Globalization
I. Globalization Defined
II. Sources of Globalization
III. Eras of Globalization
IV. Questions for a
Globalized Economy
WTO Protest, Seattle 1999
I. Globalization Defined
► Globalization : the expanding scale, growing magnitude,
speeding up and deepening impact of transcontinental
flows and patterns of social interaction (Held and
McGrew, Globalization/Anti-Globalization, p. 1)
► (Economic) Globalization: “…(the) integration of
national economies into the international economy
through trade, direct foreign investment…short-term
capital flows, international flows of workers and
humanity generally, and flows of technology…”
(Bhagwati, p. 3)
The Definition Refined
►Globalization encompasses:
ƒ Internationalization (trade & investment)
ƒ Liberalization (freeing markets)
ƒ Universalization (cultural interchange)…or…
ƒ Westernization (Western cultural dominance)
►Globalization as “Deterritorialization”
Which is the Real World?
II. Sources of Globalization
► Internationalization of Economic Activity
ƒ Trade & Finance
► Global Liberalization
ƒ Domestic and International
► Technological Changes
ƒ IT Revolution (Speed and Cost)
► Improvements in Transportation
ƒ EX: Containerized Shipping
► Globalized Production Structures
ƒ ‘Stateless Corporations’ (DaimlerChrysler)
Growth in World Trade
Growth in Global Investment
3000
Figure 3: World Gross FDI and World GDP Growth, 19802002
FDI
Index (1980 = 100)
2500
2000
1500
1000
World
GDP
500
0
1980
1985
Source: UNCTAD, FDI Database
1990
1995
2000
Growth in Foreign Exchange
Figure 2: Growth of World Foreign Exchange and World
GDP, 1980-02
700
600
1980 = 100
500
Foreign
Exchange
400
300
200
World
GDP
100
0
1980
1985
1990
Source: IMF, International Financial Statistics
1995
2000
Costs of Information Technology
Death of Distance
Call Centers in India
Transportation Costs
Transportation Costs Index
120
100
Air Travel
80
60
Shipping
40
20
0
1920
1930
1940
1950
1960
1970
1980
1990
III. Levels of Globalization
► A. Eras of Globalization
ƒ
ƒ
ƒ
ƒ
First Era of Globalization (about 1850-1914)
Interwar Period (1920-1939)
Cold War Era (1945-1989)
Second Era of Globalization (1989-Present)
► Differences of Current Era of Globalization
ƒ Trade
ƒ Finance
ƒ Technology
The Second Era of
Globalization Begins
The Destruction of the Berlin Wall
…and the (World Wide)
Web goes out.
The walls
come down…
Tim Berners-Lee
IV. Questions for a Globalized Economy
► Does globalization enrich the many or the few?
► Does it help or harm workers? the environment?
► Is it a source of freedom or a barrier to freedom?
► What role for the governments?
► Is globalization inevitable?
Overall, is globalization a positive or
a negative development????