intro to globalization - rose-hulman.educasey1/globalization (pge w05).pdf · iii. levels of...

GlobalizationGlobalizationI. Globalization DefinedI. Globalization Defined

II. Sources of GlobalizationII. Sources of Globalization

III. Eras of GlobalizationIII. Eras of Globalization

IV. Questions for a IV. Questions for a Globalized EconomyGlobalized Economy

WTO Protest, Seattle 1999WTO Protest, Seattle 1999

I. Globalization DefinedI. Globalization Defined

►► GlobalizationGlobalization : : the expanding scale, growing magnitude, the expanding scale, growing magnitude, speeding up and deepening impact of transcontinental speeding up and deepening impact of transcontinental flows and patterns of social interactionflows and patterns of social interaction (Held and (Held and McGrew, McGrew, Globalization/AntiGlobalization/Anti--GlobalizationGlobalization, p. 1), p. 1)

►► (Economic) Globalization(Economic) Globalization: : “…“…(the) integration of (the) integration of national economies into the international economy national economies into the international economy through trade, direct foreign investmentthrough trade, direct foreign investment……shortshort--term term capital flows, international flows of workers and capital flows, international flows of workers and humanity generally, and flows of technologyhumanity generally, and flows of technology…”…”(Bhagwati, p. 3)(Bhagwati, p. 3)

The Definition Refined The Definition Refined

►►Globalization Globalization encompasses:encompasses:Internationalization (Internationalization (trade & investment)trade & investment)

Liberalization (freeing markets)Liberalization (freeing markets)

Universalization (cultural interchange)Universalization (cultural interchange)……oror……

Westernization (WWesternization (Western cultural dominance)estern cultural dominance)

►►Globalization as Globalization as ““DeterritorializationDeterritorialization””

Which is the Real World?Which is the Real World?

II. Sources of GlobalizationII. Sources of Globalization►►Internationalization of Economic Activity Internationalization of Economic Activity

Trade & FinanceTrade & Finance

►►Global Liberalization Global Liberalization Domestic and InternationalDomestic and International

►►Technological Changes Technological Changes IT Revolution (Speed and Cost)IT Revolution (Speed and Cost)

►►Improvements in TransportationImprovements in TransportationEX: Containerized ShippingEX: Containerized Shipping

►►Globalized Production StructuresGlobalized Production Structures‘‘Stateless CorporationsStateless Corporations’’ (DaimlerChrysler)(DaimlerChrysler)

Growth in World TradeGrowth in World Trade

Growth in Global InvestmentGrowth in Global InvestmentFigure 3: World Gross FDI and World GDP Growth, 1980-

2002

FDI

WorldGDP

0

500

1000

1500

2000

2500

3000

1980 1985 1990 1995 2000

Source: UNCTAD, FDI Database

Inde

x (1

980

= 10

0)

Growth in Foreign ExchangeGrowth in Foreign ExchangeFigure 2: Growth of World Foreign Exchange and World

GDP, 1980-02

Foreign Exchange

World GDP

0

100

200

300

400

500

600

700

1980 1985 1990 1995 2000

Source: IMF, International Financial Statistics

1980

= 1

00

Costs of Information TechnologyCosts of Information Technology

Death of DistanceDeath of DistanceCall Centers in IndiaCall Centers in India

Transportation CostsTransportation CostsTransportation Costs Index

Shipping

Air Travel

0

20

40

60

80

100

120

1920 1930 1940 1950 1960 1970 1980 1990

III. Levels of GlobalizationIII. Levels of Globalization►►A. Eras of GlobalizationA. Eras of Globalization

First Era of Globalization (about 1850First Era of Globalization (about 1850--1914)1914)

Interwar Period (1920Interwar Period (1920--1939)1939)

Cold War Era (1945Cold War Era (1945--1989) 1989)

Second Era of Globalization (1989Second Era of Globalization (1989--Present)Present)

►►Differences of Current Era of GlobalizationDifferences of Current Era of GlobalizationTradeTrade

FinanceFinance

TechnologyTechnology

The Second Era of The Second Era of Globalization BeginsGlobalization Begins

The Destruction of the Berlin WallThe Destruction of the Berlin Wall

Tim BernersTim Berners--LeeLee

The wallscome down…

…and the (World Wide)Web goes out.

IV. Questions for a Globalized EconomyIV. Questions for a Globalized Economy

►►Does globalization enrich the many or the few? Does globalization enrich the many or the few?

►►Does it help or harm workers? the environment?Does it help or harm workers? the environment?

►►Is it a source of freedom or a barrier to freedom?Is it a source of freedom or a barrier to freedom?

►►What role for the governments? What role for the governments?

►►Is globalization inevitable? Is globalization inevitable?

Overall, is globalization a positive or Overall, is globalization a positive or a negative development????a negative development????