POLS 2401 1st EditionLecture 8Outline of Previous LectureNorth Korea and Nuclear Threats in AsiaI. Background on North Korea A. North Korean CommunismB. Economic Crises since the 1990s and Food ShortagesC. Political Repression and Human Rights ViolationsD. The Kim DynastyII. North Korea’s Military CapabilitiesIII. Chronology of the North Korea Nuclear CrisisIV.1994 Agreed FrameworkV. Improvements in North-South Korea Relations in the late 1990s and early 2000sVI. North Korea Crisis in the early 2000sVII. North Korea Goes NuclearVIII. 6 Party TalksOutline of Current LectureGlobalization: Its Proponents and Its DiscontentsI.Types of GlobalizationA. Economic globalization B. Social and cultural globalizationC. Political and military globalization D. Environmental globalization II. DefinitionIII. Economic GlobalizationA. TradeB. FinanceC. InvestmentIV. ProponentsV. Anti-globalizationGlobalization: Its Proponents and Its Discontents•POLS 2401•Global Issues•GlobalizationsExpansion, unity, trade, diversity, exploitationTypes:•Economic globalization (money)(multinational corportations)•Social and cultural globalization(people and traditions)•Political and military globalization (policy expansion)•Environmental globalization (climates, land, pollution, etc.)•Economic GlobalizationDefinition:“…the increasing integration of economies around the world, particularly through the movement of goods, services and capital across borders.” (IMF, 2008)•Economic Globalization: Trade•1200% growth in global trade in last half of the 20th century, in 2012 world merchandise trade was $36 trillion•World trade as a % of World GDP: (increased greatly)–1950: 7% à 1980: 42% à 2007: 62%•Trade Patterns: stratified with Industrialized states dominate trade (U.S, Europe, and China big influence)–1950: 64% of world exports (merchandise trade)–1970: 75% of world exports–In the 1990s – early 2000s: between 70-75% of world exports•Recent growth of trade for developing countries, but industrialized states still dominant–Developing countries % of total world trade increases from 16% in 1991 to 32% in 2011–much of this growth is in East Asia region•Economic Globalization: Finance•International bank lending:–% of world output, went up from 1% in 1964 to 8% in 1980 and 16% in 1991•International equities: (stock markets)–Cross-border equity flows of $1 trillion in late 1980s and $2.5 trillion in the mid-1990s to $11.8 trillion in 2007•International money markets–Foreign exchange market: largest international market of any kind–Annual turnover increase from $17.5 trillion in 1979 to $300 trillion in late 1990s, and now (2013) $5.3 trillion a day–Most currency trading is US$, euro, yen but emerging economies now also traded (Mexican peso and Chinese renminbi part of the top ten for first time in 2013)(rising economies)•Financial Crisis of 2008•Huge rise and fall of international capital flows–2002-2007: annual gross international capital flows rise from 5% to 17% of world GDP–2008: flows plummet to just 1% of world GDP during the start of the 2008 financial crisis•Flows are now recovering, but not as high as pre-crisis levels•Economic Globalization: Investment, MNCs and Global Production Networks•Multinational Corporations (MNCs)–2002: over 63,000 worldwide with 861,000 subsidiaries, employing 90 million (20 million in developing countries)–2007: 78,000 worldwide–2011: US MNCs alone employed 34.5 million (23 million in the US) and had sales of $10.7 trillion–Top 1000 MNCs account for 80% of world industrial output–MNCs account for about 2/3 of world trade–MNCs account of 80% of technology trade and the majority of research and development•Global production networks = stretching of corporate activities and business networks across the globe•Globalization: The Proponents•Neoliberal economists: free trade and free markets (finance, investment) benefit all•Open borders and globalization: creates growth which raises prosperity and well-being•Trade stimulates economic growth•MNCs and foreign investment bring capital, technology, jobs and new skills•Seen backlash•The Anti-globalization Movement•Economic globalization has gone too far•The state-market balance of power has shifted and corporations have too much power•Globalization compromises national sovereignty•Too much power to international organizations: globalization reduces transparency and accountability, shifting power from elected national and local officials to non-elected bureaucrats and international officials•Labor is cheaper in the developing world•Corporations have too much power•Developing worlds have lost their