7.4 global networking Flashcards
What are some examples of capitalism?
private property
right to make a profit
privatized services
buying and selling of goods
What are some examples of communism?
government ownership of property and land
state owned businesses
wages determined by government
profits taken by the gov
What is the world dominant economic system since the end of the world war?
free market capitalism
Why has free market capitalism grown and socialism/communism weakened?
-The collapse of socialist economies in the USSR and Eastern Europe
-China’s movement away from a socialist economy towards state capitalism
-Reform in communist Cuba, allowing limited private ownership of buisness
Which 5 states are still communist to some extent?
North Korea
Cuba
Vietnam
Laos
China
Who has encouraged free trade and capitalism?
IGOs, such as the World Bank, IMF and WTO
Who is the World economic forum and what do they do to promote capitalism? (WEF)
A swiss non-profit organisation that promotes globalisation and free trade via its annual meeting at Davos, which bring together global businessmen and political elite
Who is the IMF and how do they help to promote capitalism?
They promote global economic security and stability and assists countries in reforming their economies and stabilise currencies. Economic reforms often mean more open access to developing economies for TNCs
How can the IMF be a hinder to developing nations?
They help to manage issues like international debt. However, in the 80s and 90s, it imposed conditions on many borrowing countries that forced developing countries to cut spending on health and education inn return for stabilizing or extending debt repayment
What is an example of the IMF helping a developing country?
The IMF didn’t allow Cote d’Ivoire to receive aid until 2013, when they government agreed to set up commercial courts and allow free elections. After economic reforms, US$4.4 billion of debt was cancelled, but cancellation of a further uS$10 bn of debt depended on reform of the country’s electricity sector to allow companies to react to worldwide price changes.
Why is there a ban on Ivory coast exporting diamond?
because the country used them to finance a civil war in 2005
Why can Ivory Coast now transport cocoa again?
Because they agreed to minimum wages and investment in road infrastructure was achieved in 2011
What was funding towards education and training dependent on in Ivory Coast?
creating a more competitive banking sector
How do the world Bank help to promote capitalism?
They make development loans to developing countries, but within a ‘free market’ model that promotes trade and privatization, which benefits large TNCs. They also focus on humanitarian crises with the aim of eliminating poverty and reaching development goals
How does the world trade organisation help to promote capitalism?
They regulate global trade and aims to reach open trade and reduced protectionism.
What is the WTO focused on at the moment and why is it not always successful?
Currently their focused on poverty reduction through use of removing farm subsidies . However, not in many developing countries, cheaper imports undercut local farmers who are put out of work
Why are the IMF WTO and World bank all set up in favour of developed countries?
In the IMF and World Bank, not all members are equal as their individual voting rights are dependent on the amounts they have invested into the fund. On the other hand, the WTO gives everyone an equal vote, but they’ve never had a vote as it usually is based on mutual agreement
What is the Dell Theory of conflict prevention?
In 2005, Freidman developed his McDonald’s observation that no two countries both with a McDonald’s in have ever gone to war into his Dell Theory of Conflict prevention. It says that no two countries that are both part of a major global supply chain will ever fight in a war. They want TNCs to locate a part of the supply chain within their country rather than just selling things to them
Define the term ‘brand value’
A way of measuring cultural impact on global consumers
In 2015, what is noticeable about the top 16 companies in brand value?
-12 are from the US, one from Korea and Japan each and 2 from Germany
-Ten of the top 16 are involved in ICT and comms, three are car brands and 2 are food and drink
-The top Chinese company was Lenovo at position 100
What are the characteristics of Westernization that is leading to a global culture of food, the arts and media?
-consumerism
-capitalism
-white culture with English as the dominant language
-a culture which ‘cherry picks’ and adapts selective parts of world cultures and absorbs them
What is a specific example of a company fueling Westernization?
McDonald’s:
36,000 restaurants worldwide
65 million people served a day
750 people buy it every second
What evidence is used to suggest that TNCs respond to, rather than override, global cultural differences.
In India, McDonald’s has had to adapt its menu to suit local tastes and the Hindu and Muslim regions
Therefore glocalization or hybridization occurs
What shows that cultural traffic is not always West to elsewhere?
In the UK the curry is the most popular takeaway
Sushi is becoming increasingly popular
American football and baseball have had a hard time being exported to the rest of the world.
Who dominates the media sector and what does this allow them to do?
The USA- which gives them the ability to constantly reinforce its cultural message and values in a hegemonic way
How does intellectual property law protect R&D and new developments?
patents for new inventions
copyright for artistic work
trademarks to protect designs
What has to be done if a person wants to use someone’s pre-designed design or invention?
They have to pay a royalty fee
Where do most royalty fees go?
85% go to the US, EU and Japan
What does the domination of global royalties reflect?
- existing developed countries are paid for inventions and art they created decades ago
- developed countries are best placed to invest in R&D, so patent holders also tend to be patent developers
-education and skill levels are higher in developed nations
-Westernization tends to spread US and European music, film, TV and brands
What statistic shows the rise of patents and R&D in CHina?
In 2012, Chinese innovators applied for 652,000 new patents vs only 542,000 in the US
How is the global power of TNCs changing?
In 2015, the top ten TNCs in revenues held only 3 US ones
Some Chinese companies are growing rapidly
American car companies are losing ground
What statistic shows that TNCs are powerful economic forces?
In 2013, TNCs accounted for nearly 80% of all global trade which was over US$20 trillion
What are SAPs?
Structural adjustment programmes. These are economic policies formed by the IMF and World Bank in response to African debt crisis
What are examples of SAP conditions?
-reduction in gov spending to promote privatisation
-deregulation
-large scale trade liberalization
How has SAPs affected Africa?
-considered to have done more harm than good
-increase in equality
-increased unemployment
- decreases quality of services
-increases debt
What is an example of a country have to pay interest and therefore more than they initially borrowed?
In 1978, Nigeria had borrowed $5bn. By 2000, they had paid back $16bn but still owed $31bn
Why haven’t SAPs worked in Africa?
African countries weren’t ready to implement these measures. Most rich countries built their economy through protectionism and only opened their economies when they were strong enough to compete. In contrast SAPs force African countries into free market capitalism with domestic economies that aren’t strong enough to compete, causing economic decline
What factors occurring in Africa meant they weren’t prepared for SAPs
corruption
national leaders ‘flogged’ water/electricity companies when it suited them
used international loans to pursue conflict, meaning no development
Why did Superpowers curse the ability of SAPs to be successful?
SAP policies opened up African markets to create a cheap source of raw commodities of which western countries could exploit while also selling their products to African consumers with little competition from domestic industries
It can be argued SAPs were implemented to further develop western countries at the expense of untapped African economies