Deck 3: Globalization, Networks, and Contagion

Question 1

Characterize the current epoch of globalization. Does 1991 serve as the beginning? In the current epoch, what economic factors are important?

Answer 1

We could say that the current epoch of globalization started in 1991 when the Soviet Union collapsed. The fall of the Soviet Union allowed expansion and collaboration in the global economy. The current epoch of globalization is characterized in several ways, including Thomas L. Friedman's (2005) vision of a "flattening" world in which technological advances level the economic playing field for countries, companies, and workers. As urbanization expands and more than 50% percent of the world's people now live in cities, Richard Florida's (2005) vision of the current era is that globalization is "spiky".

Question 2

Does the concept of globalization refer to the opening of international borders to flows of trade and investment? Or should the concept of globalization include additional flows such as information, migration, and technology?

Answer 2

Globalization refers to the widening and deepening interconnections among the world's people through all forms of exchange, including information, people, technology, and financial exchanges. It also refers to the opening of international borders to flows of trade and investment. However, globalization does not imply an inevitable movement toward integration. When resources, goods, and people flow from one area to another, specific networks of globalization, such as supply chains, may strengthen. When countries erect barriers and close their borders, integration declines. The point is that, over time, interconnections ebb and flow.

Question 3

What are examples of positive and negative global flows? Over the epochs of globalization, what are the trends for each?

Answer 3

History of globalization:
Silk roads (1st century BC - 5th century AD, and 13th - 14th centuries AD)
• Luxury products from China started to appear on the other edge of the Eurasian continent - in Rome
• An outbreak of bubonic plague traveled the Silk roads to the West, where the disease became known as the Black Death.
Spice routes (7th - 15th centuries)
• Muslim spices traders dominated the Mediterranean and Indian Ocean trade; afterward, they could be found as far east as Indonesia and as far west as Moorish Spain.
Age of Discovery (15th - 18th centuries)
• European explorers connected East and West. Potatoes, tomatoes, coffee, and chocolate were introduced in Europe. This was also the beginning of the Slave trade.
• Following the arrival of the Europeans in America, diseases such as smallpox, measles, and bubonic plague were passed along to the native populations by the Europeans.
First wave of globalization (19th century - 1914)
• Britain's industrialization allowed them to make products that were in demand all over the world, like iron, textiles, and manufactured goods. Also, those with the means in New York, Paris, London, or Berlin could also invest in internationally active joint-stock companies.
• The first of seven cholera pandemics occurred and reach Russia, the British Empire, Spain, Africa, Indonesia, China, Japan, Italy, Germany, and America. The bubonic plague occurred in China and India.
Second and third wave of globalization (1915 - 2008)
• Global trade started to rise thanks to the Second Industrial Revolution that brought cars and planes. The Third Industrial Revolution brought the internet which helped connect people all over the world in an even more direct way.
• The Spanish Flu, the Asian flu, HIV/AIDS, and SARS all happened during that time frame and killed millions of people.
The current epoch of globalization is characterized by global flows - the movement of people, resources, goods, capital, and information.
• The ubiquitous iPhone, manufactured in China, is sold in global markets.
• French wine, a favorite of many countries for centuries, is sold in markets on five continents. With expanding global flows, many forms of output considered transformational in one period, such as modems, camera phones, and flash drives, become commonplace in the next period.
• Spread of dangerous diseases such as COVID -19.

Question 4

With respect to countries, companies, and businesses, do you think Thomas Friedman's (2005) vision that the world is flat or Richard Florida's (2005) vision that the world is spiky best characterizes the process of globalization? Why?

Question 5

Diagram a supply chain network. Identify nodes, connections, and types of flows. What is the degree of small-worldness? Is the network scale-free? How may disruptions occur? What interventions would effectively address the disruptions?

Question 6

Diagram a disease network. Identify nodes, connections, and types of flows. What is the degree of small-worldness? Is the network scale-free? How may disruptions occur? What interventions would effectively address the disruptions?

Question 7

Diagram an energy network. Identify nodes, connections, and types of flows. What is the degree of small-worldness? Is the network scale-free? How may disruptions occur? What interventions would effectively address the disruptions?

Question 8

Diagram an innovation network. Identify nodes, connections, and types of flows. What is the degree of small-worldness? Is the network scale-free? How may disruptions occur? What interventions would effectively address the disruptions?

Question 9

Study contagion in the articles by Zakaria (2020) and Acemoglu et al. (2015). How does contagion proceed? What interventions slow contagion? Does a positive counterexample to contagion exist? If so, explain.

Question 10

Is the present system of globalization more vulnerable to contagion than previous systems?