Globalization and Its Consequences
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1 Globalization and Its Consequences Min Shu Waseda University 1
2 Outline of the lecture What is globalization? Trade liberalization, capital movement, global governance Information revolution The impacts of globalization Macro-economic policies Cultural loss Race to the bottom Multi-level governance Anti-globalization movement Group Presentations 2
3 What is globalization What is globalization The fact that different connections being established not just beyond state borders but on a global scale, and the influences of such connections. Economic globalization Trade and financial liberalization Global value chains Social globalization The expansion of social space Information sharing and cultural exchange Political globalization Linkage between domestic and international politics Environmental, immigration and terrorist problems 3
4 Trade liberalization, capital movement and global governance Trade liberalization WTO-based multilateral trade negotiations Bilateral and mini-multilateral preferential trade agreements, such as FTAs and EPAs Free movement of capitals Overseas direct and indirect investment Foreign exchange market Changing structure of global governance Bretton Woods System global financial coordination GATT-based multilateral trade negotiations bilateral, minilateral and mega-fta negotiations The UN rise of multiple stakeholders and INGOs 4
5 Global flow of people Short-term overseas tourism Tourist and business trips Tourism industry International business centers Mid- and long-term foreign residents Transnational flow of labors Economic migration direction: four major pathways Migration types: high-skilled migration, low-skilled migration Legality of migration: legal and illegal migrants Preventing and dealing with terrorism 5
6 Information revolution What is information revolution? The transformation of human society and lives through the advancement of information technologies. Spread of telephone, telegram and internet Use of computers and other electronic devices Information revolution and globalization Dramatic reduction of information exchange cost The global space of economy, politics and society Facilitating the activities of international organizations, transnational institutions and INGOs Sharing production, trade, and financial information Strengthening the link between domestic and the international 6
7 The impacts of globalization The impacts of globalization Deepening of global economic integration Increase of cross-cultural communication Diversification of political actors Trans-nationalisation of (domestic/local) issues The pros and cons and globalization Advantages: enhancing economic efficiency, expand individual freedom, facilitating inter-state cooperation Disadvantages: excessive business competition, labor unemployment, ineffective domestic economic policies, transnational financial risk, cultural loss, spread of epidemic diseases, and environmental impacts 7
8 Macro-economic policies International movement of capitals Financial deregulation Overseas capital transfer Cross-border investment (seeking higher returns) Ineffectiveness of macro-economic policies Stimulus economic policies growing fiscal deficit potential macro-economic risk Tax levied on capitals capital flee Social welfare policies higher labor cost outsourcing Monetary policies (esp. interest rate policy) changing the borrowing cost international capital movement 8
9 Cultural loss Cultural exchange and competition Language and contents of cultural exchange English becomes a world language Growing uniformity of our daily lives The Americanisation of global culture Hollywood films Big Mac Maintaining cultural diversity UNESCO s initiative (2001): Universal Declaration on Cultural Diversity 9
10 Race to the bottom Global value chains and their influences Global allocation of raw materials, capitals and technologies Production (to be) located in the cheapest place Labor rights Reducing labor cost social dumping Salary, social welfare, insurance (health, employment, pension) Deterioration of working environment Challenges of environmental problems Cost reduction and environmental damages Corporate social responsibility (CSR) Corporations should be accountable not only to the shareholders, but also to the societies in which they operate Rules/Principles related to human rights, labor conditions, environmental protection, and fighting corruption 10
11 Case study: ipod and Globalization Linden et al., (2011) Innovation and Job Creation in a Global Economy: The Case of Apple s ipod, Journal of International Commerce and Economics. 11
12 Case study: ipod and Globalization 12
13 Multi-level governance Globalization and public policy-making Public policies Economic, cultural, energy, agricultural, etc. Globalization reshapes public policy-making Public policy: decision-making and implementation Redefining the role of the state The state loses its monopoly of public policy-making: sovereignty Necessary inter-state coordination global governance Multi-level governance Actors: state, international organizations, private enterprises, NGOs. Local self-governing bodies Governance levels: local, sub-regional, state, regional, global 13
14 Anti-globalization movement Opposition to globalization The problems of globalization Focusing on issues such as environment, development, human rights, and cultural diversity The targets of anti-globalization movements International organizations: WTO, World Bank, IMF G7, G8, G20 Multinational corporations 14
15 Anti-globalization movement No Logo vs. Pro Logo Naomi Klein No Space, No Choice, No Jobs The Economist Brands are good The globalization of anti-globalization movements The transnationalisation of anti-globalization movements The left-right cleavage no longer a dividing line in antiglobalization politics: opposing neo-liberalism on the left, maintaining domestic/local identity on the right From developing countries to developed countries Feminism and anti-globalization 15
16 Anti-globalization movement The WTO meeting in Seattle in
17 Group Presentations Group 15 The Logics of Economic Globalization Group 16 Brexit, Trump and Anti-Globalization Populism 17
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