Week 7-12 Notes - Alcohol & History PDF

All notes WEEK 7-12 Week 7 ====== **The Politics of Spirits** - **Gin History and Impact:** - Origin: Dutch created \"genever\" in the 16th century, adapted by the British as gin with juniper berries for flavor and medicinal uses. - British Policy: King William III...

All notes WEEK 7-12 Week 7 ====== **The Politics of Spirits** - **Gin History and Impact:** - Origin: Dutch created \"genever\" in the 16th century, adapted by the British as gin with juniper berries for flavor and medicinal uses. - British Policy: King William III taxed French brandy heavily, providing tax breaks to British gin producers, making gin cheap and widely abused. - Result: This led to public backlash and regulation via the **Gin Act of 1751**. - Recovery: In the 1800s, gin became popular again, especially as **gin and tonic** (quinine water used as an anti-malarial). - **Rum\'s Political Ties:** - Produced from molasses, a byproduct of sugarcane grown on Caribbean plantations reliant on African slaves. - British sailors were given daily rations of Jamaican rum (1731). - American colonists shifted to whiskey after the British discouraged rum production. - After the Cuban Revolution, Castro seized Bacardi's distilleries. Bacardi families fled and expanded globally, setting up operations in Puerto Rico. **Prohibition Era** - **Context and Movement:** - Prohibition criminalized the manufacture, sale, and possession of alcohol. - **Canada's Influence:** Inspired by British and American examples, driven by organizations like the Dominion Alliance and the Women\'s Christian Temperance Union, often linked to suffrage movements. - **Key Events in Canada:** - Provinces began implementing prohibition in **1901**; PEI maintained it until **1948**. - During WWI, prohibition was seen as patriotic and a way to conserve food supplies. - Daily rum rations were given to Canadian soldiers for morale and medicinal purposes. - **Political Challenges:** - The **1898 Canadian Referendum** saw majority support for prohibition except in Quebec (80% opposed). - Post-WWI, crime increased due to black markets. Brewers and distilleries lost businesses, leading to job losses. - **End of Prohibition:** - Ontario replaced prohibition with government-controlled alcohol sales under the LCBO (1927). - Strict controls included moral vetting of buyers and restricted advertising, promoting temperance and sobriety. **Alcohol Industry Characteristics** - **Major Companies' Growth Drivers:** - Focus on heritage brands and name recognition, rather than heavy reliance on technology. - Profit depends on increasing consumption, while governments seek to reduce it, leading to tensions. - **Advertising Restrictions:** - Countries use voluntary codes (less effective) or legal regulations. - **France's Loi Evin:** Prohibits advertising on TV and cinema, limiting ads to product information without lifestyle imagery. **Brand Stretch Notes** **Introduction to Brand Stretching** - Alcohol brands expand beyond traditional marketing to extend reach, visibility, and bypass advertising restrictions. Examples include: - **Non-Alcoholic Products:** Baileys ice cream, Guinness crisps. - **Merchandise:** Branded apparel, mugs, and accessories (e.g., Jack Daniels BBQ sauce). - **Global Expansion:** Kingfisher beer in India introduced Kingfisher Airlines and water. **The Role of Branding** - **Definition:** Branding differentiates products and builds consumer trust and familiarity. - **History:** - Dates back to the 18th-19th centuries during the industrial revolution. - Alcohol brands like Smirnoff, Bacardi, and Budweiser now dominate markets, often recognized even by children. **Two Types of Brand Extensions:** 1. **Line Extensions:** Variations within the same category. - Examples: - **Light beers:** Bud Light, Miller Lite. - **Flavored beers:** Carling Zest. - Low-alcohol versions to meet government duty reductions (e.g., Carlsberg Citrus). 