Lesson 4.4

Section 2 Introduction

What forms the basis of economic globalization?

Inquiry into the Issue

To what extent is a country’s level of economic freedom related to economic globalization?

Countries and Economic Freedom

According to FreetheWorld.com, a website about the economic freedom of the world, Hong Kong, Singapore, and New Zealand rated the best for economic freedom in 2007. Zimbabwe and Myanmar were assessed the worst. In this inquiry you will analyze the relationship between economic freedom and conditions that encourage or prevent the expansion of economic globalization.

economic freedom: the ability of an individual or country to produce, trade, or consume any goods or services without barriers as encouraged by democratic and free market principles interdependence: the relationship between countries and their economies The boom and bust of one country’s economy may have global impact on the economies of other countries.

Internet

This is a required activity to support the inquiry but will not be graded.

Go to the website and find the “Economic Freedom of the World Annual Report.” What criteria determine the extent of a country’s economic freedom? (You will find this information at the beginning of each annual report.)

Lesson 1

Lesson 1–Events

What events lead to the development of economic globalization?

Get Focused

Economic globalization is about the growing interdependence of trade and economies. In what ways are the recent economic events in Alberta connected to economic globalization?

Research

Select one of the following topics, or a topic from current news headlines, and research what it is about and how it was caused. Identify the global economic factors that created these events.

• parity or decline of the Canadian dollar with the American dollar
• rising or falling fuel prices
• higher or lower than $130-per-barrel oil prices
• rising food prices at the supermarket
• shutdown of outsourced services such as the Dell Call Centre

Explore 1 and 2

What events led to the development of contemporary economic globalization?

Each of these events did not occur in isolation but as a response to issues and events of a specific time period. Most economists consider the context of after the Second World War as the time period when contemporary economic globalization emerged. Many of them see the resulting economic, political, and social impacts on prosperity and sustainability as having origins in the twentieth century.

contemporary economic globalization: often used to refer to the post-Second World War period when economic policies and practices led to increased global trade and interdependence

Read

Read pages 209 to 213 in Perspectives on Globalization. This will give you an introduction to the four events considered critical to the expansion of economic globalization.

Assignment

Please complete your Economic Foundations assignment at this point.

Lesson 2

Lesson 2—Political and Economic Ideas

What political and economic ideas have most contributed to the expansion of contemporary globalization?

Get Focused

What underlying economic goals and practices form the basis of a corporation’s operating plan?

Internet

This is a required activity to support the inquiry but may not be graded by your teacher.

global giant: a business that expands to become a multinational or transnational corporation

Select one of the following three global giants. Visit its website and examine the economic goals and practices it promotes in its business operations. You will find these goals promoted in specifically tabbed sections of the website.

Media Giant – Go to the Time Warner website and examine the stated values in “About Us,” “Citizenship,” and the “Businesses” of the company.

Beverage Giant – Go to The Coca-Cola Company website and click on the “Corporate Responsibility” link. Examine the strategic vision and then examine “Sustainability of Our Business.”

Fast Food Giant – Go to the McDonald’s website and click on the “Corporate McDonald’s” link. Examine the ideas under “Investor Relations” and “Investing in McDonald’s.”

Assignment

Please complete your Global Giants, Economic Goals, and Practices Assignment at this point.

Explore 1 and 2

Explore 1

What is contemporary globalization in comparison to historical globalization?

Economic globalization can be understood in different forms. Aspects of the Age of Globalization emerged around the eighteenth century. The contemporary era of globalization is considered to have emerged in the twentieth century.

Historical and Contemporary Globalization

Review the ideas in Module 2 that formed the foundation of historical globalization:

• the rise of capitalism

• industrialization

• imperialism

• Eurocentrism

Review the motivations for creating the international monetary system, the World Bank, and the expansion of the free market economy at the end of the Cold War. This information can be found on the reading pages assigned in Lesson 1, pages 209 to 213 in Perspectives on Globalization.

Explore 2

Which political and economic ideas and factors have most contributed to the expansion of contemporary economic globalization?

