Global economic growth slowed in the second half of 2018 due to factors affecting major economies like China and Germany. China's growth declined following regulatory tightening and increased trade tensions with the US. The eurozone economy also lost momentum as business and consumer confidence weakened. Elsewhere, natural disasters hurt Japan's economy. However, conditions have improved in 2019 as the US Federal Reserve signaled easier monetary policy and optimism increased about a US-China trade deal.

1. Market
Globalism
GEC 03 The Contemporary World
Sir Malit

2. An Overview of theWorld Economy
After strong growth in 2017 and early 2018, global economic
activity slowed notably in the second half of last year, reflecting
a confluence of factors affecting major economies. China’s
growth declined following a combination of needed regulatory
tightening to rein in shadow banking and an increase in trade
tensions with the United States. The euro area economy lost
more momentum than expected as consumer and business
confidence weakened and car production in Germany was
disrupted by the introduction of new emission standards;
investment dropped in Italy as sovereign spreads widened; and
external demand, especially from emerging Asia, softened.
Elsewhere, natural disasters hurt activity in Japan. Trade
tensions increasingly took a toll on business confidence and, so,
financial market sentiment worsened, with financial conditions
tightening for vulnerable emerging markets in the spring of 2018
and then in advanced economies later in the year, weighing on
global demand. Conditions have eased in 2019 as the US Federal
Reserve signaled a more accommodative monetary policy stance
and markets became more optimistic about a US–China trade
deal, but they remain slightly more restrictive than in the fall.
Source:
https://www.imf.org/en/Publications/WEO/Issues/2019/03/28/
world-economic-outlook-april-2019 2

3. Economic
Systems
Capitalism, Socialism and Mixed
Economy
3

4. CapitalismAKA Market
Economy
4
• In a free market economy, firms and households act in
self-interest to determine how resources get allocated,
what goods get produced and who buys the goods. This
is opposite to how a command economy works, where
the central government gets to keep the profits.
• There is no government intervention in a pure market
economy (“laissez-faire“). However, no truly free market
economy exists in the world. For example, while America
is a capitalist nation, our government still regulates (or
attempts to control) fair trade, government programs,
honest business, monopolies, etc.
• In this type of economy, there is a separation of the
government and the market. This separation prevents
the government from becoming too powerful and keeps
their interests aligned with that of the markets.

5. Advantages and Disadvantages
Of Market Economy/Capitalism
Advantages
• Consumers pay the highest price they want to, and
businesses only produce profitable goods and services.
There is a lot of incentive for entrepreneurship.
• This competition for resources leads to the most
efficient use of the factors of production since
businesses are very competitive.
• Businesses invest heavily in research and development.
There is an incentive for constant innovation as
companies compete to provide better products for
consumers.
Disadvantages
• Due to the fiercely competitive nature of a free market,
businesses will not care for the disadvantaged like the
elderly or disabled. This lack of focus on societal benefit
leads to higher income inequality.
• Since the market is driven solely by self-interest,
economic needs have a priority over social and human
needs like providing healthcare for the poor. Consumers
can also be exploited by monopolies.
5

6. SocialismAKA Command
Economy
6
• In a command economic system, a large part of the
economic system is controlled by a centralized power.
For example, in the USSR most decisions were made by
the central government. This type of economy was the
core of the communist philosophy.
• Since the government is such a central feature of the
economy, it is often involved in everything from planning
to redistributing resources. A command economy is
capable of creating a healthy supply of its resources, and
it rewards its people with affordable prices. This
capability also means that the government usually owns
all the critical industries like utilities, aviation, and
railroad.