2. **Category Extensions:** Expanding into different categories. - Examples: - Jack Daniels BBQ sauces, Baileys desserts. - Guinness-branded items like umbrellas and chocolates. - Risks: Poor fit with core brands can fail, as seen with Coors' failed spring water product. **Marketing Shifts and Concerns:** - **Shift to Subtle Tactics:** - Social media, celebrity endorsements, and sponsorships target younger demographics. - Alcohol promotions in non-traditional mediums are often unrecognized as \"advertising,\" influencing drinking behavior. - **Youth Impact:** - Children as young as 10 recognize alcohol brands more than food brands. - Studies show owning branded merchandise correlates with earlier alcohol use. **Global Trends and Regulatory Workarounds:** - **Displacement Marketing:** - Alcohol companies may use brand extensions to circumvent stricter regulations. - Similar strategies were seen in the tobacco industry (e.g., Camel boots post-1975 Norway cigarette ad ban). - **Emerging Markets:** - India and China show rapid adoption of alcohol branding beyond traditional forms. - Examples: Haywards 5000 Club Soda (India) and branded music CDs by Bacardi. **Key Challenges for Regulation:** - Restrictions must address indirect marketing tactics like merchandise and food tie-ins. - Companies continue adapting to circumvent laws, as seen in India\'s alcohol-branded products despite advertising bans. Week 8 ====== **Roman Holiday** - Roman Empire\'s stability and resources enabled early tourism. - Wealthy Romans toured Southern Italy, Greece, Troy, and Egypt, including Nile cruises. - Visits to spas and baths were popular among Romans. **Pilgrimages** - Pilgrimages in Christianity, Buddhism, and Islam were spiritual journeys and sightseeing opportunities. - Businesses emerged to organize trips, provide food, drink, and lodging for pilgrims. **The Grand Tour** - Began in the 17th century in England; lasted 2-3 years. - Young gentlemen toured France, Italy, Greece, and other European cultural centers. - Focused on classical architecture, art, and history. - Exclusive to the wealthy due to high costs. - Banks provided letters of credit to travelers. - Declined due to safety concerns. **Thomas Cook Travel Company** - Founded by Thomas Cook; expanded by his grandson in 1899. - Sold in 1928 to the Belgian company managing the Orient Express. - Taken over by British railways during WWII and nationalized post-war. - Privatized in the 1970s; declared bankruptcy in 2019. **Post-WWII Travel and Tourism** - Jet plane technology made travel faster and easier. - Air travel was expensive until deregulation in the 1970s and the rise of discount airlines after 1990. - The end of the Cold War opened new destinations. **Economic Importance of Travel and Tourism** - In 2019 (pre-pandemic): - Travel and Tourism accounted for **10.5% of global jobs (334 million)** and **10.4% of global GDP (US\$10.3 trillion)**. - International visitor spending: **US\$1.91 trillion**. - 2024 projection: **\$11.1 trillion global economic contribution**. **Cruise Ships** - **1844**: Peninsular and Oriental Steam Navigation Company launched cruises from England to the Mediterranean. - **1906**: Cunard Line\'s *Mauretania* and *Lusitania*: - Largest ships of their time, carrying 2,198 passengers. - Introduced speed-focused design and dinner dress traditions. - Lusitania sunk by a German U-boat in 1915. **Titanic (1912)** - Luxury cruise with different class-based amenities: - Famous First-Class passengers: John Jacob Astor IV, Isidor Straus, Charles Melville Hays. - Poor amenities for Third-Class passengers. - Departed from Southampton; stopped in France and Ireland before heading to New York. - Sank in 2 hours and 40 minutes after hitting an iceberg; **1,500 deaths**. Bodies were sent to Halifax. **Evolution of Cruises** - Decline of ocean-crossing cruises with the rise of jetliners in the 1960s. - Modern cruises focus on destinations like the Caribbean and Alaska. - Cruise ships are now like floating hotels with nightclubs, sports facilities, and entertainment. - Growth: From **500,000 passengers in 1970** to **over 20 million in 2013**. - *The Love Boat* (1977-1986): Popularized cruise vacations. **Commercial Aviation** - **First Passenger Flight** (1914): Tampa to St. Petersburg, Florida. - One passenger per flight; limited service. - **1930s Advances**: - Pan American\'s Clipper 314 flew transpacific routes. - Planes like the Douglas DC-3 carried up to 32 passengers efficiently. - **Post-WWII**: Pressurized cabins introduced comfort and safety. - **Boeing 747** (1970): Revolutionized long-distance travel with **8,000-mile range without refueling**. **Pre-COVID and Post-COVID Air Travel** - Growth: 23.8 million flights (2004) → 38.9 million flights (2019). - COVID-19 drastically reduced flights in 2020. - Industry projected to recover beyond 30 million flights by 2021. - Environmental concerns remain significant. **Cruise Industry Innovations** - Megaships (e.g., *Icon of the Seas*): Can carry 7,600 passengers. - Features like multiple pools, water slides, and entertainment options. - Cost-saving innovations include energy efficiency and leasing private islands for exclusive tours. **All-Inclusive Resorts** - Originated