MODULE 3

An Overview:
This course introduces students to understand, analyze,
and evaluate the contemporary world by examining the multifaceted
phenomenon of globalization, among which are the economic, social,
political, technological, and other phenomena that have created an
increasing awareness of the interconnectedness of peoples and places
in the global community. Among the major topics to be discussed and
analyzed are the structures of globalization, a world of regions and
ideas, global population and mobility and global sustainable
development.

Module Outcomes
At the end of this module, the student should
have:
 Differentiate internationalism and
Globalization
 Discussed the history of market integration

UNLOCKING VOCABULARY

Corporation- is a business entity that is owned by its shareholder(s),

who elect a board of directors to oversee the organization's activities.

Investment- is an asset or item that is purchased with the hope that it

will
generate income or appreciate in value at some point in the future.

Assets- are a resource with economic value that an individual,

corporation, or country owns or controls with the expectation that it
will provide a future benefit.

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 History of Global Market Integration in the Twentieth
Century
 Labor market integration occurred between 1882 and
1936 in an area of Asia stretching from south India to
Southeastern china and encompassing the three
Southeast Asian countries of Burma, Malaya and
Thailand.
 By the late nineteenth century, globalization, of which a
principal feature was the mass migration nineteenth
century, globalization, of which a principal feature was
the mass migration of Indians and Chinese to Southeast
Asia, gave rise to both an integrated Asian labor market
and a period of real wage convergence. Integration did
not, however, extend beyond Asia to include core
industrial countries. Asian and core areas, in contrast to
globally integrated commodity markets, showed
divergent trends in unskilled wages.
 By the 1880s steamships had largely replaced sailing
vessels for transport within Asia as well as to Western
markets, and shipping fares had begun to fall sharply.
 Also, already underway was the mass migration of
Indian and Chinese workers, principally from the labor-
abundant areas of Madras in India and the provinces of
Kwangtung (Guangdong ) and Fukien (Fujian) in
southeastern China, to land-abundant but labor-scarce
parts of Asia. Chief among the immigrant-receiving
countries were Burma, Malaya and Thailand (Siam) in
Southeast Asia. Indian and Chinese labor inflows to
these countries constituted the bulk of two of three
main late nineteenth- an early twentieth-century global
migration movements, the other being European
immigration to the New World. Immigration to
Southeast Asia was almost entirely in response to its
growing demand of workers which, in turn, derived
from rapidly expanding demand in core industrial
countries for Southeast Asian exports. Studies by
Latham and Neal (1983) and by Brandt (1985-1989)
established the development of an integration Asian
rice market beginning in the latter part of the
nineteenth century.

Global Corporation
 A global corporation, also known as a global company, is
coined from the base term ‘global’, which means all around

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 the world. It makes sense to assume that a global company
is a company that does business all over the world. If you
are operating in one country, selling your products around
the world and shipping them to customers in countries in
Europe while you’re in the United States, that doesn’t
necessarily mean you’re a global company. It takes more
than that to earn the name a global company.
 Global Corporation is one that operates in more than one
country. Particularly in the United States, the term can
mean different things to different contexts, with the
characteristics of a global corporation varying accordingly.
 Business analysts and academics, Michael Porter at Harvard
University, defined global business more narrowly and
distinguish them from other operations overseas. He
defined a global business as one that maintains a strong
headquarters in one country, but has investment in multiple
foreign locations. Such investments may involve direct
investments in foreign assets, such as manufacturing
facilities or sale offices. The headquarters generally is its
home country, though some moves to more favorable
regulatory or taxation locations over time. Global
corporations strive to create economies of scale by selling
the same products in multiple locations and limiting local
customization.
 In the world finance and investment, a global corporation is
one that has significant investments and facilities in
multiple countries but lacks a dominant headquarters.
Global corporations are governed by the laws of the country
where they are incorporated.

