Part 1: Economic Globalization
Part 2: Global Media
Lesson 21
Part 1: Economic Globalization
Theme: How global corporations and
countries operate economically in the era of
globalization
Lesson 21
Characteristics of the Post-1990
Global Economy
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Expansion of trade between countries
Privatization of former state enterprises
Unfettered movement of capital
Growth of foreign investments
Deregulation that undermined the control
that national governments once exercised
over economic activity
• Emergence of a new brand of corporations
Free Trade
• Freedom from state-imposed limits and
constraints on trade across borders
Economic Organizations
• International Monetary Fund
(IMF) founded at the BrettonWoods Conference in 1944 to
promote market economies, free
trade, and high growth rate
• General Agreement on Tariffs
and Trade (GATT) signed by 23
non-communist countries in 1947
(now has 123 members) holds
regular negotiations to remove or
loosen barriers to free trade
• In 1994, the GATT established
the World Trade Organization
(WTO) which took over GATT
activities in 1995 and became a
forum for settling international
trade disputes with the power to
enforce its decisions
Protests against the WTO in
Seattle in 1999
Corporations
• International corporations sought to
extend business activities across borders
in pursuit of specific activities such as
importation, exportation, and the extraction
of raw materials
• Multinational corporations conducted
business in several countries but had to
operate within the confines of specific laws
and customs of a given society
Corporations
• Global corporations rely on a small
headquarters staff while dispersing all
other corporate functions across the globe
in search of the lowest possible operating
costs
– Treat the world as a single market and act as
if the nation-state no longer exists
– Some 50,000 global corporations exist,
including General Motors, Siemens AG, and
Nestle
Impact of Global Corporations
• In the past, corporations had to operate
under the constraints of a social compact
with their employees and their
communities
– Collective bargaining agreements, tax laws,
and environmental regulations forced the
companies to contribute to the welfare of their
communities
Impact of Global Corporations
• Now, highly mobile global
corporations have escaped
these obligations
– Have moved jobs from
high-wage facilities to
foreign locations where
wages are low and
environmental laws are
weak or non-existent
– US federal tax receipts
from corporations have
dropped from 30% to
12%
Economic Growth in Asia
• US helped rebuild Japan after World War II
• Japan’s large and mostly compliant work force
fueled an economy based on manufactured
goods slated for export to markets with higher
labor costs like the US
• In the 1960s the Japanese used their profits to
switch to more capital-intensive manufacturing
but “Made in Japan” usually was associated with
a cheap product
Economic Growth in Asia
• In the 1970s, Japan took advantage of a highly
trained and educated work force to shift their
economy toward technologically-intensive
products and “Made in Japan” came to
represent state of the art technology
• In the 1980s, Japan seemed poised to overtake
the US as the world’s largest economy, but by
the 1990s, the Japanese could not sustain their
rapid growth rates and sputtered into recession
Other Asian Markets
• Japanese growth served as a model for other
Asian countries and Hong Kong, Singapore,
South Korea, and Taiwan became known as the
“four little tigers” in the 1990s
• After the original four, Indonesia, Thailand, and
Malaysia began to grow
• Even China began to move its governmentplanned economy to a market economy in which
demand for goods and services would determine
production and pricing
– In 2001, China joined the WTO
Trading Blocs
• Since no single economic power could
fully control global trade and commerce,
groups of nations entered into economic
alliances designed to gain advantages for
the members
– EU
– OPEC
– NAFTA
– ASEAN
European Union (EU)
• Began when six European
nations agreed in 1957 to
dismantle tariffs and other
barriers to free trade among
themselves
• Subsequent treaties created
political institutions
• Now the EU has 15
members who have
subordinated much of their
national sovereignty to the
EU
– 12 nations have adopted
a common currency
Organization of Petroleum
Exporting Countries (OPEC)
• Established in 1960 by
Iran, Iraq, Kuwait, Saudi
Arabia, and Venezuela
and later joined by eight
others
• Cartel proved to be a
political as well as an
economic power during
the Arab-Israeli War of
1973
– Ordered an embargo on oil
shipments to the US
(Israel’s ally) and the price
of oil in the US quadrupled
between 1973 and 1975
North American Free Trade
Agreement (NAFTA)
• Went into effect with the
US, Canada, and Mexico
in 1994
• Constitutes the world’s
second largest free trade
zone but lacks the
economic coordination of
the EU
– Ross Perot (1992 third
party presidential candidate
would complain NAFTA
would produce “a giant
sucking sound” of jobs
leaving the US for Mexico)
Association of Southeast Asian
Nations (ASEAN)
• Established in 1967 by Thailand, Malaysia,
Singapore, Indonesia, and the Philippines
• Originally conceived as a bulwark against
the spread of communism
• Economic focus became sharper with
agreements with Japan in 1977 and the
European Community in 1980
• Established a free trade zone in 1992
Impact of the Global Economy on
Culture
• Has resulted in a consumer
culture built on a tendency toward
homogenization of cultural
products and heightened
awareness of local tastes and
values
– This homogenization is often
called the “Americanization”
or “McDonaldization” of the
world
• Through advertising, American
music, fashion, fast food, etc
have spread throughout the world
• At the same time, global
marketing often emphasizes the
local or indigenous value of a
product such as Fosters beer
from Australia or Perrier water
from France
McDonald’s in Thailand
Other Issues of Globalization
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Preeminence of English language
Overpopulation
Environmental degradation
Illegal trafficking of people and goods
Spread of disease
Urbanization
Immigration
World tourism
– We’ll talk more about some of these in Lesson 23
Part 2: Global Media
Theme: The impact of 24/7, real-time news
coverage on decision-making and public
opinion
Lesson 21
The Old Way
• 1938: the first regular
broadcast of daily news began
on radio, with the World Today
program on CBS for 15
minutes every evening,
• 1948: the “CBS TV News”
began
• 1963: CBS Evening News
expanded from 15 to 30
minutes, followed shortly by
NBC, and then by ABC in 1967
• 1968: CBS began the 60
Minutes news
magazine/documentary weekly
show
CBS News
correspondent Eric
Sevareid, 1955
24/7 News
• 1980: Cable News Network
(CNN) became the world's
first 24-hour cable television
news channel
• 1996: MSNBC and Fox
News Channel began 24hour news
• Collectively, expanded
television news coverage
creates “the CNN effect”
which affects political,
diplomatic, and military
decision making on a global
level
al Jazeera
• Founded in 1996 and based in Qatar
• Fastest growing network among Arab communities
and Arabic speaking people around the world
• Focuses primarily on news coverage and analysis
with a markedly anti-Western slant
bin Laden and al Jazeera
• “For someone who scorned
modernity and globalization,
and who took refuge in an
Islamic state that banned
television, bin Laden proved
remarkably adept at public
diplomacy. In the wake of the
September 11 attacks, bin
Laden turned to al Jazeera to
reach the two audiences that
were essential to his plans–
the Western news media and
the Arab masses.”