7. Advantages and Disadvantages
Of Command Economy/Socialism
Advantages
• If executed correctly, the government can mobilize
resources on a massive scale. This mobility can provide
jobs for almost all of the citizens.
• The government can focus on the good of society rather
than an individual. This focus could lead to a more
efficient use of resources.
Disadvantages
• It is hard for central planners to provide for everyone’s
needs. This challenge forces the government to ration
because it cannot calculate demand since it sets prices.
• There is a lack of innovation since there is no need to
take any risk. Workers are also forced to pursue jobs the
government deems fit.
7

8. Mixed Economy
8
• A mixed economy is a combination of different types of
economic systems. This economic system is a cross
between a market economy and command economy. In
the most common types of mixed economies, the
market is more or less free of government ownership
except for a few key areas like transportation or sensitive
industries like defense and railroad.
• However, the government is also usually involved in the
regulation of private businesses. The idea behind a
mixed economy was to use the best of both worlds –
incorporate policies that are socialist and capitalist.
• To a certain extent, most countries have a mixed
economic system. For example, India and France are
mixed economies.

9. Advantages and Disadvantages
Of Mixed Economy
Advantages
• There is less government intervention than a command
economy. This results in private businesses that can run
more efficiently and cut costs down than a government
entity might.
• The government can intervene to correct market
failures. For example, most governments will come in
and break up large companies if they abuse monopoly
power. Another example could be the taxation of
harmful products like cigarettes to reduce a negative
externality of consumption.
• Governments can create safety net programs like
healthcare or social security.
• In a mixed economy, governments can use taxation
policies to redistribute income and reduce inequality.
Disadvantages
• There are criticisms from both sides arguing that
sometimes there is too much government intervention,
and sometimes there isn’t enough.
• A common problem is that the state run industries are
often subsidized by the government and run into large
debts because they are uncompetitive.
9

10. The World Bank 4 Category System

11. Low-income Countries
Low-income countries have a GNP per capita
of less than $766. The characteristics shared
by countries at this income level are:
1. Limited industrialization and high
percentage of the population engaged in
agriculture and subsistence farming.
2. High birth rates
3. Low literacy rates
4. Heavy reliance on foreign aid.
5. Political instability and unrest.
6. Concentration in Africa south of Sahara.
11

12. Low-Income Countries (2019)
12

13. 13

14. Low-Middle-income Countries
Sometimes, countries that can be
assigned to the lower income
and lower-middle income
categories are known collectively
as less-developed countries
(LDCs). This to indicate a contrast
developing (upper-middle-
income) countries and developed
(high income) countries. Lower-
income countries are those with
GNP per capita between $766
and $3,035.
14

15. Low-Middle Income Countries
• Angola
• Bangladesh
• Bhutan
• Bolivia
• Cabo Verde
• Cambodia
• Cameroon
• Congo
• Djibouti
• Egypt
• El Salvador
• Georgia
• Ghana
• Honduras
• India
• Indonesia
• Ivory Coast
• Kenya
• Kiribati
• Kosovo
• Kyrgyzstan
• Laos
• Lesotho
• Mauritania
• Micronesia
• Moldova
• Mongolia
• Morocco
• Myanmar
• Nicaragua
• Nigeria
• Pakistan
• Papua New
Guinea
• Philippines
• Sao Tome and
Principe
• Solomon Islands
• Sri Lanka
• Sudan
• Swaziland
• Timor-Leste
• Tunisia
• Ukraine
• Uzbekistan
• Vanuatu
• Vietnam
• West Bank and
Gaza
• Zambia
15

16. Upper-Middle-incomeCountries
These Countries are also known
as industrializing or developing
countries with a GNP per capita
ranging from $3,036 to $9,385.
In these countries, the
percentage of population
engaged in agricultural drops
sharply as people move to
industrial sector and the degree
of urbanization increases.
16

17. Upper-Middle-IncomeCountries
• Albania
• Algeria
• American Samoa
• Armenia
• Azerbaijan
• Belarus
• Belize
• Bosnia and
Herzegovina
• Botswana
• Brazil
• Bulgaria
• China
• Colombia
• Costa Rica
• Cuba
• Dominica
• Dominican Republic
• Equatorial Guinea
• Ecuador
• Fiji
• Gabon
• Grenada
• Guatemala
• Guyana
• Iran
• Iraq
• Jamaica
• Jordan
• Kazakhstan
• Lebanon
• Libya
• Macedonia
• Malaysia
• Maldives
• Martial Island
• Mauritius
• Mexico
• Montenegro
• Namibia
• Nauru
• Paraguay
• Peru
• Romania
• Russian Federation
• Samoa
• Serbia
• South Africa
• St. Lucia
• St. Vincent and the
Grenadines
• Suriname
• Thailand
• Tonga
• Turkey
• Turkmenistan
• Tuvalu
• Venezuela
17

