Globalization

1) Globalization2) Globalization and state

sovereignty3) “McWorld”4) Responses to Globalization

Presentation Outline

Globalization is the interdependence of economies and cultures.

In other words, when a factory in China closes there is a rippling effect across the ocean impacting prices, wages, supply in the United States

Similarly, when the U.S. stock market falters, markets throughout Asia suffer as well.

1) Globalization defined

Central to globalization is the demand for states to open up their economies, allow for foreign investment, and increasing trade: economic liberalization

Economic Liberalization

It has been said that arguing against globalization is like arguing against the laws of gravity. Kofi Annan – former U.N. Secretary General

The negative side to globalization is that it wipes out entire economic systems and in doing so wipes out the accompanying culture. Peter L. Berger

Instead of saying that globalization is a fact, that it's

inevitable, we've also got to demonstrate that while the growing interdependence of the world economy is indeed a fact, it's not uncontrollable. Peter Mandelson

What others have said about globalization

2) Globalization and state sovereignty As states become more integrated into the

world economy, they tend to give up power over some decision making:

NAFTA- Mexico can no longer impose

tariffs on U.S. goods, nor can protect its industries without consulting with U.S. policymakers

World Trade Organization (WTO)

The WTO’s purpose is to regulate and liberalize trade between member states

If one member state is using “unfair” trading practices such as dumping and oversubsidizing other member states can make complaints

The WTO is involved in resolving trade disputes

By joining the WTO member states give up some sovereignty over their trading practices

Multinational Companies MNCs Companies which have branches in many

states such as Coca-Cola, Microsoft

Challenge state sovereignty as they often control a large part of many developing state’s economies

Oil company giant Exxon Mobil’s revenues are larger than the GDP of “all but the top 21 countries in the world.” Source: AP Briefing Paper- Globalization, p.12

MNCs Although MNCs do create jobs in developing

states they keep wages very low

Non-governmental organizations (NGOs)

NGOs are organizations which seek to improve living standards, work with local people, address issues such as the environment or disease control

NGOs such as the Red Cross, Greenpeace also can challenge state sovereignty by taking away decision making powers from local governments especially in developing states

3) “McWorld” Political Science professor Benjamin Barber

coined this phrase back in 1995. Ubiquitous McDonald’s restaurants all over

the world have become, according to Barber, a symbol of Western capitalism

Although we tend to see a correlation between capitalism and democracy, Barber argues that McWorld capitalism has become undemocratic by hurting local cultures, businesses, and seeking only profit

4) Responses to Globalization Protest Disintegration Decentralization Race to the Bottom

Protest Many people on the political Left see

globalization as a threat to the average citizen

Young people in particular have led vocal protests against what they see as the excesses of Western capitalism and globalization

Scenes from the Occupy Wall Street Protests in the US last year

Disintegration As the world economy moves closer to

integration, some states have experienced disintegration as nations, minority groups especially, become dissatisfied with the loss of decision making power, and the perceived threat to their distinct cultures

Some nations see globalization as an opportunity for violence and separatism

Since 1991 33 new states have been created

Others have tried and failed: Chechnya in Russia tried to secede in the mid 1990s The Chiapas (indigenous peoples) in Mexico,

angered over NAFTA, launched a revolution in the mid 1990s

Decentralization Some nations have used globalization to

demand more decision making powers from the central gov’t such as in Scotland and Wales with the creation of new national assemblies

Race to the bottom As developing states begin to liberalize

their economies and open up to foreign direct investment they run the risk of trying to get investment at any cost

This often means lowering taxes and environmental regulations to attract MNCs

Even if this creates jobs and adds to GDP does this really benefit the state in the long run?

Dark blue represents states with the toughest environmental regulations.Light blue represents states with the weakest environmental regulations.