Example of Global Incorporation

Coca-Cola Company- Consider Coca-Cola, which, in 1886, was
struggling to get by. By World War II, Coca-Cola was 50 years old and
had proudly maintained its price at 5 cents, so as to enable many
people to afford the beverage. The company would sell its drink to U.S.
soldiers stationed all over the world for 5 cents a bottle, but no more.
Coca-Cola now sells its beverages in more than 200 countries.
Not only does the Coca-Cola Company sell its popular fizzy drinks such
as Coke, Fanta, and Sprite, it also sells some 3,800 other products,
including soy-based beverages that have been enriched with vitamins.
The Coca-Cola Company also sells juices, iced teas, bottled water, and
a lot more. One of the reasons why Coca-Cola has seen such
monumental success in nearly every country it has established itself is
that it never has a standardized view of all countries. Instead, each

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country is considered on an individual basis. The company will make
sure it only provides products that fit with the tastes and culture of the
local community. Often, this means that Coca-Cola must create
entirely new products to fit a market's demographics, or it may tweak
an existing product so that it will appeal to residents in a specific
locality. You may have noticed this. Some Coca-Cola products are
available in some countries but not in others; this is because those
products were created for that country or were tweaked to suit the
preferences of a specific country.

The Benefits of a Global Corporation

1. You can increase your customer base
- When you expand your business into another country, your
customer base expands along with it. The market in the United
States could be full of products just like yours. You may find,
however, that this is not the case in another country. That
could present an expansion opportunity for your company.
What's familiar to your consumers in the U.S. could be fresh to
consumers in another country.

2. You can reduce your operating costs

- If the manufacturing or labor costs are lower in another
country, expanding to that country enables you to save on
your operating costs. This can improve your bottom line. In
fact, reducing operating costs are a key reason why many
global companies expand.
3. You don’t need to be bogged down by seasonality
- If you sell a seasonal product that experiences fluctuating
sales at different times of the year, then you can expand to
countries that have seasons opposite to those in your base
country, enabling you to have high sales figures all year.
4. You can boost the growth rate of your company
- If your company has been growing rapidly in your locale,
chances are that this growth may eventually stall, because of
market saturation. In that instance, you can expand to another
country so you can maintain rapid growth.
5. You can create new jobs
- Expanding into another country involves a lot, such as hiring
representatives and employees of your company in the new
country, as well as setting up offices and various facilities, and
so on. You’re likely to employ locals and, in the process, you
will create new job opportunities in the country where you are
expanding. This helps boost the local economy and it also
gives your company a good reputation.

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Global Interstate System
 World-systems are defined by the existence of a division of labor.
The modern world-system has a multi-state political structure
(the interstate system) and therefore its division of labor is
international division of labor.
 In the modern world-system, the division of labor consists of
three zones according to the prevalence of profitable industries
or activities: core, semi-periphery, and periphery.
Core Nations
 Core nations appear to be powerful, wealthy and
highly independent of outside control.
 They are able to deal with bureaucracies effectively;
they have powerful militaries and can boast with
strong economies.
 Due to resources that are available to them (mainly
intellectual), they are able to be at the forefront of
technological progress and have a significant influence
on less developed non-core nations.
Semi-Peripheral Nations
 These regions have a less developed economy and are
dominant in the international trade.
 In terms of their influence on the world economies,
they end up midway between the core and periphery
countries.
 However, they strive to get into a dominant position of
the core nation, and it was proved historically that it is
possible to gain major influence in the world and
become a core country.
Peripheral Nations
 These are the nations that are the least economically
developed.
 One of the main reasons for their peripheral status is
the high percentage of uneducated people who can
mainly provide cheap unskilled labor to the core
nations.
 There is a very high level of social inequality, together
with a relatively weak government which unable to
control country’s economic activity and the extensive
influence of the core nations.
 Countries tend to fall into one or another of these
interdependent zones core countries, semi-periphery
countries and the periphery countries. Resources are
redistributed from the underdeveloped, typically raw

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 materials-exporting, poor part of the world (the periphery)
to developed, industrialized core.
 World-systems, past world-systems and the modern world-
systems, have temporal features. Cyclical rhythms
represent the short=term fluctuation of economy, while
secular trends mean deeper long run tendencies, such as
general economic growth or decline. The term contradiction
means a general controversy in the system, usually
concerning some short term vs. long term trade-offs. For
example, the problem of under consumption, wherein the
drive-down of wages increases the profit for the capitalists
on short-run, but considering the long run, the decreasing of
wages may have a crucially harmful effect by reducing the
demand for the product. The last temporal feature is the
crisis: a crisis occurs if a constellation of circumstances
brings about the end of the system.

