Lesson 2.3: The Global Economy Flashcards
In our discussions about the global economy, we have identified the various structures that drive economic globalization and the processes that connect economies around the globe. We traced the different production processes as well as the globalization of consumption. While economic growth and development coincides with economic globalization, we also confront the tensions and inequalities that arise in these intense interconnections. Through Immanuel Wallerstein's The Modern World-System, we l (44 cards)
- In economic terms, globalization is nothing but a process making the world economy an ____.
- This is according to who?
- How can this be done?
- “organic system”
- This is according to Szentes
- By extending transnational economic processes and economic relations to more and more countries and by deepening the economic interdependencies among them
The “Golden Age” of Globalizaiton peaked when?
In 1914, after WWII
Economic structures among the significant developments that drove economic globalization
Provide examples each.
- Transportation (Steamships, Railroads, Airplane)
- Communication (Telegraph, Internet)
- Capital (Capital and Immigration, Remittances, Free Trade)
Problems in Global Economic Development (5)
- Poor nations and the peoples who inhabit them were and are subjugated by the operations of the global economy
- Not all parts of the world gain/gain equally from the growth of the global economy.
- Not only were or are there losers in this economic competition among geographic areas, but also certain industries and social classes lose out, at least in comparison to the winners.
- Within nations, the poor tends to suffer most, especially when those nations are forced to repay their debts to other, more developed nations.
A problem in global economic development stated by Frieden
The global economy “was not equally good for everyone and was bad for many”
A term referring to exports exceeding imports
Trade Surplus
E.g. China’s Trade Surplus Reaches a Record of Nearly $1 Trillion
A term referring to imports exceeding exports
E.g. US Trade Deficit Hit Record in 2024 as Imports Surged
Trade Deficit
Economic Chains and Networks
- Supply Chains
- International Production Networks
- Global Commodity Chains
- Global Value Chains
Economic Chains and Networks
Value-adding activities in the production process
Supply Chain
Supply Chain (3)
Raw material –> Inputs and Outputs –> Finished Products
Economic Chains and Networks
The networks of producers involved in the process of producing a finishing product
International Production Networks
Economic Chains and Networks
Value-adding chains and the global organization of industries
Global Commodity Chains
Example of Global Commodity Chains
Buyer-driven Chains (E.g. Walmart, Amazon)
Economic Chains and Networks
Global Value Chains
“These highlight the relative value of those ____ that are required to bring a good or service ____, through different phases of production (involving a combination of physical transformation and the input of various producer servics), ____”
(Gereffi, 2012)
Global Value Chains
“These highlight the relative value of those economic activities that are required to bring a good or service from conception to, through different phases of production (involving a combination of physical transformation and the input of various producer servics), delivery to final consumers, and final disposal after use”
(Gereffi, 2012)
How are China and US good examples of global value chains?
Scrap Metal: 2/3 of steel made in the US comes from recycled steel in China
*Production of Automobile –> Safe and use –> End of useful life of car/ product –> Junk cars –> FROM US (Extraction of usable metals from scrap) –>
TO CHINA (Unsorted Aluminum and copper scrap) –> Production of various products –> Sold and used nationally –> End of use –> Unsorted Aluminum and copper scrap –> Shipped and sold to US
What does increasing competition reflect regarding commodities around the world?
Increasing competition reflects the increasing demand for commodities around the world
Increase competition reflects the increasing demand for commodities around the world:
- Massive development and rapid industrialization
- Emergence of expanding consumer society
“It is absolutely a fundamental change in the global economic structures…____ ranging from oil to base metals to grains ____ in China and around the world ____ as they produce products for us, and increasingly for themselves.”
(Krauss 2008:C1)
“It is absolutely a fundamental change in the global economic structures…Global commodities ranging from oil to base metals to grains are moving higher as billions of people in China and around the world get wealthier and are consuming more as they produce products for us, and increasingly for themselves.”
(Krauss 2008:C1)
It is the transfer of activities once performed by an entity to a business in exchange for money
Outsourcing
(3) Levels of Outsourcing
(provide examples)
- Macro-level - E.g. Corporations outsourcing work in other countries (Offshore outsourcing)
- Meso-level - E.g. Companies outsourcing HR function to other countries
- Micro-level - E.g. Parents outsourcing care of children or aging parents to other individuals or institutions
Globalization of Consumption is often tied to ____
Americanization
How is the globalization of consumption tied to Americanization?
Traceable to the affluence of the US after the close of WWII and the economic difficulties encountered by most other societies in the world.
What is the emphasis of consumption in the economy?
To greatly increase global flows of everything related to consumption and decrease barriers to those flows
Globalization (in the context of consumption) is characterized by ____ and ____, as well as ____.
Globalization (in the context of consumption) is characterized by hyperconsumption and hyperdebt, as well as problems associated with them.
