Preface

The Contemporary World aims to help students understand globalization

and its impact on individuals, communities, and cultures. It presents
globalization in a clear, relatable manner using practical examples to make
complex theories more accessible. The textbook has four main goals:
1. Introduce key globalization theories found in the social sciences.
2. Make globalization concepts relevant to students’ everyday lives.
3. Encourage critical thinking.
4. Provide a historical overview of globalization as an academic topic.
Recognizing the challenges of teaching globalization—such as its abstract
nature and students' diverse backgrounds—the book offers an incremental
and student-friendly approach. It addresses misconceptions about
scholarship by showing students that curiosity and lived experiences
already connect them to globalization. Through activities, guide questions,
and real-life examples, The Contemporary World helps students engage
with globalization thoughtfully and effectively.

CHAPTER l: DEFINING GLOBALIZATION

Introduction 1
Human society has undergone significant changes over time, especially in
social relationships and structures. One of the most impactful of these is
globalization, which has become a defining feature of the modern era
(Bauman, 2003; Albrow, 1996). With tools like the internet and mass
media, people around the world are more connected than ever.
Globalization is a complex and multi-dimensional concept with varying
definitions. It cannot be limited by time, place, or situation (Al-Rodhan,
2006). It affects economies, politics, cultures, and social structures alike.
Some scholars view globalization positively, emphasizing development and
connectivity. Thomas Larsson (2001) described it as the "shrinking" of the
world—making interaction easier and more beneficial. Others, like Martin
Khor, see it as a modern form of colonization and destabilization.
This chapter explores various definitions, perspectives, and metaphors
related to globalization, as well as the theories that help explain its impact
on our world.

The Task of Defining Globalization 2

Since its inclusion in Webster's Dictionary in 1961, many definitions of
globalization have emerged, often categorized as either broad/inclusive or
narrow/exclusive. Broad definitions, like Ohmae's “borderless world”
(1992), offer wide scope but lack depth. Narrow definitions, such as Robert
Cox’s, focus on specific aspects like global production, labor division, and
state roles, offering precision but limited scope.
Despite numerous definitions, globalization remains complex and
multidimensional, involving economic, political, and social elements. A
Geneva study (2006) showed 67 out of 114 definitions emphasized
economic aspects. Kumar (2003) even questioned the usefulness of
defining globalization, equating the definition debate with the debate on
globalization itself.
Ritzer (2015) described it as “a transplanetary process” marked by liquidity
and multidirectional flows of people, goods, and information,
acknowledging both integration and fragmentation.
Understanding globalization requires recognizing that definitions are
shaped by the author's perspective. Appadurai (1996) highlighted its
diverse impacts across different societies. Al-Rodhan (2006) emphasized
that each definition reflects the author's geopolitical view.
Poppi (1997) noted that globalization and the debate around it are
inseparable. It is a constantly evolving reality influenced by societal
changes. Although difficult to define, studying it helps us engage with its
challenges and opportunities.
Ultimately, attitudes toward globalization—whether optimistic or critical—
depend on whether one benefits or suffers from it (Ritzer, 2003).

Metaphors of Globalization
In order for us to better understand the concept of globalization, we will
utilize metaphors. Metaphors make use of one term to help us better
understand another term. In our case, the states of matter—solid and liquid
—will be used. In addition, other related concepts that are included in the
definition such as structures and flows will be elaborated.

Solid arid Liquid

Before today’s globalized world, the movement of people, objects, and
information was limited—what Ritzer (2015) described as “solidity.” Social
relationships and structures were fixed in place, restricted by natural
barriers (like landforms and oceans) or man-made barriers (like the Great
Wall, Berlin Wall, or the nine-dash line in the South China Sea). These
"solids" made mobility difficult.
However, globalization is now marked by liquidity—a state where things
flow more freely. Liquids change shape and move easily, symbolizing the
fast-paced, fluid nature of modern exchanges across borders. Zygmunt
Bauman emphasized that liquid phenomena are:
1. Fast-changing and unpredictable (e.g., stock markets).
2. Hard to stop once they start (e.g., viral videos online).
3. Able to bypass or dissolve boundaries, including national borders
(Cartier, 2001).
Ritzer (2015) added that the most powerful aspect of liquidity is that it
tends to "melt" solids, challenging traditional barriers—like the weakening
of the nation-state.
While solidity and liquidity still coexist, it is liquidity that dominates
globalization today. The key metaphor for globalization is now flow—a
concept that will continue to appear in future discussions.

Flows
As globalization becomes more liquid, it results in flows—the dynamic
movement of people, goods, ideas, and information across borders (Ritzer,
2015). These flows are made possible by the increasing openness or
"porosity" of national and cultural boundaries.
Examples of flows:
 Cultural flows: Foreign cuisines like sushi, ramen, burgers, and fries
are now popular in the Philippines, showing how food culture is
globalized.
 Economic flows: Financial events in one country can quickly affect
others due to interconnected markets. For instance, the 2008 U.S.
financial crisis impacted Europe as well (Landler, 2008).
 Human flows: Movements of people include both legal and illegal
migrants seeking better opportunities worldwide (Moses, 2006).
 Informational flows: The internet enables the global exchange of
legal and illegal content—from educational blogs to harmful
materials like child pornography.
 Cultural communities: Immigrants recreate ethnic enclaves in other
countries, like Filipino communities abroad or Chinese communities in
the Philippines.

1. What are the advantages and disadvantages of using (a) broad and
inclusive definitions and (b) narrow and exclusive definitions of
globalization?
2. What do you think is the importance of defining globalization?
3. Do you agree with the idea that the contemporary world is characterized
by high liquidity? Why or why not?

We discussed the different definitions of globalization. In this global age

that we live in, globalization gained various views from many authors and
scholars. In turn, these diverse definitions can affect how one can
appreciate globalization as a process. Furthermore, we analyzed
globalization through conceptual metaphors such as solids, liquids, and
flows.

In this activity, you are to see the actual application of globalization on the
different aspects of daily life such as politics, music, sports; film, celebrity,
and disaster.
1. Answer the following questions:
a. Enumerate at least three of 'the most recent songs you have listened.
Where did they originate? Identify the nationality of the writer and/or artist
for each music.
b. What gadgets or devices do you usually use to listen to music?
c. Where were these gadgets or devices made? Where 'is the company
based?
d. How did you access this music? Did you purchase them online or listen
to them through YouTube, 'Spotify, and other music channels?

2. Using a visual representation, create your generalizations and discuss:

What is globalization? How would you define globalization?
3. What metaphors are you going to use in. order to improve your own
definition of globalization? Enumerate at least three and explain one of
them.

Globalization Theories
Globalization as a Process of Homogeneity or Heterogeneity
🔹 Homogeneity – "The world is becoming more the same."
 Globalization can lead to cultural sameness, shared economies, and
similar political systems.
 Cultural Imperialism: Dominant cultures influence weaker ones (e.g.,
Christianity from Spain, Americanization through products and
media).
 Economic Homogeneity: Spread of neoliberalism and capitalism. Rich
countries benefit, poor countries suffer (Stiglitz, 2002).
 Political Homogeneity: Rise of similar governance systems, termed as
McWorld (Barber, 1995).
 Media Imperialism: Western media (TV, music, movies) dominate
global media. Local voices struggle to compete.
 McDonaldization (Ritzer, 2008): The spread of rational systems based
on fast-food principles—efficiency, predictability, control.
 Globalization: Powerful countries/corporations impose themselves
for profit or influence.
 Flow of Nothing: Spread of “non-places” and “non-things” (e.g.,
chain stores, online services with no unique identity).
🔹 Heterogeneity – "The world is becoming more diverse."
 Globalization creates new mixes, hybrid cultures, and diverse
political expressions.
 Cultural Hybridization: Mix of global and local elements creates
something new.
 Glocalization (Robertson, 1992): When global and local forces
interact, they produce "global" outcomes.
  Economic Differentiation: Local markets adapt global products to
local tastes.
 Political Diversity: Rise of local or nationalist movements (Barber’s
"Jihad") that resist global sameness.

Dynamics of Local and Global Culture

Global cultural flows can be understood through three perspectives:
Cultural differentialism sees cultures as fundamentally different, largely
unaffected by globalization. Samuel Huntington's Clash of Civilizations
theory exemplifies this, predicting conflicts based on cultural differences.
Cultural hybridization emphasizes the blending of global and local
cultures, leading to unique outcomes, as seen in glocalization. Arjun
Appadurai's concept of scapes (flows of people, technology, money, media,
and ideas) illustrates how these interactions create cultural hybrids.
Cultural convergence focuses on global homogenization, often through
cultural imperialism, where dominant cultures impose on others. John
Tomlinson's idea of deterritorialization highlights how culture is no longer
tied to a specific geographic location.

