POWER School of Technology

The Contemporary World

Module 2

Teacher : Mr. Vhonz Sugatan

Contact No. : 0917 – 899 – 6779

Student :

Module Name: The Structures of Globalization

Content of this Module:

1. Economic Globalization & Global Trade

2. Economic Globalization & Sustainable Development
3. Environment Degradation
4. Food Security
5. The Economic Globalization, Poverty, & Inequality
6. Global Income Inequality
7. The Third World & the Global South

At the end of the module students should be able to:

1. Identify the actors that facilitate economic globalization

2. Define the modern world system
3. Articulate a stance on global economic integration
4. Identify UN roles and functions
5. Understand the economic globalization and global trade

Sources:

 The Contemporary World by Prince Kennex Reguya Aldana

 Journey Through Our Contemporary World
 https://www.nationalgeographic.org/article/effects-economic-globalization/9th-grade/
 https://examples.yourdictionary.com/examples-of-globalization.html
 https://www.youtube.com/watch?v=wFO8FDvLoms
 https://www.youtube.com/watch?v=JJ0nFD19eT8
 https://www.youtube.com/watch?v=vEaXOsU4Z4k
 https://www.youtube.com/watch?v=zXDFn8-nO1s
 https://www.youtube.com/watch?v=7V8oFI4GYMY
 https://www.youtube.com/watch?v=fCwQa9RT1V8&t=1s

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Introduction of the Lesson:

The United Nations (UN) tried to address the different problems in the world. Their efforts were guided
by the Eight Millennium Development Goals, which they created in the 1990’s.

The Eight Millennium Development Goals are:

1. To eradicate extreme poverty and hunger;

2. To achieve universal primary education;
3. To promote gender equality and empower women;
4. To reduce child mortality;
5. To improve maternal health;
6. To combat HIV/AIDS, malaria, and other diseases;
7. To ensure environmental sustainability; and
8. To develop a global partnership for development.

Since there are different standards of living around the world, we can expect different meanings
attached to it. In the Philippines, a person is officially living in poverty if he makes less than 100, 534
pesos a year, around 275 pesos a day. This is called the poverty line or poverty threshold. But we are
going to focus in extreme poverty which, according to the UN (2015), is a condition characterized by
Seven Deprivations of Basic Human Needs:

1. Food
2. Safe Drinking Water
3. Sanitation Facilities
4. Health
5. Shelter
6. Education
7. Information
The UN defines extreme or absolute poverty as living on less than $1.25 a day. The organization aims to
eliminate extreme poverty for all people by 2030.

It was three years ago and the result were in. the UN (2015 reported that 836 million people still live in
extreme poverty but that is down from 1.9 billion, so there is success or at least a lot or progress. The
World Bank predicted that by 2030 the number of people living in extreme poverty could drop to less
than 400 million, of course that assumes everything will keep improving as it has been. However,
climate change has to be considered since it is a threat to these improvements in global poverty.

Most people who have been lifted out of extreme poverty are still poor and being poor comes with
serious problems, from disease to lack of water. Income inequality is rampant and one in seven people
still live without electricity.

So why is extremely poverty falling? The answer to this is really complicated. A set of factors like better
access to education, humanitarian aid, and the policies of international organization like the UN have
made a difference. However, the greatest contribution is economic globalization. The world’s economies
have become more interconnected and free trade has driven the growth of many developing
economies.

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1.1 Economic Globalization and Global Trade

Globalization is not new. Since the start of civilization, people have traded goods with their neighbour.
As cultures advanced, they were able to travel farther afield to trade their own goods for desirable
products found elsewhere. The Silk Road, an ancient network of trade routes used between Europe,
North Africa, East Africa, Central Asia, South Asia, and the Far East, is an example of early globalization.
For more than 1,500 years, Europeans traded glass and manufactured goods for Chinese silk and spices,
contributing to a global economy in which both Europe and Asia became accustomed to goods from far
away. Following the European exploration of the New World, globalization occurred on a grand scale;
the widespread transfer of plants, animals, foods, cultures and ideas became known as the Columbian
Exchange. The Triangular Trade network in which ships carried manufactured goods from Europe to
Africa, enslaved Africans to the Americas, and sent raw materials back to Europe is another example of
globalization. The resulting spread of slavery demonstrates that globalization can hurt people just as
easily as it can connect people.