The Development of World-Systems

 The world-system perspective emerged during the world
revolution of 1968 and the anti-war movement that
produced a generation of scholars who saw the peoples of
global South (then called the “Third World”) as more than
an underdeveloped backwater.
 It became widely understood that a global power structure
existed and that the people of the non-core had been active
participants in their own liberation.

The World-System Theory

 This theory is also known as world-system analysis or world-
systems perspectives. World system theory is a
multidisciplinary, macro-scale approach to world history and
social change which emphasizes the world-system (and not
nation states) as the primary (but not exclusive) unit social
analysis.
 World-systems theory is a macro-scale approach to
analyzing the world history of the mankind and social
changes in different countries.
 The definition of the theory refers to the division of labor, be
it inter-regionally or transnationally.
 Currently, the theory divides the world into the core, semi-
periphery and periphery countries.

Global Governance

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  This term Global Governance is sometimes referred to as world
governance. Global is a movement towards political cooperation
among transnational actors, negotiating responses to problems
that affect more than one state or region.
 In response to the acceleration humankind and the biosphere, the
term “global governance” may mean the process of designating
laws, rules, or regulations intended for a global scale.
 Global governance is a collective management of common
transnational or global problems- those that were created
exacerbated by globalization, and which cannot be manage at
the nation-state.

Global Governance Problems They Deal With

1. Global climate change and pollution of the environment.
2. Poverty and management of economic development.
3. Deficit of fresh water.
4. Financial instability and management of financial markets.
5. Global economic crisis or recessions.
6. Management of global trade and investment.
7. Global economy markets and their instability.
8. Global migrations
9. Pandemic (such as Ebola or the latest Covid-19)
10. Transnational terrorism
11. Transnational crime, etc.

Effects of Globalization Governance

 According to the disciplining hypothesis, globalization restrains
governments by inducing increased budgetary pressure. As a
consequence, governments may attempt to curtail the welfare
state, which is often seen as a drag on international
competitiveness, by reducing especially their expenditures on
transfers and subsidies.
 This globalization-induced welfare state retrenchment is
potentially mitigated by citizens’ preferences to be compensated
for the risks of globalization

Institutions that govern International Relations

The following institutions govern international relations’ these
are:
 The European Institute for International Law and
International Relations (Brussels)
 ISPI Istituto per gli Studi di Polotica Internazionale (Italian
Institute for International Political Studies) Milan, Italy

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  Institute of World Politics (Washington, D.C)
 Department of International Studies (Centro Universitario de
Ciencias Sociales y Humanidades) at University of
Guadalajara located in Guadalajara, Mexico
 The Royal Institute of International Affairs, (PIIA) Karachi,
Pakistan
 The New Zealand Institute of International Affairs
(Wellington, New Zealand)
 The Australian Institute of International affairs (Deakin, ACT,
Australia)
 The Canadian Institute of International Affairs (Toronto, ON,
Canada)
 Geneva School of Diplomacy and International Relations
(Geneva, Switzerland)
 Graduate Institute of International and Development studies
(Geneva, Switzerland)
 International strategic Research Organizations (ISRO/USAK)
 EGMONT- Royal Institute for International Relations
(Egmont), Brussels, Belgium
 University of Florida International Center (U.S.A)
 Cnetr for International Affairs Jahangirnagar University,
(Savar, Dhaka, Bangladesh)
 South American Institute for Policy and strategy (Porto
Alegre, Brazil)

