GLOBALIZATION Essential Idea Globalization is the driving st

GLOBALIZATION

Essential Idea Globalization is the driving st force as we enter the 21 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 Ø 1975 8% of world’s countries had a free-market system Ø 1997 28% had one with $644 billion FDI

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 Ø What does “globalization” mean? – What are its causes? – Why is it proceeding rapidly? – What is its impact on l l Ø 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 Ø Multinational corporations looking for most efficient, low-cost producers Ø Beginning to replace governments as primary source of capital for both companies and countries Ø

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

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

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 21 st 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 Ø Globalization of markets and production – result of lowering of trade barriers – enabled by technological change Ø Telecommunications and microprocessors Ø The internet and the world-wide web Ø Transportation technology

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