SUMMARY LECTURE

FOR MIDTERMS
BY: JOHN JOHN V. BECHAYDA

What is Globalization?

“One day there will be no borders, no boundaries, no flags and no countries and
the only passport will be the heart.”
― Carlos Santana

“The process of interaction and integration among people, companies, and

governments worldwide. As a complex and multifaceted phenomenon,
globalization is considered by some as a form of capitalist expansion which
entails the integration of local and national economies into a global,
unregulated market economy.”

- Shalmali Guttal (2007)

“The geographic dispersion of industrial and service activities, for example

research and development, sourcing of inputs, production and distribution, and
the cross-border networking of companies, for example through joint ventures
and the sharing of assets.”
– Organization for Economic Cooperation and Development

"The process of the world shrinkage, of distances getting shorter, things moving
closer. It pertains to the increasing ease with which somebody on one side of the
world can interact, to mutual benefit with somebody on the other side of the
world."

- Thomas Larson (2001)

"The inexorable integration of markets, transportation systems, and

communication systems to a degree never witnessed before- in a way that
enabling corporations, countries, and individuals to reach around the world
farther, faster, deeper, and cheaper than ever before"
 - Thomas Friedman

"The term globalization should be used to refer to a set of social processes that
are thought to transform our present social condition into one globality.

"The expansion and intensification of social relations and consciousness across

world-time and across world-space."

- Manfred Steger

“The increased interconnectedness and interdependence of peoples and

countries”.
“Is generally understood to include two inter-related elements: the opening of
international borders to increasingly fast flows of goods, services, finance,
people and ideas; and the changes in institutions and policies at national and
international levels that facilitate or promote such flows. Globalization has the
potential for both positive and negative effects on development and health.”

- WHO

Definition

No matter how one classifies a definition of globalization, the concept is

complex and multifaceted as the definitions deal with either economic,
political, or social dimensions. In fact, in a comprehensive study of 114
definitions by the Geneva Center for Security Policy (GCSP) in 2006, 67 of
them refer to economic dimension. These definitions include political and
social dimensions as well. The sheer number and complexity of definitions do
not mean that there is a remarkable improvement in every definition given by
scholars. Kumar (2003) took on a different argument about the issue. To him,
the debate about what can be done about globalization and what it is are
similar. This is in relation to what some academics have claimed about
defining globalization – it is useless task.

History of Globalization

There are so many references, as far as before Christ Globalization can be seen
with supporting evidence across the world. But, the major timeline to
highlight the GLOBALIZATION was during the establishment of the so called
“SILK ROAD”.

Alibaba even put up its headquarters in the tail stretch of the silk road started
from the ancient city of Xi’aan (the start of the silk road during the Han
dynasty in 130 BC) connecting the East to the West through the stretch of
4,000 miles from end to end. (Han of china to the Tips of Europe).

Silk road is not just a single route for trade but later branched out to multiple
routes that gradually emerged over centuries. (silk is from China, dead silk
worms. The leftovers after the cocoons are unraveled with the dead
silkworms still inside the cocoon)

- Travels of Marco Polo (language, culture, religion, discovery, etc.)

- Silk road is the main culprit of the Black death in the 4 th century – killing
25 million people

- Influenza flu “Spanish flu” – killed 20 to 40 million people in 1918-1919

- Comparing to the covid 19 killing 61 million in 2023

- Silk cloth was just the starter, other commodities followed.

BARRIERS TO GLOBALIZATION:
1. Geography and transportation
 - Main barrier
- Now erased
2. Knowledge
- Limited to region, slow production and reproduction
- NOW- lightning fast
3. Information and Technology
NOW- Comfort and ease
4. Cultural differences and beliefs
- they were afraid to travel, demons, and end of the world/ocean)
NOW- Interracial mixtures
5. Wars and conflicts
- before they conquer for loots and power, then they protect it.
Today, there is no physical wars but economic wars and financial
restrictions if there is altercation.
NOW- ex: Huawei, USA, Russian pipeplines, Ukraine, power supply

Globalization inevitably open the following to be available to all people

anywhere in the world:
1. Commodities -
2. Traditions – gives us the variety of practices but dominant religion remains
3. Innovations – improved our daily lives
4. Technologies – gun powder, supersonic vehicles, www., we even tried to
contact interstellar
5. Ideologies
6. Languages - multilanguage
7. Religions – originated from INDIA but spread out through the Globe.

