The Historical Geography of the World Economy

The Historical Geography of the World Economy

I.  The Age of Exploration (1492-1776)

A.  Profitable journeys and Trade Exchange

B.  Closed, mercantilist systems

1.  Spanish empire directed through Seville

2.  Dutch and English developed private corporations

C.  Regression: The Atlantic Wars

1.  American and French Revolutions

2.  search for synthetic substitutes

3.  British emerge as dominant

a)  Industrially
b)  Imperially

II.  The Age of Industrialization (1815-1913)

A.  U.S. and British open Latin America to trade (Monroe Doctrine, 1823)

B.  Corn Laws open British grain markets

1.  benefits US farmers

2.  benefits Austrian and Russian farmers

C.  Protecting markets

D.  Protecting free trade

1.  The British trade deficit

a)  Internationally
b)  Within the empire

2.  British advantages in the service sector

a)  Currency and banking
b)  Shipping
c)  Insurance (Lloyd’s of London)
d)  Stock exchange
e)  Investments in foreign countries

3.  Immigration

III.  Regression [Group II]

A.  World War [WW] I destroyed integrated trading groups

1.  the break-up of empires

2.  the problems of war debts and reparations

3.  the role of the U.S.

B.  The Great Depression

1.  U.S. protectionism despite surplus

2.  global trade declines by 50%

C.  Centrally controlled economies seek autarky

1.  communism

2.  fascism

3.  the zaibatsu

4.  autarky and aggression

5.  goods, ideas, and people bound

IV.  G.3 Post World War II: From Containment to Free Markets

A.  Europe, Reconciliation, Reconstruction, Recovery

1.  The Marshall Plan

a)  US agriculture and industry
b)  Role in economic integration

2.  EEC Treaty of Rome (1957)

a)  Spurs foreign investment through production agreements
b)  Protectionism of Common Agricultural Policies
c)  EEC counter-complaints vs. U.S.

3.  EC/EU expansion into Southern and Eastern Europe

B.  The Soviet Sphere

1.  WWII destroyed economic infrastructure

2.  Comecon

a)  Did not allow free development within

b)  Excluded ties to foreign countries

3.  Many in former bloc to EU

C.  The Americas

1.  from bilateralism to GATT

2.  WTO as judiciary

3.  NAFTA [Group III]

a)  Latin America adopted ISI policies (1930s – 1960s)

(1)  Quest for industrial strength
(2)  Hurt foreign trade and consumers

b)  Maquilas emerged in 1965

(1)  U.S. components
(2)  Mexican assembly
(3)  1,000 by 1990

c)  Growing links to Canada

(1)  Seattle/Vancouver
(2)  Detroit/ Windsor

4.  Results of NAFTA

a)  Mexico opened to US banking and retailing

b)  Increased exports to Mexico

c)  Oil Companies and PEMEX

d)  FTA vs. Customs Union

(1)  Freedom to develop other trade agreements
(2)  Not free to funnel foreign goods

5.  MERCOSUR and the FTAA

D.  Collapse of the Soviet Union

1.  integration

2.  non-integration

E.  China

1.  Global benefits of cheap labor

a)  Lowered cost of living

b)  Exonomic expansion

2.  Benefits of cheap labor to China

a)  Some rise in living standards

b)  Economic diversification

3.  Detriments of Chinese cheap labor

a)  Environmental

b)  Displaced peasants

c)  Yuan manipulation as unfair trade practice

d)  Unsafe and exploitive workplaces

F.  Time-Space Compression

1.  Decreased friction of distance

2.  containerization

a)  packed at point of production

b)  decreased time in dock

3.  instantaneous communication and transactions

4.  Just in Time (JIT) delivery systems decrease warehouse costs

G.  Tourism

1.  Benefits

a)  Stimulates economic growth

b)  Source of foreign currency for treasury

2.  detriments

a)  environmental

b)  disruption of local culture

c)  dual economies

H.  Summary

1.  Russia and China not fully integrated

2.  problems of slow growth periods

3.  problems of U.S. trade deficit and role

4.  (Mine) assumes low energy costs in transport

Globalization and International Relations: A Geographical Perspective [Group IV]

I.  The Role of Geography

A.  Multidisciplinary

B.  Analysis at various scales

II.  Globalization as seen by economists

A.  Means by which international trade develops

1.  economic agreements

2.  institutions

3.  information on type and value of exchange

B.  shapes supply, demand, and financial flows

III.  Globalization as seen by Political Scientists

A.  Not just economic relations but also power relations

B.  International relations [IR]: how governments interact with each other

C.  IR commonly multilateral and diverse

1.  trade laws

2.  human rights standards

3.  the increased role of multinational organizations

a)  the role of resources

b)  the role of cheap labor

c)  recent trends hurt the middle

D.  Changing Patterns

1.  new sources of wealth

2.  the role of personalities

3.  the role of religion

E.  The political geography of terrorism.

Globalization and Economic Geography

IV.  Economic Geography as a subject of study

A.  Defined

1.  production, distribution, and consumption

a)  goods

b)  services

2.  human and environmental impacts

B.  The Growth of the Service Sector

C.  Location Keys: land, labor, capital

1.  situation

2.  site

D.  Transportation Issues: the relationship between raw materials and finished goods

1.  the example of coal

2.  From Pittsburgh to Korea

E.  Labor costs

1.  labor intensive industries

2.  outsourcing/offshoring

3.  maquilas and the value added tariff

V.  Dividing economic activities into sectore

A.  Primary: Ag, forestry, fishing, mining

1.  basis of mercantile trade

2.  basis of globalization

B.  secondary: manufacturing (mfg.)

1.  diffusion from UK

2.  Brown, Slater, and Watt.

3.  mfg. as path to development

4.  the comparative advantage of LDCs

C.  Tertiary

1.  physical distribution (transport)

