Part 1: Economic GlobalizationPart 2: Global Media

Lesson 21

Part 1: Economic Globalization

Theme: How global corporations and countries operate economically in the era of

globalization

Lesson 21

Characteristics of the Post-1990 Global Economy

• Expansion of trade between countries

• Privatization of former state enterprises

• Unfettered movement of capital

• Growth of foreign investments

• Deregulation that undermined the control that national governments once exercised over economic activity

• Emergence of a new brand of corporations

Free Trade

• Freedom from state-imposed limits and constraints on trade across borders

Economic Organizations• International Monetary Fund

(IMF) founded at the Bretton-Woods Conference in 1944 to promote market economies, free trade, and high growth rate

• General Agreement on Tariffs and Trade (GATT) signed by 23 non-communist countries in 1947 (now has 123 members) holds regular negotiations to remove or loosen barriers to free trade

• In 1994, the GATT established the World Trade Organization (WTO) which took over GATT activities in 1995 and became a forum for settling international trade disputes with the power to enforce its decisions

Protests against the WTO in Seattle in 1999

Corporations

• International corporations sought to extend business activities across borders in pursuit of specific activities such as importation, exportation, and the extraction of raw materials

• Multinational corporations conducted business in several countries but had to operate within the confines of specific laws and customs of a given society

Corporations

• Global corporations rely on a small headquarters staff while dispersing all other corporate functions across the globe in search of the lowest possible operating costs– Treat the world as a single market and act as

if the nation-state no longer exists– Some 50,000 global corporations exist,

including General Motors, Siemens AG, and Nestle

Impact of Global Corporations

• In the past, corporations had to operate under the constraints of a social compact with their employees and their communities– Collective bargaining agreements, tax laws,

and environmental regulations forced the companies to contribute to the welfare of their communities

Impact of Global Corporations

• Now, highly mobile global corporations have escaped these obligations– Have moved jobs from

high-wage facilities to foreign locations where wages are low and environmental laws are weak or non-existent

– US federal tax receipts from corporations have dropped from 30% to 12%

Economic Growth in Asia

• US helped rebuild Japan after World War II• Japan’s large and mostly compliant work force

fueled an economy based on manufactured goods slated for export to markets with higher labor costs like the US

• In the 1960s the Japanese used their profits to switch to more capital-intensive manufacturing but “Made in Japan” usually was associated with a cheap product

Economic Growth in Asia

• In the 1970s, Japan took advantage of a highly trained and educated work force to shift their economy toward technologically-intensive products and “Made in Japan” came to represent state of the art technology

• In the 1980s, Japan seemed poised to overtake the US as the world’s largest economy, but by the 1990s, the Japanese could not sustain their rapid growth rates and sputtered into recession

Other Asian Markets

• Japanese growth served as a model for other Asian countries and Hong Kong, Singapore, South Korea, and Taiwan became known as the “four little tigers” in the 1990s

• After the original four, Indonesia, Thailand, and Malaysia began to grow

• Even China began to move its government-planned economy to a market economy in which demand for goods and services would determine production and pricing– In 2001, China joined the WTO

Trading Blocs

• Since no single economic power could fully control global trade and commerce, groups of nations entered into economic alliances designed to gain advantages for the members– EU– OPEC– NAFTA– ASEAN

European Union (EU)

• Began when six European nations agreed in 1957 to dismantle tariffs and other barriers to free trade among themselves

• Subsequent treaties created political institutions

• Now the EU has 15 members who have subordinated much of their national sovereignty to the EU– 12 nations have adopted

a common currency

Organization of Petroleum Exporting Countries (OPEC)

• Established in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela and later joined by eight others

• Cartel proved to be a political as well as an economic power during the Arab-Israeli War of 1973– Ordered an embargo on oil

shipments to the US (Israel’s ally) and the price of oil in the US quadrupled between 1973 and 1975

North American Free Trade Agreement (NAFTA)

• Went into effect with the US, Canada, and Mexico in 1994

• Constitutes the world’s second largest free trade zone but lacks the economic coordination of the EU– Ross Perot (1992 third

party presidential candidate would complain NAFTA would produce “a giant sucking sound” of jobs leaving the US for Mexico)

Association of Southeast Asian Nations (ASEAN)

• Established in 1967 by Thailand, Malaysia, Singapore, Indonesia, and the Philippines

• Originally conceived as a bulwark against the spread of communism

• Economic focus became sharper with agreements with Japan in 1977 and the European Community in 1980

• Established a free trade zone in 1992

Impact of the Global Economy on Culture

• Has resulted in a consumer culture built on a tendency toward homogenization of cultural products and heightened awareness of local tastes and values– This homogenization is often

called the “Americanization” or “McDonaldization” of the world

• Through advertising, American music, fashion, fast food, etc have spread throughout the world

• At the same time, global marketing often emphasizes the local or indigenous value of a product such as Fosters beer from Australia or Perrier water from France McDonald’s in Thailand

Other Issues of Globalization

• Preeminence of English language• Overpopulation• Environmental degradation• Illegal trafficking of people and goods• Spread of disease • Urbanization• Immigration• World tourism