The Globalization of Religion

Globalization has played a key role in the revival and spread of religions.
Scholte (2005) highlights that globalization has enabled greater
communication and connection among co-religionists worldwide. Advances
in technology, media, and transportation have facilitated the dissemination
of religious ideas and practices. For example, Islamic revivalism in Asia was
supported by easier access to Mecca (Turner, 2007).
Religion has become a global identity, with religions asserting themselves
as "world religions" (Turner, 2007). However, globalization has made it
difficult for religions to hybridize, as their beliefs and practices often clash.
This is evident in the incompatibility between Islam and Christianity.
Many religious movements, particularly fundamentalist ones, resist the
values of globalization, such as liberalism and rationalism. Scholte (2005)
notes that these movements often view globalization as a threat to their
faith. This is seen in the extreme reactions of groups like ISIS (Ehteshami,
2007).
Overall, while globalization facilitates religious spread, it also fuels religious
self-assertion and conflict, as religions challenge globalization’s
homogenizing effects. Huntington’s "Clash of Civilizations" (1996) supports
this view, suggesting that cultural and religious divides are deepened by
globalization.

Globalization and Regionalization

Globalization and regionalization have grown significantly since the 1980s,
with regionalization often seen as a counterforce to globalization. While
globalization promotes global interconnectedness, regionalization focuses
on local economic and political partnerships, limiting the broader reach of
globalization. According to Jacoby and Meunier (2010), managed
globalization attempts to make the process more acceptable to citizens,
balancing global benefits with local concerns.
Regionalization spreads due to successful examples like the EU and
Mercosur, encouraging similar efforts in other regions (Held et al., 2005).
Hurrell (2007) suggests that globalization and regionalization are
interconnected, with regional initiatives both shaping and being shaped by
global trends.
Globalization, defined by Jacoby and Meunier (2010), refers to the
increased flow of goods, services, capital, people, and information across
borders. Regionalization, however, is the societal integration and economic
interaction within specific regions (Mansfield and Milner, 1999; Hurrell,
2007). This distinction is crucial in understanding how these processes
coexist.
Economic motivations, particularly in Asia, drive regionalization, as states
seek to protect themselves from global competition, gain bargaining
power, and provide domestic firms with regional markets (De Martino and
Grabel, 2003). TNCs also influence regionalism by pushing for favorable
trade agreements (Ravenhill, 2008).
Process Questions
1. Are societies becoming more homogeneous or
heterogeneous?
o Globalization has led to more interconnected societies, but
regionalization suggests a tendency toward retaining cultural
differences, making the world both more homogeneous in
some ways and heterogeneous in others.
2. Advantages and Disadvantages of Homogenization vs.
Heterogenization:
o Homogenization: Advantages include a shared global culture,
easier communication, and broader market access.
Disadvantages include the loss of local traditions and identities.
o Heterogenization: Advantages include the preservation of
cultural diversity, but it can lead to conflicts and fragmentation
in global cooperation.
3. Appealing View on Globalization History:
o The view that regionalization is a natural and compatible part
of globalization (Held et al., 2005) is appealing because it
highlights how regions adapt to global changes while
maintaining their distinct identities.

Op-eds on Globalization:
1. Op-ed 1: "Globalization: A Mixed Blessing"
 o This op-ed discusses the economic benefits of globalization but
acknowledges the cultural threats it poses. It supports the
definition of globalization as the increased movement of goods
and services across borders (Jacoby and Meunier, 2010). The
op-ed leans toward a narrow, economic focus, highlighting
global capitalism's effects on local economies.
2. Op-ed 2: "Resisting Globalization’s Cultural Homogenization"
o The piece critiques the cultural uniformity imposed by
globalization and defends the importance of maintaining local
cultures. It aligns with the view that globalization should be
regulated (Jacoby and Meunier, 2010) but stresses the need for
cultural preservation. This op-ed adopts a broad, inclusive
definition of globalization, highlighting both its economic and
cultural impacts.
3. Op-ed 3: "Regionalism: A Solution to Globalization’s
Discontents"
o This article discusses regionalism as a response to
globalization, focusing on how regions like the EU and ASEAN
counterbalance global forces. It follows a definition of
globalization that includes economic and political integration
(Held et al., 2005). The op-ed offers a narrow, region-focused
perspective but supports broader interregional cooperation as
essential for balancing globalization's reach.

Origins and History of Globalization

The previous discussions answered the question "What is globalization?"
The next question "Where did it start?" is not easy to answer as well
because there are different views about this. This book generally adheres
to the perspective that the major points of the beginnings of globalization
started after the Second World War. Nevertheless, it would mean no harm
to look at the five different perspectives regarding the origins of
globalization.

Hardwired
According to Nayan Chanda (2007), it is because of our basic human need
to make our lives better that made globalization possible. Therefore, one
can trace the beginning of globalization from our ancestors in Africa who
walked out from the said continent in the late Ice Age. This long journey
finally led them to allknown continents today, roughly after 50,000 years.
Globalizaq!Ohi
Chanda (2007) mentioned that commerce, religion, politics, and warfare
are the "urges" of people toward a better life. These are respectively
connected to four aspects of globalization and they can be traced all
throughout history: trade, missionary work, adventures, and conquest.
 Cycles
For some, globalization is a long-term cyclical process and thus, finding its
origin will be a daunting task. What is important is the cycles that
globalization has gone through (Scholte; 2005). Subscribing to this view will
suggest adherence to the idea that other global ages have appeared. There
is also the notion to suspect that this point of globalization will soon
disappear and reappear.

Epoch
Ritzer (2015) cited Therborn's (2000) six great epochs of globalization.
These are also called "waves" and each has its own origin. Today's
globalization is not unique if this is the case. The difference of this view
from the second view (cycles) is that it does not treat epochs as returning.
The following are the sequential occurrence of the epochs:
1. Globalization of religion (fourth to seventh centuries)
2. European colonial conquests (late fifteenth century)
3. Intra-European wars (late eighteenth to early nineteenth centuries)
4. Heyday of European imperialism (mid-nineteenth century to 1918)
5. Post-World War Il period
6. Post-Cold War period

Events
Specific events are also considered as part of the fourth view in explaining
the origin of globalization. If this is thecase, then several points can be
treated as the start of globalization. Gibbon (1998), for example, argued
that Roman conquests centuries before Christ were its origin. In an issue of
the magazine the Economist (2006, January 12), it considered the rampage
of the armies of Genghis Khan into Eastern Europe in the thirteenth
century. Rosenthal (2007) gave premium to voyages of discovery—
Christopher Columbus's discovery of. America in 1942, Vasco da Gama in
Cape of Good Hope in M498, and Ferdinand Magellan's completed
circumnavigation of the globe in 1522.

The recent years could also be regarded as the beginnings of globalization

with reference to specific technological advances in transportation and
communication. Some examples include the first transatlantic telephone
cable (1956), the first transatlantic television broadcasts (1962), the
founding of the modern Internetin 1988, and the terrorist attacks on the
Twin Towers in New York (2001). Certainly, 'With this view, more and more
specific events will characterize not just the origins of globalization but also
more of its history.

Broader, More Recent Changes

The recent developments that shaped globalization include three key
changes that emerged in the latter half of the 20th century:
1. U.S. as the Global Power (Post-WWII): After World War II, the
United States emerged as the dominant global military and economic
power, surpassing Germany and Japan in industry. This allowed the
U.S. to influence various sectors, including diplomacy, media, and
film, notably Hollywood.
2. Emergence of Multinational Corporations (MNCs): Originally
rooted in countries like the U.S., Germany, and Great Britain,
multinational corporations (e.g., Ford and General Motors) expanded
their operations globally, establishing factories and markets abroad,
marking the rise of global business.
3. Fall of the Soviet Union (1991): The dissolution of the Soviet
Union opened many parts of the world, especially Eastern Europe, to
global interactions. This event led to increased globalization, as
processes like immigration, tourism, media, diplomacy, and MNCs
spread more widely. China, despite its communist government, has
also become an influential global player, contributing to global
capitalism, particularly with milestones like hosting the 2008
Olympics.
These three developments marked significant shifts in the global
landscape, laying the foundation for the interconnected world we
experience today.

Global Demography
 The demographic transition refers to the historical shift from high to
low mortality and fertility rates, starting in Europe in the late 1700s.
 In Europe, the transition took about 200 years (e.g., France) and 100
years (e.g., the United States). It began later in Africa and Asia, with
some regions like Japan experiencing a delay.
Key Historical Developments:
 Life Expectancy and Fertility Rates: In the early 20th century, life
expectancy in India was 24 years, and China’s was similarly low.
Japan's fertility rate did not fall below five births per woman until the
1930s, leading to rapid population growth post-WWII.
 Global Gaps in Life Expectancy: By 1900, life expectancy in Japan
and the West was 20 years higher than the rest of the world. This gap
decreased to 14 years by 1999.
Population Growth Shifts:
 19th Century: Europe’s share of the global population increased,
while Asia and Oceania's share declined.
 20th Century: The global population share reversed, with Africa,
Asia, Latin America, and Oceania experiencing significant growth,
while Europe’s growth slowed.
Future Projections:
 Africa's Population Growth: By 2150, Africa is projected to make
up 20% of the world’s population, up from 7% in 1820 and 6% in
1900.
 Aging Populations: The aging populations in Japan and the West
will lead to higher dependency ratios, with developing countries like
India and the Philippines seeing a decline in dependency ratios due
to lower fertility rates.
Conclusion: The demographic transition has had a profound impact on
global population dynamics, with the shift in population growth and age
structures continuing to evolve, particularly in Africa and Asia, over the
coming decades.

