Contemporary World [MIDTERM REVIEWER ]

• Globalization


  The increasing interaction of people, states, or countries through the growth of the international flow of money, ideas, and culture
• Globalization


  • It is the interconnectedness of people and businesses across the world that eventually leads to global, cultural, political, and economic integration
  • It is the ability to move and communicate easily with others all over the world to conduct business internationally
  • It is the free movement of goods, services, and people across the world in a seamless and integrated manner
  • It is the liberalization of countries of their impact protocols and welcoming foreign investment into sectors that are the mainstays of its economy
  • It refers to countries acting like magnets attracting global capital by opening up their economies to multinational corporations
• Martin Albrow and Elizabeth King: 'Globalization is a process by which the people of the world are incorporated into a single world society'
• Anthony Giddens: 'Globalization as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa'
• Prof. Roland Robertson: 'Globalization as the compression of the world and the intensification of the consciousness of the world as a whole'
• Characteristics of Globalization

  • Social mobility of movement of people regardless of reason
  • Intensification of interactions
  • Active process
  • Borderless interaction
  • Spread of ideas, knowledge, technology, culture, religion, etc.
• Stages of Globalization

  1. Stage 1: Arm's length service activity of an essentially domestic company/institution that moves into a new market overseas by linking up with local dealers and distributors

  2. Stage 2: Company institution takes over these activities on its own

  3. Stage 3: Domestic-based company institution begins to carry out its manufacturing marketing and sales in key foreign markets

  4. Stage 4: Company/ institution moves to a full insider position in these markets supported by a complete business system including Research and Development (R&<D) and engineering. However, the headquarters mentality continues to dominate

  5. Stage 5: Company/institution moves towards a genuinely global mode of operation. Global localization happens, that is, the company institution serves local customers in markets around the globe responding to their needs. This requires an organizational transition i.e.; the company must denationalize its operations and create a system of values shared by global managers
• Merits of Globalization


  • An open economy spurs fast innovation with fresh ideas from abroad
  • Export jobs often pay more than other jobs
  • Productivity grows more quickly when countries produce goods and services in which they are of comparative advantage
• Demerits of Globalization


  • Exploitation of Underdeveloped Countries
  • Widening of Rich-poor Gap
  • Harmful Effects on Small Industries and Small Business
• The five "scapes" of Globalization

  • Ethnoscape (global movement of people)
  • Mediascape (flow of culture)
  • Technoscape (circulation of mechanical goods and software)
  • Financescape (global circulation of money)
  • Ideoscape (realm where political ideas move around)
• Aspects of Globalization

  • Industrial globalization
  • Financial globalization
  • Economic globalization
  • Political globalization
  • Informational globalization
  • Cultural globalization
• Elements of Globalization


  • Trade Agreements (bilateral, regional or multilateral economic arrangements designed to reduce or eliminate trade barriers)
  • Capital Flow (measurement of increase or decrease in a nation's domestic or foreign assets)
  • Migration Patterns (impact of labor market fluidity on production costs through the loss (emigration) or gain (immigration) of potential workers especially those with particular skills)
  • Information Transfer (communication trend that helps mitigate the asymmetric functioning of markets and economies)
  • Spread Technology (rapid diversion of the means and methods of producing goods and services)
• Global economy


  A system of trade and industry across the world that has emerged due to globalization
• The origins of a global economy can be traced back to the expansion of long-distance trade during this period, which Wallerstein has labeled the "long sixteenth century"

  1450-1640
• Economic globalization


  A historical process, a result of human innovation and technological process, referring to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders. It may also refer to the movement of people (labor) and knowledge (technology) across international borders
• Global stratification


  The hierarchical arrangements of individuals and groups in societies around the world
• Typologies of global stratification

  • First World - The Western Capitalist democracies of North and Europe, and certain other nations (Australia, New Zealand and Japan)
  • Second World - Nations belonging to the Soviet Union
  • Third World - All the remaining nations, almost all of them from Central and South America, Africa and Asia
• Replacement Typology

  • Developed
  • Developing
  • Undeveloped
• Popular Typology

  • Wealthy (or high income)
  • Middle-income
  • Poor or low-income
• Modernization Theory


  Rich nations became wealthy because early on they were able to develop the correct beliefs, values, and practices
• Dependency Theory


  The poor nations never got the chance to pursue economic growth because early on they were conquered and exploited by European ones
• World System Theory


  Some nations become modernized by exploiting other nations
• Types of Global Poverty

  • Relative poverty
  • Absolute poverty
  • Subjective poverty
• Relative Poverty


  The condition in which people lack the minimum amount of income needed in order to maintain the average standard of living in the society in which they live
• Absolute Poverty


  A condition where a person does not have the minimum amount of income needed to meet the minimum requirements for one or more basic living needs over an extended period of time
• Subjective Poverty


  Poverty that is composed of many dimensions; it is subjectively present when your actual income does not meet your expectations and perceptions
• Institutions in the Modern World System

  • Market
  • Firms
  • States
  • Household
  • Classes
  • Identities