Chapter 13: The Global Economy and Politics Flashcards
Economic Systems
1) Capitalism = private ownership; profits maximized for personal gain; market competition; minimal government intervention
2) Socialism = public ownership; collective goals; centralized decision-making
3) Mixed = capitalism and market economy for individual good + socialism and command economy for the collective good
4) Democratic socialism = private ownership of some of the means of production + government distribution of some essential goods and services; government regulation of business
5) Underground economy = informal exchange of goods and services that are not subject to taxation or regulation
Economic Development
primary sector production = extraction of raw materials and natural resources
secondary sector production = processing of raw materials into finished goods
tertiary sector production = provision of services not goods
Transnational Corporations
large-scale business organizations headquartered in one country but operating in many countries, with legal power to enter into contracts, buy and sell property, and engage in business activity
They operate beyond borders, are not accountable to any government or any regulatory agency, and they are mobile locations where conditions facilitate their unfettered operation and provide cheap labour
Free Trade Agreements
eg. NAFTA (North America Free Trade Agreement); Comprehensive Economic and Trade Agreement (CETA) between Canada and Europe
international protests against their concentration of power in the hands of transnational corporations that operate without transparency, free from any jurisdiction, without democratic processes abuses of labour force; antagonize social and publicly funded programs; vs environmental protection laws
Concentration of Wealth
1) Economic concentration = a few individuals or corporations control the vast majority of economic resources
2) Monopoly = a single firm controls an industry and accounts for all sales in a specific market
3) Oligopoly = a small number of firms control an entire industry or service
4) Mergers = the acquisition of the production and distribution of a product, ie. of firms that supply the raw materials, do the processing, and sell retail
5) Conglomerates = corporations that have control both within and across industries formed by a series of mergers and acquisitions
Corporate Welfare
Government assistance of corporations = a public subsidy for a private, powerful, and wealthy client
eg. conditionally repayable loans, grants, money for job-creation, tax breaks, tax cuts
eg. Canadian and Ontario governments gave $10.6 billion to GM after the 2008 recession
“It is clear that overall, most large corporations have gained much more than they have lost as a result of government involvement in the economy.” (K, 3rd ed., p. 306)
National Deficit and National Debt
national deficit = government spending exceeds revenues in a given year debt = cumulative amount of money borrowed to offset deficits debt servicing (interest payment) can be the largest single expenditure item in the federal budget Revenues increasingly come from taxing citizens in favour of taxing businesses.
Consumer Debt on the Rise
Consumer debt is rising risk of personal bankruptcy
in 2017, we owed $1.67 for every $1 of income (Statistics Canada, 2017. http://www.statcan.gc.ca/daily-quotidien/170315/dq170315a-eng.htm)
forms = mortgages, lines of credit, car loans, credit cards, student loans
Why? Unstable income and jobs; Low interest rates; easy credit
Unemployment
Cyclical = due to fluctuations in the business cycle
Seasonal = due to fluctuations in demand due to local conditions
Structural = due to effects of capitalism, eg. closure of manufacturing plants, or shifting of jobs to unregulated countries
Unemployment rate = 6.3% (as of October 2017.
Youth Employment
Following the recession of 2008-09, youth unemployment rate = 20.9% in 2009; highest since 1977 (Kendall, 3rd ed. p. 300)
StatsCan: youth unemployment rate, age 15-24, February 2017 = 12.4% (http://www.statcan.gc.ca/daily-quotidien/170310/t001a-eng.htm)
For those who are neither in education nor employment (NEET) = 15%, age 20 to 24 and 8%, age 15 to 19
Employment Precarity
The Precarity Penalty (Lewchuck et al. 2015, 2016)
sampled 4,193 people, ages 25-65, Greater Toronto-Hamilton area
precarious employment = temporary work, freelancers, contractors, the self-employed
uncertainty regarding future employment prospects; variable hours of employment; uncertain future earnings; few if any supplemental employment benefits beyond a wage
Between 1989 and 2014, the percentage of Canadian workers in precarious work increased from 13.7% of all workers to 21.8%.
Precarious employment is becoming the norm in many sectors and among categories of workers who in the past were privileged to work in secure jobs with good career prospects.
The effects of insecure employment are much broader than simply low wages and irregular employment.
Precarity Penalty
lower household income; lack of worker benefits like pension and health benefits that can cover family members; inability to find work when work is wanted; variable earnings from week to week; unexpected work schedule; uncertain future employment prospects; barriers to eligibility for unemployment insurance; long-term career penalties; lack of training and job mobility; unpreparedness to deal with unexpected expenses; inability to accumulate wealth; less home ownership.
Non-economic consequences = social impact on families; postponing marriage and children; reluctance to enter into romantic relationships; sustainability of relationships; social isolation; weaker attachments to communities; poorer mental health (Lewchuk et al. 2016)
Over-Qualification of University Grads
The proportion of workers aged 25 to 34 with a university degree who were over-qualified in their current position has been on an upward trend since the early 1990s, reaching 40% in 2014.
