Ge3-Week 1-3

Big Picture A
Week 1: Unit Learning Outcomes (ULO): At the end of the lesson, you should be able
to:
a. Analyze the different interpretations and concepts of globalization.
Big Picture in Focus: ULOa. Define the meaning of globalization.
Metalanguage
In this section, the most essential terms relevant to the study of the Introduction
to the Contemporary World and to demonstrate ULOs will be operationally defined to
establish a common frame of reference as to how the texts work in your chosen field or
career. You will encounter these terms as we go through the study of curriculum. Please
refer to these definitions in case you will encounter difficulty in the in understanding
educational concepts.
 Globalization. It refers to the integration of the national markets to a wider

global market.
 Globalize. Develop or be developed so as to make international influence or

operation possible.
 Global. Affecting or including the whole world.
 Contemporary. Living or occurring at the same time.
 Contemporary World. The circumstances and ideas of the present age; "in
modern times like these" modern times, modern world, present times.
Please proceed immediately to the “Essential Knowledge” part since the first
lesson is also definition of essential terms.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the first week of
the course, you need to fully understand the following essential knowledge that will be
laid down in the succeeding pages. Please note that you are not limited to exclusively
refer to these resources. Thus, you are expected to utilize other books, research articles
and other resources that are available in the university’s library e.g. ebrary,
search.proquest.com etc.
1. Definition of Globalization
1.a. It is the increasing interaction of people, states, or countries through the
growth of the international flow of money, ideas and culture. Thus,
globalization is primarily focused on economic process of integration that
has social and cultural aspects.
1.b. it is the interconnectedness of people and business across the world

that eventually lead to global, cultural, political, and economic
integration.
1.c. it is the ability to move and communicate easily with others all over the
world in order to conduct business internationally.
1.d. it is the free movement of goods, services and people across the world
seamless and integrated manner.
1.e. It is the liberalization of countries of their impact protocols and welcome

foreign investment into sectors that are the mainstays of economy.
1.f. it refers to countries acting like magnets attracting global capital by

opening up their economies to multinational corporations.
2. Historical Foundation of the term “Globalization”
Though many scholars place the origins of globalization in modern

times, others trace its history long before the European Agee of Discovery
and voyaged to the New World, some even to the third millennium BC.
Large-scale globalization began in the 1820’s. In the late 19 th century and
early 20th, the connectivity of the world’s economies and cultures grew very
quickly.
In 1897, Charles Taze Russell (of the Watch Tower Bible and Tract
Society) coined a related term, corporate giants. This term refers to the
largely national trusts and other large enterprises of the time.
In 1930, the word “globalize” as a noun appeared in a publication

entitled Towards New Education where it denoted a holistic view of human
experience in education.
In the late 1970’s the word “globalization” was coined. In 2013, this
term was used to mean “borderless society” referring to international
migration.
In the early part of 1981, the term “globalization” had been used in
its economic sense. However, in the late half of the 1980’s Theodore
Levitt popularized the term “globalization” by bringing it into the
mainstream business audience.
Lately in 2000, The International Monetary Fund (IMF) identified

four (4) basic aspects of globalization: (1) trade and transactions (2)
capital and investment (3) migration of knowledge (4) dissemination
It is only in 2017 when the word “globalization” was often used in

teaching, in discussion, in meetings and conferences, in lectures and so
on.
This time 2018, the phenomenon of globalization is now on full

swing in all academic disciplines.
3. Indicators of Globalization
The jet engine, the internet, e-banking, e-books, e-bike, the LRT,
MRT and other inventions of science and technology are attributable to the
spread of globalization. These are some of the modern offspring of
development in our infrastructure system. These improvements that people
enjoy today in this contemporary world have been major factors in
globalization which have generated further interdependence in economic
and cultural activities among nations.
Likewise, environmental challenges such as global warming, cross-

boundary water, air pollution, and over-fishing of the ocean are linked with
globalization. Globalizing processes affect and are affected by business and
work organization, economics, socio-cultural resources, and the natural into
three major areas: economic globalization, cultural globalization, and
political globalization.
4. Nature of Globalization
Globalization is a conglomerate of various multiple units located in
the different parts of the globe which are linked by common ownership.
The multiple limits draw on parts of the globe but all linked by common
ownership. Multiple units draw on a common pool of resources, such as
money, credit, information, patents, trade names and control systems. The
markets of the world. Human resources are highly diverse. Transactions
involving intellectual properties such as copyrights, patents, trademarks,
and process technologies are across the globe.
5. Dimensions of Globalization
The following are the dimensions of globalization:
a. Planning to expand the business on a worldwide scope.

b. Giving up the distinction between domestic and foreign market and
instead developing a global outlook of such business.
c. Locating the production and the physical facilities of the business by
considering global business dynamics irrespective of national
consideration.
d. Creating product development and production planning on a global
market sphere.
e. Global sourcing of the factors of production such as raw materials
components, machinery, technology, finance, and others that are obtained
from the best source anywhere in the world.
f. Global orientation or organization structure and management culture.
6. Reasons for Globalization

a. Rapid shrinking of time and distance across the globe. One can easily
cross the bridge going to the other side of the market place due to
advance tools of technology than before.
b. Domestic markets are no longer rich as a consequence of many
interlocking factors.
c. Companies and institutions go global to find political and economic
stability whish is relatively good in other countries than the country of
origin.
d. To get technological and managerial know-how of other countries due to
their advancement in science, technology, education, health and other
fields of discipline.
e. To reduce high transportation costs if one goes globally using the advance
tools of communication and information.
f. To be close to raw materials and to markets for their finished products
which are not available in the country of origin.
g. The creation of the World Trade Organization (WTO) had made it possible
in stimulating increased cross border trade. There are other world bodies
like the UN and several arbitration bodies where countries agree.
7. Stages of Globalization
Stage 1: The first stage is the arm’s length service activity of an
essentially domestic company/institution which moves into new
market overseas by linking up with local dealers and
distributors.
Stage 2: In this stage, the company/institution takes over these activities
on its own.
Stage 3: In this stage, the domestic-based company institution begins to
carry out its own manufacturing marketing and sales in key
foreign markets.
Stage 4: In this stage, the company/institution moves to a full insider
position in these markets supported by a complete business
system including Research and Development (R&D) and
engineering. However, the headquarters mentality continues to
dominate.
Stage 5: In this stage, the company/institution moves towards a genuinely
global mode of operation. In this stage, global localization
happens, that is, the company/institution serves local customers
in markets around the globe responding to their needs. This
requires an organizational transition i.e the company must
denationalize its operational and create a system of values
shared by global managers.
8. Merits of Globalization
8.1 Global competition and imports keep a lid on prices such that
inflation is less likely to derail economic growth.
8.2 An open economy spur fast innovation with fresh ideas from
abroad.
8.3 Export jobs often pay more than other jobs.
8.4 Unfettered capital flow keeps interest rates low.
8.5 Living standards go up faster.
8.6 Productivity grows more quickly when countries produce goods and
services in which they are of comparative advantage.
8.7 Countries liberalize their visa rules and procedures so as to permit
the full flow of people from country to country.
8.8 It results in freeing up the unproductive sector to investment and
the productive sector to export related activities resulting in a win-
win situation for the world economy.
9. Demerits of Globalization
9.1 Several people lose their jobs when companies import cheap labor
or materials or shift production abroad.
9.2 Workers face pay cut demands from employers who often
threatens to export jobs.
9.3 Unregulated globalization can cause serious problems to poor and
developing countries in term of labor force, wages, benefits, job,
termination, and others.
9.4 High foreign stake on industries where it is not necessarily needed
could affect the economic growth of domestic enterprise.
9.5 Sovereignty of a country and company/ institution may be at stake.
10. Importance of Studying Globalization

