MIDTERM 8 Flashcards
Commodity
A commodity is something useful that enters the market
and is available for purchase at a price.
Things to note about commodities
- Commodities are ubiquitous
- We live in a “commodity economy”
- Commodification
• What is it?
• “Fictitious” commodities
Commodity Circuits
Means of tracking and understanding connections and interdependencies among different groups of workers (human & OTH), consumers, firms, institutions and places involved in the production, distribution and consumption of commodities,
Places are connected by ___
flows
“Commodity Economy”
An economy in which commodities are producing other economies. Almost every aspect of our lives is a commodity for purchase.
Commodities in a subsistence economy
Things are generally not for sale. Commodities make up a small percentage of the market.
Commodities in a socialist economy
The state takes a bigger role in the distribution of goods/commodities.
Commodification
The process by which every more of a material, cultural, political, biological and spiritual world is rendered as something for sale.
Fictitious commodities
Something that was not produced for purpose of sale.
Example of fictitious commodities
Humans
Land
Water
Air
Animals
Labour
Space
Neoliberalism seeks to _______ everything.
commodify
__% of the water in the U.S. is privatized
15%
What does “a commodity is a “bundle of social relations” mean?”
Commodities are intimately connected with social relations
“broiler chickens”
common chicken eaten today
how are broiler chickens commodified?
- Farms - mass production
- Parts of the chicken are patented
- Genetically modified for more profit
basic production chain
Inputs→ Transformation → Distribution → Consumption
transformation in a commodity chain includes…
- Primary activities (like processing)
* Support activities (like logistics)
Value is added to a commodity chain
Value is added to a commodity chain as said commodity moves through the chain
Commodity fetishism
Consumers’ concern with the price and appearance of the goods they buy obscures the social relations of production & distribution associated with the goods
(advertising reinforces this disconnect)
How dos the study of commodity circuits undermin fetishism?
By revealing connections and interdependencies to:
- identify winners and losers
- change how circuits function.
Draw commodity circuit
see textbook
Workers further along the commodity chain make
the most money
3 dimensions of CC’s
- Geography (location, distribution)
- Governance (Organization, control)
- Institutional Frameworks (Regulations, Laws)
Geography of Commodity Chains
Refers to the location and distribution of activities.
How has the geography of commodity chains changed over time?
- Previously, most things we consumed were locally sourced.
- Most commodities have global connections now
- Emergence of nodes and clustering
Node:
area of dense activity
Commodity circuits link cities to _____
the global economy.
How does geographic complexity of commodity chains increase with globalization?
- increasingly dynamic - rapid change
- space shrinking tech
- subcontracting and outsourcing
- increased flexibility
Service sector circuits are also globalized
data processing and call centers
Inter-place competition leads to…
engagement in dynamic, upgradng strategies.
Upgrading strategies
Process upgrading (efficiency)
product upgrading (sophistication)
functional upgrading (changing/adding roles to add value)
Intersectional upgrading (move to different sectors)
Types of Governance of CC’s
Producer driven Circuits
Buyer driven circuits
Producer driven circuit
- Large TNCs play central controlling role
- Capital / technology intensive industries: computers, aircraft, automobiles, pharmaceuticals
- Producers control backward linkages (to raw material
suppliers) & forward linkages (to distributors and retailers) - “high” wages
Buyer driven circuit
- Buyers = large retailers (eg. Walmart, IKEA) or brand name merchandisers (eg. Nike, Gap) play central controlling role
- Buyers source manufactured goods globally; outsourcing is common – use of tiers of subcontractors
- Labour intensive, “low skilled” production (eg. textiles, toys, shoes)
- Buyers shape mass consumption patterns through brand names, advertising
- low wages
Typical industries of a producer driven circuit
- Automobiles
- computers
- aircraft
- electrical machinery
Typical industries of a buyer driven circuit
- Apparel
- Footwear
- Toys
- consumer electronics
Concerns of buyer driven chains
- Intense competiton
- “Race to the bottom” ↓ prod costs (labour + environment)
- Sweatshops
- Pollution
- Difficult to monitor
Institutional Contexts of CCs
International rules and agreements
Host country government regulations and preferences
Industry-wide standardization and requirements
Third-party monitoring activity
**Institutional frameworks may be formal or informal
Consumption:
The sale, purchase, use and disposal of commodities.
Consumption produces:
social, political, economic relations
Uneven consumption
- ability to consume commodities is uneven
- spatialized in various ways
- environmental ipact
Consumption is a _______ making activity
consumption is a place making activity
Examples of how consumption shapes landscape
vineyard
industrial zones/complexes
landfill
Formal Frameworks for institutional contexts of cc’s
- Rules /regulations that determine how economic activity is undertaken
Examples? -trade policy, tax system, incentives, health and safety regulations
Informal Frameworks for institutional contexts of cc’s
- Place-specific ways of doing business
Examples?? -entrepreneurial & political cultures of particular places or companies
Institutional contexts at different scales
Different spatial scales
• Local, urban, regional, national, macro-regional, global
Different political scales
* Vancouver, BC, Canada, NAFTA, WTO
* Also: corporate strategies, rules
Rana Plaza Factory
- April 2013
- Factory in Dhaka, Bangladesh collapsed
- Primark one of 40 brands producing
clothes within Rana Plaza
Fair Trade
Concerned with increasing economic returns to primary producers.
Fair Trade criticized
- Criticized for having little effect on wage workers on plantations or in processing factories
- Opens up supply chain to small producers but doesn’t necessarily provide highest prices (eg. compared to specialty coffee), or a living wage
- High cost of certification – paid by producers rather than retailers
- Only a tiny fraction of producers are certified
Standards & Certification: Issues
- Little/no oversight or monitoring
- Voluntary compliance
- Vague or overly general standards or guidelines
- Fees for certification
- Benefits entrench existing inequalities (eg. rich farmers benefit more than poor farmers)
- As big players get involved they deliberately weaken standards
- Environmental conservation and animal rights widely resisted (by rich and poor)
- Profit and growth remain primary corporate objective
