07/10/2019 Lecture Objectives Understand popularity of the term Globalization and emergence of a ‘ProGlobalization Consensus?’ Understand the Historical Link between Globalization and Prosperity Be aware of different Dimensions of Globalization Lecture 1: Case study of Global Sport What is Globalization? How do we make sense of it? So what is Globalization? Definitions and Perspectives 10/7/2019 Globalization and its discontents Historical Sketch 1: Beginnings of Globalization - real story begins with decay of feudalism and rise of capitalism and prosperity “GLOBALIZATION” - the buzzword of last two decades The massive increase in global exchange in trade, capital, knowledge and ideas thrust the term into limelight. But isn’t Globalization Janus-faced? Many see globalization as a “good thing” – leading to development of a “Pro-Globalization Consensus”  Dominant view - brings progress, development, stability, integration and cooperation Others see it in terms of regression, colonialism and destabilization. 10/7/2019 GLOBAL 2 2 GLOBAL 2 3  Global Economy grows only slowly for almost 800 years of the first millennium  Most nation-states self sufficient - little trade between them  However later, regular opening up of new frontiers by traders interested in discovery of gold, minerals, spices, other resources and markets  Industrial revolutions of the 18/19th centuries puts parts of “Hunterthe globe (industrialized Gatherers countries) on to a new affluent trajectory  Colonialism integrated more territories into world economy 10/7/2019 GLOBAL 2 Industrial Revolution Feudalism 4 1 07/10/2019 Historical Sketch 2 - Changing Balance of Global Economic Power and fortunes of countries from 19th Century Defining Globalization and its significance Globalization as international integration describing the spreading and deepening of different linkages across national boundaries the two dimensions encompass different geographical spaces – local, regional, national and global – these become interconnected Globalization leads to fundamental transformation of corporations, nation states and citizens creating new economic relationships and dependencies sometime at local or regional, others at global level 10/7/2019 THE CHINA MODEL 5 Globalization – significance and impacts 10/7/2019 Understanding Dimensions of Globalization  Parable shows that globalization can be perceived/observed from several vantage points - we call these dimensions of globalization. It is a historical process moving at different speeds in different countries and in different sectors – leading to:  uneven impacts – creating winners and losers within and between nations leading to income and spatial inequalities  Convergence and Divergence among nations  Globalization can be considered from each of these perspectives – economic, political, social and cultural etc GLOBAL 2 7 6 Steger presents adapted version of the parable of the ‘blind men and the elephant’ So Globalization as a Multi-dimensional and Multifaceted process leading to:  shrinking space  shrinking time  disappearing borders 10/7/2019 GLOBAL 2 10/7/2019 GLOBAL 2 8 2 07/10/2019 Different Dimensions of Globalization and their Effects . WTO  “the closer integration of countries and peoples of the world…brought about by the enormous reduction in costs of transportation and communication and the breaking down of artificial barriers to the flow of goods, services, capital, knowledge and (to a lesser extent) people across borders” (Joseph Stiglitz, Globalization and its Discontents (2002) . SJ movements Environment ‘Interdependence’ /’networks’ ‘Virtual communities’ ‘Power/Hegemony’ ‘Homogenization’ . Global Sport/Media “The process of globalization suggests simultaneously two images of culture. The first image entails the extension outwards of a particular culture to its limit, the globe. Heterogeneous cultures become incorporated and integrated into a dominant culture which eventually covers the whole world. The second image points to the compression of cultures. Things formerly held apart are now brought into contact and juxtaposition.” (M. Featherstone, 1995) Globalization is the spread and dominance of neo-liberal ideology and democracy around the word – leading to “end of history” (Fukuyama) “Globalization is what we in the Third World have for several centuries called colonization.” (Martin Khor, 1995) 9 10/7/2019 Business of Sport: Development of a Global Sport – Corporate (inc Media) Complex? Global Sports Event Market in 2009  EPL watched in over 190 countries and territories to potential