from Roman spa traditions and modernized in the 1950s by Club Med. - Business model eliminates the \"holdup problem\" (unexpected costs). - Generates high profits by offering a fixed-price experience. - Criticized for economic isolation and limited local benefits. **Key Tourism Preconditions** - **Security to travel**. - **Resources (financial and transportation)** to make travel possible. Week 9 ====== **Types of Money** 1. **Definitions**: - **Commodity Money**: Objects like gold, silver, shells, or grain that hold intrinsic value. - **Token Money**: Coins or paper money tied to the value of a commodity (e.g., gold standard). - **Fiat Money**: Money backed by government declaration, not tied to a commodity (e.g., Canadian dollar). - **Digital Money**: Exchanged electronically, such as cryptocurrencies. - **All Money Depends on Consensus**: Works only because people agree on its value​1. 2. **Historical Developments**: - Coins began as metals with intrinsic value but transitioned to representative tokens. - Paper money evolved from representing gold/silver to the fiat system. - Digital money represents the newest form of exchange based on information rather than physical presence​1. **Banking Evolution and Functions** **Bank of England (1694):** - **Purpose**: Created to raise funds for the Navy. - **Early Operations**: - Issued currency. - Managed public debt. - Became \"the bankers\' bank,\" holding reserves for itself and other banks. **U.S. Federal Reserve (1913):** - **Reason for Creation**: Response to the 1907 financial crisis to stabilize the monetary system. - **Key Roles**: - Centralized monetary control. - Regulated banks. - Acted as the lender of last resort. - Set interest rates​. **Banking in Canada:** - **Early Development**: - Chartered banks like the Bank of Montreal (1817) were key financial players. - Conservative banking policies and branch systems prevented early failures. - **Key Milestones**: - 1935: Bank of Canada established for central monetary control, later nationalized in 1938. - 1967 Bank Act: - Removed a 6% cap on personal loan interest rates. - Allowed banks to enter the mortgage market. - Pushed for a more open banking system following the Porter Commission (1964)​1. **Currency Systems and Exchange Rates** **Types of Exchange Rates:** 1. **Free Floating**: - Value determined entirely by supply and demand in currency markets (e.g., Canadian dollar). 2. **Managed Floating**: - Primarily market-driven but central banks intervene occasionally (e.g., Chinese yuan, Singapore dollar). 3. **Fixed Exchange Rate**: - Currency pegged to another (e.g., Hong Kong dollar to the U.S. dollar). 4. **Currency Board System**: - Domestic currency backed 100% by foreign reserves (e.g., Bulgarian lev to the euro)​1. **Euro Currency:** - **History**: - Discussed in the 1960s; formalized in 1999 with a virtual currency. - Euro coins and banknotes distributed in 2002. - Not all EU members adopted it (e.g., Denmark opted out). - **Challenges**: - Lacks a unified financial system and sufficient fiscal coordination among members​. **Key Historical Financial Events** **Potosí and Silver:** - **Historical Importance**: - Located in Bolivia, Potosí provided massive amounts of silver that fueled early capitalism. - Spanish silver boosted global trade, reshaped economies, and spurred European colonialism. - **Modern Relevance**: - Now a major source of lithium, essential for electric car batteries​. **Marquette Case (1978):** - **Legal Outcome**: - Allowed banks to \"export\" higher interest rates from their home states to others with stricter usury laws. - Resulted in deregulation of credit card operations and rising consumer debt in the U.S. **Citibank's Move to South Dakota (1981):** - **Reason**: - South Dakota had no usury limits, allowing Citibank to avoid New York\'s strict interest rate caps. - **Impact**: - Shifted consumer finance regulations, enabling banks to maximize credit card profits nationwide. - Pushed states to compete for financial business by lowering regulations​. **Global Financial Trends** **Dominance of the U.S. Dollar:** - **Reasons**: - Abundance, liquidity, and trust in the U.S. economy. - Supported by U.S. military and geopolitical influence. - Central to global trade (90% of currency exchanges involve USD). - **Criticism**: - \"Weaponization\" through sanctions (e.g., Iran, Russia)​. **Euro vs. Dollar:** - **Euro\'s Goals**: - Reduce dependence on the USD. - Establish a safer, diversified reserve currency. - **Barriers**: - Lack of centralized fiscal control. - Relatively small debt markets compared