– We’ll talk more about some of these in Lesson 23

Part 2: Global Media

Theme: The impact of 24/7, real-time news coverage on decision-making and public

opinion

Lesson 21

The Old Way• 1938: the first regular

broadcast of daily news began on radio, with the World Today program on CBS for 15 minutes every evening,

• 1948: the “CBS TV News” began

• 1963: CBS Evening News expanded from 15 to 30 minutes, followed shortly by NBC, and then by ABC in 1967

• 1968: CBS began the 60 Minutes news magazine/documentary weekly show

CBS News correspondent Eric

Sevareid, 1955

24/7 News

• 1980: Cable News Network (CNN) became the world's first 24-hour cable television news channel

• 1996: MSNBC and Fox News Channel began 24-hour news

• Collectively, expanded television news coverage creates “the CNN effect” which affects political, diplomatic, and military decision making on a global level

al Jazeera

• Founded in 1996 and based in Qatar• Fastest growing network among Arab communities

and Arabic speaking people around the world • Focuses primarily on news coverage and analysis

with a markedly anti-Western slant

bin Laden and al Jazeera

• “For someone who scorned modernity and globalization, and who took refuge in an Islamic state that banned television, bin Laden proved remarkably adept at public diplomacy. In the wake of the September 11 attacks, bin Laden turned to al Jazeera to reach the two audiences that were essential to his plans– the Western news media and the Arab masses.”– David Hoffman, Beyond

Public Diplomacy

Influence of the Media

• Agenda setting• Shaping public

opinion• Policy-makers

Tiananmen Square,

June 4, 1989

Agenda Setting

• “The mass media may not be successful in telling people what to think, but the media are stunningly successful in telling their audience what to think about.”

• “If a tree falls in the woods and CNN doesn’t cover it, did it really fall?”– Bruce W. Jentleson, American Foreign

Policy: The Dynamics of Choice in the 21st Century

Shaping Public Opinion

• “Framing”– How the media casts an

issue affects the sustentative judgments people make about the issue.

• “Priming”– The priority the media

gives to an issue affects the priority people give to the issue.

Donald Rumsfeld on the Media Coverage of OIF

• “And interestingly… we have seen mood swings in the media from highs to lows to highs and back again, sometimes in a single 24-hour period.”

• “For some, the massive volume of television - and it is massive - and the breathless reports can seem to be somewhat disorienting. Fortunately, my sense is that the American people have a very good center of gravity and can absorb and balance what they see and hear.”

Policy-makers

• Policy-makers often ask themselves “What will the media think?” as they formulate a course of action

• Political “spin” becomes extremely important

Case Study: Somalia• Drought, famine, clan violence, corruption, and inefficient

government had created a humanitarian crisis in Somalia in the 1990s.

• One of the main sources of power had been the control of food supplies. – Hijacked food was used to secure the loyalty of clan

leaders, and food was routinely exchanged with other countries for weapons.

– In the early 1990’s up to 80% of internationally provided food was stolen. 

• Between 1991 and 1992 over 300,000 Somalis were estimated to have died of starvation. – UN relief efforts were unsuccessful, largely due to looting.

• The U.N. asked its member nations for assistance. 

Case Study: Somalia

• In December 1992, President George Bush proposed to the U.N. that United States combat troops lead the intervention force.  – The U.N.

accepted this offer and 25,000 U.S. troops were deployed to Somalia.

Somalia: Entry

• Stark images from Somalia, transmitted to the world via satellite, helped shape public opinion and pressured the United Nations to take action

• One famous picture was this one of Aabiba Nuur, who weighed only 46 pounds

Somalia: Entry

• “And it was pictures -- of spectral women and withered children -- that launched the rescue mission in Somalia. It may have been awkward to have cameras meet the troops when they landed, but wasn't it also appropriate? In a sense it was cameras that had sent them there.”– Time Magazine, Dec. 28, 1992

Somalia: Exit

• Two Black Hawk helicopters were shot down in the battle of Mogadishu in Oct 1993

• Pictures included a US soldier being dragged through the streets of Mogadishu

Somalia: Perception

• Nineteen US soldiers were killed and over 70 were wounded

• Conservative estimates say more than 500 Somalians were killed and over 1,000 injured

• "The perception of an operation can be as important to success as the execution of that operation." – MG Charles McClain

Case Study: Somalia• “We went into Somalia

because of horrible television images; we will leave Somalia because of horrible television images.”– Marianne Means

• “We had been drawn to this place by television images; now we were being repelled by them. The President immediately conducted a policy review that resulted in a plan for withdrawal over the next six months.”– Colin Powell

Sudan and Somalia

• “As the contrasting responses to the seemingly similar Somalia and Sudan cases suggest, media coverage can have a significant impact.”– Arnold Kanter,

Intervention Decisionmaking in the Bush Administration

Refugees in Sudan

Other Examples

Buddhist Monk, Vietnam, 1963

America Puts a Man on the Moon, 1969

Berlin Wall, 1989

Iraqi Prisoner, Abu Ghraib, 2004

Next

• Debate: Is globalization economically unfair?