10.1 There is a greater demand in business and industry, health,
engineering and technology to have people who can work with
people of other nations and cultures.
10.2 There is greater demand of promoting the local business and
industry to other countries and if need be, owners travel
independently and internationally for a better promotion.
10.3 The contemporary world face global challenges that will take
interdisciplinary groups to solve these challenges: these
challenges are: how to provide access to clean water, clean
environment, clean renewable energy that is affordable to
everyone and how to deal with the unpredictable climate change
just to name a few. These global challenges need to be solve as
soon as possible through the gathering and sharing of information
across disciplines, institutions, and other entities in a global scale.
10.4 Creating meaningful, harmonious and workable relationship that
link globally is an important aspect of the merits of globalization,
especially if one wished to be the President of the future
generation.
10.5 Knowledge of the merits, demerits and reasons for globalization
will enable the students to work as model of collaborative
international team in the near future along the areas of business,
education, health, science, arts, engineering, hotel industries, etc.
and discuss best products in these areas.
11. The Importance of Globalization for Everyone

According to Neil Kokemuller, a writer, globalization is the
expansion of local economies and business into a broader international
marketplace. Even small business had gotten active in the global
environment as the Internet and mobile technology have enabled
communication across continents and countries. It has become important
for a number of reasons including the overall need for business to
compete.
The internet revolutionized the business arena, because it created
a whole new virtual marketplace that expands beyond physical and
geographical boundaries. Companies in foreign countries can now
compete for customers in the United States by leveraging their own
country’s resources, lower costs of labor and affordable distribution
processes. In the same way, US companies have the opportunity to
appeal to customers in the Philippines and other countries by promoting
their goods and services.
The development of business, industry and income levels in several
large population centers has also contributed to the importance of
globalization. China, India and Brazil are prominent examples of thriving
economies as of 2013. Nearly two billion people reside in these countries.
As customers gain revenue dollars can provide. Partnership opportunities
with businesses in these countries can aid growth.
12. Competition
Even if you want to avoid the globalization movement, you often
have no choice but to compete. The influx of foreign competitors in the US
limits the number of companies in some industries that can succeed
domestically. In the same way, if your competitors expand globally, you
have to consider following suit. Any money other companies make in
foreign markets, they products and services domestically.
13. Diverse Population

Business trends often mirror broader societal trends. The United
States and the world in general, has become very diverse. The United
States is home to immigrants from many countries around the world. As
people move to different parts of the world, they spread different ideas,
perspective and customs. Foreign-born citizens who work for and buy
from US companies often want to see them get involved in doing business
in other parts of world.
14. The Theory of Comparative Advantages

Globalization is grounded on the Theory of Comparative
Advantage. This theory states that countries that are good of producing
particular good are better off exporting it to countries that are less efficient
at producing that good. Conversely, the latter country can then export the
goods that it produces in an efficient manner to the former country which
might be deficient in the same. The underlying assumption here is that not
all countries are good at producing all sorts of goods and hence they
benefit by trading with each other. Further, because of the wage
differential and the way in which different countries are endowed with
different resources, countries stand to gain by trading with each other.
15. Philosophy Underlying Globalization

Globalization is one of the most widely spread recent cultural,
social, economic and political phenomenon which has strongly marked the
discourse of the humanities and social sciences. This new, not-yet
constituted era poses multiple challenges in which there is room for novel
theoretical paradigm in this new emerging world.
1. The concept of globalization has only recently been widely
accepted and adapted-words like global, globality, globalization,
globalism as well as the concepts of global market, global
ecology, global citizen, its more truly unknown up to the very
end of 20th century.
2. Discussion of world issues used the derivatives of “international”
rather than “global” relations because of the recent popularized
new concept of “globalization” has resulted in innumerable
contradicting definitions of the same.
3. While normatively speaking, some people associate
globalization with progress, prosperity and peace, some others
consider it to be retrogression, disaster and decay.
4. The common and indisputable characteristics of all it definitions
is the view that globalization is “a process of economic, social,
culture, and political activity, which transcends nation-state
borders and that it pertains to the world as a whole”. It is within
this context that the multidimensionality of the globalization
process comes to the force.
5. Globalization is a complex and controversial process of the
building of the world as a whole due to the creation of global
institutional structures and global cultural forms like a free
market (economic unification of the world with uniform patterns
of production and consumption; democratic integration of the
world based on common interest of humankind, such as
equality, human rights protection, rule of law, peace and
security, and moral integration of the world based on humanistic
values-instead of nation state particularism.
6. Various ideological movements of resistance to globalization
have been emerging in response to globalization such as the
violent and destructive mass denominations staged in various
countries are a manifestation of resistance.
Finally, based on the above philosophical dimensions underlying
globalization is the free movement of goods, services, and people across
the world in a seamless and integrated manner. Globalization can be
thought of to be the result of the opening up of the global economy and
the concomitant increase in trade between nations in this contemporary
world.
The point here is that, globalization has had positive and negative
effects and therefore, a deep approach is needed when discussing the
concept. What is undeniable is that GLOBALIZATION is here to stay
hence it is better for the countries in the global economy to embrace the
concept and live with it in this contemporary world.
Self Help: You can also refer to the sources below to help you further
understand the lesson:
Ariola, M (2018). The Contemporary World. Manila: Unlimited Books Library

Services & Publishing Inc.
Claudio, L & Abinales, P. (2018). The Contemporary World. Quezon City: C&E
Publishing Inc.
De Ocampo, F, et al. (2018). Introduction to Contemporary World. Bulacan: St.

Andrew Publishing House
Let’s Check!
Activity 1. Now that you know the most essential terms in the study of The
Contemporary World. Let us try to check your understanding of these terms. In the
space provided, write the term/s being asked in the following statements:
_________1. According to him, globalization is the expansion of local economies and

business into a broader international marketplace.
_________2. In what stage of globalization that the domestic-based company institution

begins to carry out its own manufacturing marketing and sales in key foreign markets.
_________3. It is interconnectedness of people and business across the world that

eventually lead to global, cultural, political, and economic integration.
_________4. He popularized the term “globalization” by bringing it into the mainstream

business audience.
_________5. He coined a related term, corporate giants and this term refers to the
largely national trusts and other large enterprises of the time.
_________6. It is the free movement of goods, services and people across the world in
a seamless and integrated manner.
_________7. In what stage of globalization that the company/institution moves towards

a genuinely global mode of operation.
_________8. In what year a Large-scale globalization began?