Global Migration
Types of Migrants:
 Vagabonds: These individuals are forced to migrate due to poor
conditions in their home countries, such as economic hardship or
safety concerns.
 Tourists: People who choose to move for leisure, with the ability to
afford travel.
 Refugees and Asylum Seekers: Refugees are forced to flee their
home countries due to danger, and asylum seekers are those who
seek to stay in the country they flee to for safety.
 Labor Migrants: Migrants who move for employment opportunities,
driven by push factors (e.g., lack of jobs) and pull factors (e.g.,
available work elsewhere). This often involves less-skilled or unskilled
workers, and sometimes illegal immigrants.
Labor Migration and State Concerns:
 Labor migration is influenced by both push and pull factors. However,
many countries restrict labor migration due to concerns about losing
a part of their workforce or conflicts with local residents.
 States also restrict migration due to concerns about security, such as
terrorism (Moses, 2006).
Global Migration Factors:
 Push Factors: Political persecution, economic depression, war, and
famine.
 Pull Factors: Favorable immigration policies, labor shortages, and
cultural similarities in the destination country.
 Global Factors: The ease of accessing information about potential
destinations, aided by global connectivity.
Illegal Migration:
 Many countries, especially the U.S., face illegal immigration issues,
with a significant flow of migrants from Mexico and Central America.
Tighter borders have led to increased risks for migrants and, in some
 cases, "locking in" migrants who would otherwise leave their host
country.
 Other countries facing similar issues include Great Britain,
Switzerland, Greece, and some in Asia.
Backlash Against Illegal Immigration:
 Immigrants in the North contribute to the economy by filling jobs that
locals may not take, contributing to growth, and sending remittances
back to their home countries. These remittances help reduce poverty
and increase education and foreign reserves in the countries of
origin.
 Specialized organizations play a major role in transmitting
remittances, as banks often cannot handle small, frequent
transactions.
Diaspora and Transnationalism:
 Diaspora: Migrant communities that maintain connections with both
their home country and their host country.
 Transnational Process: Diasporas are not just local communities
but also connect to multiple "imagined" and real places across
borders.
 Virtual Diasporas: The use of technology, particularly the internet,
allows diaspora communities to maintain connections globally
(Laguerre, 2002).
Conclusion: Migration today is shaped by complex factors, ranging from
economic opportunities to political safety concerns, and involves diverse
categories of migrants. Migration policies, including those addressing illegal
immigration, continue to evolve as global interconnectivity grows, making
both migration and diaspora communities more transnational.

Process Questions:
1. What do you think is the effect of a high dependency ratio in
developed countries? In developing countries?
o In developed countries, a high dependency ratio (more
elderly and youth compared to the working population) can
strain healthcare, pensions, and social services, and create
labor shortages.
o In developing countries, it often means more youth
dependents, which can strain education systems and
household income, limiting opportunities for growth unless jobs
and resources increase.
2. Is the heightened flow of people a unique feature of the
current global era?
o Not entirely, as migration has always existed. However, the
scale, speed, and ease of movement today are unique
 due to advanced transportation, communication, and
globalization.
3. Has globalization facilitated or obstructed greater labor
migration?
o Facilitated, because it has increased access to information,
job opportunities, and means of travel.
o But it has also obstructed it in some ways through stricter
border controls, visa policies, and anti-immigration sentiments
in some countries.

OFW Interview Activity Instructions:

1. Find a respondent: Interview a current or former OFW. Make sure to
protect their identity when presenting.
2. Guide Questions (you can ask more):
o How long have you stayed abroad?
o What are the purposes for your stay there?
o What were your most unforgettable experiences there? How
will you describe them, good or bad?
o How will you compare the Philippines with other countries?
o Do you want to go back abroad or to other countries in the
future? Why or why not?
3. When you share in class:
o Summarize the responses clearly.
o Reflect on what the experience reveals about globalization and
migration.
o Share your personal insights: What did you learn? Did it change
your perspective?

CHAPTER 2: THE GLOBAL ECONOMY

Introduction
The United Nations (UN), through its Millennium Development Goals
(MDGs), prioritized the eradication of extreme poverty and hunger as
its top goal, alongside seven others focused on education, gender equality,
health, environment, and global cooperation. These goals aimed to be
achieved by 2015.
 In the Philippines, a person is officially poor if they earn less than
₱100,534/year or ₱275/day.
 But extreme poverty, as defined by the UN, means living on less
than $1.25/day and lacking basic needs like food, clean water,
shelter, and education.
By 2015:
 Extreme poverty decreased from 1.9 billion to 836 million people.
  The World Bank projected it could drop below 400 million by
2030, but climate change poses a threat to this progress.
 Many who escaped extreme poverty still struggle with basic
services, and income inequality remains high.
The biggest factor in reducing extreme poverty?
Economic globalization—thanks to international trade, education
access, and global cooperation.
Economic Globalization and Global Trade
Economic globalization, as defined by the United Nations, refers to the
growing interconnection of world economies through trade, capital flows,
and the rapid spread of technology. This global integration is seen as a
major trend in economic development.
Two Types of Trade Systems:
1. Protectionism
o Government protects local industries by restricting imports
(e.g., tariffs, quotas).
o Example: A $1 pen from Country A becomes $6 in Country B
due to a $5 tariff.
o Was dominant during the mercantilist era and Great
Depression.
o Still practiced today (e.g., by China, Japan, and the USA).
2. Trade Liberalization (Free Trade)
o Encourages minimal barriers to the movement of goods and
services.
o Grew after World War II, alongside tech improvements.
o Helps spread innovation and reduce poverty.
o Example: Mobile phones—called the “most transformative
technology” by Jeffrey Sachs—enable better banking,
education, and farming in developing nations.
Leapfrogging
 Developing nations skip outdated technologies and adopt newer,
more efficient ones directly (e.g., mobile phones vs. landlines).
Globalization's Uneven Gains
 Some countries benefit more than others.
 To address this, fair trade emerged.
Fair Trade
 Promotes social, economic, and environmental well-being of
small, marginalized producers.
 Ensures fair prices, safe working conditions, and sustainable
practices.
 Products: coffee, tea, bananas, wine, etc.
 Example: Starbucks and Dunkin' Donuts support fair trade, paying
$1.29 per pound of coffee vs. the market price of $1.25.
Process Questions:
1. Do you think that the Philippines is harmed as other countries
transfer their activities to us through outsourcing?
Answer:
Not necessarily. While outsourcing can lead to exploitation if labor rights
are ignored, it often benefits the Philippines through job creation,
economic growth, and technology transfer. Many Filipinos are
employed in BPOs (Business Process Outsourcing), earning better wages
than other local jobs. However, there's a need for regulation to ensure fair
treatment and avoid over-dependence on foreign companies.
2. In what ways do international organizations help our country's
economy?
Answer:
International organizations like the UN, World Bank, and IMF provide
financial aid, economic reforms, infrastructure support, and
development programs. They also offer training, technical
assistance, and emergency support during crises. These efforts aim to
reduce poverty and improve the Philippines’ global competitiveness.
3. Does the position of rich countries as giants in the economic
chain threaten the status of less developed countries in the global
market?
Answer:
Yes, to some extent. Rich countries often control trade terms, set
prices, and own major corporations, making it hard for developing
countries to compete. This causes economic inequality. However,
through fair trade, regional cooperation, and better local governance,
less developed nations can protect their interests and gain more from
globalization.

Global Product Activity Guide (Example: Laptop)

Product: Laptop
Brand Chosen: Dell (you may choose Apple, Acer, Lenovo, etc.)
1. Main Ingredients/Raw Materials and Country of Origin:
o Lithium (battery) – Chile
o Silicon (microchips) – China/USA
o Aluminum (body) – Australia
o Rare earth metals – Democratic Republic of Congo
2. Countries Involved in Manufacturing and Their Role:
o China – Assembly and final manufacturing
o USA – Design and engineering
o Japan – Production of LCD displays
o South Korea – RAM and storage chips
3. Countries Where the Laptop is Sold (besides the Philippines):
o USA, Canada, India, Germany, Brazil, Indonesia, etc.
 4. Technologies Used in Creation:
o Cloud computing – for software development
o Automated manufacturing systems – for parts assembly
o Cargo shipping and air freight – for global distribution
o 5G & broadband – for real-time collaboration and design
5. Statement About the Creation of the Product:
“Laptops are not made in one place—they are the result of global
teamwork and technology. Every part comes from a different country,
showing how globalized our everyday lives have become.”
Economic Globalization and Sustainable Development
While global trade brings progress, it also has serious downsides—the
biggest concern being sustainability. This refers to how we use natural
resources today without destroying them for future generations. The
solution is called sustainable development, which tries to balance
economic growth with environmental protection.
As globalization pushes more production and innovation using Earth's
resources (like water and fuel), we benefit through better technology,
transportation, and communication. However, these advances also
cause problems like climate change and increasing global inequality.
So, while development helps us grow, it also comes at a cost to the
environment and fairness in the global economy.

