Post on 27-Jan-2016
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Economic Geography
New York Stock Exchange
Fiat Factory, Italy
Chemist in Laboratory
OverviewEconomic SectorsChanges in the U.S. and Global
EconomyTrading BlocksEconomic Location Theory
What makes a place developed?
LDCs – Less developed; periphery Lacking infrastructure (roads, clean
water sources, advanced energy technology), industry, healthcare and educational opportunities
MDCs – More developed; core Infrastructure, industry, healthcare
and educational opportunities
Human Development Index (HDI)
Where are high HDIs – in MDCsWhere are low HDIs- in LDCs
The HDI takes:• One Economic Factor (GDP – Gross
Domestic Product)• Two Social Factors (literacy rate and
educational level)• One Demographic Factor (life expectancy)• Used to calculate the level of development
Highest and Fails
Highest: Norway (2009) .971Lowest: Niger (2009) .340LDCs:
30 in Sub-Saharan AfricaMDCs:
Canada and the US
Gender DifferencesGender Empowerment Measure (GEM)
Compares the ability of women and men to participate in economic and political decision making• Lower scores (Africa and Asia)• Higher scores (W. Europe and the US)
Gender Related Development Index (GDI) means that women have more share of resources than in other countries Compares the development of women with that
of both sexes
How did the MDCs/Core World Develop??The History of the Industrial Revolution:- 19th century: 1800s - Begins in EnglandI. 19th Century England- called “The Victorian Age” A) Why England? 1. Natural Resources: -Coal - Iron Ore 2. New inventions:
The History of the Industrial Revolution (19th Century)
cont: a) James Watt-Steam Engine
b) Henry Bessemer – Steel refining Furnace
II. Spread of the Industrial Revolution
- United States: used to refine cotton
The Industrial Revolution in the US.
A) New Inventions in the U.S- Eli Whitney: Cotton gin- Alexander Bell: Telephone- Thomas Edison: light bulb
extra credit: African-American assistant created the filament that makes the light bulb operate
(LewisLattimer)
Levels of Economic Activity
The Industrial Revolution creates levels of economic activity: - Primary -Secondary- Tertiary
Primary Activities
Direct removal of natural resources such as mining, forestry, and agriculture -most important in the LDCs.
Subsistence AgricultureFishing and ForestryMining and Quarrying
Primary ProductsThe percentage of people working in agriculture exceeds 75% in many LDCs of Africa and Asia. In Anglo-America and Western Europe the figure is <5%
Trade in Primary ProductsImportance to
Developing Economies
Danger of Commodity Trade Dependence
Puerto Rico Coffee Plantation
Secondary Activities: Manufacturing
Secondary - Processing and transforming natural resources: steel, textiles, auto assembly. These used to be most important in MDCs, but increasingly important in the semi-periphery (Korea, Mexico, Brazil, Singapore)
Tertiary and Beyond: Services
Provision of services in exchange for payment. Includes retailing, banking, law, education, and government.
Education, R & D, and information technology becoming most important in the postindustrial core regions.
Less-developed countries often focus on tourism.
Services historically were clustered into settlements. Increasingly the most important service centers are massive world cities.
Tertiary and Beyond: Services
Less-developed countries often focus on tourism.
Club Med, The Bahamas
Vendors, Bali
Tertiary and Beyond: Services
Can What Kind of Economic Activities You Have Determine Wealth?
YES!!MDCs have more 2nd and 3rd tier
economic activities (Japan, the US and Europe)
LDCs have more 1st and some 2nd tier economic activities (Latin America, Africa and S.E. Asia) Frontline Video (Coffee) Guatemala
Resources and Technology
Resources affect patterns of development: cultivable land, energy sources, minerals. But changes in technology affect the value of these resources. Also, trade or lack of it can offset lack of resources (Japan) or make them less relevant (Brazil).
Technology Systems: roughly every 50 years since 1790 a new complex of technologies has revolutionized the world economic system and its structure. The most recent of these is the system which includes biotechnology, advanced materials (superconductors, solar power) and information technology.
Which parts of the world benefited from the shift from coal to oil? Which suffered? Which parts of the world will benefit from the inevitable end of our reliance on petroleum and the necessary shift to wind, hydro, tide, or solar power ?
International Trade ModelsRosteau’s Model – Only works with
WESTERN POWERS Doesn’t allow for Imperialism and
exploitation of raw materials FOUR STAGES:
• Rudimentary• Education of the Elite• Beginning of Industry (Textiles)• Beginning of Tertiary Activities• Mass Consumption
Rosteau’s Continued:
Mass Consumption: When markets fall, the countries that
provide goods for mass consumption fall apart (their markets)
If your market relies on ONE thing, what happens when that thing is no longer needed?• The Rust Belt in the US
Flaws in Rosteau’s ModelSome countries only have ONE major (needed)
export The Arab States (Dubai)
Some Countries SKIP Stages – From Rudimentary to Tertiary Activity The FOUR Asian Dragons: Japan (influenced South Korea China (Hong Kong) Singapore Taiwan
Flaws Continued:
Self Efficiancy Doesn’t Work (post-colonial Africa)
• Rwanda
New International Division of Labor
Transnational Companies have been very aggressive in using low-cost labor in LDCs. Seek elimination of trade barriers (Tariffs) No minimum standards in place A “rush” to the bottom? Loss of U.S. jobs - “a great sucking
sound” after NAFTA?
New International Division of Labor
Trading Blocks
International agreements that eliminate barriers to trade within regions: North American Free Trade Agreement
(NAFTA) European Union (EU) Oil Producing and Exporting Countries
(OPEC)Trading OrganizationsInternational agreements that eliminate
barriers to trade among members: World Trade Organization (WTO) for the UN
member nations
Principals of LocationIndustrial Location: Site and Situation
Factors Raw Materials Energy Labor Market Transport
In order to succeed industries must have some comparative advantage in one or more of these factors. Moreover, demand must exist for the product.
Industrial Location: Transport Characteristics (Bulk-Reducing)
Secondary Activities: Manufacturing
Industrial Location: Site and Situation Factors Transport Characteristics (Bulk-
Gaining)
Service Location Theory
•Market Areas - circular or hexagonal area from which customers are drawn.
•Range - maximum distance people will go for a service
•Threshold - minimum # of consumers needed to support the service.
Convenience Store Locations
Service Location Theory
•Market Areas - circular or hexagonal area from which customers are drawn.
•Range - maximum distance people will go for a service
•Threshold - minimum # of consumers needed to support the service.
Grocery Store Locations
Industrial Location: Site and Situation Factors
Labor Supply versus Access to Markets
Woven Cotton Production
East Asian Manufacturing Centers
Why are so many wovens produced in the less developed world?
The industrial centers of Japan, for example, depend on imported raw materials and access to markets via the Pacific.
Great Economists of the 19th CenturyAdam Smith Capitalism: “The Wealth of Nations” - father of modern capitalism - agreed with laissez faire economics and free-market trade - also: Thomas Malthus and David Ricardo
More TheoriesJeremy BenthamUtlitarianism: Do what is best for the greatest group of peopleKarl Marx- “The Communist Manifesto & Das Kapital” - history has been a struggle of the “haves” and the “have nots” - only radical social transformation ation can change the owner-
Marx
can change the owner- ship of the means of production
economic interpretation of history