The rate of globalization has increased in recent years, a result of rapid advancements in communication
and transportation. Advances in communication enable businesses to identify opportunities for
investment. At the same time, innovations in information technology enable immediate communication
and the rapid transfer of financial assets across national borders. Improved fiscal policies within
countries and international trade agreements between them also facilitate globalization. Political and
economic stability facilitate globalization as well. The relative instability of many African nations is cited
by experts as one of the reasons why Africa has not benefited from globalization as much as countries in
Asia and Latin America.

According to the United Nations, “Economic Globalization refers to the increasing interdependence of
world economies as a result of growing scale of cross-border trade of commodities and services, flow of
international capital, and wide and rapid spread of technologies. It reflects the continuing expansion and
mutual integration of market frontiers, and is an irreversible trend for economic development in the
whole world at the turn of the millennium.”

There are two different types of economies associated with economic globalization:

1. Protectionism – means a policy of systematic government intervention in foreign trade with the
objective of encouraging domestic production.

This encouragement involves giving preferential treatment to domestic producers and discriminating
against foreign competitors. Trade protectionism usually comes in the form of quotas and tariffs. Tariffs
are required fees on import or export. For instance, a pen that cost $1.00 in Country A and in Country B,
it would be given $5 tariff. The pen would become $6 in Country B. this policy was practices during the
mercantilist era, from 16th to 17th centuries until the early year of the Industrial Revolution. The Great
Depression of 1929 marked the peak of protectionism. Until today, protectionism exists in the world
economy despite the growth of trade liberation. Countries such as China, Japan and United States are
being accused of practicing protectionism.

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World War II heavily influenced the shifting of the dominant economic policy from protectionism to
Trade Liberalization.

2. Trade Liberalization/Free Trade – is the removal or reduction of restrictions or barriers on the

free exchange of goods between nations. These barriers include tariffs, such as duties and
surcharges, and nontariff barriers, such as licensing rules and quotas.

Free trades agreements and technological advances in transportation and communication, means goods
and services move around the world more easily. We are talking about everything from shoes and
bananas to innovation and ideas. Let us take mobile phones as an example. Mobile phones seem to have
a good consequence for everything including reducing poverty. According to economist Jeffrey Sachs,
mobile phones are “single most transformative technology” when it comes to the developing world.
Phones give people access to banking and payment system and better access to education and
information. In some places mobile phones help farmers get information and get the best price for the
crops they are producing. Installing cell phone towers is also a lot cheaper than running thousands of
kilometers of telephone lines. Economist call this leapfrogging, the idea that countries can skip straight
to more efficient and cost-effective technologies that were not available in the past. International trade
has also created new opportunities for people to sell their products and labor in global marketplace.

Globalization made some countries especially the developing ones, to gain more in the global economy
at the expense of other nations. There are various ways; however, the country can make trade easier
with other countries while lessening the inequities in the global world. One of them is “fair trade”. Fair
trade, as define by the International Fair Trade Association, is the “concern for the social, economic, and
environmental wellbeing of marginalized small producers” (Downie, 2007). It aims for a more moral and
equitable global economic system. Specifically, it is concerned with protection of workers and
producers, establishment of more just prices, engagement in environmentally sound practices and
sustainable production, creation of relationship between producers in the South and consumer in the
North, and promotion od safe working environment. Products like coffee, bananas, cotton, wine, tea,
and chocolate have been exchanged in light of fair trade.

A concrete example of the growth of fair trade is the case of American coffee chains such as Starbucks
and Dunkin’ Donuts. In 2006, there are $2.2 billion dollars spent on certified products, which is 42%
greater that the preceding year. In turn, coffee growers such as those in Brazil “get at least $1.29 per
pound of coffee beans compared to the current market price of $1.25.

Watch video:

1. Globalization https://www.youtube.com/watch?v=JJ0nFD19eT8
2. Protectionism https://www.youtube.com/watch?v=wFO8FDvLoms
3. Trade Liberalization https://www.youtube.com/watch?v=vEaXOsU4Z4k

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Process Questions:

1. Do you think that the Philippines is harmed as other countries transfer their activities to us
through outsourcing?
2. In what ways do International Organizations help our country’s economy?
3. Does the position of rich countries as giants in economic chain threaten the status of less
developed countries in global market?

