Globalization Explained
I.
I Globalization Defined
II. Sources of Globalization
III. Eras of Globalization
IV. Questions for a
Globalized Economy
1
WTO Protest, Seattle 1999
2
I. Globalization Defined
►
►
►
►
COMPETING DEFINITIONS:
“…the expanding scale, growing magnitude, speeding up and
deepening impact of transcontinental flows and patterns of social
interaction.” (Held and McGrew, Globalization/Anti
Globalization/Anti-Gl b li i , p. 1)
Globalization
“…(the) integration of national economies into the international
economy through trade, direct foreign investment…shortinvestment…short-term
capital
it l flows,
fl
international
i t
ti l fl
flows off workers
k and
d humanity
h
it
generally, and flows of technology…” (Bhagwati, In Defense of
Globalization, p. 3)
“…the
the set of social consequences which derive from the increasing
rate and speed of interactions of knowledge, people, goods and
capital between states an societies (Bisley, Rethinking
Globalization, p. 6)
3
The Definition Refined
►Globalization
encompasses:
ƒ Internationalization (trade & investment)
ƒ Liberalization (freeing markets)
ƒ Universalization (cultural interchange)…or…
ƒ Westernization (Western cultural dominance)
ƒ “Deterritorialization”
Deterritorialization (compression of time and
space)
4
What Kind of World?
►Thomas
Friedman’s “Flat World” OR
Richard Florida’s “Spiky World”
Richard Florida, “The World is Spiky”, Atlantic Monthly, October 2005.
5
II. Sources of Globalization
► Internationalization
of Economic Activity
ƒ Trade & Finance
► Global
Liberalization
ƒ Domestic and International
► Technological
Changes
ƒ IT Revolution
R l i (S
(Speed
d and
dC
Cost))
► Improvements
in Transportation
ƒ EX: Containerized Shipping
► Globalized
Production Structures
ƒ ‘Stateless Corporations’
6
Growth in World Trade
7
SOURCE: UNCTAD FDI Database; IMF
2007
7
2006
6
2005
5
2004
4
2003
3
2002
2
2001
1
2000
0
1999
9
1998
8
1997
7
1996
6
1995
5
2000
1994
4
1993
3
1992
2
1991
1
1990
0
1989
9
1988
8
1987
7
1986
6
1985
5
1984
4
1983
3
1982
2
1981
1
1980
0
Index 1
1980 = 100
Growth in Global Investment
FDI and World GDP, 1980-07
3000
2500
FDI Net Flows
1500
1000
FDI Stocks
500
World GDP
0
8
Growth in Foreign Exchange
Foreign Exchange and GDP Growth, 1980-2007
700
600
1980 = 100
500
Foreign
Exchange Index
400
300
200
World GDP
Index
100
SOURCE: IMF International Financial Statistics
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0
9
II. Sources of Globalization
► Internationalization
of Economic Activity
ƒ Trade & Finance
► Global
Liberalization
ƒ Domestic and International
► Technological
Changes
ƒ IT Revolution
R l i (S
(Speed
d and
dC
Cost))
► Improvements
in Transportation
ƒ EX: Containerized Shipping
► Globalized
Production Structures
ƒ ‘Stateless Corporations’
10
Costs of Information Technology
11
II. Sources of Globalization
► Internationalization
of Economic Activity
ƒ Trade & Finance
► Global
Liberalization
ƒ Domestic and International
► Technological
Changes
ƒ IT Revolution
R l i (S
(Speed
d and
dC
Cost))
► Improvements
in Transportation
ƒ EX: Containerized Shipping
► Globalized
The Death of
Distance –
Call Centers
in India
Production Structures
ƒ ‘Stateless Corporations’
12
Transportation Costs
Transportation Costs Index
120
100
Air Travel
80
60
Shipping
40
20
0
1920
1930
1940
1950
1960
1970
1980
1990
13
III. Levels of Globalization
► A.
ƒ
ƒ
ƒ
ƒ
Eras of Globalization
First Era of Globalization (about 18701870-1914)
Interwar Period (1920(1920-1939)
Cold War Era (1945(1945-1989)
Second Era of Globalization (1989(1989-Present)
► Difference
Between Eras of Globalization
ƒ Trade and Finance
ƒ Technology and Communication
ƒ Political System and Immigration
14
The Second Era of
Gl b li i B
Globalization
Begins
i
The wall(s)
comes down…
…and the (World Wide)
Web goes out.
Tim Berners
Berners--Lee
15
IV. Q
Questions for a Globalized Economyy
extent of globalization – How globalized is
the world economy?
► Inevitable or contingent – Can globalization be
reversed?
► Positive
P i i or negative
i – Is
I globalization
l b li i a Good
G d
Thing?
► The
16