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Week Two

Terms in this set (37)

EG 3: Natural development theory
A common approach to the unevenness of economic development

#1. Due to uneven geographical distribution of the bounty of nature (oil fields)

#2. Due to growth having to start somewhere
EG 3: Issues with natural development theory
Little correlation between a list of the world's wealthiest nations and a list of those with the greatest resource endowments
EG 3: Theory of temporary condition
Theory that all economies can develop if they adopt appropriate policies and strategies, and that uneven development is a temporary condition
EG 3: Value
The benefit we get from having or consuming something or the monetary worth of a good/service traded in the market economy (exchange value)
EG 3: Creation of value
Value is always created by people
EG 3: Value creation structures, past and present
Peasant economies: subsistence production so value is almost entirely retained within the household

Feudal economies: payment of tribute to a landlord

Cooperative/Collectivized economies: sharing the value created in productive activities among the group

Capitalism: System of economic organization that dominates today, involves the creation of value in waged labor processes and the private ownership of property and assets
EG 3: Thinking structurally
Going beyond motivations or experiences of individuals/firms participating in a system, and thinking about what motivates the system as a whole
EG 3: Three fundamental logics that drive contemporary capitalism
1. Capitalism is profit-oriented
2. Growth in value rests on the exploitation of labor in the production process
3. Capitalism is a necessary dynamic in technological and organizational terms
EG 3: Surplus value (exploitation)
The amount of value that the person produces in excess of what he or she is paid

Possible because the capitalist owns the means of production
EG 3: Creative destruction
The capitalist tendency for people to come up with new (profitable) ideas (creative), but in turn destroying (making bankrupt) the previous ones.
EG 3: Capitalism contradictions
1. Internal imperative for growth/profit - a drive for profit requires that labor costs be minimized

2. Workers are always producing more for the capitalist than they earn, so the aggregate demand can never keep pace with the growing supply of products (workers don't make enough money to provide sufficient demand for the goods they have produced)
EG 3: Four ways the capitalist system might restore the conditions for profitability
1. Devaluation - recreating value gets the system moving

2. Macro-economic management - devising ways of bringing together idle capital and labor (gov spending to create jobs or legislation that curbs excessive labor exploitation such as minimum wage standards)

3. Temporal displacement of capital - switching resources to meet future needs (investing in new public infrastructure/using capital as loans)

4. Spatial displacement of capital - opening up new spaces for production, new markets, or new sources of raw materials (spatial horizons of the system are expanded)
EG 3: Territorial production complexes: four spatial forms
1. Regional complexes - manufacturing belts

2. Clusters of towns - textile region, metal-working towns

3. City-satellite - textile towns or mining towns

4. Large cities or metropolises - greater London or Baltimore that contain numerous industries and their specialized districts
EG 3: Territorial production complexes are not static
As the system grows and changes, landscapes become outdated, unprofitable, and inhibiting
EG 3: Spatial division of labor
Inherently expansionary geographical process of capitalism - page 66
EG 3: See-saw development
In which some places are sites of rapid investment and growth while others decline
EG 3: New international division of labor
Transfer of some types of jobs, especially those requiring low-paid less skilled workers, from more developed to less developed countries.

List of countries on page 68
EG 3: Three key themes of global California
1. Labor migration and C's agricultural growth

2. Geopolitics and rise of aerospace and defense industries

3. Globalization and the role of C's information and communications technology and motion pictures industry
GS 2: Two important features that have characterized the global economy since 1950
1. Increased volatility of aggregate economic growth - Chapter 2

2. Growing interconnectedness between different parts of the world
GS 2: Interconnectedness has three major dimensions
1. Trade has grown faster than output

2. Foreign direct investment has grown faster than trade

3. Serious structural imbalances in the world economy have emerged
GS 2: Geographies of production, trade, and FDI remain highly uneven and strongly concentrated
Stats in middle of chapter 2
GS 10: The regional motors of the new global economy
The developed areas of the world represented as a system of polarized regional economies
GS 10: Two tightly interconnected dimensions of the problems posed by globalizing processes for both developed and developing economies
1. Income

2. Employment or self-employment
GS 10: Pre-industrial revolution
Gap in per capita income between W. Europe, India, Africa, China, etc was no more than 30%
GS 10: Transnational capitalist class (TCC) characteristics
-Economic interests increasingly globally linked rather than exclusively local and national in origin

-Behavior based on specific forms of global competitive and consumerist rhetoric and practice

-Outward-oriented global (rather than inward) perspectives on most economic, political, and culture ideology issues

-Similar lifestyles (higher education, residential segregation)

-Self-projection as citizens of the world as well as place of birth
GS 10: Two-thirds of the world's population living on less than $1 a day are women.

Reasons:
-Different work and less pay
-Housework and care still predominantly a woman's domain
-Less control over resources
-More vulnerable to domestic violence
-Less voice and less power
-Less likely to hold political office
GS 10: Development of freedom - one of the primary keys is means of employment
...
GS 10: During past 50 years, two major trends have occurred in the employment structure of developed countries
1. The displacement of jobs in manufacturing industries by jobs in services

2. The increasing participation of women in the labor market
GS 10: Within older industrialized countries, three broad geographical trends in processes of manufacturing employment decline:
1. Broad interregional shifts in employment opportunities

2. Relative decline of the large urban-metropolitan areas

3. Hollowing out of the inner cities of the older industrialized countries
GS 10: Growth of informal or hidden economy
A world of interpersonal cash transactions or payments in kind for services rendered, mostly illegal
GS 10: Product innovations tend to increase employment opportunities as they create new demand
...
GS 10: Process innovations tend to reduce employment as they are labor saving
...
GS 10: Figure 10.18 (near bottom-middle of page) shows positive and negative effects of the globalizing processes on employment in developed countries
...
GS 10: Unemployment - formal and informal sector
Formal sector - employment is in the form of wage labor, jobs are more secure, and hours/conditions of work clearly established

Informal sector - encompasses both legal and illegal activities - important in urban areas
GS 10: Figure 10.20 (near bottom-middle of page) shows positive and negative effects of the globalizing processes on employment in developing countries
...
GS 10: Neat sharing of the benefits of trade presupposes:
-Some degree of equality between trading partners
-Some stability in the relative prices of traded goods
-An efficient mechanism (the market) which ensures that over time, the benefits are indeed shared equitably
GS 10: Resource curse
The abundant endowment of resources does not necessarily create rapid economic growth and development
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