_________9. It revolutionized the business arena because it created a whole new
virtual marketplace that expands beyond physical and geographical boundaries.
__________10. This theory states that countries that are good of producing particular
good are better off exporting it to countries that are less efficient at producing that good.
Words to Know!
Activity 1. Define the following terms according to your understanding.
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3.Contemporary World_________________________________________________
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Activity 2: Explain the following.
1. Identify two (2) paragraphs on the underlying philosophy of globalization.
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2. What is the importance of studying globalization?
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3. Why is the word “globalization” given emphasis or importance in today’s
contemporary world?
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Brush Up!
Activity 3. Reflection Figure: Below is a reflection figure that looks like a human figure.
Determine what you have learned (the knowledge that serves as your foundation to
stand and keep); the things you have realized and appreciated (attitude towards
learning) and the things that you discovered (skills that you will cherish in life). Fill in
each part the reflection figure.
Things I have
learned
(knowledge)
Things I have
realized and
appreciated
(attitudes)
Big
Things I have
Picture B discovered
(skills)
Week 2: Unit Learning Outcomes (ULO): At the end of the
unit, you are expected to
a. Discuss the factors leading the formation of economic integration and

cooperation.
Metalanguage
In this section, understand the economy in the global scale, the political
component of globalization and define the terms of roles of civil society and non-
governmental organizations. Demonstrate ULOs will be operationally defined to
establish a common frame of reference as to how the texts work in your chosen field or
career. You will encounter these terms as we go through the study of curriculum. Please
refer to these definitions in case you will encounter difficulty in the understanding of
educational concepts.
 Neoliberalism. Antithetical to the protection of group - rather than

individual – interests.
 International Trade. The exchange of capital, goods, and services
across international borders or territories because there is a need or want of
goods or services.
 Mercantilism. Belief in the benefits of profitable trading.
 Global Economy. World economy
Big Picture in Focus: ULOa. Globalization of World Economics.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the 2 nd week of
16. Global Economy

Global economy is also referred to as world economy. This term refers to
the international exchange of goods and services that is expressed in
monetary units of money. It may also mean as the free movement of goods,
capital, services, technology and information.
In some context “global” or “International” economy is distinguished and
measured separately from national economies while the “world economy” is
simply an aggregate of the separate country’s measurements.
World economy is exclusively limited to human economic activity and is
typically judged in monetary terms. Typical examples are illegal drugs and
other black market goods which by any standard are part of the world
economy, but for which these is by definition no legal market of any kind.
Global economy or economic globalization is concerned on the
globalization of production, finance, markets, technology, organizational
regimes, institutions, corporations and labor. While economic globalization
has been expanding since the emergence of trans-national trade, it has
grown at an increased rate due to an increase in communication and
technological advances under the framework of General Agreement on Tariffs
and Trade and World Trade Organization, which made countries gradually cut
down trade barriers and open up their current accounts and capital accounts.
This recent boom has been largely supported by developed economies
integrating with majority world through foreign direct investment and lowering
costs of doing business, the reduction of trade barriers and in many cases
cross border migration.
17. Economic Systems

17.1 Market Economy –decision making of private individuals is a
determinant of a pure market economy. Economic freedom to
purchase and sell products, services, and properties is a key
characteristics of an economy under the will and interest of the
individuals. Economics activities like production and distribution of
goods and commodities are based on the interaction of supply and
demand. This condition is not planned by a single person or group
that has the ability to manipulate or direct the economy solely.
There is a very close economic engagement between producers
and consumers. Supply in the market is based on the consumer
behavior, price and the resource availability in the economy.
17.2 Command Economy- a central economic body handles the
entire decision-making in the operation of an economy. The quality
and quantity of goods and services produces in the market is based
on the decision of the government. Production quantity is dictated,
consumer behavior is directed, and market operation is controlled
by a single authority. During the height of communism, many
countries move its economy to state planning and government
ownership. However, economic problems hampered the economy
like limited production, faulty decisions, and weak domestic
investments.
The objective of command system is to mobilize resources
for the common good of the public and for the interest of the
nation. Private individuals have no say in the economic
operation as this includes the abolition of private of economic
competition and innovation.
17.3 Mixed Economy-market-driven economies like United
States, Great Britain and France had experienced mixed economic
system. This practice is a combination of market and command
systems of economic planning and decision-making. Some sectors
are under the direction of the private individuals while others
aspects of the economy are left within the interest and guidance of
the government. There are times that the state has to take over the
ownership and operation of a particular troubled private firm for the
purpose of maintaining the interest of the nation. When the
American market was hit by the 2008-2009 financial markets, its
government resorted to take over some collapsing financial
corporations.
18. International Trade

The conclusion of World War II signaled the beginning of trade
facilitation around the globe. Economies set rules and guidelines for
international trade which led to formation of General Agreement on Tariffs
and Trade (GATT). These trade rules were developed through series of
rounds or meetings of member economies. Exchanges of good and
commodities become more accessible, trade barriers were reduced,
unprecedented increased of specialization and product innovation, and
competitive prices were offered in major industries. These development
resulted to a more open and free flow of goods and services where
exchanges were seen between developed and less developed economies.
Why do countries engage in international trade? What are the costs
and gains in trading with other countries? This chapter will provide an
overview on the system and practice of international trade. It will present
the three leading theories and perspectives in international trade.
Likewise, the advantages and disadvantages of engaging in global trade
and international market will be described and analyzed.
International Trade (IT) is the process and system when goods
commodities, services cross national economy, and boundaries in
exchange for money or goods of another country (Balaam and Vesth,
2008). Global trade has grown dramatically since the post-cold war era as
result of increasing demand of goods and services of countries. This
global norm is are flection of growing practice of internationalizing and
globalizing local products and services.
19. Trade Theories

There are two types of trade theories explaining international trade:
19.1 Descriptive Theory. It deals with the natural order and
movement of trade. It describes the pattern of trade under the idea
of laissez faire, a French term which means “leave alone”. It refers
to the notion that individuals are the best economic agents to solve
the problems through invisible hand rather than the government
policies. Descriptive theory addresses the questions of which
product to trade, how much product to offer and produce, and
which country to trade in the absence of government restrictions.
19.2 Prescriptive Theory. This prescribes whether government,
an important economic institution, should interfere and restrict with
the movement of goods and services. This theory views
government to have participation in deciding which countries to
alter the amount, composition and direction of goods. The pressing
question describing descriptive theory is “Should the government
control trade?”
20. Three Perspective on International Trade
20.1 Economic Liberals
David Ricardo and Adam Smith were known critics of late
th
18 century on the abuses of mercantilism in England. Their liberal
ideas and contribution in understanding global trade are still
relevant until today. For Ricardo, his influential work Law of
Comparative Advantage explains that free trade efficiency is
attainable if two countries can produce more goods and trade
products separately. The advantage of this theory in international
trade is deriving from the principle of specialization and division of
labor (Nau,2009). Countries have different resources and talents;
they are better in performing in that economic activity than other
economic activities.
Economic liberals explain the importance of free trade and
the role of individual’s preference in choosing economic activity. It
includes making decision and choices on comparing the costs of
products to be produced and traded, the availability of the product
and the efficiency of producing and buying the products.
20.2 Mercantilists
Mercantilism is an economic theory emerged from about 1500-
1800.This period was the emerging eras of nations-states and the
formation of more central governments. This system flourished due to
the following reasons:
 Higher export than import. Governments imposed
restrictions and policies requiring economy and its market to
produce higher that products and services purchased
outside the country or import. Countries used this
mechanism to support their trade objectives and strengthen
their colonial rule and possessions.
 Export less high valued product and import less high valued
product. It prevented and monopolized the production and
manufacturing operation of the colonies.
 The benefits of colonial powers. Mercantilism was adopted
to increase and sustain the colonial power and its authority
to direct and control the economic activity of the colony.
Alexander Hamilton and Friedrich List are known critics of
economic liberalism. They stressed the need of government and an
economic body controlling and overseeing the operation of
economy.
20.3 Structuralists
The earliest wave of mercantilism was described as classical
imperialism. The drive of European countries to explore and
colonized underdeveloped countries originated from the aggressive
mercantilist behavior of European economies. This idea was
extended to the practice of modern capitalist-imperialist approach
by countries and economies that have the immense resource
through the use of hard power over developing and less developed
countries.
The Modern World System (MWS) theory developed by
Immanuel Wallerstein, explains the contact of economies between
core, semi-peripheral and peripheral countries in the world. The
core states have the absolute advantage over the other through
unequal exchange and extraction of raw materials from periphery
and semi-periphery. This system as part on the structure of global
capitalism, involves exploitation, and transformation in some ways.
The 16th century core states of northwest Europe moved
agricultural sector to higher –skilled industries. Eastern Europe
became the periphery economy where it heavily exported
agricultural products to the core. While Mediterranean Europe
served as intermediary between the core and periphery through
using its labor-intensive industry.
The economic globalization and market integration of the 21 st
century are extensions of the same economic motives of imperial
powers of the 19th and 20th centuries (Balaam and Veseth,2008).
21. Why Countries Engage in International Trade?

