Week 8 Module Globalization Sociology of Religion Sociology

Week 8 Module: Globalization & Sociology of Religion

Sociology of Arts & Humanities Topic: Labeling Immigrants as "The Other" • Name of Artistic Work or Event: Political Cartoon • Type of Artistic Work or Event: Graphic Art • Sociological Theory: Labeling Theory • Theorist: Howard Becker • How it reflects or inspires change in society: This piece of graphic art depicts a negative label of immigrants coming to the American shore. This is known as labeling a group of people as "the other". Sociologist Howard Becker pioneered Labeling Theory which would frame this cartoon as illustrating an "us vs. them" perspective. This is the danger of labeling. It causes some people to see others as almost nonhuman.

The Big Questions: Learning Objectives (1 of 4) 23. 1: What is globalization? Learning Objectives: 23. 1. 1: Discuss the two key changes responsible for the development of globalization. 23. 1. 2: Analyze the ways in which globalization has expanded steadily since the nineteenth century.

The Big Questions: Learning Objectives (2 of 4) 23. 2: How far-reaching is globalization? Learning Objectives: 23. 2. 1: Discuss the extent of international trade and investment in globalization. 23. 2. 2: Explain why economic integration clusters around regions.

The Big Questions: Learning Objectives (3 of 4) 23. 3: What drives globalization? Learning Objectives: 22. 3. 1: Analyze the role that value chains play in globalization. 23. 3. 2: Outline the benefits and costs of China’s export zones.

The Big Questions: Learning Objectives (4 of 4) 23. 4: What are the benefits and drawbacks of globalization? Learning Objectives: 23. 4. 1: Discuss the benefits of globalization to economic growth. 23. 4. 2: Summarize the consequences of the North American Free Trade Agreement (NAFTA). 23. 4. 3: Discuss the impact of globalization on the economic performance of low-income countries.

Big Question 23. 1 What Is Globalization?

Globalization and Its Origins (1 of 2) • Globalization – The term can mean different things, depending on context. – It can be defined as the integration of economic activities across national borders. – Globalization can also be seen in the exchange of cultural products, such as food and movies, but the concept is fundamentally about economics. • Globalization happens through international trade. – Countries export when they sell their goods and services to other countries. – Countries import when they buy goods and services from other countries. – Entrepreneurs in one country might sell in their home country but move production to another country, a process of foreign investment. – People may move to a neighboring country for better jobs. – Countries move from a condition of economic isolation to one in which economies are linked.

Globalization and Its Origins (2 of 2) • Economic integration can be carried out in a number of ways. – The most common is through international trade, a process by which people in one country sell products or services to customers in another country. – Integration can also be carried out through the movement of factors of production —capital and labor.

The Beginnings of Globalization (1 of 3) 23. 1. 1: Discuss the two key changes responsible for the development of globalization. • There is no single understanding of globalization. – Some scholars argue that international trade is at the heart of globalization. – International trade has been a feature of human societies for centuries, if not millennia. – Many scholars have concluded that global economic integration intensified markedly in the second half of the nineteenth century. ▪ 1870 s onward: Increasingly rapid growth in international trade and foreign investments, plus a convergence in prices across countries ▪ Price convergence happens when the price of a good sold in different places tends toward the same level.

The Beginnings of Globalization (2 of 3) • Factors in the rise of globalization since 1850 s: – Change in infrastructure, including technological improvements in transportation and communication ▪ Expansion of railways across Western Europe, Asia, Latin America, and the United States ▪ Advent of the steamship ▪ Invention of the telegraph

The Beginnings of Globalization (3 of 3) • Factors in the rise of globalization since 1850 s: – Transformation in dominant economic systems around the world ▪ Until the nineteenth century, markets played a minor role in people’s lives: – Most human beings lived in countryside and performed agricultural labor – Peasants had control of their land produce goods they needed to survive – Gradually, they lost access to land, moved to cities, and were integrated into market-oriented production ▪ Shift from pre-capitalist to capitalist economies: – As people lost access to goods they needed to survive, capitalism emerged. – There was a massive expansion in consumer markets, as more and more people became dependent on the market for their survival. – Former peasants were forced to purchase things they needed to stay alive from producers who were sometimes great distances from them. – This encouraged the growth of long-distance trade.