TV audience of 4.7b people (7.7b) Federation Sports Orgs 07/10/2019 GLOBAL 2 11 Sponsors Media Platforms Public/Fans News Print Events  FIFA - Global audience of 1.12 billion watched the World Cup Final between France and Croatia in July 2018 - 3.572 billion viewers watched the month long tournament 10 GLOBAL 2 TV GLOBAL 2 Radio 10/7/2019 Clubs . Globalization – examples of definitions emphasizing economic, cultural and political/ideological dimensions 07/10/2019 GLOBAL 2 12 3 07/10/2019 Or is it a ménage à trois? Ménage à trois - interplay between Media, TNCs and Sport - all three ‘players’ are involved in a most intimate relationship . . ..they all benefit from what they bring to the relationship  Media - expertise and technical equipment to produce sport into a package that is easily “consumed”. Media also provides important financial resources to sport in form of broadcasting rights  TNCs/Corporates provide sponsorship money to sport organizations in exchange for visibility of their products and also buy advertising time and space from media to ensure visibility  Sports Organizations use resources from broadcasting rights and sponsorships, and use these to invest in developing better products that further widen appeal to audiences favouring mutual and reciprocal benefits to all ‘players’ in the ménage à trois 07/10/2019 GLOBAL 2 13 Globalization of Sport – Structure producing both winners and losers 4 aspects merit special consideration: Global Division of labor: undertaken at global level where TNCs draw on Global South countries’ labor to manufacture; Global Players Market - increasing flow of talented sports players - country of birth and origin are no longer a limitation on where player plays and competes; Increased involvement of global entertainment/media conglomerates in sport - Disney, News Corporation, Time Warner, Vivendi Universal and Bertelsmann AG Impact of sport on the Environment – ecological footprint on locality – mega stadiums 07/10/2019 GLOBAL 2 14 Important Point: Global Sport and its Dimensions All dimensions - business economics (media corporates), social, cultural and political and processes inter-act and reenforce each other 10/7/2019 GLOBAL 2 15 4 12/10/2019 Lecture Objectives Understanding of emergence of New World Order (Bretton Woods System) after Great Depression and WW2 – birth of Global Keynesianism and rise of Multi-lateralism Lecture 3 and 4: Reasons for Ascendancy of Neo-liberalism from 1980s Is Globalization Driven by Markets (Trade and Investment) and Technologies? Understanding of major DRIVERS of Hyperglobalization 12/10/2019 Explaining rapid structural shifts in Global Economy: Phases and Drivers of Globalization enabling faster growth in Global GDP 2 GLOBAL 2 3 Phases of Globalization and Major Drivers 1. Different Phases of Globalization  nature and form changes over time – from “shallow” 3. “Hyper” to “deep” - but still partial - to “hyper” (‘networked’, ‘embedded’) 2. Drivers of Globalization 2. “Deep” Regulatory Changes Trade Liberalization Liberalization of Global Finance/FDI New Technologies Role of Nation-States Role of Multilateral Institutions (GATT/WTO, WB, IMF) 12/10/2019 GLOBAL 2 1. “Shallow”  Technological changes  Trade  Colonialism/Empire 1800-1945 3 12/10/2019     Trade Investment Technology Multilateralism (GATT, IMF, WB)  Neo-Colonialism  De-colonization (“Global Keynesianism”) 1945- 1980 GLOBAL 2 • • • • Trade Investment Finance Regulatory Changes/WTO • Technology (“Neoliberalism”) 1980 onwards 4 1 12/10/2019 20th Century Timeline of Major Global Events and three phases of Globalization 1.“Shallow” 2.“Deep” 3.“Hyper” Post WW2 New Global Order – Long Boom – Eventual Ascendency of Neo-Liberalism First 4 decades of 20th century were turbulent “Free Trade” “Protectionism” 1930s/40s - General Depression leads to Global Keynesianism – important role of the State “Trade Friction”  New Deal/Marshall Plan  UN created 1945 – global parliament  Bretton Woods Institutions and multi-lateralism – GATT (1948, Free Trade) IMF (1945, Financial stabilization ) and World Bank (1944, Reconstruction and Development)  But Partial Globalization – still too much regulation!! 