21.1 Use of Excess Capacity in Demand. The inadequate domestic
demand pushes business organizations to expand their market base
outside the national territory. This is usually done by firms and
companies that have the resources and capital to operate in a
transnational market. Giant brands like Nestle, Pepsi, McDonald’s,
Toyota, and Starbucks are known for expanding their operations
outside their home country.
21.2 Cost Reduction and Increase of Profit. A market leader for a
particular good or service may garner a lower production cost by
increasing its market in global rather than domestic. This enables a
firm to increase its profit while reducing its operating costs.
21.3 Cheaper Supplies. A country imports goods from other countries
because of inexpensive raw materials and supplies used for
production. The availability of buying cheaper materials from other
countries lowers the cost in production which might result to an
increase in the profit of businesses.
21.4 Addition to Product Line. Economies usually aim for a variety of
products and services available in the market. It offers consumer to
choose and buy products that are of competitive prices, degree of
importance, and will offer higher satisfaction.
21.5 Reduction Risk. Importing products is seen as an alternative to
countries that are vulnerable to supply shortage. These countries that
have high volume of imported goods are economies that confront the
demand and supply condition of the local market.
21.6 Foreign Policy Tool. The membership of a country to regional
market integration and economic relationships is part of its foreign
policy. Enhancing the economic and political affiliation of a country is
very important in sustaining its international status in a global
environment.
22. The Bretton Woods System

After the two world wars, world leaders sought to create a global
economic system that would ensure a longer-lasting global peace. They
believed that one of the ways to achieve this goal was set up a network of
global financial institutions that would promote economic interdependence
and prosperity. The Bretton Wood system was inaugurated in 1944 during
the United Nations Monetary and Financial Conference to prevent the
catastrophes of the early decades of the century from reoccurring and
affecting international ties.
The Bretton Woods system was largely influenced by the ideas of

British economist John Maynard Keynes who believed that economic
crises occur not when a country does not have enough money, but when
money is not being spent and, thereby, not moving. When economies slow
down, according to Keynes, governments have to reinvigorate markets
with infusions of capital. This active role of governments in managing
spending served as the anchor for what would be called a system of
global Keynesianism.
Delegates at Bretton Woods agreed to create two financial
institutions. The first was the International Bank for reconstruction and
Development (IBRD, or World Bank) to be responsible for funding postwar
reconstruction projects. It was a critical institution at a time when many of
the world’s cities had been destroyed by the war. The second institution
was the International Monetary Fund (IMF), which was to be the global
lender of the last resort to prevent individual countries from spiraling into
credit crises. If economic growth in a country slowed down because there
was not enough money to stimulate the economy, the IMF would step in.
To this day, both institutions remain key players in economic globalization.
Shortly, after Bretton Woos, various countries also committed
themselves to further global economic integration through the General
Agreement on Tariffs and Trade (GATT) in 1947. GATT’s main purpose
was to reduce tariffs and other hindrances to free trade.
23. Neoliberalism and Its Discontents

The high point of global Keynesianism came in the mid-1940s to
the early 1970s. during this period, governments poured money into their
economies, allowing people to purchase more goods and, in the process,
increase demand for these products. As demand increased, so did the
prices of these goods. Western and some Asian economies like Japan
accepted this rise in prices because it was accompanied by general
economic growth and reduced unemployment. The theory went that, as
prices increased, companies would earn more, and would have more
money to hire workers. Keynesian economists believed that all this was a
necessary trade-off for economic development.
In the early 1970s, however, the prices of oil rose sharply as a
result of the Organization of Arab Petroleum Exporting Countries’
(OAPEC, the Arab member-countries of the Organization of Petroleum
Exporting Countries or OPEC) imposition of an embargo in response to
the decision of the United States and other countries to resupply the
Israeli military with the needed arms during the Yom Kippur War. Arab
countries also used the embargo to stabilize their economies and growth.
The “oil embargo” affected the Western economies that were
reliant on oil. To make matters worse, the stock markets crashed in 1973-
1974 after the United States stopped linking the dollar gold, effectively
ending the Bretton Woods system. The result was a phenomenon that
Keysion economics could not have predicted—a phenomenon called
stagflation, in which a decline in economic growth and employment
(stagnation) takes place alongside a sharp increase in prices (inflation).
Around this time, a new form of economic thinking was beginning to
challenge the Keynesian orthodoxy. Economists such as Friedrich Hayek
and Milton Friedman argued that the governments’ practice of pouring
money into their goods without necessarily increasing supply. More
profoundly, they argued that government intervention in economies distort
the proper functioning of the market.
Economists like Friedman used the economic turmoil to challenge
the consensus around Keynes’s ideas. What emerged was a new form of
economic thinking that critics labeled neoliberalism. Form the 1980’s
onward, neoliberalism became the codified strategy of the United States
Treasury Department, the World Bank, the IMF and eventually the World
Trade Organization (WTO) – a new organization founded in 1995 to
continue the tariff reduction under the GATT. The policies they forwarded
came to be called the Washington Consensus.
The Washington Consensus dominated global economic policies
from the 1980’s until the early 2000’s. it advocates pushed for minimal
government spending to reduce government debt. They also called for the
privatization of government-controlled services like water, power,
communications and transport, believing that the free market can produce
the best results. Finally, they pressured governments, particularly in the
developing world, to reduce tariffs and open up their economies, arguing
that it is the quickest way to progress. Advocates of the Washington
Consensus conceded that, along the way, certain industries would be
affected and die, but they considered this, “shock therapy” necessary for
long-term economic growth.
The appeal of neoliberalism was in its simplicity. It advocates like
US President Ronald Reagan and British Prime Minister Margaret
Thatcher justified their reduction in government spending by comparing
national economies to households. Thatcher, in particular, promoted an
image of herself as a mother, who reined in overspending to reduce the
national debt.
The problem with household analogy is that governments are not
households. For one, governments can print money, while household
cannot. Moreover, the constant taxation systems of governments provide
them steady flow of income that allows them to pay and refinance debts
steadily.
Despite the initial success of neoliberalism politicians like Thatcher
and Reagan, the defects of the Washington Consensus became
immediate palpable. A good early example is that of post-communist
Russia. After Communism had collapsed in the 1990’s, the IMF called for
the immediate privatization of all government industries. The IMF
assumed that such a move would free these industries. The IMF assumed
that such a move would free these industries from corrupt bureaucrats and
pass them on to the more dynamic and independent private investors.
What happened, however, was that only individuals and groups who had
accumulated wealth under the previous communist order had the money
to purchase these industries. In some cases, the economic elites relied on
easy access to government funds to take over the industries. This practice
has entrenched an oligarchy that still dominates the Russian economy to
this very day.
24. The Global Financial Crisis and the Challenge to Neoliberalism