The Course of Globalization: From the Nineteenth Century to Today (1 of 3) 23. 1. 2: Analyze the ways in which globalization has expanded steadily since the nineteenth century. • By early 1900 s, Globalization became a powerful force • After 1913, world underwent deglobalization, process in which international economic integration decreases over time – Decline in trade as a proportion of gross domestic product (GDP)— commonly used measure of global economic integration – Gross domestic product (GDP): Value of all goods and services sold on the market in a defined period

The Course of Globalization: From the Nineteenth Century to Today (2 of 3) • Deglobalization began with World War I, which caused enormous disruption in normal patterns of trade and investment. – – Continued until the 1970 s After WWI, global economy hit by what is known as the Great Depression caused enormous disruption to international trade and investment Exporters found that markets for their goods disappeared almost overnight • After the Depression, governments all over the world adopted policies to insulate their economies: – Tariff: Tax imposed on goods imported into a country or, more rarely, to goods being exported to another country to make global trade less appealing – Capital controls: Restrictions imposed by the government on the movement of funds that can be used for investment purposes out of, or into, the country

The Course of Globalization: From the Nineteenth Century to Today (3 of 3) • Reglobalization ensued in 1970 s after decades-long hiatus – Governments’ actions: ▪ Began to undo policies that had previously blocked or reduced foreign trade ▪ Turned to more market-based policies widely described as neoliberalism – Neoliberalism: Reduction of taxes and regulation on business as well as cuts to government programs • Nothing natural or inevitable about globalization – Has always been politically driven – Made possible by political decisions taken by governments – Can be scaled back as a result of governmental decisions in the future

Big Question 23. 2 How Far-Reaching Is Globalization?

Globalization’s Reach • The process of globalization is shaped by two key questions: – How much international trade and investment is occurring? ▪ We need to know to what extent countries are participating in international economic activity. – Do countries integrate equally with different parts of the world? ▪ It may seem that every corner of the globe is more or less equally connected, but we may be experiencing regionalization instead. ▪ Regionalization: Process by which countries group together with their immediate neighbors

The Degree of Globalization 23. 2. 1: Discuss the extent of international trade and investment in globalization. • Today, the degree of global economic integration is not much beyond what it was in 1914. – This may be due to shifts in colonial power. – For some large economies, like those of England Japan, trade constitutes a smaller percentage of their total GDP than was true in 1914. • About 80 percent of global investment occurs in national borders. – Foreign direct investment (FDI): Firms from one country invest in another – 2010: FDI was only a fraction of total investment across the world economy. – While FDI tends to be volatile from year to year, it has fluctuated in a range of 10 to 20 percent in the last two decades.

The Importance of Regions (1 of 3) 23. 2. 2: Explain why economic integration clusters around regions. • Most foreign trade and investment takes place in particular regions. – Most countries have seen the average distance traveled by their total volume of exports and imports decline since the 1960 s. – This regional bias for trade is further confirmed by the increase in the regional share in total trade over the last few decades. – The share of intraregional trade is increasing for a number of regional blocs— economic ties that are densely woven between neighboring countries and that get much thinner between countries located farther away.

Figure 23. 2: Globalization or Regionalization?

The Importance of Regions (2 of 3) • A good indicator of the importance of regionalization is the role of the transnational corporation (TNC). – TNC: Corporation that sells products in more than one country – TNCs organize their trading activities across national borders. • TNCs demonstrate a regional bias: – 65 percent of the affiliates of these companies are located outside the home country in which they base their operations. – Most of their cross-border operations are conducted in locations that are close by their home country, not in far-flung corners of the globe. – The world’s largest companies are concentrated in the European Union, North America, and Japan. – Their foreign investments and sales are largely centered in their home regions.

