The Changing Global ContextThe Changing Global Context

An interdependent system of countries linked by economic and political competition

The World-SystemThe World-System

Telecommunications: Billions of MinutesTelecommunications: Billions of Minutes

““Globalization”

Globalization”

But what is Globalization?But what is Globalization?

The increasingincreasing interdependence and interconnectedness of places globally.

Elements of Globalization

• The continual The continual expansionexpansion of global of global connections, relations and networks:connections, relations and networks:

• Faster and more intenseFaster and more intense

• Increasing Increasing awarenessawareness about the world about the world

• Driven by advancing Driven by advancing technologiestechnologies

THE THE BIGBIG QUESTION: QUESTION:

Is Globalization:Is Globalization:A. Good?A. Good?

B. Bad?B. Bad?

C. All of the above?C. All of the above?

D. None of the above?D. None of the above?

Current World DivisionsCurrent World Divisions

Measuring IncomeMeasuring Income• Gross Domestic Product (GDP)Gross Domestic Product (GDP)

o Total value of all materials, goods, and services Total value of all materials, goods, and services produced in one yearproduced in one year

o Does not include inflows / outflows of money: e.g.: Does not include inflows / outflows of money: e.g.: remittancesremittances

o Impacted by: Impacted by: relative buying power: relative buying power: PPP-Purchasing Power ParityPPP-Purchasing Power Parity

-- Based on Based on hours of labor hours of labor required to purchase a required to purchase a goodgood

Exchange Rate vs. Buying PowerExchange Rate vs. Buying Power-- Euro vs. dollar vs. yuan, etc.Euro vs. dollar vs. yuan, etc.

• ““Per capita”Per capita”– Used for equalizing comparisons between dissimilar Used for equalizing comparisons between dissimilar

populations (divide GDP by population)populations (divide GDP by population)– ““GDP per capita” vs. “GDP”GDP per capita” vs. “GDP”

““Big Mac Index”Big Mac Index”Four most expensive

Switzerland - USD 7.54 Norway - USD 6.30

Denmark: - USD 5.38Brazil - USD 5.21

Five fastest earnedAustralia: 18 minutesU.K.: 24 minutesFrance: 24 minutesJapan: 30 minutesCanada: 30 minutesUSA: 36 minutes

Five slowest earnedSierra Leone: 136 HOURSAfghanistan: 6:12India: 5:48Mexico: 4:42Philippines: 4:24

“PPP”

http://www.statista.com/graphic/1/274326/big-mac-index-global-prices-for-a-big-mac.jpg

Four most affordable

Ukraine - USD 1.20 Russia - USD 1.36 India - USD 1.89

Malaysia - USD 2.11

““PPP”PPP”

The CoreThe Core• Industrialized capitalist

countries, led by former colonial powers (MDC’s)

• So-called “1st World” or “Developed World”

• Centers of trade, technology, productivity, $$$, high GDP pc

• Exploit the Periphery and Semi-periphery

• Examples: Western Europe, North America, Japan, Australia

The PeripheryThe Periphery• Poor, ex-colonial nationsPoor, ex-colonial nations• So-called So-called ““Third WorldThird World” ” or or

“Developing Countries” (LDC’s)“Developing Countries” (LDC’s)• Exploited countries and regionsExploited countries and regions

– ex·ploi·ta·tion  ex·ploi·ta·tion   (ek sploi-tay shun):  (ek sploi-tay shun): • The act of employing to the greatest The act of employing to the greatest

possible advantage: possible advantage: exploitation of copper deposits.exploitation of copper deposits.

• Utilization of another person or group Utilization of another person or group for selfish purposes: for selfish purposes: exploitation of unwary consumers.exploitation of unwary consumers.

• Exploited by Core and Exploited by Core and Semi-PeripherySemi-Periphery

• Tend to export resources and Tend to export resources and provide labor; provide labor; low GDP pclow GDP pc

• Examples: Kenya, Bolivia, Examples: Kenya, Bolivia, Pakistan, etc.Pakistan, etc.

The Semi-PeripheryThe Semi-Periphery• Somewhere in-between core and periphery

• Industrializinging ex-colonial countries (NICs)

• Countries or regions with mixed processes:– Both exploited and exploiters.– Both exporters and importers of goods.

• Examples: South Africa, Brazil, Mexico, South Africa, Brazil, Mexico, Taiwan, South Korea.Taiwan, South Korea. What about…?

CHINACHINA• Historically considered as “periphery”Historically considered as “periphery”• But never colonizedBut never colonized• With trade opening up to China over past With trade opening up to China over past

20 years, China has emerged into the 20 years, China has emerged into the “Semi-Periphery”“Semi-Periphery”

• Recent impact on international markets Recent impact on international markets and HUGE demand (i.e. oil, metals, etc.)and HUGE demand (i.e. oil, metals, etc.)

