Transcript Slide 1

What is the catalyst for
globalization?
Economic Globalization
• Some ppl believe that globalization is all about
economics.
• Those who hold this view believe:
– global trade
– global transportation and communication systems (that increase
prosperity for some people,)
– the unequal distribution of wealth
– the conflicts between ppls and countries over natural resources
– are all rooted in economics.
• Economic globalization: the spread of trade, transportation,
and communication systems around the world in the interests
of promoting worldwide commerce.
A Way to Ease Conflict
• Even before the end of WW II, ppl knew they had to
find a way of avoiding another similar global
conflict. As a result, representatives of Britain, the
US, Canada, and other countries worked together to
build an organization that would:
– Support ppl who wanted to choose their own
gov’t
– Help countries cooperate on trade issues
– Protect smaller countries against invasion by
larger ones
– Ensure that no 1 country controlled the world’s
oceans
What organization do you think
emerged from these talks?
• The organization that was built was the…
United Nations!!!
“We the peoples of the United Nations, determined
to save succeeding generations from the scourge of
war, which twice in our lifetime has brought untold
sorrow to mankind…do hereby establish an
international organization to be known as the United
Nations.” (Opening of UN charter)
Bretton Woods
• July 1944:
– representatives of 44 countries
– met in the small New Hampshire town of Bretton Woods
for a conference sponsored by the (newly founded)
United Nations.
• WW II was not yet over, but conference delegates
were already trying to figure out how they could
prevent the kind of economic turmoil that could
lead to another world war.
• Voices pg. 226
John Maynard Keynes
• Keynes led the
British
delegation
(group) at
Bretton Woods.
Keynes Wants Gov’t
• Keynes believed:
– unrestricted capitalism that had existed pre-WW I and
between the two World Wars had failed.
• He said:
– collapse of global trade,
– worldwide unemployment of the Great Depression, and
– the worst world wars in history
– proved:
• the idea of gov’t playing a very limited role in a country’s
economy was wrong.
The Gov’t Creates Demand!
• Keynes believed, for example, that:
– when a business laid off workers because there was no
market for its goods or services (like what happened in
the Great Depression),
• the gov’t should set up programs to hire the unemployed.
• He said putting people to work would ensure that
people had money to spend, and:
• would generate demand.
– Businesses would then need to rehire laid-off workers to
produce more goods and services.
Friedrich Hayek
• Hayek disagreed with
Keynes’s views.
– He mistrusted gov’t
control.
The Gov’t Should Stay Out
• According to Hayek, a gov’t should protect the
market by:
– ensuring that it rules and laws do not interfere with
competition between businesses.
• Hayek believed:
– competition and the market would keep an economy
healthy
– gov’t should stay out of the way.
Keynes vs. Hayek
• Assignment booklet: Make a chart comparing
the two economic thinkers.
• Use: notes and text pgs 226-227
World Bank & IMF
• The World Bank and the Int’l Monetary Fund, (IMF)
were mapped out at the Bretton Woods meeting.
• These organizations would be supported by the UN
and would help expand int’l trade.
• Intent:
– persuading countries to agree on a set of rules would get
int’l trade working again, and
– avoid the kind of conflict that might lead to another
world war.
Copy the Venn Diagram on the
top on pg. 228
Pros & Cons of World Bank & IMF
• Supporters of the World Bank and IMF:
– these organizations have helped stabilize the global
economy and brought prosperity to many countries.
• Critics:
– they have become too influential
– their help, especially in developing countries, comes at
too high a cost.
• For example, when the IMF lends money to countries, it may
order the gov’t to reduce spending.
General Agreement on Tariffs & Trade
• The General Agreement on Tariffs and Trade,
(GATT):
– trade rules that were signed in 1947
– GATT members agreed to:
• gradually eliminate tariffs and other trade barriers between
themselves to make trade freer.
• The World Trade Organization emerged from the
GATT in 1995. The WTO regulates world trade in
goods and services.
• FYI pg. 228
Keynes Loses Popularity
• From end WW II (1945) until the 1970s, Keynes’
theories were popular and Hayek’s weren’t.
• By the 1970s:
– some gov’ts were spending so much on expanding their
economy that they had built up huge debts.
– In addition, inflation was rising, and so was
unemployment.
• According to Keynes’s theories, these things were
not supposed to happen at the same time. Keynes
became unpopular.
What did you think happened to
Hayek when Keynes’ theories
became unpopular?
Hayek Becomes In Style
• As Keynes’s theories became unpopular, Hayek’s
views, (and his student Milton Friedman), began to
gain support.
