ECONOMIC GEOGRAPHY ESSAY

GGR209H5S- Economic Geography

Sept. 21, 2017

1

Capitalism & Uneven Development

https://commons.wikimedia.org/wiki/File:World_map_GDP_per_capita.svg

GDP per Capita, by Countries, 2012

2

Class Outline

1. Explanations of Uneven Geographical Development

a) Environmental Determinism b) Modernization Theory (and Rostow’s Model of Development) c) Political Economy (and World-Systems Theory

2. What is capitalism?

3. Capitalism in Flux

Defining Development

• Development is a process of __________.

- economic growth - socio-economic transformation

• A country that is developing is making _______ or advancement in technology, production and socio-economic well-being.

Defining Development

Development is evident in:

• _________________ • Global Connectivity (trade,

technology communication) • _________ standard of living

Uneven Economic Development

How can we explain this pattern of unevenness?

1. The _______________ (environmental determinism)

2. Just a point in time ( __________________ theory)

3. Societal ___________, like government, trade regulations, and economic decision making (political economy)

https://portside.org/2016-11-06/measuring- global-inequality

Uneven Economic Development

Sao Paulo, Brazil

Explanation through: Environmental Determinism

• a stream of thought that sees ___________ surroundings as major (or maybe the main) determinant of how a society functions

• a stream of thought that says _____________ countries will evolve towards a Western industrial model, and given enough time, will achieve similar development standards

• economies can develop if they adopt the appropriate ________ and strategies

• suggests that uneven development is a __________ condition that will naturally be overcome

Explanation through: Modernization Theory

https://letsdevafrica.wordpress.com/2015/0 5/28/ghana-development-report-using- modernization-theory-to-explain-progress- post-1983/

• a stream of thought that sees uneven development as a product of __________

Explanation through: Political Economy

What is Capitalism?

• Capitalism is an economic system where exchange happens using ______ and the purpose is to accumulate individual surplus ________.

• Private property, private capital (e.g., machinery) and wage labour are central in this structure.

What is Capitalism?

A market economy (free enterprise):

• the government has a very ________ role in the economy but provides essential services

• individual producers determine the production, distribution and consumption of goods

• businesses are motivated by ________ • customer demand affects supply as well as the

price of products • there is a high potential for ________ in society

Thinking Structurally:

• goes behind the everyday processes in which we participate

• asks about the underlying ______ of how economic relationships are organized (i.e. how is the economic system structured?)

• goes beyond thinking about the motivations and experiences of ____________

Fundamentals of the Capitalist System

Fundamentals of the Capitalist System How is wealth created?

• __________: the benefit we get from having or consuming something

• ______________: the monetary worth of a good or service traded in the market economy

• Capitalism involves the creation of value in ________ labour and the private ownership of property and assets.

Fundamentals of the Capitalist System

• _________: owns the ‘means of production’ (property and capital) and buys labour power from individuals to execute the production process

• Worker/labourer: do not own the means of production but _____ their labour to the capitalist production process

Fundamentals of the Capitalist System

• Growth rests on the _________of labour (surplus value extraction).

• ____________: the amount of value that a person produces in access of what he or she is paid.

• Example: A waitress works a 5 hour shift and sells $1000 worth of food. The waitress earns $6.95/hr earning $34.46, in total. The difference is PROFIT for the restaurant employer.

Surplus Value

Fundamentals of the Capitalist System

Capitalism is profit-oriented: _______ is essential for profit.

Social Classes:

Fundamentals of the Capitalist System

Capitalism is about the relationships between different ___________: a capitalist class that owns the means of production (including private property) and a working class that owns the labour it sells to the capitalist.

http://www.cartooningcapitalism.com/iww -cartoons

________________ (Wallerstein 1970s): A political economic approach to understanding uneven geographical development that has emerged with capitalism in the world economy.

Explanation through: Political Economy

_______ = higher levels of education, higher salaries, more technologies, diversified economies generates more wealth

________ = lower levels of education, lower salaries, less technology, generates less wealth

Semi-Periphery = both core a periphery processes occur; are exploited by the core, but in turn, they exploit the periphery

Not all places are equally wealthy in the capitalist world economy = ________________________.

Explanation through: Political Economy

Contradictions of Capitalism #1

The _________ in the price of labour that accompanies economic growth is driven by the quest for profit that requires labour costs to be _____________.

How to decrease labour costs?

• hire foreign/immigrant workers • temporary and contract work • avoid unionization • reduce wages (cheap labour) • mechanization (technological fix)

Contradictions of Capitalism #1

____________: technology is used to make production more cost efficient.

• Creates a ________________

Contradictions of Capitalism #1

• Profit, in part, is based on _______ labour.

• At a global scale, this translates into corporations moving production to places in the world with the cheapest ________ supply.

________________ = Companies in the developed world take advantage of cheap labour in the developing world.

The global division of labour is a function of capitalism’s drive for profit in a capitalist economy by reducing _______.

Contradictions of Capitalism #1

Contradictions of Capitalism #2

Workers produce more for the capitalists than they earn for themselves, not making enough money to provide sufficient __________ for all the goods they produced for the capitalists.

_________________: the circumstance in which capital produces more than it can sell

Overaccumulation can take the form of:

• overproduction of _______________ • surplus inventories • partially finished commodities • idle capital • cash _____________ • falling rates of return • lack of investment • unemployed labourers (‘reserve army of

labour’)

Capital becomes _____________ in ____

and lacks outlets for productive and

profitable investments.

Contradictions of Capitalism #2

How can capitalism survive overaccumulation?

Spatial fix: involves opening up new ________ for capitalist production

The ‘Spatial Fix’

- Capitalism uses space to help solve the crisis of overaccumulation

- Capitalism uses space to help it solve it’s contradictions and survive.

The ‘Spatial Fix’

_____________________________: an outlet for capital investment.

Capital is deferred to other places. Las Vegas, Nevada, USA

• expanding and improving the _______ environment

• transportation networks • water supply • waste disposal • communication projects

Contradictions of Capitalism #3

• As soon as capitalism creates a landscape to ensure profitability, the process of making the landscape ____________ immediately begins.

• Capital flees the crisis it creates only to bring the same processes elsewhere, which will ultimately lead to the same crisis it was _______ in the first place.

Capitalism as a State of Flux

With each era, the capitalist system has created production facilities, infrastructure and even whole landscapes that have suited its needs at a given point in time.

__________________

Figure 3.3. Waves of industrialization in East, Southeast, and South Asia, 1950–present. (2nd ed of Textbook)

! !

A landscape of ____________ capitalism: an industrial park in Suzhou, China.

Capitalism as a State of Flux

_______________: in order for development to take place in one area of the world, underdevelopment has to take place in another.

Capitalism as a State of Flux

‘Rust Belt, North-Eastern United States

Capitalism as a State of Flux

• spatial configurations are produced by capital, only to be torn down and reconfigured through subsequent rounds of ______________

• capital can leave a place but can ________ back and revitalize economic activity Baltimore Waterfront, Maryland, USA

Figure 3.4. Spatial divisions of labour (from 3rd ed. of textbook.

Capitalism as a State of Flux

Summary Points on Uneven Economic Growth

• Economic landscapes are ____________ changing.

• In capitalism’s attempt to accumulate wealth, it creates uneven development across space and through time.

• Spatial _________ is fundamental to the workings of the capitalist system, and we can expect it to continue.

Mumbai, India, 2018