G: Economic Globalisation and its Crises Flashcards

Question

Klein, 2007

Answer 1

- Disaster capitalism - Operation Corporate

Answer 2

- Keynesian regulation - State of Confidence - Crises are crises of capita;ist class - Neoliberalism

Answer 3

- Financialisation - 2 flaws in capitalism - Crises of overproduction and underconsumption due to periodic mismatches in supply and demand - Debt deflation due to financial instability

Answer 4

- 2008 wiped out $50trn in assets - property crises long lasing - Privatise profit and socialise risks - Perverse incentives - Moral hazards - Financial crises rationalise the irrationalities of capitalism - Neoliberalism uses draconian policies designed to consolidate and restore capitalismc class power - Schumpterian creative destruction

Answer 5

- Low interest rates cause of crash in 2008

Answer 6

- Multiple causes of 2008 crash - Central bankers and regulators to blame - Great moderation of low inflation and stable growth promoted complacency and risk taking - Subprime mortages repackaged into CDOs - CDOs given AAA ratings by agnecies like Moody's and Standard and Poor's - Investors bought CDOs - Banks betting on themselves with borrowed money - Low interest rates set by the Fed encouraged risky investment - Trust, the ultimate glue of all financial systems, began to dissolve in 2007—a year before Lehman’s bankruptcy—as banks started questioning the viability of their counterparties. - The whole system was revealed to have been built on flimsy foundations: banks had allowed their balance-sheets to bloat (see chart 1), but set aside too little capital to absorb losses. - Lax capital ratios proved the biggest shortcoming. Since 1988 a committee of central bankers and supervisors meeting in Basel has negotiated international rules for the minimum amount of capital banks must hold relative to their assets. But these rules did not define capital strictly enough, which let banks smuggle in forms of debt that did not have the same loss-absorbing capacity as equity.

Answer 7

- Global price of rice increased 3x after impacting poor - Maximised product complexity to conceal the risk from rating agencies, buyers and regulator - bank fault not regulators

Answer 8

Definition of financial crises - In a financial crisis, **asset prices see a steep decline** in value,** businesses and consumers are unable to pay their debts**, and financial institutions experience** liquidity shortages**.

Answer 9

COVID19 Pandemic. A global stock market crash began in February 2020. From February 20 until March 23, 2020 the S&P 500 lost over 30% of its value. This was a result of the COVID-19 pandemic, which caused widespread panic and uncertainty about the future of the global economy. Despite being severe and with global reach, markets and national economies rebounded quickly and by early April 2020, the S&P 500 had began a decisive rise, surpassing its pre-pandemic high in August 2020

Answer 10

- Deglobalisation - Biden quote - History of humanity is the history of trading - Borders opened up in 1950s - Global shift from US to China - We are all geopolitical actors - our purchases affects lives around the world - GPNs - Cooporation between people who do not know each other ir speak same language - Free trade ended Cold War - Governments undoing globalisation India paying companies to stay within India - industries such as pharmaceuticals and electronics South Korea subsidising green energy Australia to subsidise mining - process rare earth minerals there Nigeria does not want to rely on importing rice or cement - Nigeria does not want to rely on importing rice or cement Trump and Biden turning back free trade CHIPS Act - $50bn of gov funding to pay companies to produce microchips in USA Biden imposing tariffs - protecting American companies NVIDIA banned from exporting certain products to China

Answer 11

“There is no reason why American workers cannot lead the world in the production of batteries”

Answer 12

“The more China liberalises its economy, the more fully it will liberate the potential of its people”

Answer 13

- Age of post-modernity = frontiers of consumerism expanded into all areas of social and private life - capitalism has regimes of accumulation and modes of regulation - Changing mode of regulation between Fordism and Neoliberalism - Regulation approach - emphasies the role of institutuions, norms and regulations in shaping economic structures like the role of the state - Fordist modes of regulation - mass production, strong labour unions, welfare state - Non-Schumpterian approach - role of institutions, social norms and power relations in shaping economic behvaiour. Top down forcings. -

Answer 14

- The world is flat - 10 flatteners: collase of Berlin Wall, rise of internet, open source collaboration, outsourcing, offshoring, supply chain, insourcing, wireless connectivity, digital tech - 3 stages of globalisation: 1, was globalisation of contries, 2 was globalisation of companies, 3 was individuals and small groups being able to collaborate and compete globally - Challenges to globalisation - income inequality, cultural homogenisation, environmental degredation, geopolitical tension

Answer 15

3 stages of neoliberalism 1. Protoneoliberalism beofre the 198-s and the attack on neoliberalism 2. Roll back of the state in the 8-s and 90s (deregulation), privatisation of state industries and sectors, reduction of welfare state 3. Roll out of the state form the 1990s onwatds which has focused on state building and introducting market rules and regulations into new spheres. Rolling back can be seen as the destrucie phases, while rolling out is the constructive phase

Answer 16

- The Global City - hubs for the production and exchange of specialized services, such as finance, law, advertising, and consulting. - concentration of economic power in global cities, while simultaneously marginalizing other urban areas. - globalization and economic restructuring have transformed the functions and dynamics of cities. She argues that the rise of information technology, deregulation, and financialization has led to the concentration of economic power in global cities, while simultaneously marginalizing other urban areas.

Answer 17

- World is not flat - oversimplifies the complexities of globalization and fails to account for the persistence of geographical inequalities and uneven development. - This specialization leads to the concentration of certain economic activities in particular locations, contributing to spatial inequalities. - Global Production Networks: The authors highlight the role of global production networks in shaping the geography of globalization. They argue that production processes are increasingly fragmented and distributed across multiple locations, with different tasks and activities outsourced to various parts of the world. However, they caution against viewing this fragmentation as a leveling force, as it often reinforces existing geographical disparities and power imbalances.

Answer 18

- Dicken examines the strategies employed by TNCs to expand their operations across borders, including foreign direct investment, mergers and acquisitions, and strategic alliances. He discusses the concentration of corporate power in certain industries and regions, as well as the implications of TNC activity for national economies and local communities. - He discusses the transition from Fordist mass production to post-Fordist flexible specialization, highlighting the implications of this shift for employment, labor relations, and industrial organization. Dicken also examines the role of financialization, deregulation, and neoliberal policies in shaping patterns of economic growth and inequality. - Globalization and Development: Dicken discusses the uneven impacts of globalization on different regions and countries, particularly in the Global South. He examines the factors contributing to economic disparities, including historical legacies, geopolitical power dynamics, and structural barriers to development. Dicken emphasizes the importance of addressing issues such as poverty, inequality, and environmental degradation in shaping a more equitable and sustainable global economy.