Economic Globalisation Flashcards
Katz 2001
‘Global trade has been going on for millenia, though what constitutes as the “globe” has expanded dramatically during that time
Global factory
transfer of labour to south, neolib expanded labour pools
multinationals in favour of deterritorialisation (Amin, 2002), dsidtance is no longer a deterrent for cheap labour
ADB GMS economic cooperation programme, weakening concept of nation state
some nations have maintained specialisaton
mercantilism
maximise exports and limit imports (16th-18th century)
neoliberal beginnings
1973, US backed chilean coup killing democratically elected president
feared he would not implement neoliberal policies
US needed access and to create hegemony
‘lost decade’
Iraq
‘freedom’ impsed upon iraq, opening of banks to foreign control, free markets.
protests surrounding condition of welfare state, lack of economic opportunity (Harvey 2005)
thatcher
abolition of corporatist institutions, market orientated policy
privitisation and deregualtion (LSE 1987)
erosion of social entitlements and workplace protections to increase competion in labour market
righ to buy
SAPs
Not supported economic growth
generated debt cyces
destruction of welfare systems
increased power of multinationals
fordism characteristics
mass production
highly structured labour relations
mass consumption
oligopoly
state regulation
post WWII shift to global capitalism accompanied by tech improvements, mechanisation and consumption
economies of scale
average car cost decreases as production rises. early multinational (UK production in 1911, Japan 1926, Germany 1930s)
Taylorism
severe technical and social division to increase worker productivity. moving assemply line. dehumanisation of the line, anti-union.
Increases in rights
1933 roosevelts national recovery act, right to unionise
Lead to virtuous cycle (wage inc, purchasing power inc, consumerism, mass prod, lowers costs, more affordability) - companies profit, can reinvest, hire more, improve wages.
social stability, more people acheive middle class lifestyles `
what was fordism dependent on
continual, stable demand
economy insulation from global competition
weakening of fordism
int. competition - asian tigers
growing unemployment, therefore falling consumer demand
rigidity, liable in period of flux
stagflation
oil crisis 1973
1973 oil crisis
4x oil prices, energy intensive
shift in consuer preferences
accleerated move to globalisation, exposed vulnerabilities in national-prod models
decline in welfare state
US rust belt
1970-1990 manurfacturing employment declined by 13%
declines of communities around these industries
reasons for post war fordism decline
Exogenous shocks (oil crisis)
Foreign competition
Rigidity prevented adaptation
Increased non-standard consumption
Technological change
Crisis theory - periodic phases where the economy over-produces
regulation theory (aglietta et al., 1979)
regime of accumulation crisis
mode of regulation cannot support
different policies and strategies
new mode of regulation
new regime of accumulation
regime of accumulation
way of organising production, distribution and consumption in an economy
e.g fordism
mode of regulation
social, institutional and cultural norms which stabalise a regime of accumulation
e.g keynesianism, neoliberalism
Polanyis double movement
expansion of market forces (commodification of land, labour etc, deregulation)
social protection (societies reaction to market expansion. demand for welfare systems, unions)
Climate Crisis: Efforts to commodify natural resources (carbon markets, water privatization) and the pushback through environmental movements.
contradictory
criticisms of regulation theory
eurocentrism, determinism (underplays role of agency and class struggle)
what is the great moderation
period of relative economic stability from mid 1880’s until 2008 crisis. mainstream economics claimed, fewer and milder recessions, tamed inflation, end of booms and busts (experience by individual and families differed from claims)
UK ‘new economy’
aligned with latter stages of great moderation. rapid tech change, globalisation, financialization, deregulation, new labour government.
Bifurcated economy
two distinct sectors, high tech, well paid vs low income, precarious conditions
income inequality
UK north south divide
UK and US housing boom
2000’s
low interest rates led to surge in household borrowing (mortages)
consumers use credit to spend more, fuels econ growth
reliance on debt is unsustainabe, housing prices collapsed
2008 crisis
Bubble Formation: Easy credit, low interest rates, and lax regulation led to a surge in subprime mortgage lending in the early 2000s.
Trigger: Interest rates rose, and many subprime borrowers defaulted. This caused foreclosures to spike, flooding the market with excess homes.
Collapse: Housing prices plummeted, financial institutions holding mortgage-backed securities suffered huge losses, and a global financial crisis ensued.
financialisation
increasing dominance of financial motives, markets, actors and institutions
1970 - collapse of bretton woods system
80 - deregulation, neoliberal promotion
greater volatility in employment and living standards due to financial crisis
financial instiutions have influence over govs
Bretton woods system
created after WWII to help rebuild global econ
countries pegged currencies to dollar (to gold)
IMF and world bank set up
collapsed due to too many dollars in circulation, vietnam war, stagflation, low reserves of gold
shift to system determined by market forces
Power of TNCs
GPN coordinate individual production chains
take advantage of geographical differences in distribution of labour and state policy varitations
global flexibility
more power than state?
