THE CONTEMPORARY WORLD (MODULE 1)

BY: ROGUEL, CLAIRE (2C)

PAROCHIALISM – the cure, the reason we study outside the o Established when the Han Dynasty in China
contemporary world officially opened trade with the West
• Parochialism is an outlook that is limited to one's o Name comes from the popularity of Chinese Silk
immediate community o Serve as ECONOMIC BELT (incl. fruits,
• PAROCHIAL- A person who is concerned only with vegetables, live stocks, artworks, metals,
his or her family or in his village or country language, beliefs, philosophy, and science)
• PAROCHIAL PERSON – means close-minded o PAPER – was invested in China
o SPICES – trades
CONTEMPORARY – means novelty, new, modern. o MARCO POLO – Venetian explorer, famously
• In tagalog “Makabagong mundo” used the Silk Road to travel from Italy to China

CONTEMPORARY WORLD – ideas of present age: modern 2. Galleon Trade (1571) - Manila to Acapulco
world or present times. o Globalization started trade in ASIA, entry of
• An ever-changing mix of social and political GALLEON TRADE
changes. o Put up the ground to globalization by bringing up
WHAT IS GLOBALIZATION? ECONOMIC AND CULTURAL EXCHANGE,
GLOBALIZATION – unrestricted, can move from one place to INTEGRATION OF FINANCIAL MARKETS
another w/o restriction between ASIA and America.
• Increase international trade, improve the status of o Makes 1 or 2 roundtrip voyage per year
underdeveloped countries, and increase cultural between ports of ACAPULCO and MANILA
relations among countries
• Free exchange of goods or “free trade” COMPETING CONCEPTIONS
1. Globalization is Process – involves change
• can be seen in online shop like Shopee, shein
2. Globalization is change – encompasses future
economical visions
TERMS:
3. Globalization is a System – interaction among
• TARIFFS: without tariffs
countries
o Based on piece applied to specific products
4. Globalization is a Force – positive or negative force
from specific countries
in terms of employment, distribution of resources
• CUSTOM DUTY- tariffs or taxes imposed on goods
5. Is an Age – old concept, it is now a very
when transported across internation borders.
contemporary approach due to new transformation\
o Based on product characteristics
• SOCIAL MOVEMENT – an effort by a large group of
3. Gold Standard (1867) - UK and US
people to achieve a particular goal.
• GOLD STANDARD: MONETARY SYSTEM, where
o Involve individuals or organizations, or both
o About transnational, local movements (Ex: the country’s currency or paper money is value
directly linked to gold
migration, international relations)
• DEREGULATION – disappearance of state • According to MICHAEL BURDO, the gold standard
has
restrictions (reduction, elimination, loosening)
o Both domestic and international businesses
3 benefits that made popular:
o Benefit: stimulate economic activities as it
1. Record as stable nominal anchor -
eliminates restrictions for new businesses
in the market. AUTOMATICITY
2. Role as a credible commitment mechanism
• LIBERALIZATION – process of relaxation from govt
3. GOLD - Rarity, durability, Irreversible
control (
appeal
o Benefit: having few barriers to trade
reduces the cost of goods sold in importing
EUROPEAN UNION
countries
• in short, political economic alliance, has 27 member
o GOVERNMENT – exist to manipulate the countries in Europe.
flow of the economy • EU: largest and MOST POWERFUL TRADEBLOCK
❖ Monetary Policy IN THE WORLD
• PRIVATIZATION – transfer of ownership or property • 19 of them – USED EUROPE AS CURRENCY
or business from govt to private sector • Used for/GOALS:
o Benefit: improves efficiency 1. Business
o not all individuals are privatization 2. Growth
o can manipulate prices 3. Trade
o Ex: MERALCO
o MONOPOLY MARKET – one seller, many COMPONENTS OF ECONOMIC GLOBALIZATION
buyers 1. ECONOMIC GLOBALIZATION - involve the
❖ High price outputs movement of goods and services
❖ Seller – price marker ❖ International Monetary Funds – achieve
o MONOPSONY – one buyer, many sellers sustainable growth of countries
❖ Low price output ❖ International Banks for Reconstruction
❖ Buyer – price maker and Development (IBRD) – support
investments and help countries in need
When did GLOBALIZATION start? o 180 member countries
1. Silk Road (130BC) - China to Middle East and Europe o Under World Bank
o Network of routes connecting China with Far East
with the Middle East and Europe
 ❖ General Agreement of Tariffs and Trade a. International non governmental orgs – more
(GATT) – remove barriers to international on humanitarian and social areas
trade b. Social movement orgs. – focus on specific
❖ Lack of institutional structure polital and social issues.