- Christian utilized the power of the sword and cross

- Islam – influenced the southeast asia, surrounding countries of
the Philippines are muslim countries.

These changed the world without going back, today the interconnectedness is
almost without possibility of breakage. We can buy commodities with our
nearby countries and even as far from Russia and new Zealand.

Impact on culture and economy is unimaginably titanic or large.

Phases of Globalization
1st phase (15th – 18th century)

- Exchange of knowledge
- Exchange of goods

- Portuegese and Spanish of America

- Introduction of the Gregorian calendar

- Discovery of Helliocentric view of the solar system

2nd phase (18th – 19th century)

- Democracy (due to so many wars and plagues)

- Industrialization and scientific progress

- American declation in 1776 aided the democratic prograpgation

- Focused on the government

- Ships and cars were getting better, efficient, larger, numerous and
complicated

- Communication and transportation expansion and improvements

- Free trade , nobel prize and international competitions opened up

the windows wider

- People became more health focused

- Trains, steamships, telegraphs, postal system

3rd phase (1945 – present)

- Golden age of Capitalism

- Neoliberalism - The result of expanding free trade led to the great
depression the world experienced, slow growth and inflation
- Formation of International/Regional Organization and Alliances
 - Health initiatives such as MDG (8) and SDG (17)

INVASION

The main culprit of Globalization is invasion for whatever reasons. It is a

doubled edged sword with its worldly beneficial advantages but has its
corresponding disadvantages.

In the Philippines, the way of living in our contemporary world is influenced

by several factors making the invaders the greatest corresponding to the time
the nation was under their control.

1. Invasion by the Spaniards (333 years).

- November 20, 1564 start of invasion

- 4 voyage (exploration)

 Loaisa (1525)

 Cabot (1526)

 Saavedra (1527)

 Villalobos and Legazpi (1564)

2. Invasion by the Japanese

- Started on December 8, 1941

- 10 hrs. after the attack on pearl harbor

3. Invasion by the American (48 years)

- 1899 – 1902
- Independence on July 4, 1946 (flag of US was lowered while Ph
was raised)

 Real independence from US

  De Jure – 1898 we are free

 De facto government – America until July 4, 1946

- Declared on June 12, 1898

THEORIES OF GLOBALIZATION

After understanding the history and origin of Globalization, we shall

understand the different theories of Globalization.

World System Theories

According to Immanuel Wallerstein the modern world system is composed of

nations under the category of Core, Semi-Periphery, and periphery. In this
regard, identify the 5 nations for each category: Periphery, Semi-Periphery,
and Core.

Periphery

- Examples 3rd world countries, sources of raw materials

- Weak government, depends on few or single type of activities like
extracting raw materials

- Influences by Transnational and core countries

- Africa, Pakistan,

Semi-Periphery

- Examples countries evolving to core, they are the factories

- Diversified and developed countries

- India and Brazil

Core
 - Examples 1st world countries, they are the leaders and suppliers
of finish products
- Strong government with taxes to support their activities

- Independent of outside control

- UK, Russia, USA, California, etc.

- China and Japan from semi-peripherys

Modernization
- All countries followed a path of development, from traditional to
modern countries
- Countries adapt to new technology

Dependency Theories
- Periphery countries are integrated in the world system with
specific descriptions
- Hard to develop since they are in that area

Hyperglobalist
- The world is one economy

Transformational
- Skeptical
- New world is always changing
- Outcome now known

1. Theory of Liberalism vs. Theory of Political Realism

LIBERALISM – natural human desires for economic welfare and political

liberty. Led to technological advances (transport, communication and
information), this theory neglected the inevitable competition of power.