Internationalism versus Globalization

 Globalization, considered by many to be the inevitable wave of
the future, is frequently confused with internationalization, but is
in fact something totally different. Internationalization refers to
the increasing importance of international trade, international
relations, treaties, alliances, etc. International means between or
among nations. The basic unit remains the nation, even as
relations among nations become increasingly necessary and
important. Globalization refers to global economic, mainly by free
trade and free capital mobility, but also by easy or uncontrolled
migration. It is the effective erasure of national boundaries for
economic purposes. International trades (governed by
comparative advantage) become interregional trade (governed
by absolute advantage). What was many becomes one.
 The very word “integration” was derived from “integer”, meaning
“one:, “complete”, or “whole”. Integration is the act of combining
into one whole. Since there can be only one whole, only one unity
with reference to which parts are integrated, it follows that global
economic integration logically implies national economic

PAGE 8
 disintegration. By disintegration it does not mean that the
productive plant of each country is annihilated, but rather that its
parts are torn out to their national context (dis-integrated), in
order to be re-integrated into the new whole, the globalized
economy. As the saying goes, “to make an omelette you have to
break some eggs.” The disintegration of the national egg is
necessary to integrate the global omelette.
 In the classical nineteenth-century vision of Smith and Ricardo
(2016) the national community embraced both national labor and
national capital, and these classes cooperated, albeit with
conflict, to produce national goods—largely with national natural
resources. These national goods then competed in international
markets against the goods of other nations, produced by their
own national capital/labor teams using their own resources. This
is internationalization as defined above.
 In the globally integrated world of the late twentieth century,
however, both capital and goods are free to move internationally.
One little-noticed, but important consequence of free capital
mobility is to totally undercut Ricardo’s comparative advantage
argument for free trade in goods, because that argument was
explicitly and essentially premised on capital being immobile
between nations. But the conventional wisdom seems to be that
if free trade in goods is beneficial, and then free trade in capital
must be even more beneficial. In any case, it doesn’t longer
make sense to think of national teams of labor and capital in the
globalized economy. Instead, global capitalists competing with
each other for both laborers and natural resources, as well as
markets, in all countries.

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 Let’s do
the
ACTIVITY!

Directions: Find your partner. With your partner,

describe the global economy in 2019-2020

.
Assessment
I. True/False.
Directions: Write TRUE if the statement is a true and FALSE if
otherwise.
1. International strategic Research Organizations is one of the
institutions that govern international relations.
2. Semi-peripheral nations appear to be powerful, wealthy and
highly independent of outside control.
3. The international exchange of goods and services that is
expressed in monetary units of money is called globalization.
4. Labor market integration occurred between 1882 and 1936 in
an area of Asia stretching from south India to Southeastern
china and encompassing the three Southeast Asian countries
of Brunei, Malaysia and Taiwan.
5. Global economy is a system of international relations.

II. Essay. Discuss the following by your own idea. (5 points each)
1. What are the difference between internationalization and
globalization?
2. What is global governance?
3. For your own opinion, what is the impact of Covid-19 in our
economy?

Your output will be rated using the rubric below:

Features 4 3 2 1
Writer clearly Writer Writer Writer
answered all answered all answered attempted to

PAGE 10
 parts of the parts of the some parts of answer part
question in question in the question, of the
complete complete but left other question, but
Answer sentences. sentences, but parts answer is
Student the answer incomplete. unclear to
referred back may not be Answer may the reader
to the clear. not be in and not in
question in complete complete
their answer. sentences. sentences.
Writer cited Writer cited Writer may Writer did
evidence for evidence for have cited not cite
all parts of some parts of evidence for evidence
their answer the answer part of their from the text
directly from directly from answer. Most in any part of
the text, it is the text. Some parts of the their answer.
Cite clear to the parts of the answer do
reader to answer do not not have
which part of have evidence
the text the evidence. from the text.
writer is
referring.
Writer Writer Writer Writer did
explained all explained explained not explain or
parts of their most parts of some parts of expanded
answer in their answer their answer, upon their
clear terms to in clear terms. but most of answers.
their reader. Some parts of the answer
Writer the answer does not have
Explain/Expand expanded are left an
their idea unexplained. explanation
beyond Writer may as to why the
simply not have writer
answering expanded believes that
the question. their idea. is the answer.

Ariola, M. (2018), The Contemporary World.

[Link]

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