Environmental Degradation
The Industrial Revolution sped up economic development by making
production faster and more efficient. But this efficiency came with a cost
to the environment—like carbon emissions, ocean pollution, and
deforestation. As living standards rise, people want more products, which
leads to more damage.
There is a debate between environmentalists and neoliberals:
 Environmentalists say we should protect the planet first, even if
it slows trade.
 Neoliberals believe trade and economic growth are more
important and worry that environmental rules will block progress.
Some try to combine both sides. For example, ecological
modernization theory says globalization can help improve the
environment if done right.
There have been efforts like the Kyoto Protocol to cut down carbon
emissions, but they failed due to lack of support, especially from big
countries like the US.
Other solutions like carbon tax or carbon neutrality are hard to enforce,
and alternatives like ethanol have downsides too—like raising food prices
or causing more emissions in their production.
To truly solve global problems like climate change, we need a worldwide
effort, not just regional ones. Some people look to technology, like
geoengineering, to fix things—but that alone may not be enough.

Food Security
Food security means making sure everyone in the world has enough to
eat, now and in the future. By 2050, we need to feed 9 billion people —
that’s 60% more food than we need today.
Why It's Complicated
Food security depends on:
 Population growth
 Climate change
 Water availability
 Sustainable agriculture
Even big food producers like India still struggle — almost 194 million
Indians are undernourished despite being one of the top producers of
fruits and vegetables.
Environmental Challenges
 Deforestation destroys habitats needed for farming.
 Overfishing harms marine ecosystems.
 Farmland and biodiversity are declining.
 Water scarcity is growing, especially in poor regions.
 "Virtual water" means we use water from other countries through
water-heavy products like meat or chocolate.
 Climate refugees may be forced to move due to floods or droughts.
 Pollution from toxic chemicals and greenhouse gases worsens
global warming, affecting crop production and health.
Global Responses
 United Nations SDG #2: End hunger, ensure food security, and
promote sustainable farming by 2030.
 World Economic Forum (NVA): A plan launched in 2009 to build
partnerships among farmers, companies, and governments. Over
$10 billion was invested to help small farmers and improve food
systems.

Economic Globalization, Poverty, and Inequality

What Is Economic Globalization?
Economic globalization is the process where businesses and trade go
international. Companies look for the cheapest materials, labor, and
production sites to reduce costs and compete.

Who Wins and Who Loses?

 Winners:
o Companies (more profit)
 o Consumers (lower prices)
o Some workers in poor countries (better-paying jobs than
before)
 Losers:
o Workers in rich countries (lose jobs to outsourcing)
o Workers in poor countries (often face unsafe, low-paying jobs
with few protections)

Example: Bangladesh
Bangladesh depends on the apparel industry (like making clothes), which
is mostly made up of sweatshops. It's not ideal, but it's the country's main
source of income and jobs.

The Problem of Exploitation

 Critics say globalization is a new form of economic colonialism.
 Many developing countries lack labor laws, minimum wages, and
environmental protections.
 Child labor is banned globally, but not always enforced.

Can Things Get Better?

Yes — progress depends on:
1. Global Awareness – Like the U.S. report on goods made with
child/forced labor.
2. Competition for Workers – As economies grow, businesses must
offer better wages.

Solutions: Include the Poor in the Economy

A great example is microcredit:
 Started by Muhammad Yunus in Bangladesh.
 Small loans (~$100) given to poor people (mostly women).
 Helped them start businesses, raise income, and escape poverty.

The Main Idea

Globalization has helped millions escape poverty, but it also creates
inequality and tough working conditions. The goal should be to lift the
poor while protecting human rights and the planet.

Global Income Inequality

Two Types of Economic Inequality
1. Wealth Inequality – Unequal distribution of assets (land, natural
resources, property, etc.) between countries.
2. Income Inequality – Unequal distribution of earnings (money from
goods/services). Measured using GDP.
What the Numbers Say
 Global wealth: $3–5 trillion (as of 2016).
 Bottom 50% of the world owns less than 1% of all wealth.
 Top 10% owns 89% of global assets (Credit Suisse, 2016).

How Did This Inequality Start?

 The Industrial Revolution created a huge economic gap.
o In 1820, the UK and Netherlands were 3x richer than India and
China.
o Now, the ratio is 100:1 (Milanovic, 2011).

Globalization and Inequality Today

 Global capitalism has:
o Improved living standards for many poor people.
o Made the rich even richer (Freeman, 2011).

Technology & Skills

 Modern jobs need technology skills (e.g., coding, automation).
 Skilled workers earn more, unskilled workers fall behind.
 Many low-skill jobs moved overseas, deepening the income gap.

The Main Idea

Global inequality—especially in income—is growing. While globalization
helps reduce extreme poverty, it also helps the rich get richer and leaves
the unskilled behind. The world faces a challenge: how to make economic
growth fairer and more inclusive.

The Third World and the Global South

The terms "First World," "Second World," and "Third World" were coined
during the Cold War to classify countries into three distinct political and
economic blocs. The "First World" referred to Western capitalist countries,
the "Second World" to the Soviet Union and its allies, and the "Third World"
to countries that were non-aligned. After the Cold War, the term "Second
World" became obsolete, but "First World" and "Third World" persisted, with
the latter coming to represent impoverished or developing countries.
However, these terms are outdated and misleading. For instance, the
"Third World" includes over 100 countries with varying levels of economic
stability. Some of these countries, like Botswana, have relatively high
incomes compared to others like Rwanda. This illustrates that the term
"Third World" cannot accurately represent such diverse economies.
Today, countries are classified by their economic productivity, often using
metrics like Gross Domestic Product (GDP) and Gross National Income
(GNI). A simpler classification emerged, with the "Global North" referring to
developed countries (like the U.S., Canada, Western Europe, and parts of
Asia) and the "Global South" referring to regions such as the Caribbean,
Latin America, Africa, and parts of Asia. The term "Global South" was
adopted as a way to highlight the shared economic and political challenges
faced by these nations.
The distinction between the Global North and South also reflects racial
inequality, with wealthier, predominantly white countries in the North and
poorer, predominantly Black countries in the South. This disparity is linked
to historical migration patterns and globalization. Although the situation is
evolving with increased migration from the South to the North, the racial
and economic divides between the Global North and South remain
significant.

The Global City

Impact of Global Flows on the Global South:
Globalization has led to economic dependency in the Global South, where
countries shift to producing export crops and become reliant on
industrialized food imports. This displaces local farmers and creates social
instability, with mass migration to urban areas and exposure to low
agricultural prices.
Gap Between Rural and Urban Areas and Globalization’s Effect:
Globalization widens the rural-urban gap. Urban areas benefit from global
trade, while rural economies struggle with low crop prices and
industrialized farming. Migration to cities increases as people seek better
opportunities, leaving rural areas vulnerable.
Impact of Urbanization and Global Cities on Agriculture:
Urbanization and the rise of global cities focus on industries like finance
and technology, neglecting agriculture. This shift leads to the
commercialization of farming, displacing local food production and
depleting rural labor forces.
Debate: "Global Free Trade Has Done More Harm Than Good"
Position: Global free trade benefits multinational corporations but harms
developing countries. It displaces local farmers, increases inequality, and
damages the environment. Free trade prioritizes profit over social welfare,
leaving marginalized communities with the costs.

Theories of Global Stratification

For much of human history, all of the societies on earth were poor. Poverty
was the norm for everyone but obviously, that is not the case anymore.
Just as you find stratification among socioeconomic classes within a society
like the Philippines, you would also see across the world a pattern of global
stratification with inequalities in wealth and power between societies. So
what made some parts of the world develop faster, economically speaking,
than others? We may draw answers by looking at the different theories of
global stratification.
 Modernization Theory
Modernization theory explains global stratification through technological
and cultural differences between nations. It highlights two key events that
accelerated Western Europe's development: the Columbian Exchange
and the Industrial Revolution. The Columbian Exchange introduced new
agricultural products to Europe, boosting population and trade, but
devastated Native Americans with diseases. The Industrial Revolution,
powered by new technologies, increased productivity and improved living
standards, but initially benefited only the wealthy in Western countries,
leading to further disparities.
Modernization theory argues that affluence is attainable by any society, but
the tension between tradition and technological change hinders
development. Societies deeply rooted in tradition may resist adopting new
technologies and social systems. Max Weber’s Protestant work ethic is
cited as a factor that spurred Europe’s modernization, promoting
individualism and financial success as signs of virtue, which fostered
progress and innovation.