Russia’s case was just one example of how the “shock therapy” of
neoliberalism did not lead to the ideal outcomes predicted by economist
who believed in perfectly free markets. The greatest recent radiation of
this thinking was the recent global financial crisis of 2008-2009.
Neoliberalism came under significant strain during the global
financial crisis of 2007-2008 when the world experienced the greatest
economic down turn since the Great Depression. The crisis can be traced
back to the 1980’s when the United States systematically removed various
banking and investment restrictions.
The scaling back of regulations continued until the 2000’s paving
the way for brewing crisis. In their attempt to promote the free market,
government authorities failed to regulate bad investments occurring in the
US housing market. Taking advantage of “cheap housing loans”,
Americans began building houses that were beyond their financial
capacities.
To mitigate the risk of these loans, banks that were lending
houseowners’ money pooled these mortgage payments and sold them as
“mortgage-backed securities” (MBSs). One MBS would be a combination
of multiple mortgages that they assumed would pay a steady rate.
Since there was no such surplus money circulating, the demand for
MBSs increased as investors clamored for more investment opportunities.
In their haste to issue these loans, however, the banks became less
discriminating. They began extending loans and individuals with dubious
credit records- people who were unlikely to pay their loans back. These
high-risk mortgages became known as sub-prime mortgages.
Financial experts wrongly assumed that, even if many of the
borrowers were individuals and families who would struggle to pay, a
majority would not default. Moreover, banks thought that since there were
so many mortgages in jus one MBS, a few failures would not ruin the
entirety of the investment.
Banks also assumed that housing prices would continue to
increase. Therefore, even if homeowners defaulted on their loans, these
banks could simply reacquire the homes and sell them at a higher price,
turning profit.
Sometime in 2007, however, home prices stopped increasing as
supply caught up with demand. Moreover, it slowly became apparent the
families could not pay off their loans. This realization the rapid reselling of
MBSs, as banks and investors tried to get rid of their bad investments.
This dangerous cycle reached a tipping point in September 2008, when
major investment banks like Lehman Brothers collapsed, thereby
depleting major investments.
The crisis spread beyond the United States since many investors
were foreign governments, corporations, and individuals. The loss of their
money spread like wildfire back to their countries.
These series of interconnections allowed for a global multiplier
effect that sent ripples across the world. For example, Iceland’s banks
heavily depended on foreign capital, so so when the crisis hit them, they
failed to refinance their loans. As a result of this credit crunch, three of
Iceland’s top commercial banks defaulted. From 2007 to 2008, Iceland’s
debt increased more than seven-fold.
Until now, countries like Spain and Greece are heavily indebted
(almost like Third World countries), and debt relief has come at a high
price. Greece, in particular, has been forced by Germany and the IMF to
cut back on its social and public spending. Affecting services like
pensions, health care, and various forms of social security, these cuts
have been felt most acutely by the poor. Moreover, the reduction in
government spending has slowed down growth and ensured high levels of
unemployment.
The United States recovered relatively quickly thanks to a large
Keynesian-style stimulus package that President Barack Obama pushed
for in his first months in office. The same cannot be said for many other
countries. In Europe, the continuing economic crisis has sparked a
political upheaval. Recently, far-right parties like Marine Le Pen’s Front
National in France have risen to prominence by unfairly blaming
immigrants for their woes, claiming that they steal jobs and leech off
welfare. These movements blend popular resentment with utter hatred
and racism. We will discuss their rise further in the final lesson.
25. Economic Globalization Today

The global financial crisis will take decades to resolve. The
solutions proposed by certain nationalist and leftist group of closing
national economies to world trade, however, will no longer work. The
world has become has integrated. Whatever one’s opinion about the
Washington Consensus is, it is undeniable that some form of international
trade remains essential for countries to develop in the contemporary
world.
Exports, not just the local selling of goods and services, makes the
international economies grow at present. In the past, those that benefited
the most from free trade were the advanced nations that were producing
and selling industrial and agricultural goods. The United States, Japan,
and the member-countries of the European Union were responsible for 65
percent of global exports, while the developing countries only accounted
for 29 percent.
When more countries opened up their economies to take
advantage of increased free trade, the shares of the percentage began to
change. By 2011, developing countries like the Philippines, India, China,
Argentina, and Brazil accounted nations---including the United States—
had gone down to 45 percent. The WTO –led reduction of trade barriers,
known as trade liberalization, has profoundly altered the dynamics of the
global economy.
In the recent decades, partly as a result of these increased exports,
economic globalization has ushered in an unprecedented spike in global
per capita GDP rose over five-fold in the second half of the 20 th century. It
was this growth that created the large Asian economies like Japan, China,
Korea, Hong Kong and Singapore.
And yet, economic globalization remains an uneven process, with
some countries, corporations, and individuals benefiting a lot more than
others. The series of trade talks under the WTO have led to
unprecedented reduction in tariffs and other trade barriers, but these
processes have often been unfair.
First, developed countries are often protectionists, as they
repeatedly refuse to lift policies that safeguard their primary products that
could otherwise be overwhelmed by imports from the developing world.
The best example of this double standard is Japan’s determined refusal to
allow rice imports into the country to protect it’s farming sector. Japan’s
justification is that rice is “sacred”. Ultimately, it is economic muscle as the
third largest economy that allows it to resist pressures to open its
agricultural sector.
The United States likewise fiercely protect its sugar industry, forcing
consumers and sugar-dependent business to pay higher prices instead of
getting cheaper sugar from plantations of Central America.
Faced with these blatantly protectionist measures from powerful
countries and blocs, poorer countries can do very little to make economic
globalization more just. Trade imbalances, therefore, characterize
economic relations between developed and developing countries.
The beneficiaries of global commerce have been mainly
transnational corporations (TNCs) and not governments. And like any
other business, these TNCs are concerned more with profits than with
assisting the social programs of the governments hosting them. Host
countries, in turn, loosen tax laws, which prevents wages from rising, while
sacrificing social and environmental programs that protect the
underprivileged members of societies. The term “race to the bottom” refers
to countries’ lowering their labor standards, including the protection of
workers’ interest, to lure in foreign investors seeking high profit margins at
the lowest cost possible. Governments weaken environmental laws to
attract investors, creating fatal consequences on their ecological balance
and depleting them of their infinite resources (like oil, coal, and minerals).
Localizing the Material

Many Philippine industries were devastated by unfair trade deals under the GATT and
eventually the WTO. One sector that was particularly affected was Philippine agriculture.
According to Walden Bello and a team of researchers at Focus on the Global South, the
US used its power under the GATT system to prevent Philippine poultry and pork---even
as it sold meat to the Philippine.
Although the Philippine expected to make up losses in sectors like meat with gains in
areas such as coconut products, no significant change was realized. In 1993, coconut
exports amounted to $1.9 billion, and after a slight increase to $2.3 billion in 1997, it
returned to $1.9 billion in 2000.
Most strikingly, Bello and company noted that the Philippines become a net food importer
under the GATT. In 1993, the country had an agricultural trade surplus of $292 million. It
had a deficit of $764 million in 1997 and $794 million n 2002.
-Bello, Walden, Herbert Docena, Marissa de Guzman, and Mary Lou Malig.The Anti-Development State: The Political Economy of
Permanent Crisis in the Philippines. London and New York: Zed Books, 2006, 140-142.
26. Conclusion
International economic integration is a central tenet of globalization.
In fact, it is so crucial to the process that many writers and commentators
confuse this integration for the entirety of globalization. As a reminder,
economics is just one window into the phenomenon of globalization; it is
not the entire thing.
Nevertheless, much of globalization is anchored on changes in the
economy. Global culture, for example, is facilitated by trade. Filipinos
would not be aware of American Culture if not for the trade that allows
locals to watch American movies, listen to American music, and consume
American products. The globalization of politics is likewise largely
contingent on trade relations. These days, many events of foreign affairs
are conducted to cement trading relations between and among states.
Given the stakes involved in economic globalization, it is
perennially important to ask how this system can be made more just.
Although some elements of global free trade can be scaled back, policies
cannot do away with it as a whole. International policymakers, therefore,
should strive to think of ways to make trading deals fairer. Governments
must also continue to devise ways of cushioning the most damaging
effects of economic globalization, while ensuring that its benefits accrue
for everyone.
Ariola, M (2018). The Contemporary World. Manila: Unlimited Books Library Services &
Publishing Inc.
Publishing Inc.
De Ocampo, F, et al. (2018). Introduction to Contemporary World. Bulacan: St. Andrew