1980 – Revival of Neoliberalism under Reaganomics and Thatcherism - TINA 12/10/2019 GLOBAL 2 5 12/10/2019 GLOBAL 2 6 Prosperity and Globalization post WW2 driven by growth in Trade and financial integration Rise of Keynesianism and Role of the State Traditional Role of the State Export growth outstrips GDP growth since 1950  Allocative Efficiency - Market Failure – imperfect, missing, incomplete or asymmetric information Keynes: Market capitalism subject to periodic crisis Economic Crisis/Depression due to deficiency in Aggregate Demand (C+I+G+X-M) and failure to achieve full employment Role of State to augment through raising AD and to stabilize the market economy “Financialization” of the Global Economy Global Keynesianism – strong belief in multi-lateralism 12/10/2019 GLOBAL 2 7 12/10/2019 GLOBAL 2 8 2 12/10/2019 Ideological Dimension of Hyperglobalization since 1980s Deep or Partial Globalization comes under attack in 1970s – Stagflation, Fiscal and Trade Deficits, Over-regulation by State Ideological shift described as Neoliberal Capitalism, Market Fundamentalism, Washington Consensus Neo-liberalism - set of ideas that place emphasis on free markets: deregulation, privatization, and generally minimizing State’s role esp in welfare Drivers of Hyperglobalization (1) Regulatory Changes So a global ideological revolution ….model to emulate is the free-enterprise system of the US and to lesser extent UK, the Anglo-Saxon model 12/10/2019 GLOBAL 2 9 12/10/2019 GLOBAL 2 10 Regulatory Changes – by both nation states and Multi-lateral agencies – intensified from 1980s Trade: promotion of free trade under GATT impressive record in reducing tariff barriers Financial Markets: - liberalized financial markets increased K mobility FDI: regulatory framework for FDI liberalized - TNCs playing crucial role Technology and Knowledge Transfer: international framework for governing flow of technology subsumed under trade law (Uruguay Round – TRIPS/GATS) 11 GLOBAL 2 (2) Global Trade 12/10/2019 12/10/2019 GLOBAL 2 12 3 12/10/2019 How GATT reduced tariff Barriers for major traders – and later for China  Tariffs on manufactured goods fell from over 20% to around 3% as result of 8 rounds of negotiations 164 members now!  Global Trade has outstripped increase in Global Income 12/10/2019 Doha?? GLOBAL 2 13 Global 2 12/10/2019 14 Significant increase in FDI inflows in both Developed and Developing Countries – almost 50/50 share (3) Transnational Investment (FDI) 12/10/2019 Membership of WTO grows – more countries under WTO Multi-lateral Trade - also more and more countries signing Preferential Trade Agreements (PTAs) – both boost global trade Rise of TNCs from Global South FDI 2015 = $1.75t FDI 2017 = $1.43t GLOBAL 2 15 12/10/2019 GLOBAL 2 16 4 12/10/2019 But FDI Inflows are uneven across the globe - LA and Africa gets very little – link between FDI inflows and prosperity FDI Inflows by Region, 2014-16 (billions of dollars) (4) New Technologies (a) Transportation Technologies 10/12/2019 G130 GLOBAL ECONOMY AND DEVELOPMENT 17 12/10/2019 GLOBAL 2 18 Containerization – facilitates trade – maybe more important than fall in tariff barriers? The Humble Metal box  Easily movable between Ship, Truck and Train  Costs of loading/unloading fell drastically  Insurance costs also fell  Inland distribution by train and lorry was easier, ports became bigger and fewer in number. 12/10/2019 GLOBAL 2 19 12/10/2019 GLOBAL 2 20 5 12/10/2019 Technological change has been a constant since industrialization – Now “New Technologies” driving Hyperglobalization Acceleration in globalization processes associated with new technological breakthroughs satellite technology and development and widespread diffusion of new microelectronics technologies ICT - convergence between communications technology (transmission of info – fibre optics) and computer technology (storage and processing of info – chip/processor) - global information Superhighway (The Net) (4) New Technologies: (b) Information and Communication Technologies 22 12/10/2019 GLOBAL 2 21 12/10/2019 GLOBAL 2 Dramatic Fall in Computing Costs – allowing diffusion  Price of computation today is roughly one hundred-millionth of what it was in the 1970s, when microprocessors became commercially available Despite the tremendous growth in use of Internet there still appears to be a digital divide within and between countries  A megabyte of data storage in 1956 would have cost around $9,200 ($85,000 in today’s prices). It now costs just $0.00002 12/10/2019 GLOBAL 2 23 12/10/2019 GLOBAL 2 24 6 12/10/2019 Dark Side of Social Media: Rise of Social Media has also led to digital addiction!! Rapid developments in digital technologies continue – some say we are now in the 4th Industrial Revolution! 12/10/2019 GLOBAL 2 25 12/10/2019 GLOBAL 2 26 New “Frontier” Technologies Challenges: Jobs? Inequality? Exclusion? 12/10/2019 (“Internet of Things”) GLOBAL 2 27 7
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