2. CULTURAL/SOCIAL GLOBALIZATION
3. POLITICAL GLOBALIZATION
XENOCENTRISM – any that is foreign is good.
1. Capitalism
LESSON 2 2. Inputs of Products
BRETTON WOODS SYSTEM
FACTOR OF PRODUCTION – known as Inputs of Products
o Purpose is to have a fixed an international currency 1. Land – physical, natural
exchange rate 2. Labor – human effort
o The members agreed to have fixed exchange rates 3. Capital – machinery, equipment, furniture (Ex:
by tying their currencies to the U.S. dollar Supermarkets)
o IMF and WB – biggest financier of the institution ❖ Industrial partner
4. Entrepreneurship – integration of the 3 – land, labor,
INTERNATIONAL PAYMENT – consists of outgoing and capital
incoming payments in a currency ❖ risk taker (entrepreneurs)
o Usually between two parties outside the country ❖ recreation of new product
o DE FACTO – not legal tender (Ex: US dollar, ❖ innovative
Eurodollars) ❖ Ex: Pao chin
▪ May be accepted in other or different
countries as payment INDUSTRIAL PARTNER – one who contributes/provides
property or money
The earliest metallic money did not consist of coins but of
unmined metal 1. ECONOMIC DEVELOPMENT – quality life of man
o Used in 400 years by Egyptians, Asian empire and living standards
2. ECONOMIC GROWTH
MICHAEL BORDO – American and Canadian economist o measure GDP = national income (Within
o Edited works about the International Monetary fund country)
o Currencies – backed up with gold, every piece of o GNP – outside the country
paper money has specific amount of gold
o Gold was believed to guarantee noninflationary or 1. Gain Satisfaction - customer
stable economic environment which means 2. Gain Profit – producer
accelerating international trade 3. Equilibrium
o After world war 1, it was disrupted the gold stanards
European countries, but US steadily established itself 3 E’S OF ECONOMY
as the center of the capitalist world. 1. Efficiency
CULTURAL GLOBALIZATION – means different customs, 2. Effectivity
habits, traditions, and practices among local communities have 3. Equity
been shared with those who used to have different procedures
and beliefs o TRAIN LAW – 20, 833
o HEGEMONY – homogenized by other country (Ex:
Ex of Cultural Products: Korean movies)
• Coffee (from Ethiopia) and avocado (tropical o PLEURALIZATION - Pag lobo ng curve/population
temperatures of Mexico Dominican Republic
3 FACTORS AFFECTING CHANGE
HOMOGENEITY – similar in terms of culture, society, beliefs, or
1. Pluralization
the sameness of things.
2. Globalization
3. Technology
MIGRATION – for the betterment of life
CULTURAL GLOBALIZATION
FINANCIAL HOMOGENEITY – being declined nowadays
because of communist Detraditionalization – according to Giddes, detraditionalization
is one of the consequences of cultural globalization, they
• Because of Inequal distribution of wealth
question traditional beliefs about religion, marriage, and gender
• One factor: EDUCATION
roles
o Example: FGM (Female genital mutilation) – in Africa,
removal of the external female genitalia,
GLOBAL VILLAGE/ CONSCIOUSNESS – refers to a single
community linked by telecommunications.
Ex: financial help or charities by other countries

COSMOPOLITANISM – single community or connections with

different countries

EPIDEMIC – narrow, specific, region/country

PANDEMIC – whole world

POLITICAL GLOBALIZATION:
- Encounted in everyday life

4. Governmet-independent elements of global civil

society
 MODULE 2:
IMMANUEL WALLERSTEIN – developed world systems theory PROXY WARS – used in the Cold War (conducted in 3rd World
and its 3 level hierarchy Countries)
• War fought with the support of a nation but not by the
WORLD SYSTEMS – defined by the existence of a division of nation itself
labor o Ex: RUSSIA (supplier of oil) and UKRAINE
o 3 zones
1st WORLD COUNTRIES
• CAPITAL INTENSIVE – requires a high number of Countries aligned with capitalist block and demographic or
capital (ex: more on machinery and equipmet for aligned with US and other Western nations.
production) o US, Canada, Australia
o Gardenia
o Cellphone (mostly capital) 2nd WORLD COUNTRIES
o Few people, high unemployment rate ▪ More on socialist and communist block/ countries
• LABOR INTENSIVE – manual labor - requires people ▪ Ex: China, Russia, Poland, Ukraine, Soviet Union,
o Ex: restaurants, hotel Philippines