POLITICAL REALISM – states are inherently acquisitive and self-serving,

and heading to inevitable competition of power.
- Two sides of the coin
  1. Some believe that a dominant state can bring stability to
world order.
 2. Some countered by collective resistance from other states
making way for world check and balance.

2. Theory of Marxism vs. Theory of Constructivism

MARXISM – rejected the liberalist and political realist. Stated that, the
outcome of historically specific impulses of capitalist development.
Liberal talk of freedom and democracy make up a legitimating ideology
for exploitative global capitalist class relations. CLASS is a key axis of
power in globalization aside from results of drivers for surplus
accumulation.

CONSTRUCTIVISM – Concentrated on the ways that social actors

construct their world. Globalization is the secondary effects of the
primary conversation and interaction between the people. This theory
neglected the structural inequalities and power hierarchies.

3. Theory of Postmodernism vs. Theory of Trans-formationalism

POSTMODERNISM – like Marxism, highlighted structural power and

emphasizing rationalism. There is a reason why we go to a certain
direction, through the leadership of a person or group of persons.

TRANS-FORMATIONALISM – increased interconnectedness in political,

economic and cultural matters across the world creating a “shared
social space”. Importance of global marketplace, multi-national
enterprises (MNES) and Intergovernmental organization (IGOS). The
people are increasingly subject to the disciplines of the Global
Marketplace.

4. Theory of Feminism vs. Theory Eclecticism

FEMINISM – status of women, aims to equalized the rights and

responsibilities of women and men. Masculinity of men and
subordination of women.
 ECLECTICISM – this theory sifted all theories above, picking up the
usable methods, ideas and styles from the broad and diverse range of
sources into a synthesis of production, governance, identity and
knowledge.

GLOBAL ECONOMY

Historical process, the result of human innovation and technological progress.

It refers to the increasing integration of economies around the world,
particularly through the movement of goods, services, and capital across
borders. The term sometimes also refers to the movement of people (labor)
and knowledge (technology) across international borders (IMF, 2008 as cited
in Benczes, 2014: 900).

INTERCONNECTED DIMENSIONS OF ECONOMIC GLOBALIZATION

1. The globalization of trade goods and services.

2. The globalization of financial and capital markets.

3. The globalization of technology and communication.

4. The globalization of production.

TRANSNATIONAL CORPORATIONS (TNCs)

 TNCs are business organization whose activities are located to more

than two countries
 Regarded as another important economic development that involves the
changing nature of global production.

 TNCs are believed to be the main driving force of economic

globalization. - For realists, TNCs still represent national interests and
have means through which the rich can exploit the poor.
  The availability of cheap labor, resources, and favorable production
conditions in the Third World enhanced both the mobility and the
profitability of TNCs.

 TNCs' ability to 'outsource' manufacturing jobs-that is, to cut labor costs

by dispersing economic production processes into many discrete phases
carried out by low-wage workers in the global south-is often cited as
one of the hallmarks of economic globalization.

 Enterprises like Wal-Mart, General Motors, Exxon-Mobil, Mitsubishi, and

Siemens belong to the 200 largest TNCs, which accounts for over half of
the world's industrial output.

INTERNATIONAL MONETARY FUND (IMF)

 Founded at the Bretton Woods Conference in July 1944 alongside the

International Banks for Reconstruction and Development (Now called
World Bank)-which was responsible for post war reconstruction, as two
international institutions.
 The mandate of IMF was to promote international financial cooperation
and strengthen international trade.

 The IMF was expected to provide short-term financial assistance (loans)

to countries.

 Official organization for securing international monetary cooperation.

 Help less-developed countries through research and giving monetary

advice.

WORLD TRADE ORGANIZATION (WTO)

- WTO was launched on January 1, 1995 and has become an official
forum for trade negotiations. - It is a formally constituted organization
with legal personality.