• People began to embrace the idea that markets,
not the gov’t, should control a country’s economy.
• By 1974, Hayek’s ideas had become so popular that
he won the Nobel Prize in Economics. Friedman
won the award 2 years later.
What is a market economy? Is
Canada a market economy?
Moving Toward a Market Economy
• Because of Hayek and Friedman, many countries in
the world began to move toward a market
economy, in which individuals were more free to
make their own decisions with little intervention
from the gov’t and where resources are the private
property of individuals or companies.
• However, there are many who are critical of market
economies. Canada, for example, has continued to
maintain a mixed economy, in which both the public
and private sectors play a significant role. Some
resources are privately owned, but others are
publicly owned. (FYI pg. 231)
What does outsourcing mean?
Outsourcing
• Outsourcing:
reducing
costs by using
suppliers of
products and
services in
less
developed
parts of the
world.
• Pros and cons to outsourcing?
• Risks?
• http://www.fourhourworkweek.com/
• (August 8th, 2013: How Risk-Averse Entrepreneurs Succeed: Low-Cost
Testing Using Reddit, PayPal, In-Person Pressure, and More )
• http://www.fourhourworkweek.com/blog/
Communication Technologies
• Today, communication technologies are changing so
quickly that the rate of change has become far faster
than ever before. Cellphones, TV, radio, computers, and
the Internet have come to affect nearly every aspect of
people’s lives.
• Technological convergence is also increasing the rate of
globalization. Cellphones, for example, can do a variety
of things like send e-mails and take photographs.
Convergence also brings together media companies.
Today, a newspaper, textbook publisher, phone
company, TV network, and movie production company
may all be owned by the same transnational
corporation.
• (Figure 10-2 pg. 238)
Trade
• Technology plays an important role in the expansion
of global trade.
– Today, a typical consumer product is designed,
developed, manufactured, and assembled by a host of
companies, which may be located practically anywhere
in the world.
• Expansion of trade has occurred because:
– countries have opened their economies to outside
influences.
– Gov’ts have allowed foreign products and investment to
enter their country.
• In exchange, businesses and industries in the country have
opportunities to sell their goods in int’l markets.
• Figure 10-3 pg. 239
Reshaping Trade Patterns
• Globalization has been reshaping int’l trade
patterns.
– Before: developed countries would trade goods and
services among each other
– developing countries:
– supplied raw materials
– bought the manufactured goods that the developed countries
produced.
– Today:
– manufactured goods are being produced in the
developing countries as well. They are flowing more
frequently to both developed and developing countries.
– Fig. 10-4 pg 240
Developed Countries Still Dominate
• Still, exports from developed countries dominate
the percentage of the world’s total exports.
– Developed countries make up about 75% of the world’s
exports
– developing countries make up about 25%.
• But this balance is starting to shift. The balance of
trade between China and the US has been in China’s
favour for several years.
The People’s Republic of China
• Assignment: Read pgs 232-233.
• Respond to #1 and Assignment bklt.
Transportation
• 2nd half pg. 240 , FYI pg. 240 - containerization
• What is a warehouse? Could increased
transportation affect warehouses? How so?
• The just-in-time delivery and inventory system used
today by many manufacturers means:
– parts are ordered and scheduled to arrive at the factory
at the moment they are needed.
– They are shipped, unloaded from containers, and moved
directly onto the factory floor.
– This saves handling and storage costs because parts no
longer need to be kept in warehouses until they are
required.
The Media
• The media play a distinct role in expanding
globalization.
• One way the media contribute to expanding
globalization :
– running commercials that encourage consumers to buy
products.
• This expands the market for goods and services.
Being Part of the Media
• Media convergence has also resulted in the
commercialization of news.
• News programs often dictate which news stories to
cover in their efforts to achieve the highest ratings
possible. (instead of..?)
• Also, due to globalization, you can be part of the media.
– With a cellphone that takes pictures and records videos, you
can contribute to local and global newsmaking by sending
your information to news programs or posting it on social
networking sites.
– www.theweathernetwork.ca
http://www.youtube.com/watch?v=ww7
HzqJwwz4
http://www.youtube.com/watch?v=Ml9
KHwDfVko
Why do people “take away” from
the environment?
People & the Environment
• People cannot live without having some effect on
the environment. Everyone needs:
– Materials to make homes, clothing, tools, etc.
– Fuel for heat, transportation, and electricity
– Food to stay healthy
– Water for drinking, cooking, cleanliness, and
health
Ecological Footprint
• Scientists use the term ecological footprint to describe
the load people impose on nature.