Activity: Follow the Product

The product that we consume and use – foods, clothing, and gadgets – are part of our way of life.
Globalization allows for a worldwide exchange of these commodities and exposure to different cultures
as well. This activity will allow the learners to investigate the origin and spread of the products and
services sold in our country. They will also able to know the countries involved in the production,
distribution, and consumption of the products being sold and consumed in the country. The following
are the steps to accomplish this activity:

1. Learner will be choosing to any one of the following products being sold in the Philippines. The
Learner shall choose a specific foreign brand of the product he selects.

a. Coffee d. Hamburger
b. Sports car e. Wristwatch
c. Laptop f. Shoes

2. List down main ingredients or raw materials in manufacturing the chosen product. Identify the
corresponding country from which each ingredient or raw material came from.
3. Identify the countries involved in the manufacturing of the chosen product. Indicate the
corresponding service the country does for the product. (ex. Costa Rica-Planting of coffee beans)
4. Aside from the Philippines, list other countries in which the product is being sold.
5. Cite the kinds of technology that made the creation of the product possible. Consider
communication and transportation.
6. Write one to three statements about the creation of the product.

1.2 Examples of Globalization

Globalization in Economics - Interdependence among international economies is a great starting point

when seeking an understanding of globalization. A greater number of goods can be exchanged and
production methods can be improved. Here are some examples:

 Multinational corporations operate on a global scale, with satellite offices and branches in
numerous locations. This means multinational companies can stay open virtually 24 hours a day
and service customers no matter where they're located.
 Outsourcing can add to the economic development of a struggling country, bringing much
needed jobs. If a powerful organization is able to outsource its call center to a developing
country, that creates a new class of jobs for people who may not have had that opportunity
otherwise.

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 Some automobiles use parts from other countries. A car being assembled in the United States
may import parts from Japan, Germany, or Korea. This creates a whole new avenue for trade,
when the United States has to pay for certain parts from around the world, wait for them to be
shipped, and then resume localized production.
 The European Union is an economic and political union of 28 countries. When you consider the
resources that these countries can pool together, it can be said that they stand stronger.
Immigrating from one country to another is easier, currencies are more easily exchanged, and
tourism is encouraged.
 Consider how one shirt sold in the United States might have been made from Chinese cotton by
workers in Thailand. From there, that same shirt may have been shipped on a French freighter
that hosted a Spanish crew. Now, people from four different countries have had a hand in the
production process before the shirt arrives in a fifth country to be put on sale.

Globalization in the Blending of Cultures - While world economies benefit from globalization, the
spread of new cultures is equally encouraging. Let's take a look at some of the more personal benefits of
globalization.

 Greek culture spread across Africa, Europe and Asia under the rule of Alexander the Great. This
is the reason there are dozens of cities named after Alexander, including in Egypt, Turkey, Iran,
and Pakistan.
 The Silk Road was a trade route between China and the Mediterranean Sea area. It allowed the
exchange of not only goods, but also culture and knowledge. As merchants grew to understand
Chinese culture through their trades, an appreciation for Chinese culture began to flourish well
beyond China's borders.
 Christian missionaries from Europe added to the globalization of Christianity. As they migrated
from one country to another, more and more people were converting to a new spiritual way of
living.
 Improved travel facilitated the growth of globalization, as people moved for a better job or a
better life. Migrants also fled from danger or oppression. People can pack up all their belongings
and have them shipped anywhere in the world. Planes are faster, frequent, and, often, more
affordable.
 Food is another factor of globalization. Indian food, for example, is certainly not only limited to
India. Rather, we can dine on Indian delights in America, all across Europe, and beyond. Certain
affections for other cultures can begin with one delicious dish and then advance to other areas
of cultural intrigue.

Globalization in Technology - It's easy to argue that technology is a vehicle to globalization. The ability
to Access Mountains of information online has opened countless doors. Here are some examples of
globalization, brought to us by the gift of technology:

 The Internet is a major contributor to globalization, not only technologically but in other areas
as well, like the cultural exchanges of art. Consider how we can enrol in online educational
programs from anywhere in the world and access new information on virtually any topic.

