth rates has become a concern
in many countries (WHO - World Health
Organization assists in family-planning)
GLOBAL PROBLEMS:
ENVIRONMENT
Exploitation and competition
Urbanization and agricultural expansion
Increased use of fossil fuels
Kyoto Treaty
Greenpeace and Earth Day
Climate Change
Genetically Modified Organisms and Food
GLOBAL PROBLEMS: ECONOMIC
INEQUITIES AND LABOR
SERVITUDE
Causes of poverty
• Resource distribution and access
• Income opportunities limited
• Education opportunities limited
Forced labor
• Slavery still exists
• Child labor still common
GLOBAL PROBLEMS:
DISEASES
Last major pandemic – Spanish flu of
1918/1919; killed 20-40 million
Smallpox and diphtheria have been
eradicated
Medical innovations: polio vaccine,
antibiotics, artificial heart,
transplants
GLOBAL PROBLEMS:
DISEASE
HIV/AIDS
• Identified in 1981 in San Francisco
• kills adults; leaves children orphaned; threatens society
• Treatment is expensive
• In 2000, 36.1 million people living with HIV/AIDS worldwide; of those
21.8 million are in Africa
GLOBAL PROBLEMS:
DISEASE
Diseases associated with your
lifestyle: diabetes, heart
disease, Alzheimers
Diseases associated with
poverty: malaria, TB, cholera
Current concerns: Ebola &
Zika
GLOBAL PROBLEMS:
• The use of violence, or threatened use of
violence, in order to achieve a political, religious,
or ideological aim.
• Globalization has contributed to conflict. How?
• Alienates & angers ppl who feel victimized by
foreign influences that threaten native culture
& practices
• Creates economic frustrations as traditional
skills become obsolete in the global market.
The Karnataka State Farmers' Movement (KRRS) burn genetically modified
crops as part of the "Cremate Monsanto" campaign. Karnataka, India,
1998.
hhh
ZAPATISTA WOMEN ARE VIGILANT IN DEFENDING THEIR
COMMUNITY. CHIAPAS, MEXICO.
PALESTINIAN WOMEN PROTEST AGAINST THE ISRAELI OCCUPATION
AND ESCALATION OF MILITARY AGGRESSION AGAINST CIVILIANS IN
THE WEST BANK AND GAZA. SAN FRANCISCO, CALIFORNIA, 2002.
You can kill the messenger but not the message!
NIGER DELTA WOMEN PROTEST
UCSC LECTURERS PROTEST UNFAIR LABOR PRACTICES, 2002
