Market Integration

Introduction:

— The social institution that has one of the biggest impact is the economy.

* It is the social institution that organizes all production, consumption, and trade of goods in the society.

* Economic system vary from one society to another.

Production Typically Splits Into Three Sectors

1.) Primary Sector - extracts raw materials from natural environment.

2.) Secondary Sector - gains the raw materials and transform them into manufactured goods.

3.) TertiarySector - involves services rather than goods.

International Financial Institutions

— World economies has been brought together by globalization.

— It is reflected in the phrase " When the American econmy sneezes , The rest of the world catches a
cold." But it is important to remember that it is not only the economy of the U.S. but also other
economies in the world that have a significant impact on the global market finance.

The Bretton Woods System

— The major economies in the world had suffered because of World War I , The great depression in
1930's, and the World War II.

Bretton Woods System has Five key Elements

* First Element - is the expression of currency in terms of gold or gold value to establish a par value
( BOUGHTON,2007)

* Second Element - is that " the official monetary authority in each country ( a central bank of its
equivalent) would agree to exchange rates plus or minus one percent margin." (BOUGHTON,2007)

* Third Element - is the establishment of an overseer for these exchange rates; thus, The International
Monetary Fund (IMF) was founded.
* Fourt Element - is eliminating restrictions on tge currencies of member states in the international
trade.

* Final/Fifth Element - is that U.S. dollar became the global currency.

The General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)

One of the systems born out of bretton woods was the general agreement on Tariffs and Trade (GATT).
That was established in 1947. It focused on trade goods through multinational trade agreements,
conducted in many "rounds" of negotiation. However, "it was out of the Uruguay round ( 1986-1993)
that an agreement was reached to create the World Trade Organization (WTO).

The WTO headquarters is located in Geneva, Switzerland. Unlike GATT, WTO is an independent
multilateral organization that became responsible for trade in services, non tariff-related barriers to
trade, and other broader areas of liberalization.

An example cited by ritzer (2015) was that differences between nations in relation to regulations on
items as manufactured goods or food. A given nation can be taken to task for such regulations if they are
deemed to be an unfair restraint on the trade in such items.

The General idea where the WTO is based was that of neolibarilsm. This means that by reducing or
eliminating barriers, all nations will benefit.

Significant criticism to WTO

One is that trade barriers created by developed countries cannot be countered enough by WTO,
especially in agriculture. Grain prices increased and food riots occured in many member state of WTO,
like Mexico, Egypt, and Indonesia in 2008.

Aside from issues in agricultural sector, the decision-making processes were heavily influenced by
larger trading powers, in the so-called green room, while excluding smaller powers in meetings.

Lastly, Ritzer (2015) pointed out that international non-government organization (INGOs) are not
involved, leading to the stages of "regular protests and demonstration against WTO".
The International Monetary Fund (IMF) and World Bank

IMF and the World Bank were founded after the World War II. Their establishment was mainly
because of peace advocacy after the war.

This institutions aimed to help the economic stability of the world. Instead of being started by
individuals like regular banks, they were started by countries.

IMF and the World Bank designed to complement each other. The IMF's main goal was to help
countries which were in trouble at that time and who could not obtain money by any means. Perhaps,
their economy collapsed or their currency was threatened.

IMF in this case, served as a lender or a last resort for countries which needed financial assistance.

The World Bank, in comparison, had more long-term approach. Its main goals revolved around the
eradication of poverty and it funded specific projects that help them reach their goals, especially in poor
countries. An example of such is their investment in education since 1962 in developing nations like
Bangladesh, Chad, and Afghanistan.

The reputation of this institutions has been dwindling, mainly due to practices such as lending the
corrupt government or even dictators and imposing ineffective austerity measures to get their money
back.

The Organization for Economic Cooperation and Development(OECD)

-This is the most incompassing club of the richest countries in the world.

-It is highly influencial, despite the group having little formal power.

- with 35 member state as of 2016.

The Organization of Petroleum Exporting countries(OPEC)

-originally comprised of Saudi Arabia, Iraq, kuwait, Iran, and Venezuela. They are still part of the major
exporters of oil in the world today and was formed because member countries wanted to increase the
price of oil, which in the past had a relatively low price and had failed in keeping up with inflation.