Walt Rostow's Four Stages of Modernization

American economist Walt Rostow's modernization theory outlines four
stages of societal development:
1. Traditional stage: Societies are small, agricultural, and based on
family labor with strict social hierarchies (e.g., feudal Europe).
2. Take-off stage: People innovate, creating markets and linking social
status with wealth.
3. Drive to technological maturity: Technological growth leads to
population growth, reduced poverty, and more job opportunities.
Social and political changes, like education and democracy, follow.
4. High mass consumption: Economies focus on fulfilling wants
rather than needs, with social support systems in place.
Modernization theory argues that investment in technology can raise
production and wealth, benefiting everyone. Rich countries can assist
developing nations by exporting technology and providing aid.
However, critics argue that the theory is Eurocentric, equating
development with capitalism and ignoring historical factors like slavery and
resource exploitation. They also suggest it blames poor nations for not
adopting change, while neglecting the impact of external forces.

Dependency Theory and the Latin American Experience

Starting in the 1500s, European explorers colonized regions in the
Americas, Africa, and Asia, exploiting natural and human resources. The
British Empire, at its peak, controlled a quarter of the world. The
transatlantic slave trade funneled goods like cotton and tobacco to Europe,
while Africa sent slaves. Colonialism shifted focus from human to natural
resources by the mid-1800s, and by 1940, only Ethiopia and Liberia
remained free from colonization. Many colonies remained until the 1960s,
with Hong Kong being the last British colony to gain independence in 1997.
After WWII, the question arose: "Why aren't many countries developing?"
Dependency theory emerged in response, suggesting that the
development of wealthy nations often came at the expense of poorer ones.
It argues that poorer countries' underdevelopment is caused by their
dependency on wealthier nations, whose exploitation prevents true
economic growth in the periphery. The theory focuses on the exploitation of
peripheral countries’ resources, which are processed in core nations and
sold back at a higher price, creating a cycle of dependency.
Dependency theory has two main sub-theories:
1. Neo-Marxist (North American): Developed by Andre Gunder
Frank, it rejects the idea that poor countries can develop by following
the path of developed nations, instead attributing underdevelopment
to dependency on the capitalist system.
2. Structuralist (Latin American): Led by Raul Prebisch, it highlights
the reliance of Latin American nations on exporting primary
commodities, which leads to economic instability and
underdevelopment. It advocates for import substitution and self-
sustaining development.
These theories argue that dependency persists due to the global economic
system, where wealthier nations' interests are tied to exploiting poorer
countries.

The Modern World-System

Immanuel Wallerstein's "Modern World-System" theory describes the global
economy as divided into three regions: the core, periphery, and semi-
periphery. High-income nations, or the core, dominate global wealth and
technology. Low-income countries, or the periphery, supply raw materials
and labor, often exploited by multinational corporations in a neocolonial
system. Middle-income countries, like India and Brazil, form the semi-
periphery, with closer ties to the core.

In this model, poor nations remain dependent on wealthy ones. They

export raw materials cheaply but lack industrial capacity, so they import
expensive manufactured goods. This imbalance leads to high debt and
prevents investment in their own development. Wallerstein argues that the
issue isn't a lack of global wealth, but its poor distribution.

However, critics of dependency theory argue that economic growth doesn't

always make poor nations poorer. Some nations, like Singapore, have
thrived despite being former colonies, and foreign investment from
wealthier nations has helped poorer countries. Critics also note that
dependency theory focuses solely on capitalism, ignoring other factors like
culture and political regimes, and doesn't offer practical solutions to
poverty.

Despite these criticisms, the global economy has grown, improving living
standards worldwide. The percentage of people living on less than $2.50 a
day has dropped from 52% in 1981 to 22% by 2008. The expansion of
global trade, including agreements like NAFTA, remains a debated topic,
balancing free trade benefits with job losses. Understanding economic
globalization helps address global stratification and find solutions to
poverty.

Processed questions:
1. Philippines' Role in the Modern World-System:
The Philippines is involved in the modern world-system as part of the
semi-periphery. It has industrial and technological development, but
its economy is still dependent on exports, foreign investment, and
remittances.
Advantages:
o Access to foreign markets and investment opportunities.
o Potential for industrial growth and technological advancement.
Disadvantages:
o Economic dependency on core countries.
o Limited control over trade terms and prices.
o Inequality due to reliance on low-wage labor and raw material
exports.
2. Upgrading the Economy:
To upgrade its economy, the Philippines could focus on improving its
manufacturing sector, investing in education, technology, and
infrastructure, and diversifying its economy. Building stronger trade
agreements, especially with rising semi-peripheral nations, would
help reduce dependency on core economies like the U.S. and Japan.
Developing local industries and reducing reliance on foreign imports
can also boost economic independence.
3. Economic Globalization and Colonial History:
Considering the Philippines' colonial history, economic globalization
can be seen as a continuation of historical patterns where the
country is economically dependent on wealthier nations. Colonial
legacies still influence the Philippines’ trade patterns and the
structure of its economy, creating challenges in achieving self-
sustaining growth. However, economic globalization offers
 opportunities for growth if the country can manage its resources
effectively and reduce its dependence on core nations.
Activity Answer:
Based on Wallerstein's world-system theory:
 Core: Australia, France, Germany, Japan, South Africa, UK, USA,
Canada
 Semi-periphery: China, Indonesia, Malaysia, Mexico, Singapore,
Turkey, Brazil, India, Spain, Chile, Uruguay
 Periphery: Philippines, Sudan, Bangladesh, Nepal, Kenya, Nigeria,
Madagascar, Panama, Sri Lanka
For the activity, the countries would be grouped based on their
classification, with core countries at the center, surrounded by semi-
periphery countries, and peripheral countries on the outer ring.

CHAPTER 3: MARKET INTEGRATION

Introductioh
The economy is a social institution that organizes production, consumption,
and trade in society. While often discussed in numerical terms like
unemployment or GDP, it is ultimately composed of people. Economic
systems, such as capitalism and socialism, shape how people live and
work.
Economies are divided into three sectors:
 Primary sector: Extracts raw materials (e.g., farming, mining).
 Secondary sector: Transforms raw materials into goods (e.g.,
refining oil).
 Tertiary sector: Provides services rather than goods.
This chapter explores the contributions of financial and economic
institutions to the global economy, examining the history of global markets,
economic revolutions, and the rise of multinational corporations.

International Financial Institutions

Globalization has closely interconnected world economies. The saying,
"When the American economy sneezes, the rest of the world catches a
cold," highlights the significant influence of major economies like the U.S.
on the global market. However, other economies also impact global
finance, as seen in the financial crises in Russia and Asia. Stronger
economies have a greater effect on others, while crises in weaker
economies, such as Argentina’s in the late 1990s, have a smaller global
impact.
Financial institutions and economic organizations further link countries,
particularly in trade, contributing to the global economy's
interconnectedness.
 The Bretton Woods System
The major global economies suffered due to World
War I, the Great Depression, and World War II. To prevent future economic
instability and political turmoil, the Bretton Woods system was established
to reduce trade barriers and ensure financial stability.
The system consists of five key elements:
1. Currency value was pegged to gold, establishing a par value (e.g., 35
U.S. dollars per ounce of gold).
2. Countries' central banks agreed to exchange currencies at fixed rates
with a 1% margin.
3. The International Monetary Fund (IMF) was created to oversee
exchange rates.
4. Restrictions on member states' currencies in international trade were
removed.
5. The U.S. dollar became the global currency.

The General Agreement on Tariffs and Trade(GAIT) and the

World Trade Organization (WTO)
The General Agreement on Tariffs and Trade (GATT), established in 1947,
was a platform for 23 countries to negotiate multinational trade
agreements. GATT's focus was on goods trade through various negotiation
rounds. The Uruguay Round (1986–1993) led to the creation of the World
Trade Organization (WTO).
The WTO, established in 1995, is an independent multilateral organization
with 152 members as of 2008. Unlike GATT, it oversees trade in services,
non-tariff barriers, and broader areas of trade liberalization, advocating for
the reduction or elimination of trade barriers to benefit all nations.
However, the WTO faces significant criticism:
1. Agricultural Subsidies: Developed countries' subsidies in
agriculture hurt emerging markets, especially in the Global South,
leading to increased grain prices and food riots in countries like
Mexico, Egypt, and Indonesia in 2008.
2. Decision-Making: Larger trading powers dominate decisions,
especially in the "Green Room," while smaller countries are excluded.
3. Lack of INGOs Involvement: International Non-Government
Organizations (INGOs) are not involved, leading to protests and
demonstrations against the WTO.

The International Monetary Fund (IMF) and the World Bank

The International Monetary Fund (IMF) and the World Bank were
established after World War II to promote global economic stability. These
institutions are essentially banks, but unlike regular banks, they were
founded by countries. The wealthiest nations had the most influence due to
their larger financial contributions.
The IMF's primary role is to provide financial assistance to countries in
economic distress, serving as a lender of last resort. For example, Yemen
borrowed $93 million from the IMF in 2012 to combat terrorism.
The World Bank, on the other hand, focuses on long-term poverty
eradication and funds development projects. Since 1962, it has invested in
education projects in developing countries like Bangladesh, Chad, and
Afghanistan.
However, both institutions have faced criticism for lending to corrupt
governments and dictators, as well as for imposing austerity measures that
are often seen as ineffective.

