Geography 2412 Lecture Notes
Sept. 16.
The Political Economy
of the World System and Globalization (pp. 53-57)
Introduction:
The current global economic system has positive and negative outcomes for people and environment. We’ll focus on how the global economic structure both affects the environment and how it affects social response to environmental problems.
Key trends associated with rise of the global system (these are selected trends from list on p. 53) include:
Since we’ll be talking about how the political economy interacts with environment for some time, it is worth a look at how it came about and what it looks like (e.g., who are the players).
There are two main theories of the roots of globalization:
This theory argues that nation-states were frustrated with the age-old results of “nationalism”, especially “economic nationalism” (also referred to here as “merchantilism.”) in which each nation-state protected and subsidized its economy and markets, and often went to war over economic tensions with other nation-states (you’ll recognize that economic nationalism still holds in some cases today).
Neoliberal thinking argues that world leaders saw this historical pattern and tried to break it with agreements to free up international trade, first by putting a global monetary systems in place (you need a stable exchange mechanism for trade) and then by promoting free trade policies (e.g., limiting import tariffs).
Among the results of freer global trade was the rise of large Transnational Corporations (TNCs), and a historic increase in global production and consumption.
Free trade also meant that rich countries could get natural resources from poor countries at bargain rates---and do it without having to go to war or to colonize that country (though former colonial powers did still use their positions to gain special access to Third World resources).
Another result has been a growing disparity between rich and poor, and, especially given the rise of TNC’s who can shift production wherever labor is cheap. (Under economic nationalism, nation-state rulers would at least protect workers in favored sectors, like particular guilds or craftspeople. Still, this may be just trading one form of servitude for another—labor seems to suffer under many economic models, except Marxism which we will not examine in detail here).
Other results of an open global market (free trade), included:
Rise of international organizations that assist or regulate the global systems, like the World Bank, World Trade Organization, International Monetary Fund, etc.
Rise of international “NGOs” (non-governmental organizations) to advocate for labor rights, the environment, social justice. Harper says they grew in to curb abuses by TNC (which makes some sense), but they also act as watch-dogs on the behavior of nation-states as members of the global system. We’ll hear more about them soon.
The second model of the global political economy is subtly different from the Neo-liberal theory. “World Systems Theory” is anchored in more historical antecedent, that the “great powers” of the past, especially the European mechantile nation-states (Britain, Dutch, France, Germany, etc) created a global system of Have’s and Have-Not’s, in which some powerful and rich nation-states would benefit fm the exploitation of poorer ones. The poor ones would become known as the “Third World” (I’m not sure but I think the Second World was the communist states like the former Soviet Union; while the First is the richer, industrial capitalist nation-states).
This came to be called:
More developed Countries: MDCs
Less developed Countries (LDCs)
Because of their geographic position on the globe, some people call this the “North” and “South”, and many still use the term “Third World” for the LDCs.
The MDCs have the technology, the capital, and they provide the “value added” manufacturing that turns raw resources into more valuable goods and services. And they have the wealthy consumers.
The LDCs have the raw material to export (with few environmental protections), and cheap labor (with few labor laws or protections) for many forms of cheap manufacturing.
One theme of world system theory is that the “Core Countries” try to keep the “Peripheral Countries” in a relatively fixed economic state so that the can exploit their resources. This is also called ‘Dependency Theory” because the LDCs depend on MDC markets and consumers for their export economies. They are blocked by the “system” from developing their own, more diversified economies. (Note a few countries seem in the “middle,” developing more MDC-like economies, like Mexico and Brazil).