Globalization: The latest stage of Capitalism

Mercantilism (1500-1700)◦ Early colonialism, discovery of America◦ Wealth fixed, measured in precious metals

Early Capitalism (1700-1850)◦ Imperialism. Entire world being colonized◦ Modern Industry is born

Late Capitalism (1850-1914)◦ Imperial contest leads to world war◦ Wealth and industry increase

End of Great War (WWI) led to a 2 system world.

Capitalism (free market economy) Communism (command economy)

Cold War ◦ Battle for the control of the world economic

system between U.S.A and Soviet Union.

End of the Cold War ushers in new era.◦ Globalization

A FEW DEFINITIONS

a set of economic, social, technological, political and cultural structures and processes arising from the changing character of the production, consumption and trade of goods and assets that comprise the base of the international political economy.

(UNESCO) Globalization – the growing integration of

economies and societies around the world (World Bank)

a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

(Levin Institute)

a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, socio-cultural and political forces...that is, integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration and the spread of technology.

(Wikipedia)

Free market economics (Market economy)

◦ Closely associated with Laissez-Faire economic philosophy

◦ An economic system where prices of goods and services are determined by the laws of supply and demand and NOT by government.

◦ During the Cold War, was the alternative to the command economy.

◦ During the 1970s and 1980s led to increased development in the 3rd world. Meaning growth of total wealth had its negative effects as well

Widening gap between rich and poor, Environmental degradation Loss of culture.

◦ Governments should NOT raise barriers to trade

Import duties, import quotas, import/export license, tariffs, subsidies, embargo, non-tariff barriers to trade

regulate the economy Provide financial support to poor (price subsidizing) Provide services Tax

◦ Governments should Protect private and public property Maintain law and order

◦ Accepted by most, if not all, governments of the world as their economic policy.

◦ Still only theoretical in a sense. All government of the world still have some control

over their economies (some more than others) Mixed economy: GVTs that have more control of their

economies (Canada, Sweden, Norway, W. Europe) Market economy: GVT that have less involvement in

economy (U.S.A, Chile, Colombia)

◦ Creation of free trade zones NAFTA, EU, FTAA

Economic

Culture

Technology

Environment

Political

Spread of free market capitalism ◦ Increase in Foreign Direct Investment ◦ Increase in capital flows (money movements)

Corporations become transnational as markets open◦ Has both positive and negative impacts

Increase in international trade◦ Access to more and cheaper goods and services

Increase of wealth ◦ Globalization = economic growth (bigger pie)◦ Distribution becomes key

The fear of “Americanization” or “Westernization”◦ The more powerful economies and corporations end up having a

greater influence on the world scene.

◦ Most powerful economies and corporations are American/Western

◦ Small businesses cannot compete Local business “mom and pop” business

◦ Spread of English through business and Western media

Migration of people◦ Currently the greatest human migration in history

How will that affect culture?

End of the 20th century was a technological revolution. ◦ communications, biotechnology, robotics,

transportation technologies, etc

◦ Spread of information like NEVER BEFORE. 2 keys of technology

◦ Brings down costs Changes the nature of production and distribution

◦ Allows for rapid proliferation of ideas, information, and money.

Since Industrial Revolution humans have been destroying the planet.

Unsustainable model of the I.R. has not been addressed by free market capitalism.◦ Natural resources turned into products.◦ Energy: coal, oil, hydro electric.

Environmental standards in West and in the developing world.◦ 21st century problem

Who will govern the new world order? ◦ Business

Transnational Corporations Investment

◦ Government Elected representatives

Currently globalization is being led by the an alliance between government and business◦ Business elite have had strong influence in

government policies.

In what ways has globalization benefitted me?

What are some dangers of Globalization in the near future?

Do you think Globalization is inherently good or bad? Explain.