The Organization for Economic Cooperation and Development

(OECD), the Organization of Petroleum Exporting Countries
(OPEC), and the European •Union (EU)
The Organization for Economic Cooperation and Development (OECD) is a
powerful group of 35 wealthy nations, including Latvia as of 2016. Though
it has limited formal power, its influence stems from its members'
economic strength.
The Organization of Petroleum Exporting Countries (OPEC), founded in
1960 by Saudi Arabia, Iraq, Kuwait, Iran, and Venezuela, aims to control oil
prices. Today, additional members include the UAE, Algeria, Libya, Qatar,
Nigeria, and Indonesia.
The European Union (EU) consists of 28 member states, with most adopting
the euro. Critics argue the euro has led to higher prices and slower
economic growth in countries like Greece, Spain, and Portugal, with the
European Central Bank's policies contributing to these issues.
North American Free Trade Agreement (NAFTA)
The North American Free Trade Agreement (NAFTA), established on January
1, 1994, between the U.S., Mexico, and Canada, expanded on a 1989 pact
between Canada and the U.S. It aimed to foster trade, improve working
conditions, and reduce trade barriers.
NAFTA led to the outsourcing of manufacturing jobs from the U.S. and
Canada to Mexico to cut costs. This caused job losses and wage stagnation
in the U.S., while in Mexico, two million farmers lost their livelihoods, and
food prices rose, pushing 25% of Mexicans into food poverty.
While NAFTA boosted U.S. GDP by $127 billion annually, its impact was
mixed. It increased trade, lowered prices, and created U.S. jobs, but also
resulted in over 682,000 lost manufacturing jobs, environmental damage,
and exploitation of Mexican workers and farmers. For Canada, reliance on
U.S. trade makes any changes to NAFTA potentially devastating.
 History of Global Market Integration
Before the rise of today's modern economy, people only produced for their
family. Nowadays, economy demands the different sectors to work together
in order to produce, distribute, and exchange products and services. What
caused this shift in the way people produce for their needs? In order to
understand this, we will be going back in time; 12,000 years ago.

The Agricultural Revolution and the Industrial Revolution

The Agricultural Revolution marked a significant economic shift as people
learned to domesticate plants and animals, leading to surplus production.
This allowed for permanent settlements, trade, and population growth.
The Industrial Revolution in the 1800s introduced new tools like steam
engines and mass production, shifting workers from home-based
production to factory labor. This boosted productivity, raised living
standards, and increased access to goods.
However, factory workers, often poor women and children, faced
dangerous conditions and low wages, leading to economic inequality. In
response, labor unions emerged, advocating for better wages, working
conditions, and safety regulations, influenced by Marxist ideas.

Capitalism and Socialism

Capitalism:
 Private Ownership: Resources and production are privately owned.
 Profit Maximization & Competition: Driven by competition,
businesses strive to reduce prices and improve quality.
 Market Efficiency: Operates on Adam Smith's "invisible hand,"
where consumer choices regulate the market.
 Market Failures: Unregulated markets can lead to inefficiencies like
monopolies, prompting government intervention (e.g., antitrust laws,
minimum wage, public services).
Socialism:
 Collective Ownership: The government controls resources and
production.
 Emphasis on Equality: Focuses on collective welfare and meeting
everyone's basic needs over individual profit.
 Government Control: Rejects capitalism’s private ownership,
aiming for social equality (often implemented by the state).
 Power Imbalance: In practice, socialist economies often led to
political elites holding power, exacerbating inequalities.
Comparison:
 Economic Performance: Capitalist countries have typically
outperformed socialist ones (e.g., Soviet Union vs. capitalist nations).
 Income Inequality: Capitalism leads to higher income inequality,
while socialism tries to reduce it, but both systems have flaws.
In summary, both models have their strengths and weaknesses, influencing
the global economic landscape today.

The Information Revolution

The Information Revolution: Key Points
 Shift to Service Economy: Technology has reduced human labor in
manufacturing, moving economies toward service work and idea
production. Automation and outsourcing are replacing many jobs,
contributing to the decline in union membership, which is now mainly
for public sector jobs.
 Post-Industrial Jobs:
o Agricultural Jobs: These have greatly decreased, especially in
the Philippines, while in the U.S., manufacturing jobs have also
declined over the past 30 years.
o Service Industry: Jobs like administrative assistants, nurses,
teachers, and lawyers dominate today's economy, with jobs
categorized into the primary labor market (high-paying,
stable, with benefits) and the secondary labor market (low-
paying, unstable, with fewer benefits).
 Future Economic Revolution: The role of corporations is
increasingly important, often operating across borders, shaping
economies globally.
Questions to Consider:
1. Effects of the Information Revolution on the Global Market:
Impact on labor, jobs, and industries due to technological
advancements.
2. Impact of Multinational Corporations on the Philippine
Economy: How their global operations affect local economies.
3. Socialism vs. Capitalism in the Philippine Context: Analyzing
which system is more fitting for the country’s needs.

Activity: Global Economic Scenarios

Discuss the following scenarios with a partner and assess the positive and
negative impacts based on the Philippine context. Use the Case-by-Case
column for your final judgment.
Scenarios:
1. Scenario A: Agriculture is replaced by real estate developments to
attract foreign investors.
2. Scenario B: Purchasing a shirt online from a London-based store.
3. Scenario C: The Philippine government imports rice due to an
economic crisis.
4. Scenario D: A multinational closes, leading to job loss for your
father unless he relocates.
 5. Scenario E: A global financial crisis affects your mother’s retirement
funds.
Discuss and share your responses with the class.

Global Corporations
Global Corporations and International Trade: Key Points
 International Trade and Regulation: International trade is
supported by regulatory groups like the WTO and trade agreements
(e.g., NAFTA), reducing tariffs and making cross-border trade easier.
These agreements often benefit private industries, allowing
companies to produce goods across multiple countries, such as a
backpack designed in the U.S., made in China, and assembled in
Mexico.
 Multinational Corporations (MNCs): MNCs, or global corporations,
operate across national borders, taking advantage of different
countries’ opportunities to manufacture, distribute, and sell products.
Examples include McDonald's, Coca-Cola, and Ford. They have
significant economic and political influence, donating to political
campaigns and lobbying for favorable trade laws.
 Benefits and Drawbacks of MNCs:
o Benefits: MNCs bring jobs and innovations to developing
nations, promoting economic growth and reducing conflict by
making countries more interdependent.
o Drawbacks: Workers in developing countries often face
exploitation, with poor wages, long hours, and unsafe
conditions. MNCs can relocate factories to countries with more
favorable labor laws, leaving unemployment in their wake.
Outsourcing to cheaper labor markets also impacts job
availability in core countries.
 Globalization’s Cultural Impact: Beyond economic effects,
globalization also brings cultural changes. The diffusion of ideas,
practices, and cultural expressions occurs through trade, mass
media, and the internet, spreading North American culture and
scientific knowledge worldwide.
 Overall Impact: While global corporations can drive economic
growth and lower product prices, they also contribute to worker
exploitation and cultural shifts, reshaping economies and societies
globally.

Processed questions:
1. Global Nature of Multinational Corporations: Multinational
corporations (MNCs) operate across multiple countries, taking
 advantage of global markets, lower production costs, and access to
diverse resources. They manage operations, production, and sales
worldwide, which increases their influence on the global economy
and politics.
2. Positive vs. Negative Effects of MNCs: The positive effects
include economic growth, job creation, and innovation transfer to
developing countries. However, the negative effects—such as
exploitation of workers, environmental harm, and loss of jobs in core
countries—often outweigh the positives. The focus on profit
maximization can lead to unethical practices, causing long-term
social and economic harm.
3. Ways to Lessen Negative Consequences:
o Strengthening labor laws to protect workers' rights and ensure
fair wages.
o Encouraging corporate social responsibility (CSR) practices that
prioritize ethical behavior and environmental sustainability.
o Supporting fair trade agreements and ensuring regulatory
bodies enforce ethical standards globally.
o Promoting transparency in corporate practices to hold MNCs
accountable for their impact on local communities and workers.

CHAPTER 4,• THE GLOBAL INTERSTATE

SYSTEM
Introduction
The state has historically been central in global politics, managing warfare
and economic policies, with its authority over borders recognized by other
nations. The Treaty of Westphalia (1648) established the concept of nation-
states and state sovereignty. However, globalization has challenged the
power of states, with multinational corporations and global organizations,
like the Red Cross, becoming more influential.
The idea of the nation-state may be outdated, as regional alliances,
international economic bodies (like the IMF and World Bank), and non-state
actors (e.g., multinational corporations, NGOs like Amnesty International)
challenge national autonomy. Additionally, groups like Al-Qaeda and ISIS
also question state power by attempting to replace existing governments
with their own ideologies.

Global Governance in the Twenty-First Century

Global Governance Emergence Factors:
1. Declining power of nation-states – This creates a void that global
governance can fill.
2. Flow of information – The Internet's cross-border flow is hard for
states to control, leading to calls for global governance.
 3. Mass migration – Uncontrolled migration and illegal entry into
states necessitate global governance to manage the issue.
4. Criminal flows – The spread of criminal activities (e.g., drugs,
trafficking) calls for global governance intervention.
5. Internal conflicts – Examples like Sudan's Darfur crisis show that
some internal conflicts require global governance to intervene,
especially when states resist or fail to control them.
6. Global problems – Issues like global financial crises exceed the
capability of individual states, requiring global governance to assist.
7. Struggling interstate systems – Existing systems like NATO
struggle with complex global problems, prompting the development
of more global governance structures.