– Your ecological footprint represents the area of the earth’s
surface necessary to sustain the level of resources you use
and the waste you create.
• The ecological footprint of an individual or group is a
measure of
– how much biologically productive land and water resources
are needed to keep them alive.
– Dividing the bioproductive area of Earth by the total
population reveals that 1.89 hectares of productive area are
available for each person.
Garbage Patches
• KY/NY/NJ – landfills, garbage island
• Garbage Patch – Great Pacific Garbage Patch and many other
Garbage Islands
– http://garbagepatch.net/greatpacificoceangarbagepatchfacts/
• New Ocean Blue (goto:News)
•
http://newoceanblue.org/
Predict Your Ecological Footprint
• Think of your own personal ecological footprint.
What percentage of the land you use do you think
goes to the following areas?
• Crop Land (land used to produce crops for food)
• Sea Space (sea area used to produce fish & seafood)
• Pasture Land (grazing land used to produce animal
products)
• Forest Land (trees used to produce wood & paper)
• Energy Land (forested area used to absorb carbon
dioxide produced by burning fossil fuels)
• Built Area (land used for houses, factories, & roads)
Which Canadian City Most Negatively
Affects the Environment?
• Rank the following Canadian cities that you think
“takes the most from nature.”
• 1. Halifax, 2. Winnipeg, 3. Edmonton, 4. Windsor, 5.
Saskatoon, 6. Quebec City, 7. Regina, 8. Calgary, 9.
Vancouver, 10. Ottawa and 11. Toronto
Canada’s Ecological Footprint
• Figure 11-2, 3, and 4 (pg 260)
• Earth’s resources are not shared equally. Canadians,
for example, have a much larger ecological
footprint, (7.25 ha per person), than people in most
other countries.
• How does this compare with the amount of
bioproductive land available to each person on
Earth?
Bangladesh’s Ecological Footprint
• While Canada has
one of the biggest
ecological
footprints in the
world, Bangladesh
has one of the
smallest: 0.6
hectares per
person.
A Poor Country
• Bangladesh is one of the world’s least developed
countries.
– Bangladeshis have little money to spend on consumer
goods, large houses, and expensive vehicles.
• Only 33% of people have access to electricity.
– As a result, their consumption of resources is far lower
than that of Canadians. And because Bangladeshis
consume less, they produce less waste.
• Figure 11-5, 6, and 7 pg. 261
Comparison: Examine Figure 11-5 on pg. 261.
1. How many times larger is Bangladesh’s
population than Canada’s?
2. How many times larger is Bangladesh’s population
density than Canada’s?
3. How many times faster is Bangladesh’s growth rate
than Canada’s?
4. How many times more is Canada’s GDP per person
than Bangladesh’s?
Global Perspective on Ecological
Footprints
• The ecological footprint of 70% of the world’s
people
– is smaller than the 1.89 hectares available for each
person.
• The remaining 30% of ppl take much more than
their share:
– We consume about 90% of the world’s ecological
capacity.
• Figure 11-8, pg. 262
The Kogi
• Read The Kogi – At the Heart of the World (txt
262).
• Assignment booklet
The Resource Gap
• The gap between the resources the earth can
reasonably supply (1.89 ha per person), and what
the ppl of the world now consume (2.8 ha per
person) presents a challenge.
– To meet this deficit, people are using up resources that
could be left for future generations.
• Think about what would happen to a family that
spends more money than it earns and borrows to
make up the difference.
– At some point in the future, this debt must be repaid.
The same thing is happening with the environment.
Population Growth
• At some point, the earth will not be able to sustain
actions like this. The debt will have to be repaid.
• Over the next 4 or 5 decades, the world’s
population is expected to grow by 2 to 5 billion.
– The earth’s resources are fixed, but an ever-increasing
number of ppl will need to share them.
• How do you think this situation might affect smaller,
less developed countries with limited access to
natural resources?
• How do you think North Americans will respond to
this challenge? (Figure 11-10, pg 263)
Consumption of Resources
• Many of the world’s people are striving to improve
their material well-being by consuming more goods
and services.
• The more they consume, the larger their ecological
footprint grows.
• As the same time, individuals and groups are
warning that consumption of resources will affect
sustainability: the ability of the earth to provide the
resources necessary to meet ppl’s needs.
Stewardship
• These individuals and groups are promoting the
idea of environmental stewardship: accepting
responsibility for ensuring that the earth’s resources
remain sustainable.
• What would happen if all the world’s population
were to achieve the same consumption levels as
Canadians?