2.  wholesale

3.  retail

D.  quartenary: information andknowledge based

1.  FIRE

2.  producer and computer services

E.  Quinary/quintary: decision-makers of global corporations

1.  CEOs

2.  CFOs

3.  research and development

VI.  Economic Location Principles: From Local to Global

A.  Raw material orientation

1.  Weight (sugar and timber)

2.  perishability

B.  Market orientation

1.  Weber’s material index

a)  Gross goods as raw material oriented (rm/fp>1)

b)  Pure good (rm/fp = 1)

c)  Ubiquitous good (rm/fp < 1)

VII. Changing nature of production

A.  The role of education

B.  Footloose companies

1.  hi-technology

2.  quality of life issues

3.  absence of comparative advantage

VIII.  Examples of Globalization

A.  Agribusiness(Primary)

1.  small producers

2.  consumer backlash

3.  environment

B.  mfg (secondary)

1.  Ford, Whitney, and Mass production

2.  oligopoly

3.  the rise of imports and standardization

4.  the JIT system

5.  decreased demand for skilled blue-collar labor

6.  the growth of the mid-South

a)  labor issues

b)  DFI competition among foreign companies

C.  Tertiary

1.  call centers and the legacy of colonialism

2.  India’s Silicone Valley (Bangalore)

a)  Education

b)  Telecommunications technology

3.  Walmart as global retailer

IX.  The Downside: Negative Consequences of Globalization

A.  Locational relationship between

1.  headquarters

2.  research and development

3.  manufacturing and competition among LDCs

B.  Host country strategies to protect

1.  local content in mfg. process

2.  joint ventures

3.  management positions

C.  The problems of pollution

D.  U.S. problems

1.  the conducive business climate

2.  the leverage of corporations

E.  social and economic separation in LDCs

1.  rural and urban

2.  migration

F.  Assault on traditional values

1.  tribalization

2.  rise of fundamentalism

Recent Developments: “Globalization, Agriculture and Human Geography [Group VII]

I.  A Smaller World

II.  Free Trade

A.  The effects of NAFTA and theWTO

1.  increased ag exports from US

2.  increased ag imports to US

B.  negative effects

1.  the “inefficient” Mexican peasant

2.  cotton subsidies

III.  Biotechnology and Agricultre

A.  Genetic Modification

B.  The US and GM: soybeans, corn, cotton, canola

C.  The European Criticism

D.  New Developments

Singapore: The Most Globally Integrated Place on Earth [Group VIII]

IV.  Origins: The British East India Trading Company

V.  The Globalization Index (GI)

A.  Terms and measures (based on 62 countries)

1.  economic integration

a)  GDP

b)  Trade

c)  Foreign Direct Investment (FDI)

2.  Personal contact

a)  Telephone traffic

b)  International arrivals

c)  Remittances and personal transfers

3.  technological connectivity

a)  internet users

b)  internet hosts

c)  secure servers

4.  political engagement

a)  membership in international organizations

b)  UN peacekeeping

c)  Treaties

d)  Government transfers (credit)

VI.  Singapore replaced Ireland

A.  40% increase to UN peacekeeping

B.  Bilateral FTA with US

C.  1st in trade, FDI and telephone traffic

D.  Ireland GDP declines by more than 60%

VII. US ranks 4th: schizophrenia and treaty issues

VIII.  Russia and China

IX.  Little correlation between size of economy and GI

X.  Smaller economies’ relative wealth appears to be positively influenced by globalization

From Mocha to Java: The Coffee Story [Group IX]

I.  History

A.  Ethiopian source

1.  contagious diffusion to Red Sea port of Mocha

2.  relocation diffusion to Java

B.  The Coffeehouse Phenomenon

C.  Suriname to Brazil

D.  Ceylon: From Coffee to Tea

E.  Brazilian domination

F.  The ICO cartel

G.  Coffee surplus and free trade

II.  How Coffee is grown

A.  Moderate temperature and precipitation

B.  Equatorial

C.  Altitude

D.  Arabica vs. canephora

E.  The agro-forestry system

F.  The Industrial Approach

G.  As cash crop

III.  The economics of coffee

A.  Price fluctuations

B.  The value chain

1.  drying

2.  milling

3.  roasting

4.  packaging

5.  transport

IV.  Coffee in the U.S.

A.  Physical and social stimulant

B.  Advertising and popular culture

C.  Corporate takeovers

D.  The Starbucks phenomenon

1.  vertical integration: from field to retail

2.  horizontal expansion

a)  outlets

b)  ice cream

c)  bottled drinks

d)  beans

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