Publishing House
Let’s Check!
Activity 1. Now you already understand of globalization of world economics. Let us try
to check your understanding. In the space provided, write the term/s being asked in the
following statements:
___________ 1. This period was the emerging eras of nations-states and the formation
of more central governments.
___________ 2. It deals with the natural order and movement of trade.
___________3. This term refers to the international exchange of goods and services
that is expressed in monetary units of money.
___________4. He used the economic turmoil to challenge the consensus around
Keynes’s ideas.
___________ 5. This theory views government to have participation in deciding which
countries to alter the amount, composition and direction of goods.
____________ 6 This theory was developed by Wallerstein explains the contact of

economies between core, semi-peripheral and peripheral countries in the world.
____________ 7. It refers to countries’ lowering their labor standards, including the
protection of workers’ interest, to lure in foreign investors seeking high profit margins at
the lowest cost possible.
____________ 8. It explain the importance of free trade and the role of individual’s
preference in choosing economic activity.
____________ 9. The earliest wave of mercantilism was described as _______.
___________ 10. It is the process and system when goods commodities, services cross
national economy, and boundaries in exchange for money or goods of another country
Let’s Analyze
Activity 2. Discuss and explain the following.
1. How do economic forces facilitate the deepening of globalization?

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2. How is the Philippines central to the history of economic globalization?
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3. Compare and contrast the assumption of the original Bretton Woods system with
those of the Washington Consensus.
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Brush Up!
Activity 1. Reflection Figure: Below is a reflection figure that looks like a human figure.
Determine what you have learned (the knowledge that serves as your foundation to
stand and keep); the things you have realized and appreciated (attitude towards
learning) and the things that you discovered (skills that you will cherish in life). Fill in
each part the reflection figure.
Things I have
learned
(knowledge)
Things I have
realized and
appreciated
(attitudes)
Big Picture C
Week 3: Unit Learning Outcomes (ULO): At the end of the unit, you are expected to
a. Discuss the historical evolution of international politics.
Metalanguage
In this section, understand the history of global politics as well as the difference
between internationalism and globalization and know the definition of state and nation.
Demonstrate ULOs will be operationally defined to establish a common frame of
reference as to how the texts work in your chosen field or career. You will encounter
these terms as we go through the study of curriculum. Please refer to these definitions
in case you will encounter difficulty in the in understanding educational concepts.
Big Picture in Focus: ULOa. Discuss the evolution of international

politics.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the 3rd week of
27. A History of Global Politics: Creating an International Order

The world is composed of many countries or states, all of them
having different forms of government. Some scholars of politics are
interested in individual states and examine the internal politics of these
countries. For example, a scholar studying the politics of Japan may write
about the history of its bureaucracy. Other scholars are more interested in
the interactions between two or more countries. These scholars are
studying international relations. Moreover, when they explore the
deepening of interactions between states, they refer to phenomenon of
internationalization.
Internationalization does not equal globalization, although it is a

major part of globalization. As we explained in Lesson 1, globalization
encompasses a multitude of connections and interactions that cannot be
reduced to the ties between governments. Nevertheless, it is important to
study international relations as a facet of globalization, because
states/governments are key drives of global processes. In this lesson, we
will examine internationalization as one window to view the globalization of
politics. Although this course is about the contemporary world, we cannot
avoid history. What international relations are today is largely defined by
events that occurred as far back as 400 years ago. Don’t worry; we will
eventually discuss contemporary world politics. But to do that, we need
first to work backward. This lesson will begin with identifying the major
attributes of contemporary global politics and then proceed to ask: How
did this system emerge? IN doing so, you will have a solid foundation to
understand the major issues of global governance in the next lesson.
28. The Attributes of Today’s Global System

World politics today has four key attributes. First, there are
countries or states that are independent and govern themselves. Second,
these countries interact with each other through diplomacy. Third, there
are international organizations, like the United Nations (UN), that facilitate
these interactions. Fourth, beyond simply facilitating meetings between
states, international organizations also take on lives of their own. The UN,
for example, apart from being a meeting ground for presidents and other
heads of state, also has task-specific agencies like the World Health
Organization (WHO) and the International Labour Organization (ILO).
What are the origins of this system? A good start is by unpacking

what one means when he/she says a ‘‘country’’ or what academics also
call the nation-state. This concept is not as simple as it seems. The
nation-state is a relatively modern phenomenon in human history, and
people did not always organize themselves as countries. At different parts
in the history of humanity, people in various regions of the world have
identified exclusively with units as small as their village or their tribe, and
at other times, they see themselves as member of larger political
categories like ‘’Christendom’’ (the entire Christian world).
The nation-state is composed of two non-interchangeable terms.

Not all states are nations and not all nations are states. The nation of
Scotland, for example, has its own flag and national culture, but still
belongs to a state called the United Kingdom. Closer to home, many
commentators believe that Bangsamoro is a separate nation existing
within the Philippines but, through their elites, recognizes the authority of
the Philippine state. Meanwhile, if there are states with multiple nations,
there are also single nation with multiple states. The nation of Korea is
divided into North and South Korea, whereas the ‘’Chinese nation’’ may
refer to both the People’s Republic of China (the mainland) and Taiwan.
29. What then is the difference between nation and state?

In layman’s term, state refers to a country and its government, i.e.,
the government of the Philippines. A state has four attributes. First, it
exercises authority over a specific population, called its citizen. Second, it
governs a specific territory. Third, a state has a structure of government
that crafts various rules that people (society) follow. Fourth and the most
crucial, the state has sovereignty over its territory. Sovereignty here refers
to internal and external authority. Internally, no individuals or groups can
operate in a given national territory by ignoring the state. This means that
groups like churches, civil society organizations, corporations and other
entities have to follow the laws of the state where they establish their
parishes, offices, or headquarters. Externally, sovereignty means that a
state’s policies and procedures are independent of the interventions of
other states. Russia or China, for example, cannot pass laws for the
Philippines and vice versa.
On the other hand, the nation, according to Benedict Anderson, is

an ‘’imagined community’’. It is limited because it does not go beyond
given ‘’official boundary’’, and because rights and responsibilities are
mainly the privilege and concern of the citizens of that nation. Being
limited means that the nation has its boundaries. This characteristic is in
stark contrast to many religious imagined communities. Anyone, for
example, can become a Catholic if one chooses to. In fact, Catholics want
more people to join their community; they refer to it as the call to
discipleship. But not everyone can simply become a Filipino. An American
cannot simply go to the Philippine Embasy and “convert’’ into a Philippine
citizen. Nations often limit themselves to people who have imbibed a
particular culture, speak a common language, and live in a specific
territory.
Calling it “imagined” does not mean that the nation is made-up.
Rather, the nation allows one to feel a connection with a community of
people even if he/she will never meet all of them in his/her lifetime. When
you cheer for a Filipino athlete in the Olympics, for example, it is not
because you personally know that athlete. Rather, you imagine your
connection as both members of the same Filipino community. In a given
national territory like the Philippine archipelago, you rest in the comfort
that the majority of people living in it are also Filipinos. Finally, most
nations strive to become states. Nation-builders can only feel a sense of
fulfillment when that national ideal assumes an organizational form whose
authority and power are recognized and accepted by “the people”.
Moreover, if there are communities that are not states, they often seek
some form of autonomy within their “mother states”. This is why, for
example, the nation of Quebec, though belonging to the state of Canada,
has different laws about language (they are French-speaking and require
French language competencies for their citizens). It is also for this reason
that Scotland, though part of the United Kingdom, has a strong
independence movement led by the Scottish Nationalist Party.
Nation and state are closely related because it is nationalism that

facilitates state information. In the modern and contemporary era, it has
been the nationalist movements that have allowed for the creation of
nation-states. States become independent and sovereign because of
nationalist sentiment that clamors for this independence.
Sovereignty is, thus, one of the fundamental principles of modern

state politics. Understanding how this became the case entails going back
as far as 400 years ago.
30. The Interstate System