MODERN WORLD SYSTEM – division of labor consist of 3 3rd WORLD COUNTRIES

zones according to the prevalence of profitable industries ▪ Used historically to describe a class of economically
o Multistate, Multiple structure (political structure = developing countries, Low and middle-incomes
interstate system) internation division of labor ▪ Nonaligned nations
o Ex: Asia, Africa, Latin America, Philippines
3 ZONES
1. CORE PLURALIZATION – increasing number of population
2. SEMI-PERIPHERY
3. PERIPHERY GATT – the legal agreement between many countries whose
overall purpose was to promote international trade by reducing
1. CORE – dominant capitalist countries that exploit peripheral trade barriers such as tariffs or quotas
counties for labor and raw material
o Includes, US, Germany, Japan (dominant countries) INTERNATIONALIZATION – the practice of bringing
high urbanization products/businesses within internal operations or more on
expansion in international markets
Characteristics/traits: o Sourcing, producing, selling materials, delivering of
1. Highly developed economy services, setting up
2. Technology Advanced o TRADE OF MEMBERS
3. Industrialized
Other Terms: GLOBALIZATION – connecting economies to the world
1. Advanced Economies o INTERACTIONS
2. Industrialized Nations o Bring company products and business w/ the rest of
3. Called GLOBAL NORTH the world
4. High Income Countries o Integration with the nation, lead to the promotion of
internationalization
2. PERIPHERAL – dependent on core countries for capital and o Provides great opportunities for the future; for all
have underdeveloped industry others
o Ex: Philippines, Africa, South America o Spreads freedom, free market, free trade because of
o Lack of consistency in internet access relations to society, equality prevails, lessens
inequality
Characteristics/traits: o Promotes commitment to free market and support
1. Less developed economy other countries
2. Very low industrialization o Infrastructural, telecommunications
Other Terms o Get affected by cultural tastes and difftences
1. Global SOUTH – called LDC (Low developed o Eliminate visa obligations
countries)
2. Underdeveloped nations ADAM SMITH (Father of Economics)
3. Low-income countries o The concrete outcomes of market interactions are
neither intended nor foreseen but are the result of
4. SEMI-PERIPHERAL – buffer between core and peripheral workings
Ex: South Korea, Taiwan, Mexico, Brazil, India
NO ONE IS IN CONTROL
Characteristics/traits: Everything depends on the events happening in our economy
1. Fall between core and peripheral
2. Not that poor like peripheral ANTI-GLOBALIZATION - opposed to the emergence and
benefits of Globalization and capitalism
Other Terms o Presentation of natural environment, human rights,
1. NIC – Newly Industrialized Countries democratic institutions
2. Middle Income Countries
3. Emerging markets ALTER-GLOBALIZATION – pro-globalization, opposed to
4. Transitional economist negative effects of Globalization
o Support polices in free trade and open borders
o Oppose limitation and tarrifs and other internationally
restricted economic and political actions by national
govt.
1st, 2nd, and 3rd world countries = COLD WAR
▪ 1945 - Begin
KARL MARX
▪ 1991 – Ended
o Das Kapital (book) – Bible of the Working Class
▪ Neither the Soviet Union nor US declared war to
each other – more on proxy wars (alliances)
 o Reason why capitalists (private sectors) are able to
make a profit is that they need to pay workers their
value (how much it keeps them to be functional)
o Workers are exploited by the society because
capitalists have more power and control the means
of production
o Capitalist – will be richer
o Worker’s character are negative affected by the
system.

Positive Aspects
1. Multiculturalism and Multilingualism - free
exchange of goods and services
2. Free trade -reducing the cost of dealing products
almost worldwide provided huge profits for a number
of big transnational corporation
3. Educational Exchanger - diverse culture
4. Global Cooperation - globalization rules and
mechanisms are created and governed by global
entities

