Globalization: What is it

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Globalization What is it?

• August 31, 2005
• PSC 300.301

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What to Cover In this Session

• Distinguish between
• Globalization and other IR theories
• Globalization new and old
• Globalization and Cold War Systems
• Learn some concepts
• Globalization, 2nd image and 2nd image reversed
• Understand Friedmans theoretical framework

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Discussion Questions

• What new thing did you learn from the Friedman?
• What point(s) is Friedman making?
• What is your viewpoint concerning these first
  three chapters

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Opening Scene

• South East Asian countries
• South Korea, Thailand, Malaysia, etc
• Cuts down on oil consumption
• Russia
• Slowed oil imports
• Unable to pay its debts
• Foreign investors in Russia
• Sell assets to repay banks
• Brazil
• Investments called up at short notice domestic
  crisis
• US T-Bonds
• Influx of buyers
• Interest rates fall

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Discussion Questions

• Friedmans Story
• What is globalization?
• Description
• In contradistinction to what?
• How does it manifest (what has changed)?
• When did it start?
• What is/are the cause/s of globalization?
• What are its long-term effects?
• Compared to the pre-existing situation(s)?

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Comparison with IR Theories

• So what are the differences or similarities (if
  any) between globalization and
• Neorealism
• Neoliberalism
• Marxism

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Globalization as a theory

• States ? global relations
• Neorealism
• states as actors
• self-help for survival
• military power a necessity
• State effects on international level (state ?
  world politics)
• States others ? global relations
• Neoliberalism
• states and others as actors
• voluntary cooperation for survival
• economic and other forms of power essential
• 2nd image (domestic groups ? world politics)

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• Globalization?
• States, groups and individuals as actors
• voluntary cooperation and military power matter
  for survival
• form of cooperation matters
• free market capitalism
• Types of actors matter
• Electronic herd, super-empowered individuals
• Domestic groups affect world politics and in turn
  are affected by world politics
• 2nd image and 2nd image reversed

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What is Globalization?

• A system
• Interconnected/interdependent/integrated
• Differs from Cold War System (state centered)
• An process
• iterative
• evolving historically (Globalization I and
  Globalization II)

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How Old is Globalization?

• Round I 1800s to 1920s
• Round II Late 1990s onwards (integration)
• Similarities
• Investment in emerging markets
• Volumes of trade and capital flows across borders
• Migration flows existed
• Absence of financial regulations
• Differences
• Degree and intensity of integration
• Kinds of political relationships
• Causes of Globalization
• Organizing principles

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Differences

• Globalization I
• Causes
• transportation costs
• Commodity Trading
• Kind (organizing principles)
• Centralized production
• Industrial manufacture goods
• Regulated markets and empire
• Key Political actor
• British navy pound
• Some state control

• Globalization II
• Causes
• Telecom costs
• Free markets
• Kind (organizing principles)
• Distributed production
• New global goods (services)
• Free market and liberal organized
• Key Political actor
• US dollar and navy
• No state control

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• Intensity and degree
• Size and of people involved
• Miniscule in absolute terms compared to today
• developing countries were left out

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Similarities Globalization and Cold War

• Both influenced domestic politics
• Clearly defined spheres of influence
• Parameters of frameworks are the same (economic,
  politics, etc)

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Differences

• Globalization
• Power Structure
• Interdependence, integration
• Ideologies
• Free market capitalism trade and finance
• Technologies
• Microchip/telecoms
• Political threat
• Electronic herd individuals

• Cold War
• Power structure
• Balance of power, spheres of influence
• Ideologies
• Communism, Keynesian capitalism
• Technologies
• Nuclear weapons
• Political threat
• Nuclear annihilation

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Definition

• A System
• Integration of markets, nation-states and
  technologies to a degree never witnessed before
  along two dimensions
• Enabling Individuals, corporations and nations
  states reach into the world farther, faster,
  deeper cheaper
• Enabling the world to reach into individuals,
  corporations, and nation-states farther, faster,
  deeper cheaper
• Walls/boundaries between countries, markets and
  disciplines are disintegrating
• One system influencing more people in more ways
  at the same time

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Defining Characteristics (Evidence)

• What has Changed (Cold War Glob I)
• Economic approaches Spread of free-market
  capitalism finance systems
• Culture Americanization
• Technology telecoms - digitization
• Politics New power players individual actors
• electronic herd individuals
• Environment demographic changes

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Theoretical Framework

• 6-D Framework
• Politics
• Culture
• Foreign Affairs
• Technology
• Trade/Finance
• Environment

• Globalist - Perspective
• Politics
• Economics
• Culture
• Technology
• Environment

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• Causes
• Free-market capitalism
• rule by market forces
• open economy to competition (privatization) and
  trade
• Effects of globalization (see earlier slides)
• In contrast to globalization I
• In contrast to Cold War

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• Responses
• Backlash from the brutalized
• Implications
• Like the Cold War, influencing state policies
• external needs define internal economic activity
• Insecurity spread to all levels and to all actors
• Complex world politics
• Governments vs governments
• States vs corporates
• States vs individuals

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Conclusion

• What is Globalization?
• Describes both a process and a system
• Iterative not unidirectional system (feeds on
  itself)
• 2nd image and 2nd image reversed
• Multidimensional (complex)
• Combines realist, neoliberal and cultural
  political perspectives
• Caused by free market capitalism
• Reorganizing principles changed
• What can you do about it?
• Understand the system and then manage it