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 Global news networks, like CNN, contribute to the spread of knowledge. Worldwide news is
reported almost instantly, if not via live broadcast, then through continual updates to online
news outlets.
 Cell phones connect people all over the world like never before. There are a multitude of
platforms through which people can communicate too, including Facebook Messenger,
WhatsApp, Instagram, and Snapchat.
 Military cooperation between countries adds to globalization, such as the Strategic Arms
Reduction Treaty or anti-terrorism agreements. Where two or more strong forces come
together, greater military force can be placed on international terrorist groups
 Environmental cooperation has spread to help reduce chlorofluorocarbon (CFC) emissions and
slow the depletion of the ozone. One example is the Montreal Protocol. Since the United States,
members of the European Union, and other countries came together to form this agreement,
the ozone hole in Antarctica has started to recover.

1.3 Economic Globalization and Sustainable Development

There are some significant downsides to globalize trade and perhaps the strongest argument against
economic globalization is its lack of sustainability or the degree to which the earth’s resources can be
used for our needs, even in the future. Specifically, the development of our world today by using the
earth’s resources and the preservation of such sources for the future is called sustainable development.

In other words, development has to be ensured in and for the future generations. One significant global
response or approach to economic path between economic growth and a sustainable environment. The
relationship between globalization and sustainability is multidimensional – it involves economic,
political, and technological aspects.

The continuous production of the world’s natural resources, such as water and fossil fuel allows
humanity to discover and innovate many things. We were able to utilize energy, discover new
technologies, and make advancements in transportation and communication. However, these positive
effects of development put our environment at disadvantage. Climate change accelerated and global
inequality was not eradicated. This means that development, although beneficial at one hand, entails
cost on the other.

Watch video:

1. Economic Globalization - https://www.youtube.com/watch?v=zXDFn8-nO1s

2. Sustainable Development - https://www.youtube.com/watch?v=7V8oFI4GYMY

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1.4 Environment Degradation

Development, especially economic development, was hastened by the industrial Revolution. This is the
period in human history that made possible the cycle of efficiency. Efficiency means finding the quickest
possible way of producing large amounts of particular product. This process made buying of goods
easier for the people. Then, there is an increased demand. Ultimately, there was an increased efficiency.
This cycle harms the planet in a number of ways. For instance, the earth’s atmosphere is damaged by
more carbon emissions from factories and around the world. Another example is the destruction of
coral reefs and marine biodiversity as more and more waters are thrown into the ocean. Many experts
do not think that the planet can sustain growing global economy. Deforestation, pollution, and climate
change will not adjust for us, especially if increases in living standards lead people to demand more
consumer goods like cars, meat, and smartphones.

Various efforts are underway to deal with climate change. However, strong resistance on the part of
governments and corporations counters these. For instance, the Kyoto Protocol aimed at reduction of
global carbon emissions, but failed to take off largely because it was not ratified by the United States.
However, momentum is being built up in corporate circles in dealing with environmental problems.

Previous experiences in dealing with environmental issues indicate that a global view of the problem is
required. A focus on specific regions, such as Europe, overlooks impacts in other regions. Instead of
dealing with the causes of global warming, there is some interest in “technological fixes” such as
geoengineering.

Watch video:

1. Environment Degradation https://www.youtube.com/watch?v=fCwQa9RT1V8&t=1s

2. Industrial Revolution https://www.youtube.com/watch?v=xLhNP0qp38Q&t=81s
3. Climate Change Problem & Solution https://www.youtube.com/watch?v=-D_Np-3dVBQ
4. What can you do about Climate Change https://www.youtube.com/watch?v=VTfgNFz1DBM
5. Earth’s Destroyer https://www.youtube.com/watch?v=WfGMYdalClU

1.5 Food Security

The demand for food will be 60% greater than it is today and the challenge of food security requires the
world to feed 9 billion people by 2050. Global food security means sufficient food to the entire world
population. It is, therefore, a priority of all countries, weather developed or less developed. The security
of food also means the sustainability of society such as population growth, climate change, water
scarcity, and agricultural.

Another significant environmental challenge is the decline in the availability of fresh water. The decline
in water supply because of degradation of soil or desertification transformed what was once
considerable a public good into privatized commodity. The poorest areas of the globe experience a
disproportionate share of water-related problems. The problem is further intensified by the

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consumption of “virtual water,” wherein people inadvertently use up water from elsewhere in the world
through the consumption of water-intensive product.

The destruction of the water ecosystem may lead to creation of “climate refugees, people who are
forced to migrate due to lack of access to water or due to flooding.”