18. High-Income Countries
High-income countries are also
known as advanced, developed,
industrialized, or post-industrial
countries. They have a GNP per
capita above $9,386. With
exception of a few oil-rich
nations, the countries in this
category reached their present
income levels through a process
of sustained economic growth.
18

19. High-IncomeCountries
• Andorra
• Antigua and
Barbuda
• Argentina
• Aruba
• Australia
• Austria
• Bahamas
• Bahrain
• Barbados
• Belgium
• Bermuda
• British Virgin Islands
• Brunei
• Canada
• Cayman Islands
• Channel Islands
• Chile
• Croatia
• Curacao
• Cyprus
• Czech Republic
• Denmark
• Estonia
• Faroe Islands
• Finland
• France
• French Polynesia
• Germany
• Gibraltar
• Greece
• Greenland
• Guam
• Hong Kong
• Hungary
• Iceland
• Ireland
• Israel
• Isle of Man
• Italy
• Japan
• Kuwait
• Latvia
• Liechtenstein
• Lithuania
• Luxembourg
• Macao
• Malta
• Monaco
• Netherlands
• New Caledonia
• New Zealand
• Northern Mariana
Islands
• Norway
• Oman
• Palau
• Panama
• Poland
• Portugal
• Puerto Rico
• Qatar
19

20. 20
• Sweden
• Switzerland
• Taiwan
• Trinidad and Tobago
• Turks and Caicos Islands
• United Arab Emirates
• United Kingdom
• United States
• Uruguay
• U.S. Virgin Islands
• Saint Kitts and Nevis
• Saint Martin
• San Marino
• Saudi Arabia
• Seychelles
• Singapore
• Sint Maarten
• Slovakia
• Slovenia
• South Korea
• Spain

21. Thesixcore
claimsofMarket
Globalism
21

22. The World Bank 4 Category System
Globalization: Liberalization and Global Integration of Market

23. • The perspective of this claim dwells on the vital functions of the
free market, on its rationality and efficiency likewise in its alleged
ability to bring about greater social integration and material
progress. This can only be realized in a democratic society that
values and protects individual freedom.
• There are two established ideologies that play an important role in
market. The first is the libertarian variant of liberalism which is
often referred to as neo-liberalism. Neo-liberals see the importance
of “free market” and “free trade” although they are more inclined
on the latter because the attitude toward big business has a big
impact on the intrusive government action as to policies and
regulations.
23

24. • The driving idea behind globalization is free-market capitalism. This means the more you let market forces rule and the
more you open your economy to free trade and competition, the more efficient your economy will be. Hence,
globalization means the spread of free market capitalism to virtually every country in the world.
• Market Globalist view globalization in the following manner
A. As natural economic phenomenon whose essential qualities are liberalization and integration of global markets.
B. The reduction of governmental interference in the economy
• Privatization, free trade, and unfettered capital movements are portrayed as the best and most natural way for realizing
individual liberty and material progress in the world. Market globalist have been successful because they have
persuaded the public that their neo-liberal account of globalization represents an objective or at least neutral diagnosis
rather than a direct contribution to the emergence of the very conditions it conveys to analyze.
24

25. The World Bank 4 Category System
Globalization: Inevitable and Irreversible

26. • The perspective of this claim two is that globalization reflects the spread of
irreversible market forces driven by technological innovations that make the
global integration of national economies inevitable.
• Governments, political parties, and social movements had no choice but to
‘adjust’ to the inevitability of globalization. Their sole remaining task is to
coordinate and provide the necessary facilitation of the integration of
national economies in the new global market. This means that States and
interstate system should, therefore, serve to ensure the smooth working of
players in the world market.
• Frederick Smith (199) CEO of FedEx Corporation states that globalization is
irreversible. Globalization is inevitable and inexorable and it is accelerating.
Globalization is happening, it is going to happen. It does not matter whether
you like it or not. 26