Over-qualification is concentrated in those who had studied: (1) business, management and public administration; (2) social and behavioural sciences and law; and (3) humanities.
especially in clerical occupations (28%); sales and services (20%); and retail sales and clerks (9%). (Uppal and Larochelle-Côté, 2011. Cited in PBO, 2015)
less susceptible = those with higher degrees; unionized workers; those with full-time jobs; people who had studied sciences and health
over-qualified commerce grads = 37%; arts, humanities or social sciences grads = 32%; of science or health grads = 20% (Li, Gervais and Duval, 2009. The Dynamics of Overqualification: Canada’s Underemployed University Graduates. http://www.statcan.gc.ca/pub/11-621-m/11-621-m2006039-eng.htm)
no significant difference between men or women; no regional differences
Recent immigrants are twice as likely (52%) to experience over-qualification, and they are twice as likely to stay overqualified 100% of the time. (Li et al, 2009)
Voter Apathy
Voter turnout for Canadian elections is low.
Federal = 70% in 2011; 77% in 2015
Aged 18–24 = 67% in 2015; aged 25–34 = 70% (Statistics Canada, 2016. Reasons for not voting in the federal election, October 19, 2015 http://www.statcan.gc.ca/daily-quotidien/160222/dq160222a-eng.pdf)
Provincial = 70.7% (Siaroff and Wesley, 2015. Turnout in provincial elections, 1965-2014. Canadian Political Science Review.)
Municipal = 54.7% for Toronto, 2014 (City of Toronto. 2014. http://www.toronto.ca/311/knowledgebase/85/101000040385.html)
Even though cities administer programs that affect citizens’ everyday life, eg. urban life, transportation, schools, housing, environment, public health units, city parks, libraries, etc.
Functionalism
power is widely dispersed through many competing interest groups
political leaders made decisions on behalf of the people
they compromise, accommodate, balance competing interests
checks and balances by various groups, eg. business, law, consumers
problems are solved through incremental change
Conflict Theory
elites possess wealth and other resources; make the most important decisions that affect everyone; serve capitalist interests
they finance campaigns; use legal loopholes to gain favours; gain influential appointments
markets do not function democratically
democracies must do what markets cannot do
change may be radical and comprehensive
Interactionism
small-scale interactions
eg. the subjective meanings of deficit and debt, tax cuts
people’s reactions, eg. protest
How do reporters frame issues, eg. protestors as dangerous
Feminism
Liberal = promotes women’s rights Materialist = concerned with class inequities, control of global powers Multicultural = experiences of racialized women Radical = strategies of resistance, solidarity, activism Anarcha-feminists = the state is inherently oppressive and needs to be abolished Ecological = fights against trade agreements, esp. re their impact on vulnerable groups and the environment
Capitalism
Characterized by private ownership of the means of production, from which personal profits can be derived through market competition and without government intervention.
Socialism
Characterized by public ownership of the means of production, the pursuit of collective goals and centralized decision making
In a truly socialist society everything is collectively or by the state, not private individuals or corporations
Privatization
A process by which many socialist nations process through which resources are converted from state ownership to private ownership and the government maintains an active role in developing, recognizing and protecting private property rights.
Privatization continues in countries like formerly socialist Turkey
Mixed Society
Contains elements of both capitalist and socialism
State capitalism
The government is involved in the dealings of privately opened companies, including having strong role in setting the rules, policies and objectives of the businesses.
Eg. Japan, Singapore - greater good for everyone however in Saudia Arabi is has resulted in making fewer very wealthy.
Democratic Socialism
Private ownership of some of the means of production is combined with governmental distribution of some essential good and services and free elections
Eg. Sewed on, canada
Underground Economy
Made up of money making ideas that do not report to the government and for jobs that they do not have licenses or credentials to perform
“Informal” or “shadow economy”
Workers who are paid off the books
Problems in the Global Economy: Inequality based on uneven Development
In canada corporations rely on workers throughout the world
12 years ago1/3 of the workers lived in economies in which were centrally planned
Fewer than 10% of the world’s workers live in countries in which they are disconnected from world markets
Rapid change is never easy fears of rising insecurity and technological
Primary Sector
The extraction of raw materials and natural resources from the environment
Diamonds in the Canadian Arctic and oil in Alberta
Technology has improved - factory work is much more specialized, repetitious and bureaucratically organized than preindustrial economies
Tertiary Sector
Fast food, transportation, communication, education, real estate, advertising, communication and entertainment
Only found in post industrial economies
Inequality typically increases in postindstrial economies
Where people in high tech and high wage job financially
Those in low tech, low wage jobs have a hard time paying the basics
Secondary Production
The processing of raw materials into finished products
Eg. Assembly line workers
Now done on a global basis
Transnational Corporations
Large scale businesses that is headquartered in one country but operates in many countries, which has less legal power (separate from individual owners or shareholders) to enter into contracts, buy and sell property, and engage in other business activity.