Monopsony - one buyer, many seller

Monopoly - many buyer, one seller

Hegemony - dominant in influencing other culture

3 Factors Affecting change

1. Globalization
2. Technology
3. Pluralization

UTILITARIANISM – it will benefit everyone, regardless of its

consequences = GOOD DECISION
o Ex: Duterte
MODULE 3: GNP – incomes of business owners outside the country.
GLOBAL CORP – available in other coutries
• Ex: Nestle, General Electric, PNG, 3M LOOP – law of one price
• Identical/common price
LENDER OF LAST RESORT CONDITIONS
• BSP (Banko Sentral ng Pilipinas) – preserving the 1. Fair and open population
stability of the monetary and banking system, by 2. No trade frictions (no tarrifs, no restrictions)
protecting diposity of the public 3. Price is able to flanctuate freely (no
manipulations)
GLOBAL/MULTINATIONAL CORPS (MNC) – controls good or 4. Same currency is used for the purchase
services in at least 1 contry other than its own country
GLOBAL INSTITUTIONS – ex: UN HOMOGENOUS price – meet the condition
ARBITRAGE – take advance of price difference, didn’t meet the
TENETS – meaning principle doctrine, beliefs conditions
COGS - COST OF THE GOODS SOLVED
MARKET INTEGRATION - doesn’t need standard perfect
GLOBAL ECONOMY= refers to interconnected worldwide market or atomistic market (ideal type of market structure,
economic activities that take place between multiple countries. cannot influence market price of their product – PRICE takers)
• EX: Global supply chain – worldwide
network/company that uses goods from other 4 TYPE OF IMPERFECT MARKETS
countries, involves people, processes, production, 1. MONOPOLY – many buyers (Ex: MERALCO)
cars, smartphones, information, resources, handling 2. MONOPSONY – many sellers (Ex: Phone industry)
and distribution of materials, providing service to 3. OLIGOPOLY – few sellers (Ex: 5 star hotels, airlines)
customers. 4. MONOPOLISTIC COMPETITIONS – many seller
with highly differentiated product
US – not the richest but the most powerful
QATAR – richest MICROECONOMICS – refers to unit of economy, NOT THE
SYSTEM
FOREIGN DIRECT INVESTMENT – when a company poses • studies economic behaviors, individuals, household,
another company in a different country peers
• Directly involved in day-to-day operations, providing
skills, knowledge, and technology EXAMPLES:
• Ex: APPLE investment in China 1. DEMAND – this is the schedule of various good and
• OPEN or FREE MARKET -offers skill workforce services where buyers are willing and able to
purchase.
PORTFOLIO INVESTMENT MARKET – closed market, may o Law of demand – as prices increase,
restrict who can participate quantity demanded decreases (magkaiba)
2. SUPPLY – goods that buyers are willing to sell.
COLONIALISM – policy or practice of acquiring or partial Sellers can produce
political control of country different o Law of demand – as prices increase,
• Asymmetries – lack of equality, hindi mababago quantity SUPPLY increases (directly
proportional)
TRADITIONAL – traditions, customs, beliefs that shape goods 3. PRICES – willing to pay by customers
and services the economy produces as well as rules, manner of 4. ELASTICITY – reaction to changes affecting demand
distribution and supply (ex: coffee to milo - substitute)
• More on RURAL or FARM based 5. OPPORTUNITY COST – value of the choice, results
• AGRICULTURE, all forestry of scarcity, forgotten value (hindi pinili)
COMMAND ECONOMY – key picture of any communist society Example:
1st choice – medtech (chosen)
• Ex: China (also trad), Korea, soviet union
2nd choice – business ad (opportunity cost)
MARKET ECONOMY – decisions here about investment,
trade-off – cheaper )
distribution, production are guided by the price signal created
o TRADE OFF – involves time, money, choice
by the forces of the supply and demands
(pinagpalit)
• Ex: PH (also trad)
6. LABOR ECONOMICS – focuses on wages and labor
MIXED – capitalist and socialist, allows independence in capital
markets, behavior of employers and employees in
use but also unable govt to intervene in their economic activities
response to of wages and salaries prices and their
or decisions
relationships
7. COMPETITION - unhealthy
ECONOMIC SYSTEM – to solve or meet objectives, basic 3
TYPES:
economic problems
1. DIRECT COMPETITORS –
1. What to produce
competing in the same industry, with
2. How to produce
the same goods (ex: smart and glove
3. For whom to produce
2. INDIRECT COMPETITORS – offer
products that defer slightly but with
GDP – a collection of incomes, profit of employment produces
the same benefits (Ex: coca cola, milk
within the country
tea, energy drinks)
• $1.980 trillion
3. PHANTOM COMPETITORS – called
• Purchasing power parity – theory allows the “replacement competitors” substitute
comparison of financing of various countries goods and services that fulfill the
• EXPORT – inilalabas sa pilipinas same role
• IMPORT – pinapasok sa Pilipinas 8. COMPETITIVE ADANTAGE – strength, what makes
• 4 ASIAN TIGERS – South Korea, Hongkong, Taiwan, the product unique, favorable position in the market
Singapore TIPS