to the U.S. Treasury​. **Big Mac Index:** - **Purpose**: - Demonstrates **Purchasing-Power Parity (PPP)** by comparing the price of a McDonald's Big Mac in different countries​. **Credit Card Industry Evolution** **Growth of Consumer Finance:** - 1960s: Credit cards expanded from local markets to national networks (e.g., BankAmerica, Master Charge). - Challenges: - High administrative costs, fraud risk, and usury laws made profitability difficult. **Citibank Innovations:** - Early struggles in New York due to low usury limits. - 1976: Attempted service fees led to public backlash and lawsuits. - Post-Marquette: Exploited deregulation to expand credit operations​. **Monetary Funds and Central Banks** 1. **Central Banks**: - Manage currencies, interest rates, and banking systems (e.g., Bank of England, Federal Reserve, Bank of Canada). - Example: The Federal Reserve was created in 1913 after the 1907 crisis to stabilize the monetary system​. 2. **International Monetary Fund (IMF)**: - Monitors global monetary policies, provides financial support in crises, and promotes economic reforms. - Assists countries in managing exchange rate systems like free-floating or fixed​. 3. **Canada**: - 1931: Left the gold standard. - 1935: Bank of Canada established for centralized monetary control. - 1967: Banking reforms allowed for mortgages and lifted interest rate caps​1. **Exchange Rates and Currency Systems** 1. **Types of Exchange Rates**: - **Free Floating**: Market-driven (e.g., Canadian dollar). - **Managed Floating**: Central bank intervenes occasionally (e.g., Chinese yuan). - **Fixed Rates**: Pegged to another currency (e.g., Hong Kong dollar to USD). 2. **Reserve Management**: - Countries hold reserves (e.g., USD, Euro) to back currencies and stabilize rates. - Example: Hong Kong uses large reserves to maintain its USD peg​1. **European Monetary System (EMS) and Euro** 1. **EMS**: - Created after Bretton Woods to stabilize exchange rates. - Introduced the ECU and fixed-but-adjustable exchange rates. - Inflation and crises forced some currencies out (e.g., British pound)​. 2. **Euro**: - 1999: Launched as a virtual currency; coins and notes introduced in 2002. - Maastricht Treaty (1992): Set strict economic criteria for joining the Eurozone. **Global Financial Trends** 1. **Dominance of USD**: - USD remains the primary global reserve due to stability, liquidity, and U.S. economic power. - Drawback: Countries are vulnerable to U.S. monetary policies​. 2. **Efforts to Diversify**: - The euro and Chinese yuan aim to reduce USD dominance but face challenges like lack of unified systems​. **Marquette Case (1978)**: - Allowed U.S. banks to export higher interest rates, driving deregulation and national credit card expansion​. **Citibank's Move to South Dakota (1981)**: - Exploited lax usury laws to bypass New York restrictions, reshaping U.S. consumer finance​ Week 10 ======= **Evolution of the Textile Industry** - **Origins and Early History** - Textiles date back to prehistoric times (100,000--500,000 years ago). - Early hubs: China, Turkey, and India along the Silk Road. - Egyptian Pharaohs used linen and animal skins; Byzantine Empire prized purple silk. - **The Silk Road (100--200 BCE)** - Connected China to Rome; silk was highly demanded in the Roman Empire for comfort and status. - Silk production was a Chinese state secret until \~300 AD. - Spread of silk facilitated cultural and economic exchanges and was linked to the Black Plague\'s spread in the 14th century. - **Industrial Revolution (1700s)** - Shifted textile production from homes (cottage industry) to factories. - Key inventions: - **Spinning Jenny (1764)**: Sped up thread production. - **Water Frame (Richard Arkwright)**: Stronger thread via water power. - **Power Loom (1785)**: Faster weaving with steam power. - Cotton gin (1793): Mechanized seed removal, boosting cotton production. - By the 1800s, Britain dominated the global cotton industry, expanding it to America. - **Global Spread** - Cotton spread west via trade and war (Alexander the Great introduced cotton to Europe). - By 1500, cotton was widespread in Europe due to Muslim traders and colonization. - **Labor Dynamics** - Initially, women and children worked in factories due to cheap labor. - Lowell Mills in the U.S. employed \"mill girls,\" offering independence but harsh conditions. - Sharecropping replaced slavery post-Civil War, continuing reliance on cotton in America. - **Sharecropping** is a system of agriculture in which a landowner allows a tenant to use their land in exchange for a share of the crops produced