APHUG Unit 7

Industrial Revolution

The rapid transformation of the economy through the introduction of machines, new power sources, and new chemical processes in Europe and the United States between 1760 and 1830

Labor productivity

The average amount of goods or services produced per worker per unit of time

Fossil fuel

Natural fuel derived from the fossilized remains of living organisms

Commercial farmers

Farmers who raise crop and livestock to sell in the market at a profit rather than raising them for their own consumption

Wage labor

A socioeconomic relationship in which an employer pays a worker to complete a task

Working class

The people in an industrial economy who depend on wage labor to obtain the necessities of life

Capitalist class

People who own the means of production and the wages of the workers

Middle class

People who are either salaried professionals or office wage workers

Labor union

Associations of workers in particular industries established to collectively bargain with capitalists

Mass production

The machine manufacture of large quantities of identical parts

Mass consumption

The purchase of large amounts of mass-produced goods by large numbers of people

International division of labor

The situation in which the labor forces of different countries and world regions play complementary roles in an interdependent global economy

Economic sectors

Groupings of industries based on what is produced and the activities of the workforce

Primary sector

Industries that extract natural resources from the environment

Secondary sector

Industries that process raw materials extracted by primary industries, transforming them into finished, usable forms

Tertiary sector

Industries that provide services to businesses and consumers, including transport and delivery

Quaternary sector

The portion of the economy dedicated to intellectual and informational services

Quinary sector

The portion of the economy where the highest-level management decisions are made in the areas of business, government, education, and science

Base industry

An industry of disproportionate economic importance and on whose existence other industries and employment sectors depend

Break of bulk point

A location where cargo is transferred from one mode of transportation to another

Least cost theory

Alfred Weber’s theory that transportation costs and labor costs play a strong role in determining the location of manufacturing facilities

World systems theory

Wallerstein’s theory of economic development that regards world history as moving through a series of socioeconomic systems, culminating in the modern world system by about the year 1900

Dependency theory

The theory that the periphery is poor because it was economically dependent on the core in disadvantageous relationship originally established under colonialism and imperialism

Commodity dependence

Occurs when commodities account for more than 60 percent of the value of a country’s total exports

Gross national product (GNP)

The total value of all goods and services made by a country’s residents and businesses in a specific time period, regardless of the country or location in which they were made

Gross domestic product (GDP)

The total value of all goods and services produced within a country over a specific time period, regardless of the producer’s national origin

Gross national income (GNI)

The total income of a country’s residents and businesses, including investment income, regardless of where it was earned, as well as money received from abroad

GDP per capita

A country’s CDP divided by its total population

Purchasing power parity (PPP)

Measures how much a common “basket of good” costs locally in the currency of each country being compared

Gender inequality index (GII)

A statistical measure of gender inequality that combines data on reproductive health, empowerment, and labor-market participation

Human development index (HDI)

A statistical measure of human achievement that combines data on life expectancy at birth, education levels, and GNI per capita (PPP) population

Informal sector

The part of any economy that is not officially recorded, monitored, or taxed by the government

Formal sector

The part of the economy that is officially recorded with the government

Income distribution

How a country’s total GDP is distributed among the individuals in its population

Gender empowerment measure

A measurement of gender equality that includes the proportion of seats held by women in politic, economic decisions, and share of earned income

Gender parity

A way of documenting progress toward gender equality using measures such as relative access to education, average income, and workforce participation of women

Microloan

A very small loan to people with little income or collateral intended to help them establish or expand a small business

Mercantillism

A theory of trade stating that each country strives to export more than it imports in order to accumulate wealth

Protectionism

Trade rules that restrict imports in order to protect domestic industries

Absolute advantage

A country’s ability to produce a good or service more efficiently than another country

Comparative advantage

A country’s ability to produce one product much more efficiently than it can produce other products within its economy

Transnational corporation

A firm with the power to coordinate and control operations in more than one country, even if it does not own those operations

Competitive advantage

A firm’s relative ability to outperform its other TNCs in its industry

Neoliberalism

A range of pro-market and anti-government positions on the economy, reduce government and promote market

International monetary fund (IMF)

International organization that seeks to foster global monetary cooperation, stability, trade, and economic growth

World bank

An international financial organization that provides funding and expertise to promote sustainable economic growth in developing countries

World trade organization (WTO)

An international organization that regulates trade among 184 member states providing framework for trade agreements and resolving disputes

Free trade agreement

A treaty between two or more countries that reduce tariffs and promotes foreign investment

Tariff

Tax on imported goods and services

Customs union

A free trade agreement among two or more member countries, combines for a common external trade policy for nonmembers

Organization of the Petroleum Exporting Countries (OPEC)

An international trade agreement designed to regulate the output of oil

Trade embargo

An official ban on trade with a specific country or of a specific good

Financial market

Marketplace where financial instruments are traded; stock, bond, foreign exchange markets

Debt crisis

Occurs when a governments’ debts exceed its tax revenues to the point that it cannot meet its loan payments

Import substitution industrialization (ISI)

An economic development policy intended to replace imported goods with domestically produced goods to reduce dependence

Fordism

The economic and social arrangement based on the mass production of standardized goods, labor unions, manufactured employment, and high factory wages that enable mass consumption

Corporate disinvestment

A process in which companies stop investing in factory construction, equipment, and improvement and begin selling off assets

Offshoring

The relocation of manufacturing and support services from one country to another

Outsourcing

The transfer of part of a firm’s internal operations to a third party

Deindustrialization

The decline of employment in the manufacturing sector in the core’s industrial centers

Special economic zone (SEZ)

Specific area within a country’s borders where business and trade laws are different from those in the rest of the country

Export processing zone (EPZ)

Industrial zone with special incentives to attract foreign investment to places where imported materials undergo processing or assembly before being re-exported

Free trade zone (FTZ)

Specially designed duty-free area that provides warehousing, storage, and distribution facilities for goods intended for trade or re-export

New international division of labor

The spatial shift of manufacturing from developed countries to developing countries

Post fordism

The shift from manufacturing centers to spatially dispersed production sites, from mass production to specialized and from permanent workforce to temporary

Just-in-time manufacturing (JIT)

The production of small batches of goods as needed by customer demand

High tech industry

An industry that develops and used the most advanced technology available and has the highest levels of research and development

Agglomeration economy

Occur where firms cluster spatially in order to take advantage of geographic concentrations of skilled labor and industry suppliers

Multiplier effects

The creation of new business and jobs in other industries as the result of investment in a different industry

Growth pole

Geographically pinpointed center of economic activity organized around a designated industry usually high-tech

Sustainable development

Development meets present consumption needs without compromising the ability of future generations to meet their consumption needs

Resource depletion

The consumption of natural resources faster than they can be replenished

Environmental pollution

The contamination of the physical (air, water, earth) and biological components of the environment to the point that normal functions are negatively affected

Carbon neutrality

Achieving zero CO2 releases through a combination of emissions reduction and carbon removal

Carbon offsets

Processes that remove or sequester (store) carbon from the atmosphere to make up for CO2 emissions elsewhere

Ecotourism

Travel to natural areas of ecological value in support of conservation efforts and socially just economic development

Sustainable solutions

Conserving natural resources, reducing pollution, carbon-neutral industrialization