The origins of the present-day concept of sovereignty can be traced
back to the Treaty of Westphalia, which was a set of agreements signed in
1648 to end the Thirty Years’ War between the major continental powers
of Europe. After a brutal religious war between Catholics and Protestants,
the Holy Roman Empire, Spain, France, Sweden, and the Dutch Republic
designed a system that would avert wars in the future by recognizing that
the treaty signers exercise complete control over their domestic affairs and
swear not to meddle in each other’s affairs.
The Westphalian system provided stability for the new nations of

Europe, until it faced its first major challenge by Napoleon Bonaparte.
Bonaparte believed in spreading the principles of the French Revolution---
liberty, equality, and fraternity---to the rest of Europe and thus challenged
the power of kings, nobility, and religion in Europe. The Napoleonic Wars
lasted from 1803-1815 with Napoleon and his armies marching all over
much of Europe. In every country they conquered, the French
implemented the Napoleonic Code that forbade birth privileges,
encouraged freedom or religion, and promoted meritocracy in government
service. This system shocked the monarchies and the hereditary elites
(dukes, duchesses, etc.) of Europe, and they mustered their armies to
push back against the French emperor.
Anglo and Prussian armies finally defeated Napoleon in the Battle

of Waterloo in 1815, ending the latter’s mission to spread his liberal code
across Europe. To prevent another war and to keep their systems of
privilege, the royal powers created a new system that, in effect, restored
the Westphalian system. The Concert of Europe was an alliance of “great
powers” ---the United Kingdom, Austria, Russia, and Prussia---that sought
to restore the world of monarchial, hereditary, and religious privileges of
the time before the French Revolution and the Napoleonic Wars. More
importantly, it was an alliance that sought to restore the sovereignty of
states. Under this Metternich system (named after the Austrian diplomat,
Klemens von Metternich, who was the system’s main architect), the
Concert’s power and authority lasted from 1815-1914, at the dawn of
World War I.
Despite the challenge of Napoleon to the Westphalian system and

the eventual collapse of the Concert of Europe after World War I, present-
day international system still has traces of this history. Until now, states
are considered sovereign, and Napoleonic attempts to violently impose
systems of government in other countries are frowned upon. Moreover,
like the Concert system, “great powers” still hold significant influence over
world politics. For examples, the most powerful grouping in the UN, the
Security Council, has a core of five permanent members, all having veto
powers over the council’s decision-making process.
31. Internationalism
The Westphalian and Concert systems divided the world into
separate, sovereign entities. Since the existence of this interstate system,
there have been attempts to transcend it. Some, like Bonaparte, directly
challenged the system by infringing on other states’ sovereign, while
others sought to imagine other systems of governance that go beyond, but
do not necessarily challenge, sovereignty. Still, others imagine a system of
heightened interaction between various sovereign states, particularly the
desire for greater cooperation and unity among states and peoples. This
desire is called internationalism.
Internationalism comes in different forms, but the principle may be

divided into two board categories; liberal internationalism and socialist
internationalism.
The first major thinker of liberal internationalism was the late 18 th
century German philosopher Immanuel Kant. Kant likened states in a
global system to people living in a given territory. If people living together
require government to prevent lawlessness, shouldn’t that same principle
be applied to states? Without a form of world government, he argued, the
international system would be chaotic. Therefore, states, like citizens of
countries, must give up some freedoms and “establish a continuously
growing state consisting of various nations which will ultimately include the
nations of the world.” In short, Kant imagined a form of global government.
Writing in the late 18th century as well, British philosopher Jeremy

Bentham (who coined the word “international law” in 1780), advocated the
creation of “international law” that would govern the inter-state relations.
Bentham believed that objective global legislators should aim propose
legislation that would create “the greatest happiness of all nations taken
together”.
To many, these proposals for global government and international

law seemed to represent challenges to states. Would not a world
government, in effect, become supreme? And would not its laws
overwhelm the sovereignty of individual states?
The first thinker to reconcile nationalism with liberal internationalism

was 19th century Italian patriot Giuseppe Mazzini was both an advocate of
the unification of the various Italian-speaking mini states and a major critic
of the Metternich system. He believed in a Republican government
(without kings, queens, and hereditary succession) and proposed a
system of free nations that cooperate with each other to create an
international system. For Mazzini, free, independent system. He argued
that if the various Italian mini-states could unify, one could scale up the
system to create, for example, a United States of Europe. Mazzini was a
nationalist internationalist, who believes that free, unified nation-states
should be the basis of global cooperation.
Mazzini influenced the thinking of United States president (1913-

1921) Woodrow Wilson, who became one of the 20 th century’s most
prominent internationalist. Like Mazzini, Wilson saw nationalism as a
prerequisite for internationalism. Because of his faith in nationalism, he
forwarded the principle of self-determination—the belief that the world’s
nations had a right to a free, and sovereign government. He hoped that
these free nations would become democracies, because only by being
such would they be able to build a free system of international relations
based on international law and cooperation. Wilson, in short, became the
most notable advocate for the creation of the League of Nations. At the
end of World War I in 1918, he pushed to transform the League into a
venue for conciliation and arbitration to prevent another war. For his
efforts, Wilson was awarded the Nobel Peace Prize in 1919.
The league came into being that same year. Ironically and
unfortunately for Wilson, the United States was not able to join the
organization due to strong opposition from the Senate. The League was
also unable to hinder another war from breaking out. It was practically
helpless to prevent the onset and intensification of World War II. On one
side of the war were the Axis Powers---Hitler’s Germany, Mussolini’s Italy,
and Hirohito’s Japan—who were ultra-nationalists that had an instinctive
disdain for internationalism and preferred to violently impose their
dominance over other nations. It was in the midst of this war between the
Axis Powers and Allied Powers (composed of the United States, United
Kingdom, France, Holland, and Belgium) that internationalism would be
eclipsed.
Despite its failure, the League gave birth to some of the more task-
specific international organizations that are still around until today, the
most popular of which are the World Health Organizations (WHO) and the
International Labour Organization (ILO). More importantly, it would serve
as the blueprint for future forms of international cooperation. In this
respect, despite its organizations dissolution, the League of Nations’
principle survived World War II.
The league was the concretization of the concepts liberal

internationalism. From Kant, it emphasized the need to form common
international principles. From Mazzini, its enshrined the principles of
cooperation and respect among nation-states. From Wilson, it called for
democracy and self-determination. These ideas would re-assert
themselves in the creation of the United Nations 1946 (see next lesson).
One of Mazzini’s biggest critics was German socialist philosopher