UK restructuring post 2008
Low unemployment (UK definition, only one hour to be classified as employed)
zero hours contracts, self emploment
falling real wages
role of unions
women are more highly unionised than men, public sector female women of colour
Platform technology
Uber
disrupts olf models
convienience for consumer
legal challenges, regulatory system challenges
automated managemnt
money out of local system
Detroit
declared bankruptcy in 2013
police cuts, parks and pensions
Flint - emergency manager, lay off council
disporportionatley affected black communities, strucural racism
water infrastructure collapsed
social justice issue
How have some nations mainatined specialisation
Lee 1977
High Levels of Technological Innovation: Both nations invest heavily in research and development.
Skilled Labour Forces: Their education and training systems produce workers specialised in high-value industries (e.g., automotive, machinery).
Territorial Embeddedness: These nations maintain a distinctive territorial focus, preserving industries tied to their national identity.
global factory
Opening of chinas economy, large capital investments flowed
- continual labour supply needed, reliant on mobilisation of young workers from the rural areas (primarily female)
- Subsidies to expand industries to northern and western provinces where workers traditionally migrate from (go west)
Low wage work outsourced to centres in SE asia (go-out)
Chinese manufacturer being encouraged to upgrade production and working conditions (go-up)
responding to what harvey calls - surpluses of labour, capital
GMS
1992, ADB GMS economic cooperation programme
Free trade and investment in region
Myanmar, thailand, cambodia, china, laos
Lift barriers at boarders, facilitate production networks, sustain growth
Occurred in time with re-territorialisation of nation state
Konzelmann et al 2016
Crisis originated in sub-prime mortgage debacle - rebranded as a public sovereign-debt crisis (governments being in debt, rather than banks being irresponsible)
Govs bailed out banks, transferred financial burden to public sector - framed as due to overspending - implementation of austerity measures
After WWII, govs adapted keynesian economics - emphasising state intervention
Welfare state was established
Austerity temporarily used to stabilise the economy (not long term)
Progressive taxation ensured economic burden was fairly distributed - resulted in economic growth, equality, rising living standards
Kalecki 1943
- predicted cap would struggle to sustain high employment (not in powerful business interests)
- 70s crises, stagflation, challenged keynesian policoes
- blamed on trade unions and protections
-80s shift to neoliberalism (, inflation caused by too much money, unemployment wass natural, gov intervention was problem)
austerity became a LT policy
Govs stopped aiming for full employment, left job creation to market forces
shifting responsibility for unemployment from the system to the individual.
Reinhart & Rogoff 2009
austerity is required to reduce public debt-toGDP ratios to growth-permitting levels, a public debt “threshold” – 90 percent of GDP – at which economic growth contracts
findings discredited
McCausland and Theodossiou (2016) - found austerity has damagin effect on recovery and growth, during periods of recession, policies aimed at reducing deficits worsen debt to GDP ratio, also increase unemployment
Christopherson et al 2008
Is globalisation rendering the significance of location and place redundant?
Friedman 2006 - world is flat - ICT revolution, deregulation, inc economic integration = time space compression, no longer any ‘friction of distance’
not all people have = acces. = access doesnt mean = opportunity and outcome
Globalisation is spatially uneaven with respect to its causes and motive forces and implications for places regions and countries (Harvey 2006)
Increasing economic integration can lead to spatial agglomeration of economic activity rather than disperse (leamer)
prewar fordism
1890s-1945
laissex-fiare capitalism
limited welfare protections
mass production
1913-1914 time to produce model T automobile went from 12.5hrs to 93 minutes (cost of worker satisfaction) - ‘five dollar day’ (Anderson, 2014)
prewar fordism collapse
1929 great depression - high unemployment and poverty - demand fell and system collapsed
Umlauft 2015
comparibility of 1929 great depression and 2008
1933 unemployment reached 25%, 9000 banks suspended operation
gov intervention prevented worsening of 2008 crisis
Uncertain weather government actions - bank bailouts - prevented that crises at the expense of future financial stability
Logan 1990
fordism collapse -
Economic restructuring was used to remedy the problem created by geographically redistributing production (globalisation made capital much more mobile)
liberalism breakdown
2008 crisis revealed some flaws in deregulation, some return of state intervention - e.g Biden Administration CHIPS Act 2022, funding to boost domestic manufacturing of semiconductors.
China’s rise disproved the idea that free markets and democracy go hand in hand
Political liberalism under pressure - populism and authoritarianism challenging
