UNIT 7: Industrial Revolution and its aftereffects

Industrial Revolution: More people, more jobs, more factories, more output

18th century, hearth was United Kingdom, textile production, coal mining, and trains

New economy of scale– food and goods could be transported (more trade), people could be transported to urban cities

Diffusion ;)

Social Change

• Wage laborers were members of the working class

  • they worked in factories

• Capitalist class owned the factories

• Labor unions were made by working people that fought for better conditions

• Mass production led to a new “division of labor”

Economic Sectors

• As a country develops, so do the needs and wants of its people

• Their economies change to reflect the needs and wants of their societies

• We have talked about agriculturally-focused economies, and industrially-focused economies that accompanied the industrial revolution

• The other one is services!

  • Providing services and goods to businesses and consumers

PRIMARY SECTOR (AG/MINING)

Extracting materials from the Earth: Farming, mining, fishing, and 

Forestry

SECONDARY SECTOR (INDUSTRY)

Manufacturing and processing those raw materials from the 

primary sector

TERTIARY SECTOR (SERVICE)

Providing services and goods to businesses and consumers

QUATERNARY SECTOR (SERVICE)

Concerned with the collection, processing, and manipulation of 

information and capital

Base industries

• Sell their goods primarily to consumers in another location–used to be big manufacturing and other primary and secondary industries

• Over time, they attract other industries to an area

  • For example: other businesses will try to sell their goods to FedEx in Memphis, therefore attracting their products from another place to Memphis

• If a community loses a base industry, there is a ripple effect across the entire economy–even restaurants and hairdressers could go out of business without a manufacturing plant

Spatial Organization

Industry Location

• Factors that influence the location of manufacturing lead to uneven distribution across the world

• You have to consider how much you’re going to pay your employees, and if they have the right skill level, transportation (access to shipping containers), and energy costs

Energy, Materials (including land), and Labor

• Where would you want to locate your business, depending on the costs 

MEASURING DEVELOPMENT

Countries and their economies change over time, and industrialization has played a major role in the movement from developing to developed status– but what else is more?

We should look at GDP (gross domestic product) which shows economic activity

DTM (age structure) can show how developed you are

Standard of Living

• Percentage of living

• Necessary items for living

Can happiness be measured? Necessary items for living, being content with being uncontent?

Urban/rural communities– usually more urban when more developed

Economic measures are usually the first thing people think of, but development is more than just money

There are 3 ways to measure economic measures:

• (GDP) Gross Process Product

  • Value of national output

  • Includes includes income from immigrants living in country

• (GNP) Gross National Product

  • GDP plus net property and income that people make abroad (since people can be living somewhere else and also making money for the country)

• (GNI) Gross National Income

  • Similar to GNP, but also includes investment from other countries 

  • Called “foreign direct investment”

Per capita means per person

INFORMAL ECONOMY
The informal sector is part of the economy that is not officially recorded, monitored, or taxed by the government

You are still being paid, but it’s not included in the GDP

Although, it is still a huge part of the economy for developing countries

Developing countries don’t have the infrastructure for someone to check if people have a license to sell things– so they are missing out on a lot of taxes

HUMAN DEVELOPMENT INDEX (HDI)

• Economics (gross national income GNI)

• Heath metric (lifespan)

  • Access to healthcare

  • Can you heal from being sick?

• Education

  • Average years of schooling

  • Expected years of schooling

  • Access to knowledge

• One limitation to this is now showing the vast differences that exist within regions of a country

GENDER INEQUALITY INDEX

Combines data on reproductive health, empowerment, and labor-market participation

Maybe can do wage-gap?

Some things are hard to measure

MICROLOANS

Small loans that do not require any collateral from borrowers

• Collateral means something you can give up, repayment

Creates opportunities for local small businesses

Improves standard of living 

Despite the apparent success of microcredit, some people struggle to repay them, and they sink further into poverty

THEORIES OF DEVELOPMENT AND GLOBAL TRADE

Rostow’s model

• Based on post-WW2 economic experience in US, Japan, and Europe

• “How development should look when these nations start to engage in national trade”

• It’s possible for every country to reach the maximum level of development

• Critics argue that it follows too closely to the development of Britain or the US

THE 5 STAGES

• STAGE 1: Most countries start out as “Traditional Society”

  • Mostly bartering and subsistence agriculture

  • Not international in scale– without connection to other places

• STAGE 2: Transitional Stage

  • Country might have people that start to become wealthy by selling goods that they specialize in

  • Start to accumulate goods from stage 1– turning it into opportunity

• STAGE 3: Take-off

  • Industrialization

  • Reinvesting back in the country

  • Regional growth

  • Political change– involving more people in the political process since they are accumulating more wealth

• STAGE 4: Drive to Maturity

  • Rely less on imports

  • Make everything locally

  • Diversifying their economies

• STAGE 5:

  • High mass consumption

  • Mostly service based

  • Selling high-value consumer goods

  • More reliant on international goods

  • Buying from other places and selling them internally

• Focused on specific countries

WORLD SYSTEMS THEORY

Focused on a global sense of conflict

• Immanuel Wallerstein: Core periphery model- Dependency

  • He argues that there is not a march towards progress

  • Because of things like colonialism and imperialism, the core countries have a structural advantage in the economy

  • There are other periphery countries that focus on agriculture and making goods for the core countries

  • The core countries purposefully and not purposefully prevent the growth of the periphery because we need their work– and if they grew to our level then the cost of living would rise

  • Unequal relationship

GLOBAL TRADE

Comparative Advantage

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

Complementarity

• A measure of how well one country’s export profile matches another country’s import profile.

