Y1S1 - Economic and Political Geography - Globalisation

Globalisation

Increase in the interconnectedness, intercommunication and interdependence of the world + its multi-dimensional

Different types of Globalisation

-Technological

-Financial

-Corporate

-Cultural

-Sociological

-Human

-

Technological globalisation

 the use of computer technologies to accelerate ‘time-spaced compression’ (takes less time to travel to different parts of the world, causing it to shrink) – technology reduces distance

Financial globalisation

Financial transactions across the globe 24/7

Corporate globalisation

New integrated production systems that allow firms to use capital and labour across the world

Cultural globalisation

consumption of ‘global products’ across the world, leading to a homogenising effect

Sociological globalisation

seeing the world as a ‘single society’ that is interconnected

Human globalisation

Increase in the scenario of people migrating to different countries for work, study etc

What two approaches does World System Theory stem from?

o   Braudel’s longue durée: a materialist approach to the study of history which focuses more on the enduring effects of economic processes rather than on volatile political facts.

o   Neo-Marxist development studies => capitalism in the Third World is disruptive for local societies (modernization theory vs. dependency theory)

What is world system theory?

·       Political-economic approach towards the study of the spatiality functioning of the capitalist world. Emerged from 1450 and became global around 1900

What is the “single-society assumption”?

·       Social change in one country can be fully understood only within the wider context of the modern world system

What is the modernisation theory?

The idea that integration of developing countries into the world economy is good for them as well as for the developed countries: globalization benefits all.

o   Economic development -> middle class -> democracy

What is dependency theory?

o   development in poor countries is confined only to a small elite associated with the state and is dependent on external capital => informal imperialism

Three 3 features of the World Economic System

-A single world market

-A multiple state system

-A 3 tier economic structure

Define world economic system feature: A single world market

- the whole world is one single market

- production is for exchange not for consumption

• price, quantity and location of production is determined by the market (producing where it is most cost-effective, selling where it is most profitable)

Define world economic system feature: A multiple state system

o   essential for avoiding control of the world market by one state, creating a world-Empire

Define world economic system feature: A 3 tier structure

§  Core:  High-wages, high text production

§  periphery: Low wages and low tech productions.

§  semi-periphery: a mix of core and peripheral processes. No semi-periphery process (both exploiter and exploited)

Key features of Fordism

§  mass production and mass consumption, organized at the national level

§  nationally closed economies

§  division of labor at the national scale

Key features of Post-Fordism

-  flexible production and diversified products - no longer exclusively linked to national markets

-  rapid response to changing market conditions

-  the increased integration of markets leads to a division of labor at the global scale

• New International Division of Labor (NIDL) – labour is outsourced to other countries.

-  => nation-state, regions, cities (‘selling places’)

What is “spatial fix” theory?

A response to “over accumulation” and “over production” by relocating products elsewere

What is over-accumulation?

When too much capital invested which does not return good profit

What is over-production?

as labour is exploited, there is not enough demand to absorb what has been produced

What is creative destruction?

Development in one region (new capital investment) is linked to decline in another region (disinvestment)

impact of NIDL on Core countries

-  out-sourcing: low & medium skilled manufacturing jobs (IT and service jobs too: e.g., call-centers) are out-sourced to semi-periphery countries.

-  jobs in the core are mainly in the service sector (about 80% of the total employment in the UK and in the USA)

·       Non-routine cognitive: Consultant

·       Routine cognitive: E,g, accountant

·       Routine manual: Factory chain worker

·       Non-routine manual: Plumber

-  In the core the salary gap between CEOs and rank-and-file workers increases.

What are the four types of jobs?

Non-routine cognitive: Consultant

Routine cognitive: E,g, accountant

Routine manual: Factory chain worker

Non-routine manual: Plumber

Impact of NIDL on periphery countries

• they are integrated into the global economy mainly as resource-export economies (e.g., oil, minerals, agricultural products => cash-crop) like DRC Congo

• dependency on world prices (volatile) and on conditions of free (fair) trade barriers/subsidies

• increasing environmental degradation due to resource extraction

• resource rents monopolized by a small ruling class => political oppression to maintain power => instability

Impact of NIDL on semi-periphery countries

-  new jobs are created => economic growth => income inequality

-  divide between rural (periphery) and urban (core) increases (e.g. China) => urban migration from rural to urban areas

-  increasing environmental pressure: urbanization leads to  increased energy and water consumption.