The Importance of Regions (3 of 3) • Labor flows exhibit the same regional bias: – The total number of annual migrants in the world has skyrocketed since the mid 1960 s. – Most movement of workers across borders happens via migratory corridors between neighboring countries. • Evidence suggests that globalization has not resulted in the integration of national economies across the world. – Globalization has promoted the rise of regional economic blocs, the most important of which are centered in Europe and North Africa, North America, and East and South Asia.

Big Question 23. 3 What Drives Globalization?

Globalization’s Driving Forces • We now know what globalization means, when it started, and how far it has gone. – The world has not moved in a steady path from less globalized to more globalized. – What seems to be emerging is a world comprising economic regions, not a seamless web of economic integration. • This section will explore the key forces driving globalization.

Outsourcing and Global Value Chains (1 of 2) 23. 3. 1: Analyze the role that value chains play in globalization. • Elements of the drive toward economic globalization: – Outsourcing: Producers take activities that they once did in-house and farm them out to other firms in remote locations – Emergence of global value chains, in which different aspects of the process of producing a good or service are performed in different countries – In many industries, segments of the production process are outsourced to countries where wages are lower – Work that involves more manual labor and requires a workforce with fewer skills and less experience working with complicated machinery networks

Outsourcing and Global Value Chains (2 of 2) • Often this work is conducted in export processing zones. – Export processing zones: Locations where governments encourage foreign investment by offering exemptions from certain regulations and special tax breaks – Materials that are processed in these zones have often already been partially or fully manufactured elsewhere. – They are commonly destined for far-flung markets in other countries. • Production has been dispersed, but not usually all over the globe; increasingly globalized value chains are usually embedded in regional economic networks.

China’s Export Zones: A Case Study (1 of 3) 23. 3. 2: Outline the benefits and costs of China’s export zones. • China an excellent example of consequences of this process – In recent decades, China has become a center of manufacturing that is tied into global value chains. – In 2011, China exported about $400 billion worth of goods to the United States. • Chinese factories often assemble components produced elsewhere into final products – Chinese factories tend to perform particular steps in the production process, such as assembly work, that don't require expensive machinery or a highly skilled workforce. – This dynamic allows transnational corporations to take advantage of what China does offer: a large pool of relatively low wage labor.

China’s Export Zones: A Case Study (2 of 3) • Chinese workers: – Have benefited from the growing number of jobs in the manufacturing sector – Face poor working conditions: ▪ Workdays are 10 -14 hours long and overtime is mandatory ▪ Low pay rates ▪ Housing in factory owned dormitories, 6 to 10 people to a room ▪ Few institutional protections, such as trade union organizations and labor laws that regulate the terms and conditions of employment ▪ High rates of exposure to dangerous chemicals and being hurt or killed in workplace accidents

China’s Export Zones: A Case Study (3 of 3) • American firms can use threat of outsourcing to China to control workers. – They can force employees in the United States to accept cuts in wages and benefits along with other such undesirable concessions to management. – Studies show that these threats are often effective in scaring U. S. workers into making concessions to management. – Managers only rarely follow through on threats with actual plant closures. • The impact of globalization on workers depends on the level of democracy, trade union strength, and economic growth.

Big Question 23. 4 What Are the Benefits and Drawbacks of Globalization?

