WHAT IS GLOBALIZATION?WHY IS IT HAPPENING?

HOW DOES IT IMPACT US AND THE WORLD?

GLOBALIZATION

• DEFINED: an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of exchange and trade

• Occurs thanks to the interconnectedness of the modern global economy

• Globalization forces our culture to interact and deal with others

SUPPLY CHAINS• DEFINED: the connections that link all

parties involved in the production and sale of a product

• Supply chains begin and end with the consumer (you)!

• First a consumer DEMANDS, or wants a product

• Then a long “chain” of people work to SUPPLY create it

• It ends with the consumer ends by purchasing it at a certain PRICE

• Example?

Why is globalization happening so quickly now?

• ECONOMIC REASONS: – New forms of technology allow gigantic flows

of capital and other technologies

• Transnational corporations (TNCs)

• International economic institutions

Bretton Woods Conference 1944

• 44 Nations agreed to revise trade practices

• 3 new int’l economic organizations– IMF: International Monetary Fund– World Bank– GATT: General Agreement on Tariffs and

Trade later to be the World Trade organization (WTO)

• Bretton Woods lasted for over 30 years– “the golden age of controlled capitalism– Ended by conservative politics embrace of

“neo-liberalism”• Market is self-regulating• Survival of the fittest (Herbert Spencer)• Rejected Keynesian models of state intervention• Validated by the fall of communism

Transnational Corporations (TNCs)

• GM, Walmart, Exxon, Mitsubishi, Siemens, etc

• 42 of the world’s top economies are corporations

• powerful players the influence the economic, political and social welfare of many nations

• International Economic Institutions– IMF, World Bank, WTO– Began as means of loans to developing

nations– Now more interested in integrating and

deregulating markets around the world

Problems with Globalization

• Lowering of labor standards

• Ecological degradation

• Growing indebtedness of the Global South to the North– Loans tied to laws– Interest payments now exceed aid received

($355 Billion interest v. $80 Billion in aid)