-  ‘race to the bottom’: Competition for attracting capital at the expense of labor and environmental standards

·         As a result, Export Processing Zones (EPZ) sweatshops form

What are Export Processing Zones (EPZ)?

·       an export-oriented manufacturing enclave in which foreign investment enjoys preferential treatment => customs-free zone (not having to pay tariffs).

·       foreign firm goal: to settle in a EPZ to take advantage of a customs free area, in which labor is cheap, not-unionized, with relatively low labor regulations.

·       For a country, goal: the goal of establishing an EPZ is to attract foreign capital which in turn brings technological innovation and employment.

·       Four relations of modern imperialism → relationship between elites and workers in the world economy today

o   Collaboration: elites in the core and in the periphery collaborate to jointly exploit the dominated class in the periphery

o   Social imperialism (core): in the core, elites ‘buy off’ the working class through welfare policies (e.g. free education, home loans, social security, etc.) and, in some cases (e.g. USA), through hegemonic ideas (‘American dream’)

o   Repression (periphery): in the periphery, elites oppress the dominated class (forced labor, punishment, etc.) in their own interest and in the interest of the elites in the core.

o   Division: there is no collaboration between the dominated class in the core and the dominated class in the periphery.

The 3 scales of World System Theory

-Scale of experience

-Scale of ideology

-Scale of Reality

WST Scale of experience - define

o   locality): the experience of everyday life – where you live (home) and what you do for living (work). It is here that you feel the effects of the world economy, mediated through the scale of the nation-state

WST Scale of ideology - define

o   (nation-state): the scale which mediates between the scale of experience and the scale of reality. How?

§  by adopting one ideology over another (e.g., social-democratic vs. capitalist), it shapes the way a national economy integrates into the world economy

§  it diverts protests away from the scale of reality, i.e. it defuses protests which might challenge the system as a whole

§  it prevents alliance of the workers in different states

WST Scale of reality - define

(world economy): it is the ultimate scale of capital accumulation; it is the scale where crucial events which structure our lives occur.

The Limits to Globalization Theory: A Geographic Perspective on Global Economic Change → Globalization depends on ability to “switch” between scales. - true or not?

True

The Limits to Globalization Theory: A Geographic Perspective on Global Economic Change → An example of globalisation requiring shifting into different scales

Firms shifting from global strategy to local implementation; “glocalization.”

The Limits to Globalization Theory: A Geographic Perspective on Global Economic Change→ State three globalisation metaphors

1. Globalization as external force — rejected; globalization and locality are mutually constitutive.

2. Globalization as natural and inevitable (TINA) — false; globalization is contingent.

3. Globalization as universal and beneficial — overlooks uneven spatial logics and inequalities.

The Limits to Globalization Theory: A Geographic Perspective on Global Economic Change→ Asian Financial Crisis (1997-98)

• Often portrayed as a globalization crisis.

• Author argues:

  • Scalar switchability enabled integration into global markets.

  • Rapid capital flows increased vulnerability.

  • Discursive framing encouraged risky liberalization.

• Severity varied by national context.

 

The Limits to Globalization Theory: A Geographic Perspective on Global Economic Change→summary argument

• Globalization is not a causal force but a phenomenon to theorize.

• Geography provides the lens to understand spatial preconditions and effects.

• Emphasizes:

  • Social construction of scales.

  • Discursive politics.

  • Demystifying globalization’s causal power.

The Limits to Globalization Theory: A Geographic Perspective on Global Economic Change→Key takeaways

• Geography remains central.

• Scalar switchability and discursive practices enable globalization.

• Globalization is contingent, constructed, and limited.

• Asian crisis illustrates dangers of treating globalization as independent cause.

• Calls for a geographic theory situating spatial processes within broader dynamics.