Global Trade and Economic Shifts Summary Notes

End of the Cold War: Marked the explosion of global trade.
Advocacy for Market-Oriented Policies:
- Leaders: Ronald Reagan (USA) & Margaret Thatcher (UK).
- Policies: Cut taxes, reduce regulations, decrease government assistance.
- Consequences: Increased wealth for many but hardships for others, as noted by Wheeler.
Technological Revolution: Growth in information and communications technology led to knowledge economies, while manufacturing was increasingly situated in Asia and Latin America.

Definition of Globalization: Interaction among peoples, governments, and companies on a global scale.
- Historical examples include trade in the Indian Ocean & European imperialism.
Economic Liberalization: Refers to reducing government restrictions on trade.
- Post-1970s: Eastern Bloc countries could trade freely after the fall of the Soviet Union.
- India and other nonaligned countries relaxed trade restrictions in the 1990s.

Augusto Pinochet's Regime: U.S.-backed coup overthrew socialist government (Salvador Allende).
- Resulted in violent repression and economic reforms.
Economic Reforms:
- Critics: Policies promoted by economists known as Chicago Boys under Milton Friedman did not address poverty.
- Balanced approach post-Pinochet utilized free trade along with government social programs to reduce poverty.

Deng Xiaoping: Introduced economic reforms moving away from strict economic equality toward growth.
- Key reforms:
- Replaced communes with peasant-leased land.
- Encouraged factory productivity and foreign investment in special economic zones.
- Reopened Shanghai stock market and allowed some private ownership.
Political Repression: 1989 Tiananmen Square protests faced violent military response, showing conflict between economic and political reforms.

Definition: Economy focused on the creation, distribution, and use of knowledge and information. Professions in this category include technologies and education sectors.

From Agrarian to Knowledge Economy:
- Transition in the 1990s after loss of Soviet markets led to competitive global market engagement.
- Investment in education and technology allowed for growth in IT and mobile phone development.

Post-WWII policies aimed at boosting exports and limiting imports, reminiscent of mercantilism:
- Government and corporate coordination via subsidies and tariff protections.
- Emphasized rigorous educational preparedness for workforce.
Challenges: Low wages for labor led to consumer affordability issues. Economic pressures eventually led to stronger labor unions.

Asian Tigers: Hong Kong, Singapore, South Korea, and Taiwan adopted similar economic strategies as Japan with substantial government-business collaboration.
Manufacturing Migration: U.S. and European manufacturing have largely moved to Asia and Latin America due to lower costs.

Vietnam & Bangladesh: Rising economies recognized for clothing exports; labor costs attract foreign investment.
Labor Issues: Protests occur regarding low wages and working conditions.

NAFTA (1994): Encouraged U.S. and Canadian industries to build factories in Mexico (maquiladoras) utilizing cheap labor for tariff-free goods.
- Critiques: Led to significant U.S. job losses and concerns about labor conditions.

Growth Influences: Several post-WWII organizations catalyzed global economic growth:
- General Agreement on Tariffs and Trade (GATT): Reduced world average tariff rates from 40% to below 5%, promoting free trade.
- Regional Organizations include European Economic Community, Mercosur, and ASEAN, facilitating easier trade across borders and lowering consumer prices.