WORLD BANK
 - Two mandates of the institution: end extreme poverty and
promote shared prosperity.
- Offers financial and technical assistance to developing countries.

WTO, IMF, and WORLD BANK

- 3 institutions that underwrite the basic rules and regulations of

economic, monetary, and trade relations between countries.
- Many developing countries have loosened their trade rules
because of the influence and pressure of these institutions.

- Today, because of the developments in transportation and

communication, economic interdependence also intensified

- Countries trade with each other due to lack or insufficient

resources to satisfy their needs and wants.

- Before Countries develop their own resources and then trade it

for the resources they need. This can be seen long time ago when
people travelled long distances to exchange goods and
commodities, i.e BARTER SYSTEM now we follow the one
currency bill – DOLLAR SYSTEM from the Gold Standard from
1870s – 1932.

- 1971 – US unilaterally terminated Gold Standard or the (Bretton

Woods System).

- Issues on the dollar standard is becoming alarming due to

digitalization.

2. Market Integration

Market integration is a term used to identify a phenomenon in which markets

of goods and services that are related to one another is experiencing similar
patterns of increase or decrease in terms of the prices of those products. The
term can also refer to circumstances in which the prices of related goods and
services sold in a defined geographical location also begin to move in some
sort of similar pattern to one another.

 Because of globalization which created the world economy, markets

have also become integrated.
 Fusing of many markets into one

 Global market integration means that price differences between

countries are eliminated as all markets become one.

 In one market, a commodity has a single price if these areas were part of
the same market.

 Today, markets are MORE INTEGRATED than before because

transportation costs have continued to fall, and most tariffs have been
scrapped altogether.

Two Types of Integration

- Negative Integration
- Positive Integration

a. Negative Integration reduces non-tariffs and tariff barriers to trade as a

main tool for integrating markets.

b. Positive Integration adjusts domestic policies and institutions through the

creation of supranational arrangements.

Supranational Arrangements

 is a type of multinational political union where negotiated power is

delegated to an authority by governments of member states.
 The Government of Governments.

Essential Elements of the State

1. Permanent Population - Inhabitants of the country

2. Territory - total portion of the land
 3. Government - an entity that regulates relations among its own
people and with other states.

4. Sovereignty-supreme power/authority of the state over its

territory; refers to internal and

external authority

States have the following rights:

1. Right to govern its people

2. Right for self-determination

3. Right to impose country's policy

4. Right to take over issues in its jurisdiction

Degree of Economic Integration (Levels of Economic integration)

1. Preferential Agreement is considered to be the first stage to which it

lessens tariffs and quotas between member countries who have signed
the agreement. It allows member countries to have access to some of
their products. Tariffs are not eliminated but it is lessened as compared
to non-participating countries

2. Free Trade Area is considered to be the second stage of economic

integration for which it reduces barriers to trade among member
countries to zero, but each member country has its own decision when
it comes to the external rate of tariff to nonmember countries

3. Custom Union is almost similar to the free trade area but it differs from
the former economic integration as Custom Union has a common
external rate of tariff to nonmember countries.
 4. Common Market is second to the highest degree of economic
integration by which labor and capital are included in the trade. It is to
integrate both product and factor markets of member countries.

5. Economic Union is considered to be the final step in complete

integration by which the member countries have common policies that
involve common currency among member nations, fiscal and political
policies.

INTERNATIONAL/
REGIONAL ORGANIZATION AND ALLIANCES

Organization for Economic Co-operation and Development (OECD)

(OECD) is an international organization that works to build better policies for

better lives. Their goal is to shape policies that foster prosperity, equality,
opportunity and wellbeing for all. Together with governments, policymakers
and citizens, they work on establishing evidence-based international
standards and finding solutions to a range of social, economic and
environmental challenges. From improving economic performance and
creating jobs to fostering strong education and fighting international tax
evasion, they provide a unique forum and knowledge hub for data and
analysis, exchange of experiences, best-practice sharing, and advice on public
policies and international standard-setting

The Organization of Petroleum Exporting Countries (OPEC)

The Organization of the Petroleum Exporting Countries (OPEC) is a

permanent, intergovernmental Organization, created at the Baghdad
Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and
Venezuela. It was established to monitor and stabilize the price of OIL that is
both beneficial and fair with the stakeholders such as the producer and
consumer.

