Superpowers EQ2 Flashcards
What influence does superpowers have globally?
- influence over the global economic system (free trade and capitalism) through IGOs
- TNCs via technology (patents) and trade patterns
- global culture ‘westernisation’
How does superpowers influence the global economy?
Superpowers influence the global economy through control over IGOs (world bank, IMF, WTO and WEF). They are
- capitalist
- dominated by private enterprise
Why do superpowers have a disproportionation influence over global economy?
- control over IGOs
- dominated by private enterprises
- promote and benefit form free trade (no tariffs and quotas)
E.g. The USA, EU and Japan accounted for 60%of worlds GDP in 2016
What is free market capitalism?
- private ownership of property
- private ownership of businesses
- the right to make and accumulate unlimited profits
- buying and selling of goods and services in a competitive free markets with limited restrictions
E.g. USA, Canada, Western Europe
What is a centrally planned economy?
- government ownership of property and land
- state owned businesses and wages decided centrally
- profits taken by government to provide services
- prices of good and services controlled by the government
E.g. USSR, China snd Cuba
What are inter-governmental organisations (IGOs)?
Regional or global organisation whose members are nation states. They uphold treaties and international law as well as allowing cooperation in issues such as trade, economic policy and human rights.
What is the role of the World Bank?
They make development loans to developing countries, but with a ‘free market model’ promoting free trade, industrialisation and private businesses. Money lend by developed countries tend to benefit TNCs.
What is the role of International Monetary Fund?
They promote global economic security and stability and aid countries in opening up to the world of trade and investment. Resulting in larger markets for TNCs.
What is the role of the World Economic Forum?
This is a Swiss no profit that promotes globalisation and free trade via annual meetings. Bringing together global business and political elites.
What is the role of the World Trade organisation?
They regulate global trade, they work to remove barriers to international trade and reduce protectionism.
What are state-led TNCs?
These are TNCs owned by governments. They are normally found in communist command economies and tend to be strategic industry such as banking, oil and gas.
E.g. Bank of China and Petronas (Malaysia)
4 of the top 20 TNCs are Chinese States owned TNCs.
What are public owned TNCs?
These are TNCs owned by private shareholders. Found in capitalist, free market economies with the shareholders receiving all annual profit. E.g. Apple, Tesco and Shell
Largest TNC is Walmart with a revenue of more than $485 billion in 2015. (Public owned)
How do TNCs influence the global economy?
- technology (patents)
- trade patterns
- cultural impact
What does TNCs influence fade patterns?
- there large economic power massively influences trade patterns through their individual exports. They therefor determine the location of areas of growth through FDI
- partially responsible for the global shift of industry causing economic decline in developed areas and economic progress in developing nations.
How does TNCs influence innovation and technology?
they invest their large profits heavily in new technology and patents. Earning them more money through new products and royalties paid by other companies to use their patents.
E.g. 90% of global patent royalties are paid to EU, US and Japan countries
What are patents?
A patent is legal protection given to new inventions. Other companies can use it but will have to pay a royalty fee. WTO enforces intellectual property rights.
How does TNCs influence the global culture?
TNCs brings cultural influence to the counties the export and manufacture in. Due to the majority of TNCs originating form the West (America), the cultural diffusion from these American led TNCs has caused ‘Westernisation’ and consequently a global culture.
C > UK has 6 times as many curry restaurants as McDonald’s. And company’s stills take part in localism.
What is ‘westernisation’?
- culture of consumerism
- cultural of capitalism
- English as dominant language
- free rights (gender and rel go is equality)
How is Westernisation spread?
- media
- TNCs manufacturing and exports
- films, music and TVs
Massively involved in hegemony.
Why do TNCs have such economic power?
- dominate global economy (largest 200 TNCs produce 25 % of global output)
- account for 80% of global trade
- exempt political power by using their profits to lobby governments
- links closely with dependency theory.