Pollution trough toxic chemicals has been a long term impact on the environment. The use of persistent
organic pollutants (POPs) has led to significant industrial pollution. Greenhouse gases, gases that trap
sunlight and heat in the earth’s atmosphere, contribute greatly to global warming. In turns, this process
causes the melting of land-based and glacial ice with potentially catastrophic effects, the possibility of
substantial flooding, and a reduction in the alkalinity of oceans, and destruction of existing ecosystem.
Ultimately, global warming poses a threat to global supply of food as well to human health.
Furthermore, population growth and its attendant increase in consumption intensify ecological
problems. The global flow of dangerous debris in another major concern, with electronic waste often
dumped in developing countries.

Watch video:

1. Food Security https://www.youtube.com/watch?v=8c5ZN7BseNA

2. Water Crisis https://www.youtube.com/watch?v=E6pjj2gVnWA
3. Water Scarcity https://www.youtube.com/watch?v=E6pjj2gVnWA
4. Pollution https://www.youtube.com/watch?v=fty3eYqra6E

1.6 Economic Globalization, Poverty, & Inequality

The Swedish statistician Hans Rosling once said, “The 1 to 2 billion poorest in the world who don’t have
food for the day suffer from the worst disease, globalization deficiency. The way globalization is
occurring could be much better, but the worst thing is not being part of it.

Economic and trade globalization is the result of companies trying to outmaneuver their competitors.
While you search for the cheapest place to buy shoes, companies search for cheapest place to make
those shoes. They find the cheapest sources of leather, dye, rubber, and of course labor. The result is
that labor-intensive products like shoes are often produced in countries with the lowest wages and
weakest regulations. This process creates winners and losers. The winners include corporation and their
stockholders who earn more profit. They also include consumers who get products at a cheapest price.
The losers are high wageworkers who used to make those shoes. Their jobs moved overseas. But what
about the low wage foreign workers? Are they winning or losing? A lot of workers are thrown into
hazardous working conditions but it is also true that many workers in developing countries are at least
making more money. These jobs pay above average wages. People want these jobs and although the
pay would be unacceptable in developing countries, they also often the best alternative.

Economic globalization has helped millions of people get out of extreme poverty but challenge of the
future is to lift up the poor while at the same time keep the planet livable. One of the best way to help
those in extreme poverty is to enable them to participate in economy. This applies to developing
countries in the global marketplace and to individuals at local level.

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Watch Video:
1. Poverty https://www.youtube.com/watch?v=U5qig9HIJ7k
2. Inequality https://www.youtube.com/watch?v=KxjW-HU1BCM

1.7 Global Income Inequality

Globalization and inequality are closely related. We can see how different nations are divided between
North and South, developed and less developed, and the core and periphery. These differences mainly
reflect one key aspect of inequality in the contemporary world – global economic inequality. There are
two types of economic inequality.

1. Wealth Inequality – Wealth refers to the total amount of assets of an individual or household.
This may include financial assets, such as bonds and stocks, property and private pension
rights. Wealth inequality therefore refers to the unequal distribution of assets in a group of
people.
2. Income Inequality – Is the extent to which income is distributed unevenly in a group of people.
Income is not just the money received through pay, but all the money received from
employment (wages, salaries, bonuses etc.), investments, such as interest on savings accounts
and dividends from shares of stock, savings, state benefits, pensions (state, personal, company)
and rent.

In order to measure global economic inequality, economists usually look at income using Gross
Domestic Product (GDP). Income is the new earnings that are constantly being added to the pile of a
country’s wealth.

Let us look at both types of inequality in the global level. According to the Global Wealth Report
2016 by the Credits Suisse Research Institute, global wealth today is estimated to be about 3.5
trillion dollars and it is not distributed equally. Countries like the United States and Japan were able
to increase their wealth.

Due to currency depreciation, however, the United Kingdom had a significant decline. Furthermore,
the report showed that income inequality continues to rise: “While the bottom half collectively own
less than 1% of total wealth, the wealthiest top 10% own 89% of all global assets.

Although it is the Industrial Revolution that allowed a significant inequality in the past, economic
globalization and international trade are the forces responsible in today’s global inequality. Many
economists believe that the world’s poorest people gained something from the globalization. The
rich on the other hand, earned a lot more. Harvard economist Richard Freeman noted, “The triumph
of globalization and market capitalism has improved living standards for billion while concentrating
billions among the few”. In other words, the poor are doing a little better and the rich are becoming
richer due to the global capitalism.