• A high degree of complementarity can provide the basis for successful trade

We can work together to create a global system of trade by being interdependent 

TRADE AGREEMENTS

• After ww2 many countries sought to reduce governmental and regulatory barriers to trade

• These neoliberal policies created a series of organizations

• Helps countries to sign an agreement– reducing tariffs

• We get access to cheap goods that are made in other places even though it’s detrimental to our local manufacturing

• It’s cheaper to do things overseas– so we close our factory here and produce in places like china

Free trade agreements

• USMCA 

• Reduces trade barriers between canada, usa, and mexico

• The European union has a similar agreement

Customs Union

• Bloc of countries that agrees to eliminate tariffs within the union

• Also establishes common tariff policies for countries that are not part of the bloc

These agreements create new spatial connections among countries by altering the flow of goods and services

A “cartel” controls the flow and a price of a good through the production process

GLOBAL FINANCIAL CRISES

In the past 25 years, there have been several dips in the world and national economies

Financial markets have increasingly intertwined across the globe, banks in europe fund things in the US

• If one thing falls then everything collapses

In 2008, the US housing market caused an entire international financial crisis

• They wanted everyone to own a home as part of the “american dream”

• Then everyone got a loan, and home prices went up a lot

• People didn’t pay back the loans because they couldn’t afford the houses after the loans

Most of our stuff used to be made here in the US, now it’s made far away

Economic Restructuring - changing where our stuff is made

How new productions and practices has reshaped the international economy

Core Deindustrialization (not having manufacturing jobs)

• “Fordism” - Assembly line, how the US used to make what we needed, and we had the capacity to do that during WW2 to make things more efficiently

• Our economy boomed as we spent time and energy to produce our own stuff

• We didn’t have access to things far away

• Later, we realized that our things were kind of out of date, and instead of replacing our machines, we invested in other places 

• Labor costs, and lower taxes, lower costs of land were reasons why they did this

• Jobs were offshored or outsourced

• Fewer people work in manufacturing, but our output increased as we started to use machines

Right to work states

• Don’t allow unions to require membership for certain types of jobs

Periphery Industrialization

• Special economic zones in countries (SEZ)

• They have total different trade laws than the rest of the country

• Example is lower wages, or removing tariffs

• Removing tariffs appeals to transnational corporations (TNCs) to set up a factory in the SEZ

Manufacturing Zones (kinds of SEZs)

• EPZ (export processing zone)

  • Special incentives to attract foreign investment

  • Raw materials get exported to EPZ with no tariff then get processed or assembled

  • They then sell/export them to somewhere else

• FTZ (free trade zone)

  • Specifically designated duty free areas with warehouses and storage for goods that need to be exported

FRQ Practice

Describe the spatial pattern of the clusters located on the map

The majority of the specialized clusters of Special Economic Zones in southern China are located on the coastline, and are largely clustered in the biggest cities.

Explain ONE reason for the spatial patterns identified from the map

The major ports in southern China are located on the coastlines, and are bigger depending on the size of the city.

Explain ONE strength of Wallerstein’s world systems theory in explaining where these products are made and where these products are sold

Wallerstein’s world systems theory explains the unequal relationship between core countries and periphery countries. It is helpful to explain these clusters, as southern China represents a periphery country that exports goods to be sold in core countries like the United States.

Post “Fordism”

• Manufacturing characterized by flexibility in production sites (having multiple places where things get made)

• They invest more in their employees to learn every step of the process, so they have different jobs and choice

  • INSTEAD of fordism where one person had one repeated job

Just in time manufacturing (JIT)

• Production of small batches of goods

• Dependent on customer demand

• Flexible on what they produce depending on what’s popular

• Loses economies of scale

HIgh-Technology Industry

• Develops and uses the most advanced technologies

• Research and development

• Quaternary sector of economy

• Completely new industries

• Example silicon valley

Agglomeration (just means cluster) economy

• Firms cluster spatially to take advantage of concentration of skilled labor and suppliers

• Specialized infrastructure

• Makes it easy to contact similar industries

• Concentration of skilled and smart people

• Where the money is (Venture Capital)

Multiplier Effect

• Creating a job indirectly creates new businesses and jobs

• Economic benefits lead to growth poles

  • Locations where innovation generates a new product or service

  • Core industry is pole, secondary industries like suppliers and customers build around it

Environmental Consequences of Industrialization and Sustainable Development

• Using natural resources for industrialization has environmental consequences

• Policies could manage mass consumption, regulating pollution, and lessening the impact of climate change

Point source pollution 

• Pollution enters water at a specific point

  • Usually factory, mine, or wastewater treatment pipe

• Nonpoint source pollution enters from a large diffused area

  • Usually agriculture, since the runoff with fertilizers and pesticide goes into our waterways

Mass Consumption

• Relies of non renewables

• Petroleum, about 10% of all oil and gas goes to make single use plastics

• Even polyester clothes are just plastic

• Plastics were a byproduct of industrialization for WW2

Climate Change

• The reliance on fossil fuel energy sources for electric generation and vehicle fuel depletes global resources

• Burning fossil fuels releases CO2

• Blanket effect on atmosphere

Carbon Neutrality

• Achieving zero CO2 release 

• Many countries assume that it’ll be approx 2050

• Debt for nature swap

  • Developed countries take away developing countries’ debt for them to protect their natural environment

Ecotourism

• Tourism based on environments

• Helps to protect natural environments

• Doesn’t work as well as they want

UN Sustainable Development Goals (SDG)

• Gender equality

• Decent work and economic growth

• Sustainable cities and communities