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    SSC 6 Module 3

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    Novelyn Garcia
    The document discusses the increasing globalization and integration of the world economy. Key points include: - Global markets have emerged as local competitors have been displaced or absorbed, and the integration of the world economy has significantly increased through various economic agreements and partnerships between regions. - Production has become focused on generating employment, and individual economies now play subordinate roles to the dominant world economy. - Capital movements, rather than trade, have become the main driving force behind the global economy.

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    SSC 6 Module 3

    Uploaded by

    Novelyn Garcia
    23 views3 pages
    The document discusses the increasing globalization and integration of the world economy. Key points include: - Global markets have emerged as local competitors have been displaced or absorbed, and the integration of the world economy has significantly increased through various economic agreements and partnerships between regions. - Production has become focused on generating employment, and individual economies now play subordinate roles to the dominant world economy. - Capital movements, rather than trade, have become the main driving force behind the global economy.

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    The document discusses the increasing globalization and integration of the world economy. Key points include: - Global markets have emerged as local competitors have been displaced or absorbed, and the integration of the world economy has significantly increased through various economic agreements and partnerships between regions. - Production has become focused on generating employment, and individual economies now play subordinate roles to the dominant world economy. - Capital movements, rather than trade, have become the main driving force behind the global economy.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    23 views3 pages

    SSC 6 Module 3

    Uploaded by

    Novelyn Garcia
    The document discusses the increasing globalization and integration of the world economy. Key points include: - Global markets have emerged as local competitors have been displaced or absorbed, and the integration of the world economy has significantly increased through various economic agreements and partnerships between regions. - Production has become focused on generating employment, and individual economies now play subordinate roles to the dominant world economy. - Capital movements, rather than trade, have become the main driving force behind the global economy.

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    © All Rights Reserved
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    of 3

    MARKET GLOBALIZATION

    THE WORLD ECONOMY has changed profoundly as time changes. Perhaps the most
    fundamental change is the emergence of global markets; responding to new opportunities, global
    competitors have steadily displaced or absorbed local ones. Concurrently, the integration of the world
    economy has increased significantly. In this module you will learn about the Integration striking in two
    regions; the European Union (EU) and the North American Free Trade Agreement (NAFTA). Other
    economic integrations have also been playing an important factor in their respective regions including
    the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation.

    Changes in the Global Economy


    1) Capital movements rather than trade have become the driving force of the world economy.
    2) Production has become a source of generating employment and
    3) The world economy dominates the scene. Individual economies play a subordinating role.

    Economic Systems and Resource Allocation


    1. Capitalism – This is also known as laissez-faire economy or free market economy. In this type of
    economy, individuals and firms pursue their own self-interest without any central direction or government
    intervention.
    2. Communism – The basic economic questions are answered by a central government or planning agency.
    Through a combination of government ownership of enterprises and central planning, the government dictates the
    directions of the economy.
    3. Socialism – Major industries are owned and controlled by the government while few industries are
    privately owned.
    4. Mixed Economy – A regulated market economy. The government plays a vital role in the economy while
    allowing the market mechanism to govern the economy.
    Resource Allocation
    Resource allocation is assigning the right people to work on the tasks necessary to complete A project. So, if
    you're going to need designers, writers, construction workers or other individuals to work on the project those are
    some of your resources
    5. Market Allocation System
    - A market allocation system relies on households and firms to allocate resources.
    - Consumer decides what goods they desire, and firms determine how much is made.
    - The market system is an economic democracy where people have the option to buy according to their choice and
    budget.
    - The role of the state in a market economy is to promote competition and ensure consumer protection.
    6. Command Allocation System

    A. The country or nation has broad powers to serve the public interest on what is appropriate based on their
    judgement.

    B. Powers

    ▪ The government planning on production


    ▪ Control entire industries and individual enterprises
    ▪ Distribution is handled by the government (product homogeneity)

    1
    C. China, Soviet Union, Cuba are former pure command markets

    7. Mixed Allocation System


    A. Mixed allocation stems on the principle that there is no “pure market or command allocation systems among
    the world’s economies.”
    B. The function of the government in modern market economies varies widely.
    C. Sweden, China, US.

    World Bank Four Category System


    1. Low-Income Countries
    Low-income countries have a GNP per capita of less than 766 dollars.
    A. Limited industrialization and a high percentage of the population engaged in agriculture and subsistence
    farming; High birth rates;
    B. Low literacy rates;
    C. Heavy reliance on foreign aid;
    D. Political instability;
    E. Concentration in Africa, south of Sahara
    2. Lower-Middle-Income Countries
    A. Less-Developed Countries
    B. Lower income countries are those with GNP per capita between 766 dollars and 3,035 dollars;
    C. These countries are typically early stages of industrialization
    D. Consumer markets in these countries are expanding
    E. The LDCs in the lower-middle-income category have a major competitive advantage in mature,
    standardized, labor-intensive industries such as toymaking and textiles.
    3. Upper-Middle-Income Countries
    A. Industrializing or developing countries
    B. GNP per capita income ranging from 3, 036 dollars to 9, 385 dollars
    C. People are engaging more in the industrial sector than in agriculture
    D. Rising wages and high rates of literacy and advanced education but significantly lower wage costs than
    the advanced countries.
    4. High-Income Countries
    A. Advanced, developed, industrialized, or post-industrialized countries
    B. GNP per capita income above 9, 386 dollars; With exception of a few oil-rich countries, these nations in
    this category reached their present income levels through a process of economic growth.
    C. USA, Sweden, Japan, United Kingdom and other European Countries
    D. South Korea – Samsung, LG, Goldstar, Daewoo, Hyundai, KIA and other well-known global enterprise
    E. G7 – USA, Japan, Germany, France, Great Britain, Canada and Italy

    2
    The Six Core Claims of Market Globalism

    1. Globalization: Liberalization and Global Integration of Markets


    a. As a natural economic phenomenon whose essential qualities are the
    liberalization and integration of global markets.
    b. The reduction of governmental interference in the economy.
    2. Globalization: Inevitable and Irreversible
    a. The perspective of this claim is that globalization reflects the spread of
    irreversible market forces driven by technological innovations that make the global
    integration of national economies inevitable.
    3. Nobody is in Charge of Globalization
    a. This perspective focuses on the classical liberal concept of the self-regulating
    market. The semantic link between ‘globalization market’ and the adjacent idea of ‘no leader’
    is simple.
    4. Globalization Benefits Everyone
    a. The adjacent idea of benefits for everyone is usually unpacked in material terms
    such as economic growth and prosperity.
    b. Economic growth and progress in today’s independent world is bound up with
    the process of globalization.
    c. Globalization provides great opportunities for the future, not only for our
    countries but for all others too.
    5. Globalization Furthers the Spread of Democracy in the World
    a. Freeden (1996) coined the word “Thatcherism”. Globalists tend to treat freedom,
    free markets, free trade and democracy as synonymous terms.
    6. Globalization Requires War on Terror
    a. This final claim combines the idea of economic globalization with open
    militaristic and nationalistic ideas associated with the American-led global War on terror.

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