Globalization

Essential Idea Globalization is the driving force as we enter the 21st century and affects economics, security, and culture.

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

Global Economy Multinational Corporations Companies that operate in a number of different countries Exxon Mobile, Ford, BP, Toyota View the whole world as a market for their goods Royal/Dutch Shell: global group of energy and petrochemical companies, operating in more than 140 countries and territories, employing more than 112,000 people

Global Economic Development In the postwar era, the expansion of the world’s economies led to an increase in production of goods and services so that many nations benefited. Manufacturing moves from developed nations to emerging nations.

Globalization 1975 8% of world’s countries had a free-market system   1975 8% of world’s countries had a free-market system 1997 28% had one with $644 billion FDI

Global Economy Global Economy: includes all the financial interactions that cross international borders

Global Economy Free Trade: elimination of trade barriers (ex: tariffs) among nations Regional trade blocs- EU, NAFTA

Globalization What does “globalization” mean? What are its causes? Why is it proceeding rapidly? What is its impact on Jobs? Incomes? Labor and environmental policies? National sovereignty? International Trade patterns Foreign direct investment (FDI) flows Economic growth rates Multinational corporations and their impact

Globalization The “Electronic Herd” Power in the hands of stock, bond and currency traders moving funds around the world Multinational corporations looking for most efficient, low-cost producers Beginning to replace governments as primary source of capital for both companies and countries

Impact of the Global Economy Environmental Political Global Warming Large-scale soil erosion Habitat destruction Need for oil = conflict

Illustrative world trade flows ($billions) Western Europe intratrade: 1430 194 227 241 North America intratrade: 465 200 Asia / Pacific Rim intratrade: 632 393 382 279 365 Rest of world intratrade: 175 381 140 137 313

Global Security Peacekeeping Activities: UN Peacekeeping Forces Made up of soldiers from different nations Work to carry out peace agreements, monitor cease-fires, or put an end to fighting and allow for negotiations

Global Security Weapons of Mass Destruction: Nonproliferation- stop spread of weapons Various treaties to stop production and/or destroy stockpiles Some nations continue to pursue development of WMDs Is this a problem that can be solved?

Global Security Ethnic and Religious Conflicts: Protestants and Catholics in Ireland Palestinians and Israelis in the Middle East Serbs, Bosnians, and Croats in Southeastern Europe

Global Security Human Rights: Universal Declaration of Human Rights- UN issued (1948), sets human rights standards for all nations Violations occur all around the world

Global Security Health Issues: Diseases of poverty persist (Cholera, Malaria) Epidemics occur with some regularity (Flu Epidemic, AIDS, Ebola)

Global Security Terrorism: the use of violence against people or property to force changes in societies or governments Modern terrorism has become increasingly destructive and high-profile Nations respond aggressively

Global Culture 21st century technologies allow for widespread cultural diffusion Popular Culture- cultural elements that reflect a group’s common background and changing interests Music Sports Movies Clothing fashions Foods Hobbies and leisure activities

“Drivers” of Globalization: Technological Change Globalization of markets and production result of lowering of trade barriers enabled by technological change Telecommunications and microprocessors The internet and the world-wide web Transportation technology

Globalization Crash Course #1- The Upside Globalization Crash Course #2- Is it a net positive?