• Huge population will affect globalizationHuge population will affect globalization

Brief History of “Globalization”Brief History of “Globalization”

1400s: European Colonialism1400s: European Colonialism• Christopher

Columbus: Where was he Where was he going? Why?going? Why?

Hegemony Hegemony • Domination over a Domination over a

region or the worldregion or the world

• ColonialismColonialism

• Not just political or Not just political or military controlmilitary control

• Most pervasive is Most pervasive is economic and economic and cultural controlcultural control

• TheThe “Golden Rule”“Golden Rule”

1800-19001800-1900

Geographic ImplicationsGeographic Implications• Imperialism and Imperialism and

Colonialism Colonialism

• Ethnocentrism Ethnocentrism and Racismand Racism

• Environmental Environmental DeterminismDeterminism

Imperialism:Imperialism:FormalFormal Colonialism

• Colonies under direct governance and control

• Core controls labor, resources, land

• Often indirect political rule through local leaders

IndustrialIndustrialRevolutionRevolution

• Early-1800sEarly-1800s– Britain (Hearth): (Hearth): from slave cotton– Textiles, steam power, iron, canals

• Mid-1800sMid-1800s– Diffusion to Germany, France,

Belgium, Netherlands– Steel used for railroads, steamships,

telegraph (means of globalization)

• Late-1800s/ early-1900sLate-1800s/ early-1900s– Spread to Europe, US, Japan– Electricity, oil, engines, roads, radio

Ethnocentrism and RacismEthnocentrism and Racism• “Our way is best”

• “Civilizing”– Natives– Non-whites

1900:1900:Rise of MultinationalRise of MultinationalCorporations (MNCs)Corporations (MNCs)(Transnational-TNCs)(Transnational-TNCs)• Investments, activities

transcend borders

• Cheap labor / resources in Periphery / S-P countries supply core

• Int’l business and government become increasingly linked

Cartoon on Standard Oil, Cartoon on Standard Oil, 19041904

• Industrial revolution helped create the rise of MNCs / TNCs

• “Golden Rule” in full effect

• Rules made by core in interest of business

““Modern”Modern”ImperialismImperialism

(Frequently (Frequently viewed as viewed as

Post-WWII)Post-WWII)

1945: World War II1945: World War II “Begins” contemporarycontemporary globalization

• Sudden shifts in economic hegemony, political power

• Sudden technological innovations

• Sudden growth of transportation, communications networks

Late 1940s: Late 1940s: U.S. dominantU.S. dominant• Sole possession of

atomic bomb to 1949

• War destroyed industries of Europe, Russia and Japan

• U.S. finances reconstruction

Nagasaki

Frankfurt

Anti-Anti-colonial colonial revoltsrevolts

• Decolonization: Colonial flags come down– Asia, 1940s-1950s– Africa 1960s-1970s

• Neocolonialism Neocolonialism begins– Periphery countries “free,” but…– Ex-colonial powers still dominate economies,

resources, cultures, etc.

Neocolonialism Neocolonialism ((InformalInformal Colonialism): Colonialism): Spheres of InfluenceSpheres of Influence

• Post-WWII (today!)Post-WWII (today!)• Core-dominatedCore-dominated• NOT militarily controlledNOT militarily controlled• ““Controlled” through trade and resources Controlled” through trade and resources ($)($)

World divisions: World divisions: Late 20th centuryLate 20th century• First World (“Global North”)First World (“Global North”) - Industrialized Industrialized

capitalist countries of Western Europe, North America.capitalist countries of Western Europe, North America.

• Second World Second World - Centrally-planned “socialist” - Centrally-planned “socialist” countries such as former Soviet Union.countries such as former Soviet Union.

• Third World (“Global South”) - Ex-colonies: India, Malaysia, Brazil, Algeria, etc.

• Fourth World (“Global South”) - Poorest nations including indigenous communities

North / South DivideNorth / South Divide

““Global North vs. Global South”Global North vs. Global South”

Regions of the Regions of the “Global Village”“Global Village”

EastAsians

SouthAsians

Africans

European

Latin Am

North Am

Oceania

• 22 East Asians22 East Asians• 38 South Asians38 South Asians• 15 Africans15 Africans• 10 Europeans 10 Europeans • 9 Latin Americans 9 Latin Americans • 5 North Americans5 North Americans• 1 from Oceania1 from Oceania

In a world village of 100 people:

Household incomeHousehold income

Less than$650$650-$35,000Over$35,000

• Average annual Average annual income $4,890income $4,890

• 60 poor60 poor

• 30 marginal30 marginal

• 10 well-off10 well-off

Ownership / ConsumptionOwnership / Consumption

• 20 richest 20 richest villagers own villagers own and consumeand consume

80% of goods80% of goods

• Other villagers Other villagers own and own and consume consume remaining 20%remaining 20%

“80 / 20 Rule”

It’s here to stay.It’s here to stay.Globalization…Globalization…