Globlisation Flashcards
globalization?
worldwide interconnectedness; flow of ideas, capital, commodities and people form one nation to another is globalization. it has three dimensions - economic, cultural, political.
economic globalization?
integration of national economies into the international economy through trade, investment, and flow of capital.
characterized by growth of MNCs, trade liberalization, and expansion of global markets.
political globalization?
refers to the growing role of international organizations like UN and WTO in shaping global politics.
characterized by emergence of transnational alliances.
cultural globalization?
refers to the spread and sharing of ideas, values and cultures across national borders.
cultural diffusion?
refers to the spread of cultural beliefs, social activities, and ideas.
leads to the adoption of new practices, beliefs and technology.
can occur via trade or migration
cultural homogenization?
process of different cultures becoming more similar and identical to each other due to globalization and spread of dominant culture values.
see: westernization - society adapts to western culture - Democracy, American pop culture
mcdonaldization - the spread of the idea of fast food
cultural assimilation?
local cultures are transformed or absorbed by a dominant culture; adaptation of minority groups to the dominant culture.
ex. after the US was formed, European immigrants were quickly assimilated into the culture.
homogenization vs assimilation?
homogenization describes the process by which cultures become more alike. Assimilation occurs when one culture is absorbed into another culture.
causes of globalisation?
technology (communication) and transportation
is globalization a 20th century phenomenon?
no, consider silk routes, roman empire, columbian exchange. trade exchange between the harappan and mesopotamian civilization. colonial trade between european and oriental nations and european and south asian nations.
in the 20th century, frequency, size, and scale of globalization has increased due to advancements in technology; the concept itself is an old one.
transnational corporations?
headquarters in multiple nations
TNC vs MNC?
make pen sell in 10 countries - MNC
if business increases so much that you need to higher people in the other countries and offices for your company are built in other countries - TNC
multinational corporation
headquarters in one nations, but business opportunities in others.
outsourcing?
a company may choose to outsource certain tasks to low cost countries (LEDCs) where labour maybe be cheaper or more skilled.
ex. apple assembling products in china, ford and jeep manufacturing their cars in india. nike, adidas having sweatshops in countries like bangladesh and indonesia.
a company might decide to outsource its customer support team to a location in India where the cost of labor is much lower than it is in the company’s home country
economic negatives of globalization? (loser)
LEDCs have raw materials which they sell to MEDCs for low prices. MEDCs create high value goods from those materials and accumulate excessive profits. LEDC gets nothing.
free trade?
agreement b/w two or more nations to reduce trade barriers to import and export b/w them.
protects traders against unhealthy compeition.
regulated by the government.
objective of free trade?
to boost economic growth of countries; to generate more profit
how is free trade done?
lower tariffs, quotas, embargoes, and regulatory trade barriers. delicensing and deregulation. – allows for unrestricted export and import
this enhances efficiency of global markets by increasing economic growth, while also lowering prices for consumers.
this lower price, however, means that there are workers are exploited and trade violations exist.
fair trade?
when producers in developing countries are paid a fair price for their work by companies in developed countries.
it is a trading partnership based on transparency, dialogue, and respect.
regulated by Fairtrade International and FLO-CERT
objective of fair trade?
to develop more equitable trade relationships; focused on creating product w/o exploitation of environment and workers.
seeks to regulate trade based on concerns about environmental conditions and violation of human rights and labour laws.
focused on favoring rights of workers (improving working conditions and eliminating pay discrepancies)
how is fair trade done?
firms work w/ peasants and artisans, which ensures suitable financing and wage - regulations exist so that companies don’t take advantage of farmers.
similarity between fair and free trade?
both are policies that focus on the regulation of commercial activities across countries
both aim to increase wealth globally
pros of free trade?
lower prices (for govt. and consumer)
increased efficiency because it creates competition (best product at lower price), ultimately increasing the buying power for all consumers.
under Ricardo’s theory, countries can produce more goods collectively by trading on their respective advantages - leads to economic growth.
cons of free trade?
increased job outsourcing (so job losses); competition with foreign exports may cause local unemployment and business failures.
unequal distribution of benefits
countries may become reliant on the global market for key goods, leaving them at a strategic disadvantage in times of crisis.
worker’s rights not taken into consideration
pros of fair trade?
better wages for producer
worker’s rights is taken care of
cons of fair trade?
higher prices of products
less product choice
limited consumer customer base around the world
not all producers can access fair trade due to the high certification fees and due to the focus of the model on developing countries.
need for foreign aid?
arises from challenges faced by developing countries
challenges include wards, famines and health crises.
it is instrumental in saving lives but there is debate about aid dependency and self-sufficiency.
is aid a product of globalization?
not a direct product of globalization (market driven phenomenon), but closely related to globalization.
it is a response to uneven distribution of the benefits of globalization.
institutions involved in providing foreign aid
international donor agencies
government institutions of developed countries
UN agencies like UNDP, UNICEF, UNESCO
WHO
the world bank
international monetary funds (IMF)
NGOs
types of aid?
bilateral
multilateral
bilateral aid?
aid that is given directly from one country to another.
military aid is a type of bilateral aid used to assist a country in its defense efforts.
multilateral aid?
aid that is given by a donor country to an international organization like the world bank, which then distributes it to developing countries.
humanitarian aid is a type of multilateral aid provided in response to natural or man-made disasters such as famine, disease, or war. often channeled through international organizations and NGOs.
for example, humanitarian aid from wealthy nations poured into the coastal regions in South Asia after a 9.0 magnitude earthquake triggered a tsunami in the Indian Ocean, killing more than 200,000 people.
Ukraine received the most money through development and humanitarian response programs as of September 2023. The country received more than $1.7 billion. Syria and Yemen were the second- and third-highest recipients with about $1.5 billion and $1.4 billion in aid, respectively.
benefits of international trade
- increased competition
- increased efficiency
- increased market reach
- lower production cost because countries can specialise in producing goods they have a comparative advantage in
- better resource allocation
- job creation