There are diverse understandings of how contemporary economic globalization developed.

Read

Read about people of economic influence on pages 214 to 216 in Perspectives on Globalization.

Read about the link between freer trade and economic globalization, the regulation of freer trade, and freer trade between Canada and the United States on pages 217 and 218 in Perspectives on Globalization.

Read about international agreements on pages 229 to 235 in Perspectives on Globalization.

Read about transnationals on pages 236 to 240 in Perspectives on Globalization.

 

Read about telecommunications and transportation technologies on pages 241 to 245 in Perspectives on Globalization.

Internet

View the interview with Naomi Klein, the author of No Logo: Taking Aim at the Brand Bullies. The interview can be found in the CBC Archives.

Section Summary and Glossary

Globalization and Free Market Conditions

Greater liberalization or greater regulation of market forces?

You have now completed the lessons for Module 4 Section 2. Complete the section challenge activity to demonstrate the new understandings you have developed about globalization and the economic and political ideas and events that form its foundations.

In this section challenge you will explore the economic implications of globalization and free market conditions. You will write a letter to the international community to persuade international bodies of the need for greater liberalization or for greater regulation of market forces.

Research

This is a required activity to support your challenge but will not be graded.

Select and summarize newspaper articles on international economic events. Scan the headlines for newspaper articles related to the following topics:

• trade liberalization
• foreign investment
• privatization
• outsourcing
• resource development agreements
• environmental legislation
• land-and resource-use projects
• conversion to knowledge economy

Assemble approximately eight to ten newspaper articles dealing with various international events that have economic implications for Alberta. Some examples include NAFTA, the Kyoto Accord, jobs moving abroad, and global interests in Alberta’s oil sands.

trade liberalization: the reduction of barriers to allow for free trade between countries

outsourcing/outsourced services: the hiring of one company by another company, often in another country, to complete certain tasks of production

View this Multinational PowerPoint.

Assignment

Please complete the Challenge: Globalization and Free Market Conditions Assignment at this time.

Section Summary and Glossary Con't

In this section you examined the events and ideas that formed the foundations of contemporary economic globalization. These events and ideas influenced how countries traded and economies operated. The adoption of these ideas varies among countries and times of economic boom and recession. At times, strong government regulation is called for by citizens. Many multinational corporations support ideas of a free market in society.

contemporary economic globalization: often used to refer to the post-Second World War period when economic policies and practices led to increased global trade and interdependence

economic freedom: the ability of an individual or country to produce, trade, or consume any goods or services without barriers as encouraged by democratic and free market principles

free market economy: an economic system characterized by competition, supply, and demand

It supports the view that the consumer dictates what is produced with a response to purchase or not purchase the product or service. It promotes as limited government involvement as possible.

free trade: a view supporting the removal of as many trade barriers as possible and encouraging free movement of goods and services between countries

freer trade: refers to further expanding the ability to trade freely between countries

This is often the motive for international trade agreements. Many supporters of freer trade believe freer trade will help the global economy and will resolve issues such as global poverty.

Friedman, Milton: a twentieth-century economist who promoted economic ideas that greater prosperity and political and social freedom would be achieved if there were less government control and more free market practices

Consumers would drive the economy with their spending and should adapt without government support if the economy struggles.

global giant: a business that expands to become a multinational or transnational corporation

Hayek, Friedrich: a twentieth-century economist who supported limits on the role of government in society, especially the economy

interdependence: the relationship between countries and their economies

The boom and bust of one country’s economy may have global impact on the economies of other countries.

Keynes, John Maynard: a twentieth-century economist who influenced economic policies and practices

He supported a strong government role in the economy. The government was essential in increasing the ability of consumers to spend and to keep the economy out of recession or a slump in economic activities for the country. He suggested that the government would increase or decrease taxes in response to consumer spending.

outsourcing/outsourced services: the hiring of one company by another company, often in another country, to complete certain tasks of production

trade agreement: a contract between two countries to trade freely between each other

trade liberalization: the reduction of barriers to allow for free trade between countries

transnationals: companies and/or people who have established corporate or home bases in two or more countries