– David Hoffman, Beyond
Public Diplomacy
Influence of the Media
• Agenda setting
• Shaping public
opinion
• Policy-makers
Tiananmen
Square,
June 4, 1989
Agenda Setting
• “The mass media may not be successful in
telling people what to think, but the media
are stunningly successful in telling their
audience what to think about.”
• “If a tree falls in the woods and CNN
doesn’t cover it, did it really fall?”
– Bruce W. Jentleson, American Foreign
Policy: The Dynamics of Choice in the 21st
Century
Shaping Public Opinion
• “Framing”
– How the media casts an
issue affects the
sustentative judgments
people make about the
issue.
• “Priming”
– The priority the media
gives to an issue affects
the priority people give
to the issue.
Donald Rumsfeld on the Media
Coverage of OIF
• “And interestingly… we have seen mood swings in the media from
highs to lows to highs and back again, sometimes in a single 24hour period.”
• “For some, the massive volume of television - and it is massive and the breathless reports can seem to be somewhat disorienting.
Fortunately, my sense is that the American people have a very good
center of gravity and can absorb and balance what they see and
hear.”
Policy-makers
• Policy-makers
often ask
themselves “What
will the media
think?” as they
formulate a
course of action
• Political “spin”
becomes
extremely
important
Case Study: Somalia
• Drought, famine, clan violence, corruption, and inefficient
government had created a humanitarian crisis in Somalia
in the 1990s.
• One of the main sources of power had been the control
of food supplies.
– Hijacked food was used to secure the loyalty of clan
leaders, and food was routinely exchanged with other
countries for weapons.
– In the early 1990’s up to 80% of internationally
provided food was stolen.
• Between 1991 and 1992 over 300,000 Somalis were
estimated to have died of starvation.
– UN relief efforts were unsuccessful, largely due to
looting.
• The U.N. asked its member nations for assistance.
Case Study: Somalia
• In December 1992,
President George
Bush proposed to
the U.N. that United
States combat
troops lead the
intervention force.
– The U.N.
accepted this
offer and 25,000
U.S. troops were
deployed to
Somalia.
Somalia: Entry
• Stark images from
Somalia, transmitted to
the world via satellite,
helped shape public
opinion and pressured
the United Nations to take
action
• One famous picture was
this one of Aabiba Nuur,
who weighed only 46
pounds
Somalia: Entry
• “And it was pictures -- of spectral women
and withered children -- that launched the
rescue mission in Somalia. It may have
been awkward to have cameras meet the
troops when they landed, but wasn't it also
appropriate? In a sense it was cameras
that had sent them there.”
– Time Magazine, Dec. 28, 1992
Somalia: Exit
• Two Black Hawk
helicopters were shot
down in the battle of
Mogadishu in Oct
1993
• Pictures included a
US soldier being
dragged through the
streets of Mogadishu
Somalia: Perception
• Nineteen US soldiers
were killed and over 70
were wounded
• Conservative estimates
say more than 500
Somalians were killed
and over 1,000 injured
• "The perception of an
operation can be as
important to success as
the execution of that
operation."
– MG Charles McClain
Case Study: Somalia
• “We went into Somalia
because of horrible television
images; we will leave
Somalia because of horrible
television images.”
– Marianne Means
• “We had been drawn to this
place by television images;
now we were being repelled
by them. The President
immediately conducted a
policy review that resulted in
a plan for withdrawal over the
next six months.”
– Colin Powell
Sudan and Somalia
• “As the contrasting
responses to the
seemingly similar
Somalia and Sudan
cases suggest,
media coverage
can have a
significant impact.”
– Arnold Kanter,
Intervention
Decisionmaking in
the Bush
Administration
Refugees in Sudan
Other Examples
Buddhist Monk, Vietnam, 1963
America Puts a Man on the Moon,
1969
Berlin Wall, 1989
Iraqi Prisoner, Abu Ghraib, 2004
Next
• Debate: Is globalization economically
unfair?