Effects of Globalization to Governments

State sovereignty is fundamentally linked to the authority of a government,
which has the right to act on behalf of the state and manage internal
affairs. Globalization, however, has introduced challenges that impact the
autonomy of governments. These challenges stem from various global
forces that test the boundaries and powers of state governance.
Challenges to State Sovereignty:
1. Traditional Challenges – The core function of the government is to
make decisions, resolve conflicts, and implement policies. This is
traditionally carried out through governmental institutions and
elections.
2. National or Identity Movements – Movements that seek to assert
independence or challenge existing national boundaries, threatening
state autonomy.
3. Global Economics – Economic globalization often forces
governments to adjust policies in line with global market forces,
limiting their ability to make independent decisions.
4. Global Social Movements – Worldwide social movements, such as
those focused on environmental issues or human rights, can
influence national policies and challenge the state's control over
internal matters.
Conclusion: While the government remains the cornerstone of state
sovereignty, globalization introduces significant challenges. These
challenges—from global economics to social movements—impact the
government's authority, forcing states to adapt and collaborate with
external forces while trying to maintain control over their internal affairs.

Traditional Challenges
Traditional challenges to state sovereignty have traditionally been external
interventions, including invasions and internal political crises. In today’s
world, these challenges have evolved, including external interventions by
other countries, internal political movements, and regional organizations
influencing state decisions.
Traditional Challenges to State Sovereignty:
1. External Interventions – Historically, external interventions were
often invasions, such as Iraq’s invasion of Kuwait in 1990. Today,
Russia’s intervention in Ukraine over Crimea’s desire to re-affiliate
with Russia is another example of a state’s sovereignty being
contested by another nation.
2. Internal Political Challenges – These arise when internal dissent
leads to power struggles within the state. For example, after Egypt's
Arab Spring, a fundamentalist government was elected and
overthrown by the military, while in Syria, the rebellion against
Assad’s government was a fight for control from within the country.
3. Regional Organizations – Organizations like the United Nations
challenge state autonomy by intervening in domestic conflicts. For
example, the UN intervened in Sudan due to the civil war, and the
European Union intervened during Greece's debt crisis.
Conclusion: State sovereignty is increasingly challenged not just by
foreign invasions but also by internal political struggles and the influence of
regional organizations. These challenges complicate the ability of states to
act independently and manage their internal affairs without external
interference.

Challenges from National/ldentity Movements

National and identity
movements challenge traditional state sovereignty by asserting cultural
and national identities that may not align with state boundaries. These
movements often push for greater autonomy or independence, creating
tensions with established states.
Challenges from National/Identity Movements:
1. Cultural Identity vs. State Boundaries – Nations often have
cultural identities tied to specific regions, but these identities do not
always align with state boundaries. For example, Kurds live in Iraq,
Iran, and Turkey, while Catalans are primarily in Spain but also in
France.
2. Scottish Nationalism – In 2014, Scotland voted on whether to
become an independent state, ultimately voting against it, but
Scotland now enjoys a significant degree of autonomy compared to
the past.
3. Global Movements – Al-Qaeda and ISIS are examples of global
movements that challenge state sovereignty by promoting a
 fundamentalist version of Islam and seeking control over territories,
thus questioning the legitimacy of existing states.
Conclusion: National and identity movements, whether cultural or
religious, challenge the authority and autonomy of states by pushing for
autonomy or independence. These movements complicate the traditional
understanding of state sovereignty and its ability to manage diverse
identities within its borders.

Global Economics
Global economics presents a significant challenge to state sovereignty by
demanding conformity to free-market capitalism. States are often
pressured by international organizations and regional agreements to adopt
neoliberal economic policies that can limit their control over domestic
markets and economies.
Challenges from Global Economics:
1. Neoliberal Economics – Starting in the 1980s, neoliberal
capitalism focuses on free trade, dismantling trade barriers, and
limiting government regulations. It promotes the free flow of
capital, privatization of services, and fiscal austerity,
diminishing the state's role in the economy.
2. International Organizations – Institutions like the World Trade
Organization (WTO), IMF, and World Bank push governments,
especially in poorer countries, to implement reforms that favor free-
market policies. These reforms often result in less governmental
control and greater dependence on global financial systems.
3. Case of Greece – Greece's entry into the EU in 1981 led to the
removal of borders and economic cooperation. However, their
adoption of the euro and borrowing for infrastructure, coupled with
the 2008 financial crisis, led to economic collapse. Austerity
measures imposed by the IMF and the global financial market forced
Greece to accept economic terms that further reduced its
sovereignty.
4. Global Corporations – Developed country businesses establishing
factories in developing nations for cheaper production exacerbate
global inequality and limit the economic control of the state in
these regions.
Conclusion: Global economic systems, driven by neoliberal policies,
challenge state sovereignty by demanding economic cooperation and
market liberalization. As seen in cases like Greece, states may be forced to
comply with global financial systems and austerity measures, limiting their
ability to protect their own economic interests.

Global Social Movements

Global social movements, though often not seen as direct threats,
challenge state sovereignty by promoting values and agendas that
transcend national borders. These movements can limit a state's control
over policies, especially when they address issues of human rights,
environmental protection, and personal autonomy.
Challenges from Global Social Movements:
1. Transnational Movements – Social movements like human rights,
environmental, and gender equality movements operate across
borders, making them difficult for states to control or suppress. These
movements often create public sentiment and advocate for changes
in policies that contradict national decisions.
2. Human Rights Movements – Human rights advocacy challenges
state sovereignty when countries implement policies that violate
international human rights standards. For example, the death
penalty in the United States faces opposition from global consensus,
with some countries refusing to extradite individuals facing
execution.
3. Environmental Movements – Movements like Blockadia respond
to government actions that prioritize the interests of neoliberal
capitalists, focusing on environmental protection and local
resistance against state policies.
4. Women's Rights and Personal Autonomy – Global social
movements are increasingly focused on women's rights, personal
autonomy, and LGBTQ+ rights, advocating for gender equality and
same-sex marriage, which challenge traditional values in some
countries.
5. International Organizations and NGOs – Organizations like the
United Nations (UN), International Criminal Court (ICC), and
non-governmental organizations (NGOs) such as Doctors
Without Borders and Amnesty International play a significant
role in advocating for global change, further limiting state control.
Conclusion: Global social movements challenge state sovereignty by
promoting values and policies that transcend national borders, especially in
areas like human rights, environmental protection, and personal freedoms.
The growing influence of international organizations and NGOs further
limits a state's autonomy in addressing these issues.

The Relevance of the State amid Globalization

The relevance of the nation-state amid globalization has been widely
debated. While some argue that globalization weakens the power and role
of the state, others contend that the nation-state remains a key player in
global politics. This discussion explores the elements of a state, the role of
national identity, and how globalization impacts state sovereignty.
Key Elements of a State: A state is defined by four key elements:
people, territory, government, and sovereignty. A nation refers to a
collective identity based on culture and history, whereas the state refers
to the political entity with clear boundaries and governance structures. The
nation-state is the idea that a people with shared identity governs a
defined territory, although in practice, many nation-states contain diverse
ethnic and cultural groups.
Arguments on the Relevance of Nation-States:
1. Enduring Role of Nation-States: Scholars like Gilpin and Beland
argue that despite globalization, nation-states remain central in
managing security, economy, and identity. The state responds to
threats like terrorism, economic globalization, immigration, and
global diseases, which may increase its power. For instance,
austerity measures and military interventions are often justified
by the state’s response to perceived global threats.
2. Globalization as an Opportunity: Some argue that globalization
can benefit nation-states by encouraging economic liberalization
and privatization. For example, Australia used globalization to
push for neoliberal reforms, using the rhetoric of globalization to
justify economic changes.
3. Challenges to State Sovereignty: Global business, migration,
and the rise of international organizations may challenge the
state's autonomy. However, these factors do not entirely undermine
the state's sovereignty. Some argue that while globalization affects
governance, it does not make the nation-state obsolete.
Conclusion: The debate about the relevance of nation-states in the era of
globalization highlights different perspectives. While globalization presents
challenges, nation-states still have a significant role in managing national
security, economic policies, and cultural identity. Whether globalization
weakens or strengthens the nation-state depends on how states adapt to
global processes and structures.