Association of South East Nations (ASEAN)

The Association of Southeast Asian Nations (ASEAN) was formed in 1967 by
Indonesia, Malaysia, the Philippines, Singapore, and Thailand to promote
political and economic cooperation and regional stability. The Economic,
Political-Security, and SocioCultural Community are the three pillars of ASEAN
Community. The annual meeting is usually held to promote the economic,
social and cultural development of the region to protect the stability of its
politics and economy against rivalry with enormous power. For some reason,
it is also held to serve as a forum for the resolution of intra-regional
differences.

Asia Pacific Economic Cooperation (APEC)

The Asia Pacific Economic Cooperation (APEC) was established in 1989.
Currently, the APEC has a twenty-one member over the four continents. APEC
Member Economies works together to sustain economic growth through a
commitment to open trade, investment and economic reform. The economic
growth is usually accomplished through the reduction of barriers such as
tariffs and import quotas. Its Goal is to ensure the sustainability of growth and
development of the region for the good of its people. Likewise, the reduction
of barriers among member economies is in consistent with the principles of
GATT, where applicable, and without detrimental effect to its member
country.

European Union
The European Union adheres to the economic and political union where its
member countries have a single currency, Euro. Through its harmonization of
its political and economic policy, the European Union was able to deliver
peace, prosperity, and stability for more than fifty years by which it increases
the standards of living of its people. The EU remains focused on making its
governing institutions more transparent and democratic. Decisions are taken
as openly as possible and as close as possible to the citizen. The European
Union is the largest trade block in the world. The European Union is one of the
largest exporters of goods and services and considered to be the biggest
import market for over a hundred countries.

North American Free Trade Agreement (NAFTA)

This organization was formed in 1994 by the Canada, Mexico and America for
the reason of elimination of barriers when it comes to trade and investment.
The agricultural sector, production and manufacturing sector, investment, and
other services are some of the economic sectors wherein tariffs are
eliminated. This organization has also given importance to the protection of
intellectual property rights, environments, and rights of workers or laborers.
Small businesses were among those that were expected to benefit the most
from the lowering of trade barriers since it would make doing business in
Mexico and Canada less expensive and would reduce the red tape needed to
import or export goods.

PROTECTIONISM: Protectionism refers to government policies that restrict

international trade by imposing tariffs, quotas, product standards, and
subsidies.

TRADE LIBERALIZATION: It is the process of removing or reducing the

barriers or restrictions in the exchange for goods between and among nations.
With the reduction of barriers such as tariffs and import quotas in the process
of exchanging goods and services, it significantly reduces the cost of goods
sold by the importing countries Thereby, allowing an increase of exchange
between and among countries. Thus, the proponents of trade liberalization
believe that reduction of barriers ultimately lessen consumer costs while
increasing efficiency, and fostering the growth of the economy.

The General Agreement on Tariffs and Trade (GATT)

The agreement was signed into law on January 1, 1948 with 23 countries after
the world war to monitor world trade that may lead to economic recovery. Its
main objective was to eliminate barriers in international trade by either
reducing or removing tariffs and quotas. As time passed by, the agreement
was replaced by the world trade organization in 1995.