27. • In order to survive and prosper, market globalist must adapt to the discipline of the market so they could easily convince
the people. As such, the claim of inevitability serves a number important functions as follows.
a. It neutralizes the challenges of alter-globalist opponents by depoliticizing the public discourse about globalization:
Neo-liberal policies are above politics because they simply carry out what is ordained by nature.
This view implies that instead of acting according to a set of choices, people merely fulfill world market laws that demand
the elimination of government controls.
b. There is noting that can be done about the natural movement of economic and technological forces: political groups
ought to comply and make the best of an unalterable situation. Since the emergence of a world based on the primary
market values reflects the dictates of history, resistance would be unnatural, irrational, and dangerous.
27

28. The World Bank 4 Category System
Nobody is in charge of Globalization

29. •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.
Globalization does not reflect the arbitrary
agenda of a particular social class or group of the
undisturbed workings of the market indeed
preordained a certain course of history.
29

30. 30
• Robert Hormats (1998)
emphasized that the great
beauty of globalization is
that no one is in control. It
is not controlled by any
individual, any government,
and any institution.

31. 31
• This is supported by
Thomas Friedman’s (1999)
statement that the most
basic truth about
globalization is no one is in
charge and that the global
market today is an Electric
Heard of often anonymous
stock, bond, and currency
traders and multinational
investors.

32. The World Bank 4 Category System
Globalization Benefits Everyone

33. • The adjacent idea of ‘benefits for everyone’ is usually ‘unpacked in material terms such as ‘economic growth’ and
‘prosperity’. This perspective is supported by the join statement of powerful industrialized nations in 1996 G-7 Summit in
Lyons, France:
• Economic growth and progress in today’s independent world is bound up with the process of globalization. Globalization
provides great opportunities for the future, not only for our countries, but for all others too. Its many positive aspects
include unprecedented expansion of investment and trade; the opening up to international trade of the world’s most
populous regions and opportunities for more developing countries to improve their standards of living; the increasingly
rapid dissemination of information and the proliferation of skilled jobs.
33

34. 34
• As John Meehan (1997) puts it,
‘episodic’ dislocations’ such as mass
unemployment, and reduced social
services might be necessary in the
short run’, but,’ in the long run’,
they will give way to quantum leaps
in productivity.’ Hence, market
globalist like Meehan justify the real
human cost of globalization as the
short-term price of economic
liberalization.

35. The World Bank 4 Category SystemGlobalization Furthers the Spread of Democracy in the
World

36. 36
• This claim links to
‘globalization’ and ‘market’ to
the adjacent concept of
‘democracy’, which also plays a
significant role liberalism,
conservationism, and socialism.
Freeden (1996) coined the
word ‘Thatcherism.’ Globalists
tend to treat freedom, free
markets, free trade, and
democracy as synonymous
terms.

37. 37
• Francis Fukuyama (2000) asserted that there exists
a ‘clear correlations’ between a country’s level of
economic development and successful democracy.
While Globalization and capital development do
the not automatically produce democracies, the
level of economic development resulting from
globalization is conducive to the creation of
complex civil societies with a powerful middle
class. It is this class. It is this class and societal
structure that facilitates democracy.
• However, Fukuyama’s argument lies on a limited
definition of democracy that emphasizes formal
procedures such as voting.

38. The World Bank 4 Category System
Globalization Requires War on Terror

39. 39
• Finally, claim 6 is the neo-
conservative commitment to
‘American Values’ of freedom,
security and free-markets. This is
Supported by Kaplan (2003) in his
statement that “you also have to
have military and economic power
behind it, or else, your ideas cannot
spread’. This final claim combines
the idea of economic globalization
with openly militaristic and
nationalistic ideas associated with
the American-led global war on
terror.