GLOBALIZATION

WHAT IS GLOBALIZATION?  Refers to the increased flow of trade, people, investment, technology, culture, ideas among countries and creates a more integrated and interdependent world  Globalization has been around since the 15 th century when European exploration & colonization created global empires & markets, but most historians and economists agree that today is special by the extent of interdependence and the speed by which it has occurred.

DRIVERS OF GLOBALIZATION Two factors underlie globalization ▫ “Decline in barriers to the free flow of goods, services, and capital” that has occurred since the end of World War II ▫ Technological change Two factors underlie globalization ▫ “Decline in barriers to the free flow of goods, services, and capital” that has occurred since the end of World War II ▫ Technological change

DECLINING TRADE AND INVESTMENT BARRIERS During the 1920s and ‘30s, many nations erected formidable barriers to international trade and foreign direct investment international trade foreign direct investment Advanced industrial nations of the West committed themselves after World War II to removing barriers to the free flow of goods, services, and capital between nations. During the 1920s and ‘30s, many nations erected formidable barriers to international trade and foreign direct investment international trade foreign direct investment Advanced industrial nations of the West committed themselves after World War II to removing barriers to the free flow of goods, services, and capital between nations.

AVERAGE TARIFF RATES ON MANUFACTURED PRODUCTS France21 %18 %5.9 %4.0 % Germany20 %26 %5.9 %4.0 % Italy18 %25 %5.9 %4.0 % Japan30 %--5.3 %3.8 % Holland5 %1 %5.9 %4.0 % Sweden20 %9 %4.4 %4.0 % UK--4%5.9 %4.0 % US44 %14 %4.8 %4.0 %

EFFECTS OF LOWERING TRADE BARRIERS

THE ROLE OF TECHNOLOGY  Lowering of trade barriers made globalization possible;  Technology has made it a transforming movement “World Wide Web” has exploded in last 20 years Computers can move money around world = “finance capital” Silicon Valley is 9th largest economy in world!

INTERNET USAGE GROWTH

GLOBALIZATION IS ACCELERATION OF TRENDS OF THE LAST 10,000 YEARS People lived for 250,000 years in hunter-gatherer bands Rise of agriculture 10,000 years ago led to rise of empires and nation-states Science and ‘enlightenment’ after 1600 produced global trade and empires Free trade and tech after 1945 produced present-day globalization

ASPECTS OF GLOBALIZATION 1.ECONOMIC 2.CULTURAL 3.POLITICAL THESE ASPECTS ARE ALL INTERCONNECTED! *********************

ECONOMIC GLOBALIZATION Economies Are Increasingly Linked Together EX: NAFTA (MX, CA, US), The EU, WTO (World Trade Organization) Creation of Global Institutions:  World Trade Organization (WTO)--responsible for policing the world trading system and ensuring that nations adhere to the rules established in WTO treaties  In 2008, 151 nations accounting for 97% of world trade were members of the WTO  International Monetary Fund (IMF)--maintains order in the international monetary system, provides loans

ECONOMIC GLOBALIZATION MULTI-NATIONAL CORPORATIONS OLD: Dutch East India Company 1602 company of Dutch merchants & independent trading companies Spice trade monopoly in East Asia Power to colonize territories & enslave indigenous people Indonesia & South Africa

ECONOMIC GLOBALIZATION Multinational Corporation--any business with productive activities in 2 or more countries. NEW: Nike, Wal-Mart, Royal/Dutch Shell Top 100 multinationals are all US-owned companies! Royal/Dutch Shell: global group of energy and petrochemical companies, operating in more than 140 countries and territories, employing more than 112,000 people

GLOBALIZATION OF PRODUCTION &... SERVICES  Vizio flat panel TV is  designed in a small office in California  assembled in Mexico  From  panels made in South Korea  electronic components made in China  microprocessors made in the U.S.  Increasingly companies are using modern communications to outsource service activities to low-cost nations  Example: Customer Service calls routed to India

GLOBALIZATION OF MARKETS  In the past, each country had its own companies in many industries and its own products  I never saw Japanese media (and I saw little non-US media) in college  Now today everyone knows…  Nintendo  Starbucks  Coca-Cola  Ikea  McDonald’s  Samsung

ASEAN (Association of Southeast Asian Nations) 1967 EC (European Community) 1967 EU (European Union) 1993 NAFTA (North American Free Trade Agreement) 1994 AEC (African Economic Community) 1991 GROWTH OF REGIONAL TRADING ALLIANCES (SHARED POLITICAL AND ECONOMIC INTERESTS TO PROMOTE TRADE)

Began in 1957 with six nations; now 27 Intended to integrate the European economy Common currency – the Euro EUROPEAN UNION

