Question 2 Flashcards
(8 cards)
The new international division of labor
Shift from old colonial division of labor. Went from raw material to manufactured goods
Including from import substitution to export-led strategies
Led by TNCs (transnational corporations) which tried to access new markets. Tncs tried to produce different components in cheap places then export to another country
Internationalization of finance
1970s- collapse of the Bretton Woods agreement which wanted a stable exchange rate relationship between countries.
There is also a floating of currencies of more then 25 hour financial trading. Currencies are changing all of the time. People can speculate the value of currencies which becomes a way of making money
Deregulation of financial services. Countries had currency controls. You might have been able to take out 500$ if u were leaving the us. Now it is unlimited. There was also a division between investment and commercial banks. This began to decline. This led to speculative behavior. For example, banks would gamble with your money so they separated the two banks.
There was also a financialization of global economy. (Define financialization)
New technology
Telecommunications
Internet allows firms to know their sales instantly and to become aware of events.
Global consumerism
People consuming brands from other countries
global products/ brands became popular
Created a globalization of us pop culture
Why is it different from earlier forms of globalization?
Globalization is not unprecedented. It has been going on for several hundred years and always developing.
Fact
They are all linked together by commodity chains
Globalization
Greater interaction between people in different locations
Increasing inter-connectedness
Expansion/intensification of linkages and flows
Transnational rules and governance (UN, world trade)
Four factors driving globalization
- The new international division of labor
- Internationalization of finance
- New technology
- Global consumerism