World Bank: this Institution was established to provide financial assistance

and strategic advice to nations profoundly affected by the previous world
wars. The two main goals of the world bank are to end extreme poverty and
increase overall prosperity. It supplies qualifying governments with low-
interest loans, zero-interest credits, and grants to support the development of
individual economies. In reality, the World Bank has four other
branches/organizations that have specific goals

World Trade Organization

The World Trade Organization is a global organization made up of 164
member countries that deals with the rules of trade between nations. It was
born out of the General Agreement on Tariffs and Trade (GATT), which was
established in 1947. Most of the time, the WTO resolve trade disputes
between and among its member countries. Its goal is to ensure that trade
flows as smoothly and predictably as possible.

Powers of IOs
by Michael N. Barnett and Martha Finnemore in Claudio & Abinales,

1. Power of classification - IOs can invent and apply categories, they create
powerful global standards.
E.g. they can define what poverty means and through that, nation-states
can determine who the poor in their
demographic area.

2. Power to fix meanings - a broader function related to the power of

classification; the need to address here is for concepts such as "development"
to be well-defined. IOs are viewed as legitimate sources of information by
states, organizations, and individuals. The meaning they create have effects on
policies.
E.g. if an 10 defined what it means when you say development, then
states will pattern its policies to achieve the kind of development
defined by 10s.

3. Power to diffuse norms - 10s can define and/or for codes of conduct or
behavior. IOs also spread ideas thereby establishing global standards.
Eg. They can also spread global standards about no discrimination on
employment and occupation. *Norms: accepted codes of conduct that
may not be strict law but produce regularities in behavior.

World Health Organization (2015)

argues that three primary gaps exist

1. Jurisdictional gap – between the increasing need for global governance in

many areas such as health and the lack of an authority with the power, or
jurisdiction, to take action.

2. Incentive gap – between the need for international cooperation and the
motivation to undertake it. It is said to be closing as globalization provides
increasing impetus for countries to cooperate. However, there are concerns
that, as Africa lags further behind economically, its influence on global
governance processes will diminish

3. Participation gap – refers to the fact that international cooperation remains

primarily the affair of governments, leaving civil society groups on the fringes
of policy-making.

Weiss and Thakur (2014) elaborated ways on how to identify, diagnose, and
fill the gaps through managing knowledge, developing norms, promulgating
recommendations, and institutionalizing ideas.

1. Knowledge gaps
- Important because if we do not know the severity of a problem, or if we
do not have the resources to investigate a particular issue, then this could
become difficult for effective global governance.
- If we do not have information or research, we will not only know the
severity of the problem, but also how to resolve the situation or problem.
- Therefore, the first step in addressing a problem is to recognize its
existence to understand that there is a problem – then collect necessary
data

2. Normative gaps
- This follows the knowledge gaps
- After we recognize that an issue exists, it is important to establish norms
address that problem.

3. Policy gaps
- As new problems emerge and new norms arise, they highlight gaps in
policy that also need attention.
- The policy stage refers to the statement of principles and actions that an
organization is likely to take in the event of particular contingencies.
- Related to the specific policies that one can implement in order to
address the stated problem.
 - The UN's ability to convene and consult widely plays an enormous part in
its ability to formulate recommendations for specific policies, and
institutional arrangements

4. Institutional gaps
- These are the challenges of implementing any policies that are put forth
by the international community
- Once knowledge has been acquired, norms articulated and policies
formulated, an existing institution
can oversee their implementation and monitoring.

5. Compliance gaps
One of the final challenges with regards to global governance. This
includes effective implementation, as well as enforcement

FEATURES OF REGIONALISM

 It is a broad term seen often as a political and economic phenomenon.

 Regionalism, as a phenomenon, can be examined in relation to social
structures such as identities, ethics, religion, ecological sustainability,
and health among others.

 Also, a process that must be treated as" emergent, socially constituted

phenomenon."

 It means that region are not natural or given, but are constructed and
defined by policymakers, economic actors, and even social movements.
-(Claudio& Abinales,2018)

Why Early Globalization Matters:

COLLECTIVE LEARNING
1. Printing
2. Potatoes
3. Plagues

Importance to study Globalization?

- Contribution to family
- Barangay

- Municipality

- Region

- Nation

- World