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