Access to technology also contributed to worldwide income inequality. It complemented skilled

workers but replaced many unskilled workers. In modernized economies, jobs are more technology
– based, generally requiring new skills. This is what economist referred to as skill-based
technological change. As a result, workers who are more educated and more skilled would thrive in

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those jobs by receiving wages. On the other hand, the unskilled workers will fall behind. They will be
left or overtaken by machines or more skilled workers.

Watch Video: Wealth and Income Inequality

1. https://www.youtube.com/watch?v=0xMCWr0O3Hs

1.8 The Third World and the Global South

People often use the term “Third World” as shorthand for poor or developing nations. By contrast,
wealthier countries such as the United States and the nations of Western Europe are described as being
part of the “First World.” Where did these distinctions come from, and why do we rarely hear about the
“Second World?” These terms are outdated and inaccurate ways of talking about global stratification.
How then we are going to talk about global stratification.

Let us begin by deconstructing the idea of the First, Second, and Third World hierarchy by looking at
their origin and their implications. The terms date back to the Cold War, when Western policymakers
began talking about the world as three distinct political and economic blocs. Western capitalist countries
were labelled as the “First World.” The Soviet Union and its allies were termed “Second World.”
Everyone else was group into “Third World.” After the Cold War ended, category of Second World
countries became null and void, but somehow the term “First World” and “Third World” stuck around in
the public consciousness. Third World countries, which started as just a vague catchall term for non-
alliance countries, came to be associated with impoverished states, while the First World was associated
with rich, industrialized countries.

World map of the First, Second, and Third World. The map shows the countries of the US aligned countries of the First World (in green), the
Communist states (in red), the Third World (in yellow). European neutral states (in white), and countries which have been communist nations for
a short period in light red. IMAGE: www.nationsonline.org

Today, the powerful economies of the West are still sometimes described as “First World,” but the term
“Second World” has become largely obsolete following the collapse of the Soviet Union. “Third World”

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remains the most common of the original designations, but its meaning has changed from “non-aligned”
and become more of a blanket term for the developing world. Since it’s partially a relic of the Cold War,
many modern academics consider the “Third World” label to be outdated. Terms such as “developing
countries” and “low and lower-middle-income countries” are now often used in its place.

In addition to being outdated, these terms are also inaccurate. There are more than 100 countries that
fit the label of “Third World,” but they have vastly different levels of economic stability.

Some are relatively poor, but many are not. For example, lumping Botswana and Rwanda into the same
category does not make much sense because the average income per capita in Botswana is nine times
larger than in Rwanda. Nowadays, social scientist sort countries into groups based on their specific level
of economic productivity. To do this, they used the Gross Domestic Product (GDP), which measures the
total output of a country, and the Gross National Income. GNI) which measures GDP per capita.

A new and simpler classification, North-South, was created as Second countries joined either the First
World or the Third World. First World countries, such as the United States, Canada, Western Europe,
and developed parts of Asia are regarded as the “Global North,” while the “Global South” includes the
Caribbean, Latin America, South America, Africa, and parts of Asia. These countries were used to be
called the Third World during the Cold War.

These distinction point largely to racial inequality, specifically between the Black and White. According
to Ritzer (2015), “at the global level, whites are disproportionately in the dominant North, while blacks
are primarily in the south; although this is changing with South-to-North migration”. In other words, the
difference between the Global North and the Global South are shaped by migration and globalization.
Nevertheless, the economic differences between the wealthy Global North and poor Global South “have
always possessed a racial character” (Winant, 2001).

1.9 What makes a nation Third World

Nowadays, the term Third World is more often replaced by the terms Least Developed Countries (UN) or
Low-Income Countries (World Bank). Whatever term is used, it serves to designate countries that suffer
from high poverty, high child mortality, low economic and educational development, and low self-
consumption of their natural resources. Countries that are vulnerable to exploitation by large
corporations and industrialized nations.

These are the developing and technologically less advanced nations of Asia, Africa, Oceania, and Latin
America. Third world nations tend to have economies dependent on the developed countries and are
generally characterized as poor with unstable governments and having high fertility rates, high gender-
related illiteracy and are prone to diseases. One of the critical factors is the lack of a middle class; there
is a huge impoverished population and a small elite upper class that controls the country's wealth and
resources. Most Third World nations also have very high foreign debt levels.