Truly global entities
Proper by serving global markets in a borderless world
Transnational Corporations Canada
100 of the largest economies, 52% are private corporations
US, China, Japan, Korea, Great Britain, and Germany.
Because transnational corporations are large entities they play a significant role in the economies and governments
Do not depend on one country for labour, capital, or technology
Where political leaders accept their practices and few other employment opportunities
Global consumerism
Inevitably changes local cultures and encourages shop till you drop mentality through advertising and strategic planning
MacDonald’s and CocoCola
Economic Concentration
Refers to the extent to which a few individuals or corporations control the vast majority of all economic resources in a country
Monopoly
Exists when a single firm controls an industry and accounts for all sales in a specific market
Oligopoly
A situation in which a small number of companies or suppliers control an entire industry or service
Concentration of Wealth
Refers to the extent to which a few individuals or corporations control the vast majority of all economic resources in a country
Concentration of wealth in Canada has gone through many stages
Most investment capital was owned by individuals in the early stages
Now in canada it is families
Monopoly
Exists when a single firms controls an industry and accounts for all sales in a specific market
Interlocking Corporate Directorates
Members of directors of one corporation who sit on the board of one or more other orporations
Richest Canadians
Earned about $200,000 in 2010 in comparison with $147,000
In 2012 the average Canadian earned $46,634
The National Deficit
Refers to the situation government spending on initiative and programs, along with the interest charges on its outstanding debts, exceeds its revenues in a given year.
Debt
The amount of money borrowed by the government to offset its deficits
In the era of the welfare state re-entrenchment, governments typically lay the blame on social and other normal program spending, urging individuals to do what they can to “tighten their belts”
The Canadian Deficit 2014,2015
The Canadian Government would have another deficit
Functionalist Perspective: Pluralism
Assumes that people generally agree on the most important concerns- freedom and security and that governments fulfill important functions in these tow regards that no other institution can
When competing viewpoints come into play the government arbitrates
Pluralist model
Power is widely disperse throughout many competing interest groups in our political system
The Pluralist Model 5 Functions
1) Political Leaders make decisions on behalf of the people through a process of bargaining
2)leadership groups serve as watchdogs to protect ordinary people
3)Power is widely dispersed in society
5) public policy reflects a balance among competing interest groups
A certain amount of government intervention in the economy is appropriate, but too much, or the wrong kind is detrimental
Conflict Perspective
Believe that democracy is an ideal not a reality
Government primarily benefits the wealthy and the politically powerful
Conflict Perspective: Elite Model
1) Elites poses the greatest wealth, education, status, and other resources and make the most important decisions in society
2) elites generally agree on the basic values and goals of society
3) power is highly concentrated at the top of the pyramid-shaped social hierarchy, and those at the top set public policy
3) elites use media to shape political attitudes
Conflict Perspective : C Wright Mills
Power elite which at the top is composed of business leaders, the executive branch of the federal government and the top brass of the military Power elite have similar class backgrounds and interests and interact of a regular basis Political and economic alliances the power elite can influence important decisions
Conflict Perspective: William Domhoff (1978)
Ruling class which is made up of the corporate rich a relatively fixed group of privileged people who wield power over political processes and serve capitalist interests. The only way to overcome problems in politics and the economy is to change the entire system
Symbolic Interactionist
Micro - view society as a series of interactions between individuals specific settings - subjective interpretations of the physical world
People in different classes, races, and genders experience the world in dramatically different ways
Feminist Perspective: Liberal Feminists
Work to ensure that women have the rights and abilities to participate fullly in political and economic spheres of social life
Eg. Securing women’s right to vote
Material Feminist Perspective
Concerned with class inequalities Widening gaps between different groups Control over resources, and control of power globally Analyze, challenge and work to change business practices, globalization initiative and development programs that continue to exploit women
Multicultural Feminist
Global survival depends on solidarity between peoples across the globe
Internalized racism and their impacts on the lives of people such as foreign domestic and sweatshops and immigrant women, refugee women and their communities are a primary concern for these feminists
Radical Feminists
eomen’s personal experiences as political and focus on developing strategies of resistance
Patriarchy and masculinity practices that construct women as passive and submissive
Engage in actions such as the fight for the rights and freedoms of women and children who are trafficked in sex trade
Ecological Feminists
Political and economic activities such as free trade agreements transnational corporation and war impact women the natural environment and the quality of life for people, animals and the earth.
Indian women have done much to oppose this, from being the tree huggers to being the seed keeps and prevent the emergence of mono corps
Anarch Feminists
Analyze the role patriarchy plays in subjutigating women and believe that the state is inherently oppressive
The whole system needs to be abolished