The Effects of Globalization • Domains that are also undergoing globalization: – Entertainment field – Cuisine • The main promise of globalization, presented by its advocates, is that it should give a boost to economic growth. • This section will consider: – What kinds of economic policies were practiced by developing countries in the years of deglobalization – What has changed in recent years

Economic Policies in Developing Countries: 1930 s to 1980 s (1 of 3) 23. 4. 1: Discuss the benefits of globalization to economic growth. • From 1930 s to 1980 s, most countries in the developing world saw periods of rapid industrialization – Shifted from agricultural to manufacturing economies – Relied a great deal on the involvement of the state • Model is known as import-substituting industrialization (ISI) – Scholars tend to see ISI as a strategy of poor nations in the mid-twentieth century. ▪ Similar policies have been adopted by almost every country that has attempted to industrialize since the eighteenth century ▪ British used policies emblematic of ISI as they tried to fend off competition from the Dutch in the 1700 s. ▪ United States and numerous countries in Europe used it as they tried to catch up with Britain in the 1800 s.

Economic Policies in Developing Countries: 1930 s to 1980 s (2 of 3) • Purpose of ISI is for government to lessen challenges that domestic industries face from foreign competitors – Impose tariffs and subsidies – Regulate markets – Provide cheap credit to lower costs – Help acquire latest technology • When globalization took off in 1980 s, protections were progressively eliminated. – Globalization associated with introduction of more market-friendly policies – Policies were associated with neoliberalism

Economic Policies in Developing Countries: 1930 s to 1980 s (3 of 3) • In developing world, neoliberalism came in form of policy package known as the Washington Consensus – Policies under the Washington Consensus were geared toward: ▪ Opening the domestic economy to international finance and capital ▪ Lowering trade barriers and liberalizing the domestic economy ▪ Aimed to open emerging economies to goods and capital from the advance world and to encourage more exports from the former to the latter

NAFTA: A Case Study (1 of 3) 23. 4. 2: Summarize the consequences of the North American Free Trade Agreement (NAFTA). • The North American Free Trade Agreement has been extensively studied as a key example of economic globalization. – Supporters promised that it would lead to income growth and greater employment opportunities on both sides of the U. S. –Mexico border. – Critics were concerned with the lack of effective labor and environmental protections and that it would exert a downward pressure on wages and living standards.

NAFTA: A Case Study (2 of 3) • Assessing NAFTA’s consequences is difficult. – Everyone agrees that NAFTA produced a significant increase in cross-border trade and financial flow. – Defenders insist that it has contributed substantially to overall economic growth across North America. – Critics point out that the wealthy have seen the most advantages. – American workers have been devastated with the loss of 680, 000 jobs in the United States. – Access to Mexican markets has benefited large U. S. agricultural producers but resulted in elimination of hundreds of thousands of smaller family farms.

NAFTA: A Case Study (3 of 3) • NAFTA impacts on Mexico: – Nearly all of the growth in manufacturing employment was due to greater work opportunities in maquiladoras, foreign-owned export assembly plants. ▪ Very low-wages and highly exploitative ▪ Do not come with standard Mexican benefits – Expanded employment in manufacturing was outweighed by losses suffered in Mexico’s agricultural producers. ▪ Caused massive migration from rural areas

Has Globalization Lived Up to Its Promise? (1 of 2) 23. 4. 3: Discuss the impact of globalization on the economic performance of low-income countries. • One of the most direct ways to assess globalization is by looking at growth rates. – Economic growth was better during the ISI era throughout the developing world. ▪ In all four of the regions covered—East Asia, Latin America, Africa, and the Middle East—growth slowed down after the end of ISI. – Some regions did better than others. ▪ East Asia managed to sustain decent growth, even though it was lower than in earlier years. ▪ Latin America and the Middle East witnessed a more dramatic slowdown.

Figure 23. 3: Regional Economic Growth Rates, 1961– 2015

Has Globalization Lived Up to Its Promise? (2 of 2) • This tells us that globalization did not deliver as promised. – Disappointment in results was greater in some regions than in others. – However, slowdown in growth inside the developing world was part of a global decrease in growth rates after 1980 – What little income growth there has been has gone to the wealthy. – Economic conditions for the poor and very poor have become much worse. • Advanced countries witnessed a deceleration. – Globalization has exacerbated the gap between wealthy countries and poor countries. – It has also generated sharp disparities in the global South.

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