Karl Marx who was an internationalist, but who differed from the former
because he did not believe in internationalism should deliberately reject
nationalism, which rooted people in domestic concerns instead of global
ones. Instead, Marx placed a premium on economic equality; he did not
divide the world into countries but into classes. The capitalist class
referred to the owners of factories, companies, and other “means of
production”. In contrast, the proletariat class included those who did not
own the means of production, but instead, worked for the capitalist.
Marx and his co-author, Friedrich Engels, believed that in a socialist

revolution seeking to overthrow the state and alter the economy, the
proletariat “had no nation”. Hence, their now famous battle cry, “Workers
of the world, unite! You have nothing to lose but your chains”. They
opposed nationalism could make workers in individual countries identify
with the capitals of their countries.
Marx died in 1883, but his followers soon sought to make his vision
concrete by establishing their international organization. The Socialist
International (SI) was union of European socialist and labor parties
establish in Paris in 1889. Although short-lived, the SI’s achievements
included the declaration of May 1 as Labor Day and the creation of an
International Women’s Day. Most importantly, it initiated the successful
campaign for an 8-hour workday.
The SI collapsed during World War I as the member parties refused

or were unable to join the internationalist efforts to fight for the war. Many
of these sister parties even ended up fighting each other. It was a
confirmation of Marx’s warning: when workers and their organizations take
side of their countries instead of each other, their long-term interest are
compromised.
As SI collapsed, a more radical version emerged. In the so-called

Russian Revolution of 1917, Czar Nicholas II was overthrown and
replaced by a revolutionary government led by the Bolshevik Party and its
leader, Vladimir Lenin. This new state was called the Union of Soviet
Socialist Republics, or USSR. Unlike the majority of the member parties of
the SI, the Bolshevik did not believe in obtaining power for the working
class through elections. Rather, they exhorted the revolutionary
“vanguard” parties to lead the revolutions across the world, using methods
of terror if necessary. Today, parties like this are referred to as Communist
parties.
To encourage these socialist revolutions across the world, Lenin

established the Communist International (Comintern) in 1919. The
Comintern served as the central body of directing Communist parties all
over the world. This international was not radical than the Socialist
International, it was also less democratic because it followed closely to the
top-down governance of the Bolshevik.
Many of the world’s states feared the Comintern, believing that it

was working in secret to stir up revolutions in their countries (which was
true). A problem arose during World War II when the Soviet Union joined
the Allied Powers in 1941. The United States and the United Kingdom
would, of course, not trust the Soviet Union their fight against Hitler’s
Germany. These countries wondered if the Soviet Union was trying to
promote revolutions in their backyards. To appease his allies, Lenin’s
successor, Joseph Stalin, dissolved the Comintern in 1943.
After the war, however, Stalin re-established the Comintern as the
Communist International Bureau (Cominform). The Soviet Union took over
the countries in Eastern Europe when the United States, the Soviet Union,
and Great Britain divided the war-torn Europe into their respective spheres
of influence. The Cominform, like the Comintern before it, helped direct
the various communist parties that had taken power in Eastern Europe.
With the eventual collapse of the Soviet Union in 1991, whatever

existing thoughts about communist internationalism also practically
disappeared. The SI managed to re-establish itself in 1951, but its
influence remained primarily confined to Europe, and has never been
considered a major player in international relations to this very day.
For the postwar period, however, liberal internationalism would

once again be ascendant. And the best evidence of this is the rise of the
United Nations as the center of global governance.
32. Conclusion
This lesson examined the roots of the international system. In
tracing these roots, a short history of internationalism is but one window
into the broader phenomenon of globalization. Nevertheless, it is a very
crucial aspect of globalization since global interactions are heightened by
the increased interdependence of states. This increased interdependence
manifests itself not just through state-to-state relations. Increasing,
international relations are also facilitated by international organizations
that promote global norms and policies. The most prominent example of
this organization, of course, is the United Nations.
Ariola, M (2018). The Contemporary World. Manila: Unlimited Books Library Services &
Publishing Inc.
Publishing Inc.
De Ocampo, F, et al. (2018). Introduction to Contemporary World. Bulacan: St. Andrew

Publishing House
Let’s Check!
Activity 1. Now you already understand of international relations. Let us try to check
your understanding. In the space provided, write the term/s being asked in the following
statements:
__________ 1. It served as the central body of directing Communist parties all over the
world.
___________ 2. It is a system of heightened interaction between various sovereign
states, particularly the desire for greater cooperation and unity among states and
peoples.
___________ 3. A British philosopher who coined the word “international law” in 1780.
___________ 4. It means that a state’s policies and procedures are independent of the
interventions of other states.
__________ 5.
__________ 6
__________ 7. Four attributes of the state.
__________ 8.
__________ 9. He dissolved the Comintern in 1943.
__________ 10. It is the center of global governance.
Let’s Analyze
Activity 2. Define the following terms according to your understanding.
1. Global interstate system

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2. Internationalism_____________________________________________________
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3. International law
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___________________
Activity 3: By using Venn Diagram differentiate Nation and State.

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Big Picture A

a. Analyze the different interpretations and concepts of globalization.

Big Picture in Focus: ULOa. Define the meaning of globalization.

 Globalization. It refers to the integration of the national markets to a wider

 Globalize. Develop or be developed so as to make international influence or

 Global. Affecting or including the whole world.

 Contemporary. Living or occurring at the same time.

1.b. it is the interconnectedness of people and business across the world

1.e. It is the liberalization of countries of their impact protocols and welcome

1.f. it refers to countries acting like magnets attracting global capital by

2. Historical Foundation of the term “Globalization”

Though many scholars place the origins of globalization in modern

In 1930, the word “globalize” as a noun appeared in a publication

Lately in 2000, The International Monetary Fund (IMF) identified

It is only in 2017 when the word “globalization” was often used in

This time 2018, the phenomenon of globalization is now on full

Likewise, environmental challenges such as global warming, cross-

a. Planning to expand the business on a worldwide scope.

6. Reasons for Globalization

10. Importance of Studying Globalization

11. The Importance of Globalization for Everyone

13. Diverse Population

14. The Theory of Comparative Advantages

15. Philosophy Underlying Globalization

Ariola, M (2018). The Contemporary World. Manila: Unlimited Books Library

De Ocampo, F, et al. (2018). Introduction to Contemporary World. Bulacan: St.

_________1. According to him, globalization is the expansion of local economies and

_________2. In what stage of globalization that the domestic-based company institution

_________3. It is interconnectedness of people and business across the world that

_________4. He popularized the term “globalization” by bringing it into the mainstream

_________7. In what stage of globalization that the company/institution moves towards

_________8. In what year a Large-scale globalization began?

Activity 2: Explain the following.

1. Identify two (2) paragraphs on the underlying philosophy of globalization.

2. What is the importance of studying globalization?

3. Why is the word “globalization” given emphasis or importance in today’s

a. Discuss the factors leading the formation of economic integration and

 Neoliberalism. Antithetical to the protection of group - rather than

Big Picture in Focus: ULOa. Globalization of World Economics.

16. Global Economy

17. Economic Systems

18. International Trade

19. Trade Theories

21. Why Countries Engage in International Trade?

22. The Bretton Woods System

The Bretton Woods system was largely influenced by the ideas of

23. Neoliberalism and Its Discontents

24. The Global Financial Crisis and the Challenge to Neoliberalism

25. Economic Globalization Today

Localizing the Material

De Ocampo, F, et al. (2018). Introduction to Contemporary World. Bulacan: St. Andrew

____________ 6 This theory was developed by Wallerstein explains the contact of

1. How do economic forces facilitate the deepening of globalization?

2. How is the Philippines central to the history of economic globalization?

a. Discuss the historical evolution of international politics.

Big Picture in Focus: ULOa. Discuss the evolution of international

27. A History of Global Politics: Creating an International Order

Internationalization does not equal globalization, although it is a

28. The Attributes of Today’s Global System