THE CHANGING ROLES OF COUNTRIES IN THE GLOBAL ECONOMY In the 1960s:  The U.S. dominated the world economy and the world trade picture  U.S. multinationals dominated the international business scene  About half the world-- the centrally planned economies of the communist world-- was off limits to Western international business Today, much of this has changed.  In the early 1960s, the U.S. was the world's dominant industrial power accounting for about 40.3% of world manufacturing output  By 2007, the U.S. accounted for only 20.7%  Other developed nations experienced a similar decline

CULTURAL GLOBALIZATION McArabia Kofta

CULTURAL GLOBALIZATION Consumerism – People want more than they need Cultural lines have become blurred as world becomes more connected - (cultural imperialism) “Americanization” or “McDonaldization” threatens local cultures Hollywood movies Disneyland Starbucks Dominance of the English language

AMERICANIZATION OR MCDONALDIZATION Pepsi in Russian

WESTERN CONSUMERISM SPREADS Iran’s Islamic answer to Barbie and Ken: Sara and Dara

Sports --Baseball in Japan --Football (soccer) and the World Cup *spread around the world via the British *Colonial nationalists emphasized playing football to generate a national identity Art --Other cultures represented in Western art, such as African sculpture in Pablo Picasso’s pieces and Japanese woodblock printing influence in Impressionism GLOBAL INTERACTIONS IN CULTURE

POLITICAL GLOBALIZATION GLOBAL INSTITUTIONS United Nations (UN)—global association of countries that work to facilitate international peace and security, friendly relations among nations, cooperation in solving international problems and respect for human rights. World Bank—fights poverty by promoting economic development among developing countries Whose interests do the UN & World Bank represent?

THE GLOBALIZATION DEBATE  Pro  Lower prices for goods and services  Economic growth  Increase in consumer income  Creates jobs (for many)  Countries specialize in production of goods and services that are produced most efficiently  Pro  Lower prices for goods and services  Economic growth  Increase in consumer income  Creates jobs (for many)  Countries specialize in production of goods and services that are produced most efficiently  Con  Destroys manufacturing jobs in wealthy nations  Wage rates of unskilled in advanced countries decline  Outsourcing  Companies move to countries with fewer labor and environment regulations  Loss of sovereignty  Homogenized cultures  Con  Destroys manufacturing jobs in wealthy nations  Wage rates of unskilled in advanced countries decline  Outsourcing  Companies move to countries with fewer labor and environment regulations  Loss of sovereignty  Homogenized cultures

20 th century had a vast increase in the population b/c of advances in ag, industry, science, medicine Reducing birth rates has become a concern in many countries (WHO - World Health Organization assists in family-planning) GLOBAL PROBLEMS: DEMOGRAPHIC

Exploitation and competition Urbanization and agricultural expansion Increased use of fossil fuels Kyoto Treaty Greenpeace and Earth Day Climate Change Genetically Modified Organisms and Food GLOBAL PROBLEMS: ENVIRONMENT

Causes of poverty Resource distribution and access Income opportunities limited Education opportunities limited Forced labor Slavery still exists Child labor still common GLOBAL PROBLEMS: ECONOMIC INEQUITIES AND LABOR SERVITUDE

Last major pandemic – Spanish flu of 1918/1919; killed million Smallpox and diphtheria have been eradicated Medical innovations: polio vaccine, antibiotics, artificial heart, transplants GLOBAL PROBLEMS: DISEASES

HIV/AIDS Identified in 1981 in San Francisco kills adults; leaves children orphaned; threatens society Treatment is expensive In 2000, 36.1 million people living with HIV/AIDS worldwide; of those 21.8 million are in Africa GLOBAL PROBLEMS: DISEASE

Diseases associated with your lifestyle: diabetes, heart disease, Alzheimers Diseases associated with poverty: malaria, TB, cholera Current concerns: Ebola & Zika GLOBAL PROBLEMS: DISEASE

The use of violence, or threatened use of violence, in order to achieve a political, religious, or ideological aim. Globalization has contributed to terrorism. How? Alienates & angers ppl who feel victimized by foreign influences that threaten native culture & practices Creates economic frustrations as traditional skills become obsolete in the global market. GLOBAL PROBLEMS: TERRORISM

The Karnataka State Farmers' Movement (KRRS) burn genetically modified crops as part of the "Cremate Monsanto" campaign. Karnataka, India, 1998.

ZAPATISTA WOMEN ARE VIGILANT IN DEFENDING THEIR COMMUNITY. CHIAPAS, MEXICO.

PALESTINIAN WOMEN PROTEST AGAINST THE ISRAELI OCCUPATION AND ESCALATION OF MILITARY AGGRESSION AGAINST CIVILIANS IN THE WEST BANK AND GAZA. SAN FRANCISCO, CALIFORNIA, 2002.

You can kill the messenger but not the message! NIGER DELTA WOMEN PROTEST

UCSC LECTURERS PROTEST UNFAIR LABOR PRACTICES, 2002