Watch Video:

1. Third World vs. First World Countries https://www.youtube.com/watch?v=1yKvwOydZFw

2. Global North and Global South https://www.youtube.com/watch?v=O1iLO8ZpTvU

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1.10 The Global City

A global city, also called a power city, world city, alpha city or World Center, is a city which is a primary
node in the global economic network. The concept comes from geography and urban studies, and the
idea that globalization is created and furthered in strategic geographic locales according to a hierarchy
of importance to the operation of the global system of finance and trade.

The rural-urban differentiation has a significant relationship to globalization. Globalization has deeply
altered North-South relation in agriculture. For instance, the relations of agricultural production have
altered due to the rise of global agribusiness and factory farms. In this scenario, the South produces
non-traditional products for export and become increasingly dependent on industrialized food exports
from North. Consequently, this leads to a replacement of the staple die as well as the displacement of
local farmers. Schlosser (2005) pointed out that as commercial agriculture replaces local provisioning,
the relations of social production are also altered. Rural economics are exposed to low prices and mass
migration.

Sassen (1991) used the concept of global cities to describe the three urban centers of New York, London,
and Tokyo as economic centers that exert control over the world’s political economy. World cities are
categorized as such based on the global reach of organization found in them. Not only are there
inequalities between these cities, there also exists inequalities within each city (Beaverstock et al, 2002).
Alternatively, following Castells (2000), these cities can be seen as important nodes in a variety of global
networks.

Although cities are major beneficiaries of globalization, Bauman (2003) claimed that they are also the
most severely affected by global problems. Therefore, the city faces peculiar political problems, where it
is often fruitlessly seeking to deal locally with global problems and “local politics has become hopelessly
overloaded”.

Process Question:

1. What is the impact of global flows on the Global South?

2. Examine the gap between rural and urban areas across the globe. How is the gap affected by
globalization?
3. What do you think is the impact of urbanization and the rise of global city on the agricultural
sector?

Activity: the Global Free Trade on Trial

This is a reasoning activity which intends to show the stance of the students regarding economic
globalization. Argue based on this statement: “Global Free Trades has done more harm than good.”

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The Contemporary World
Module 2

1.11 Theories of Global Stratification

Stratification refers to the range of social classes that result from variations in socioeconomic status.
Significantly, because socioeconomic status measures a range of variables, it does not merely measure
economic inequality. For example, despite earning equal salaries, two persons may have differences in
power, property, and prestige. These three indicators can indicate someone’s social position; however,
they are not always consistent.

Global inequality refers to the unequal distribution of resources among individuals and groups based on
their position in the social hierarchy. Classic sociologist Max Weber analyzed three dimensions of
stratification: class, status, and party. Modern sociologists, however, generally speak of stratification in
terms of socioeconomic status (SES). A person’s SES is usually determined by their income, occupational
prestige, wealth, and educational attainment, though other variables are sometimes considered.

1.12 Modernization Theory

Modernization theory arose in the context of decolonization in Africa and Asia and the early years of the
Cold War. It grew out of efforts to understand how recently independent nations and other ‘Third
World’ countries might achieve economic and political development similar to that of the US and
northern Europe, which were viewed as the products of a linear and potentially universal process of
rationalization and progress.

Watch Video

1. https://www.youtube.com/watch?v=b350ljkYWrU
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1.13 Modern World System

"World-system" refers to the inter-regional and transnational division of labor, which divides the world
into core countries, semi-periphery countries, and the periphery countries. Core countries focus on
higher skill, capital-intensive production, and the rest of the world focuses on low-skill, labor-intensive
production and extraction of raw materials. This constantly reinforces the dominance of the core
countries. Nonetheless, the system has dynamic characteristics, in part as a result of revolutions in
transport technology, and individual states can gain or lose their core (semi-periphery, periphery) status
over time. This structure is unified by the division of labour. It is a world-economy rooted in a capitalist
economy. For a time, certain countries become the world hegemon; during the last few centuries, as the
world-system has extended geographically and intensified economically, this status has passed from the
Netherlands, to the United Kingdom and (most recently) to the United States.

Process Question:

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POWER School of Technology
The Contemporary World
Module 2
1. In the case of the Philippines, how much do you think are we involved in the modern world
system? What do you think are the advantages and disadvantages of being a part of such?
2. How can we “upgrade” our economy given the strength of global economy, especially the giant
economies like United States and Japan
3. How do we examine economic globalization considering our colonial history/

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