The European Union(EU)

-it is made up of 28 member states. Most member in the eurozone adopted the euro as basic currency
but some Western European nations like the Great Britain, Sweden,and Denmark did not. Critics argue
that the euro increased the prices in Eurozones and resulted in depeessed economic growth rates, like in
Greece,Spain,and Portugal.The policies of the European Central Bank are considered to be a significant
contributor in these situations.

North American Free Agreement( NAFTA)

- it is a trade pact between the United States, Mexico,and Canada created on January 1, 1994 when
Mexico joined the two other nations. It was first created in 1989 with only Canada and the United States
as trading partners. NAFTA helps in developing and expanding world trade by broadening internatioanal
cooperation.

- it aims to increase cooperation for improving conditions in North America by reducing barriers as it
expands the market of three countries.

-generally NAFTA has its positive and negative consequences. It lowered prices by removing tariffs,
open up new opportunities for small and medium- sized business to established a name for
itself,quadropled trade between the three countries, and created five million U.S jobs. Some of the
negative effects, however, include excessive pollution, loss of more than 682,000 manufacturing jobs,
exploitation of workers in Mexico, and moving Mexican farmers out of business.

HISTORY OF GLOBAL MARKET INTERGRATION

 Before the rise of today's modern economy, people only produced for their family. Nowadays,
economy demands the different sector to work together in order to produce, distribute, and exchange
product and services.

THE AGRICULTURAL REVOLUTION AND THE INDUSTRIAL REVOLUTION

The fish economic change was the AGRICULTURAL REVOLUTION ( Pomerans 2000 ). When people
learned how to domesticate plants and animals, they realised that it was much more productive than
hunter gatherer societies. This became the new agricultural economy.

The second major economic revolution in the INDUSTRIAL REVOLUTION of the 1800s. With the rise of
industry came new economic tools , like steam engines, manufacturing, and mass production. Factories
popped up and changed how work function.

However, every economic revolution comes with economic casualties. The workers in the Factories—
who were mainly poor women and children—worked in dangerous conditions for low wages. As a result,
nineteenth-century industrialists were known as robber baron—with more productivity came greater
wealth, but also greater economic inequality. In the late nineteenth ,labor unions began to form.
These organisations of workers sought to improve wages and working conditions through collective
action, strikes, and negotiations. Inspired by Marxist principles, labor unions gave way for minimum
wages law, reasonable working g

Hours, and regulations to protect the safety of workers.

Capitalism and socialism

There were two competing economic models that sprung up around the time of the industrial
revolution, as a economic capital became more and more important to the production of goods.

There are Many sectors where a hands-off approach can lead to what economist call market failures
where an unregulated market ends up allocating and sevices inefficiently.
At the same time, capitalist countries economically outperform their socialist counterparts contributing
to the unrest that eventually led to the downfall of the USSR.

The information revolution

Ours is the time of the information revolution.Technology has reduced the rule of human labor and
shifted it from a manufacturing-based economy to one that is based on service work and the production
of ideas rather than goods.

What do jobs in a post-industrial society look like? Agriculture jobs, which once were a massive part of
the Philippine labor force, have fallen drastically over the last century.

The industry includes every job such as administrative assistant, Nurses, Teachers,and Lawyers

What is next for capitalism and socialism? No one knows what the next economic revolution is going to
look like.

GLOBAL CORPORATION

The increase in international trade has hoth created and been supported by international regulatory
groups like wto and transnational trade agreements like NAFTA ,there is not single group thate is
completely independent . all are dependent to some degree on international trade for their own
company with out international regulation groups international trade at. the current massive scale
would be impractical the trade regulatory groups and reduces traffrics which are taxes on imports and
make customs producer easier this make trading across national borders much as feasible .

These are companies that extend beyond the borders of country ar called multinational or
transaditional corporation (MNC OR TNCS) they are also reffered to as global corporations. They
internationally surpass national borders and take andvantage of opportunities in different countries to
manucfacture distribute market and sell their product some global corporations are ubiquitous like
MC donalds or coca cola and yet they still market themeselve as american companies others can be
surprising like general electric which is based the united states but more than half of business and
employees working in other countries another example is ford motor company the classic american car
company in michigan