• 5 TIGER CUBS ECONOMIES - Indonesia, Malaysia, 1. PRICE
Philippines, Thailand, Vietnam 2. PRODUCT
• TIGER – important symbol 3. CUSTOMER EXPERIENCE
 9. CONSUMER CHOICE – bringing satisfaction about 1. FORWARD INTEGRATION – third type, cutting out
how needs, perceptions shape consumer choices the middlemen, wants to increase control over its
• 2 factors: supplier to increase its market power
1. Their income o Ex: wholesalers, clotting labeled
2. Prices of goods 2. BACKWARD – companies tries to increase
10. CONSUMER CONFIDENCE – measure financial ownership over companies once their suppliers.
situation if a person can purchase o Ex: wine manufacturer
11. BUSINESS CONFIDENCE – to produce in the future,
if you can sustain the employees and business SUMMARY
o Horizontal integration – merger of 2 firms at same
stage
MODULE 4: o Vertical integration – merge with another company
with the same product, but different stage production
HORIZONTAL INTEGRATION – acquisition of business o CONGLOMERATION – the merger of 2 firms making
operating at the same level of the value chain in similar or different products, diversification (advantage: risk of
different industry. loss lessens, expanded customer-based, increase
• Integration – to strengthen positions in the market, efficiency - productive)
and enhance the production or distribution stage
• 2 businesses through merger (HORIZONTAL
MERGER) – impossible to identify the type of GLOBAL INTESTATE SYTEM
integration of the business. o Relationship between diff state unions, whole system
• EX: APPLE – hardware company, software company, of human interaction
service company, retailed company MODERN WORLD SYSTEM
o structured politically “interstate system” – system of
• MCDONALDS (Burger King)
competing and allying or “economic system”
o “international relations”
EFFECTS OF HORIZONTAL INTEGRATION
• Economies of scale – microeconomic theory, cost of
HEGEMON – dominant state, authority over other
advantage that enterprises obtain due to their scale of
Immanuel Wallerstein
operation.
o Typically measured by output produce, when
EUROCENTRISM – cultural phenomenon that views the history
production become efficient
and culture of non western as inferior or lack or rational thinking
(Asia)
ADVANTAGE
o Biased view that favors only western countries
1. LOWER COST – availability of resources
o Practice barbaric customs - window burning
2. HIGHER EFFICIENCY – less input, more output or
(INDIA), foot binding, FGI
volume
3. INCREASE DIFFTENTIATION – uniqueness and
WORLD SYSTEMS THEORY – emphasize as the primary unit
competitive advantage
of social analysis
4. INCREASE MARKET POWER – dominance
o Integrated through the market, rather than political
5. REDUCED COMPETITION – merger
center
6. ECONOMIC OF SCALE – efficiency of production
• Producing of the same goods by increasing
CORE REGION (Structural) – more labor-intensive
efficiency
PERIPHERY – capital-intestive production
7. ECONIMIC OF SCOPE – production of 1 good
reduces the cost of producing another related good,
o NATIONS – group of people who share history,
• producing variety of different product to
values
reduce cost
o STATES – formal organization
8. INTERNATIONAL TRADES – exchange of goods
o SYTEMNESS – coherence, the interaction of one
and services another
DISADVANTAGE OF HORIZONTAL INTEGRA
GLOBAL GOVERNANCE – to provide global public goods,
1. DESTROY VALUE – synergies never materialize peace, security
despite the cost of horizontal integration
o Has many perspectives to consider
o Synergies – cooperation of 2 or more orgs
2. Legal repercussions – anti-trust laws are inplaced,
1. TOP DOWN GOVERNANCE – relies on higher
their laws prevent big corporations from the
authority
acquisitions and mergers that would narrow the
o Called as iron first, velvet glove mode of
competitive market and possible create monopoly
governance
3. REDUCED FLEXIBILITY – company is now a larger
o Powerful hierarchal state which has strict
corps, addition of more personnel and process result and sequential command of bureaucrats
in the need of transparency and more accountability 2. BOTTOM UP GOVERANANCE - gives entire staff
o Red tape – refers to excessive regulation,
the voice to decision making
considered redundant. o Democratic approach (people focused)
3. MARKET GOVERNANCE – individuals or workers
VERTICAL INTEGRATION
4. NETWORK GOVERNANCE – privatization, public
o Strategy whereby a company owns and controls its and private partnerships, contacting
suppliers and its distributes or retail location to control
5. COMPLEX WEB GOVERNANCE – includes treaties
its value or supply chain
1) PROCESSES
o Involves purchasing a part of the production and 2) POLICIES
sales process that was previously outsourced to have
3) PROCEDURES
it done
o Include both own orgs standards and
o FACTOR: reduces the number of middlemen in the external regulations or compliance
marketing channel
standard
o EXAMPLE: APPLE INC. o To provide best user experience for
possible website visitors, by ensuring
TYPES OF VERTICAL INTEGRATION
quality, consistency, accessibility,