Debate Guidelines:
 Central Issue: "The state remains relevant amid globalization."
 Affirmative Side: Argue that globalization does not diminish state
sovereignty; the state remains essential for security and governance.
 Negative Side: Argue that globalization weakens the state’s power
and influences policies and governance.
 Each side has 20 minutes to prepare, with 10 minutes for the
presentation of arguments.
 Follow-up Q&A for 2 minutes each.
 Final statements for 3 minutes each.
Institutions That Govern International Relations
There are several international organizations that governments of countries
around the world and individuals participate in. These include the United
Nations, the International Court of Justice, NAFTA, and NATO. There ere also
nongovernmental organizations promoting social and economic growthXet
us look at them one by one

Peace Treaties and Military Alliances: The UN and NATO

Global politics is shaped by various international organizations and
alliances that govern the relationships between nations. Two significant
actors in this context are the United Nations (UN) and the North
Atlantic Treaty Organization (NATO), both playing pivotal roles in
global peacekeeping, conflict resolution, and military alliances.
The United Nations (UN)
The United Nations (UN), established in 1945, is an international
organization aimed at fostering global peace and cooperation. It consists of
193 member states, with its headquarters in New York City. The UN
operates in military, economic, environmental, and human
protection domains, focusing on peacekeeping, conflict prevention,
and human rights. It maintains international peace primarily through its
Security Council, which includes five permanent members (U.S., U.K.,
Russia, China, France) with veto power, and ten rotating members. The UN
also conducts peacekeeping missions and mediates conflicts, as seen in
past interventions in Iraq, Cambodia, and East Timor.
Moreover, the UNICEF program provides emergency relief to children in
crisis areas, while the Sustainable Development Goals (SDGs) tackle
global issues like poverty, inequality, and climate change. The
International Court of Justice (ICJ) settles international disputes, and
the Human Rights Council ensures the promotion and protection of
human rights worldwide.
NATO (North Atlantic Treaty Organization)
NATO is a military alliance formed in 1949 between the U.S., Canada,
and 25 European countries, emphasizing collective security. Its
primary purpose is to defend its members against external threats, with
Article 5 committing all members to assist any member under attack.
NATO has conducted military operations in Afghanistan, Kosovo, and
Iraq, and its presence in global conflicts, often led by the U.S., plays a
significant role in international security.
Conclusion
Both the UN and NATO have critical, though distinct, roles in global
politics. The UN focuses on maintaining peace through diplomacy, human
rights, and development, while NATO operates as a defense alliance
focused on military security and collective defense. Despite criticisms of
their weaknesses, these organizations continue to influence international
relations and global stability.
 Non-Governmental Organizations (NGOs)
Non-Governmental Organizations (NGOs) are independent entities
that operate globally, providing humanitarian aid and services without
being tied to any country. This freedom allows them to assist in areas
affected by disasters, conflict, or war. A prominent example is the Red
Cross (or Red Crescent in Muslim countries), established to provide
emergency relief such as food, water, and medical supplies. It also
monitors the treatment of prisoners of war and ensures war crimes
are not committed. The Red Cross maintains neutrality, offering help to
both sides of a conflict, which makes it more likely to be allowed to operate
in war zones. Its headquarters are in Geneva, Switzerland, with branches
worldwide.
Other notable NGOs include Doctors Without Borders, which provides
emergency healthcare in disaster areas; Oxfam, which combats famine
and disease; Amnesty International, which advocates for human
rights and political prisoners; and Save the Children, which focuses
on providing healthcare and education to children.
Conclusion
NGOs play a vital role in humanitarian efforts, offering assistance to
those in need regardless of borders or political affiliations. Through their
neutrality and global presence, they are essential in providing relief during
crises and advocating for human rights worldwide.

Global Economic Associations: The WTO and NAFTA

The World Trade Organization (WTO) is an economic association made
up of 162 countries, created to promote free trade by reducing or
eliminating tariffs and import taxes. This allows countries to buy and sell
goods with fewer barriers. However, it faces criticism, particularly after a
1999 protest in Seattle, where some argued that the WTO benefited large
corporations more than ordinary people.
Another significant economic organization is NAFTA (North American Free
Trade Agreement), an economic treaty between the United States,
Canada, and Mexico, allowing for free trade without taxing each other's
goods. NAFTA also faces criticism, especially from American
autoworkers, as many car companies relocated their factories to Mexico
for cheaper labor.
Conclusion
Both the WTO and NAFTA aim to enhance global trade and economic
cooperation, but they have faced significant criticism for favoring large
corporations and contributing to the loss of manufacturing jobs in certain
regions.

Globalization and Globalism

Globalization refers to the increase or decline in the degree of
globalism. While globalism refers to the network of connections that
span different countries, globalization focuses on the speed and intensity
of these connections. The contemporary world is characterized by rapid
connections through the Internet, modern transportation, and
communication technologies, unlike the slower connections in the past,
such as those along the Silk Road.
The key difference between globalism and globalization is the
"thickness" of these connections. Globalism is thin, and as it becomes
thicker, globalization occurs. For example, global trade in the past,
such as along the Silk Road, was slower and involved fewer people. Today,
trade can occur online, connecting millions instantly and significantly
increasing the speed of transactions. The example of oil prices changing
overnight illustrates the speed of contemporary globalization.
There are four dimensions of globalism: economic, military,
environmental, and social. As globalization intensifies, these dimensions
also become thicker and faster. For instance, the threat of nuclear war
represents military globalism, while global warming exemplifies
environmental globalism. Social and cultural globalism involves the
rapid spread of ideas, such as religious teachings, facilitated by mass
media, television, radio, and the Internet.
Conclusion
While globalism refers to the network of global connections,
globalization is the process by which these connections become more
dynamic and faster. This intensification of connections across economic,
military, environmental, and social spheres shapes the interconnected
world we live in today. The rapid exchange of information and goods has
fundamentally transformed how we interact, trade, and communicate.

Informationalism
Informationalism: The New Technological Paradigm
Informationalism is a technological paradigm that emphasizes the
growth of information as the primary force connecting people, things,
and places globally. It is associated with advancements in computer
science, telecommunications, and media, replacing industrialism as the
dominant global system. Unlike industrial goods, the contemporary focus is
on exchanging information and knowledge, which are immaterial but
crucial in today's society.
Key advancements driving informationalism include the creation of the
container ship (1956), airfreight, and FedEx in the 1970s, which uses
computer technology for deliveries. Additionally, technologies like MRI,
ultrasound, and CT scans exemplify the use of computers in healthcare,
while satellite technology, GPS, and Global Navigation Systems
(GNS) highlight how computers support military and global positioning
systems.
The Internet is central to informationalism, connecting people worldwide
and enabling easy access to information. The flat world thesis posits
that, theoretically, anyone can engage with the Internet. Yet, access to
modern technologies is not universal, with barriers like lack of electricity,
illiteracy, weak financial systems, and government restrictions (e.g.,
the Great Firewall in China) limiting global participation.
McLuhan and Fiore (2005) argue that in the New Media Age, the
medium through which a message is transmitted, not just its content,
plays a crucial role in shaping individual subjectivity and culture. This is
seen in how television and social media shape perceptions globally, with
visual spectacle often being a key element in media.
Conclusion
Informationalism highlights the importance of information and
technology in today's interconnected world. While the Internet and media
are central to this shift, barriers to access persist, limiting the global spread
of information. The rise of informationalism reshapes the way we connect,
learn, and communicate, underscoring the importance of digital technology
in the modern era.
Global Citizenship
Global Citizenship: A New Ethical Disposition
Global citizenship refers to a moral and ethical disposition that helps
individuals understand their roles in both local and global contexts and
reminds them of their responsibilities within various communities.
According to Caecilia Johanna van Peski (as cited in Baraldi, 2012), global
citizens are those who connect different communities in an increasingly
globalized world. They navigate across boundaries, helping to make
sense of a complex world.
While global citizenship does not imply a singular value system or
attitude, it challenges us to engage with the different forms of
globalization that exist. Some aspects of globalization should be resisted,
while others should be welcomed. Resistance to globalization often comes
from the bottom billion who suffer from systemic inequalities and lack of
infrastructure. Opponents of globalization often criticize Westernization
and global capitalism.
There are three approaches to resisting economic globalization:
1. Trade protectionism – Government intervention through tariffs and
non-tariff barriers to protect domestic economies.
2. Fair trade – A counter to neoliberal free trade, aiming for a more
equitable global economic system where prices are negotiated
transparently.
3. Aid to the bottom billion – Increasing aid and adapting
international norms to help marginalized populations.
When addressing political globalization, key issues include
accountability and transparency. Political organizations must be more
accountable due to increased global interaction. Mechanisms like
transnational justice systems and Transparency International help
improve transparency.
Resistance to globalization is complex and contradictory. However, it can
also drive the creation of a new public sphere based on progressive
values such as democracy, social justice, and peace. Globalization
from below, driven by oppressed groups, seeks a more democratic global
process. For example, the World Social Forum (WSF) aims to address
the lack of democracy in political and economic affairs, while
cyberactivism and virtual movements like Global Huaren have
mobilized global protest actions.
Conclusion
The future of global citizenship is multifaceted, as there is no singular
form of globalization. Some foresee its continued expansion, while others
predict its decline. Given the absence of a world government, achieving
the promises of globalization requires the collaboration of citizens,
community action groups, inter-governmental organizations like the
United Nations, and international NGOs like Greenpeace. Reforms in
global governance are essential for global citizens to directly influence
global issues.