on that land. **Fast Fashion** - **Origins and Development** - Emerged during the Industrial Revolution, accelerated in the mid-20th century. - Zara (1975): Introduced speed and adaptability in fashion. - H&M (1947): First major fast fashion brand; expanded globally by the 2000s. - **Key Features** - Quick production cycles: Zara can go from design to store in 15 days. - Trends are adapted to customer demand, not seasonal schedules. - Low prices and constant new inventory drive consumer visits. - **Labor Issues** - Fast fashion often relies on sweatshops with poor conditions: - Long hours (10--18 hours/day), unsafe environments, low pay. - Women face verbal and physical abuse in many factories. - In response, home-based work emerged in places like China and Latin America, accounting for up to 60% of garment production. - **Cultural Impact** - Popularized by figures like Kate Middleton and Michelle Obama. - Democratized fashion, allowing trends to reach all income levels. **Indian Textile Industry** - **Historical Role** - India supplied 95% of British cotton by the 1600s--1700s. - Known for techniques like dyeing and producing vibrant calico fabrics. - **Colonial Exploitation** - British policies banned Indian textiles to protect their own industry. - Tariffs and taxes made Indian goods uncompetitive. - Resources and profits were drained from India to benefit Britain. **Ethical and Environmental Concerns in Textiles** - **Sweatshops** - Predominant in developing nations (e.g., Cambodia, Bangladesh). - Workers face exploitative conditions and unsafe workspaces. - **Sustainability** - Global textile industry generates \$450 billion annually; only \$3 billion (\~0.5%) is fair trade or sustainable. - Waste and labor practices highlight the need for change. - **Disasters Highlighting Issues** - Triangle Shirtwaist Factory fire (1911, New York): 146 garment workers died. - Rana Plaza collapse (2013, Bangladesh): Over 1,100 fatalities due to unsafe factory conditions. **Economic Impact of Cotton** - **Global Trade and Dominance** - Cotton became a global commodity, driving British industrial power. - By 1830, English cotton production reached 347 million yards annually. - In the 1850s, U.S. cotton accounted for over 50% of global exports. - **Post-Civil War U.S.** - Sharecropping replaced slavery in cotton farming. - New markets in India and the Middle East emerged due to disruptions in U.S. supply. - **Technological Innovations** - Spinning Jenny and power looms made mass production possible. - Steam power revolutionized efficiency, reducing labor needs. Week 11 ======= **1. What is Petroleum?** - Petroleum is a naturally occurring liquid found beneath the Earth\'s surface. - Formed by the decomposition of organic matter under high pressure and heat over millions of years. - **Key Uses**: - Fuel for vehicles, heating units, and machines. - Converted into products like plastics, fertilizers, kerosene, and gasoline. - **Characteristics**: - Contains hydrocarbons of varying molecular weights. - Denser petroleum is harder and costlier to refine, making it less valuable. - **Energy Sector**: - Divided into **upstream** (finding and extracting oil), **midstream** (transport and storage), and **downstream**(processing and selling products). - **Pros**: - High energy efficiency and easy transport. - Versatile with multiple uses. - **Cons**: - Non-renewable and emits harmful carbon. - Extraction and transportation damage the environment. **2. Gasoline** - Originally a byproduct of kerosene refining. - Before internal combustion engines, gasoline had limited use and was often discarded. - Became essential for cars, tractors, and planes after the invention of the internal combustion engine. - **Historical Figures**: - **Karl Benz**: Developed commercial production of gasoline cars in the 1880s. - **John D. Rockefeller**: Founder of Standard Oil, which benefited massively from gasoline demand. - **Impact on Society**: - Cars required highways and gas station networks. - Allowed suburban expansion. - Sparked exploration in Alberta, Texas, and the Middle East. **3. OPEC (Organization of Petroleum Exporting Countries)** - **Founded**: 1960 to unify and coordinate petroleum policies among member countries. - **Role**: - Manages oil production quotas. - Significant influence on global oil prices due to controlling 72% of reserves. - 1973 oil embargo by OPEC caused an economic recession in the West. **4. The Oil Market** - **Benchmarks**: - **Brent Crude**: A global price benchmark from North Sea oil. - **West Texas Intermediate (WTI)**: U.S. benchmark based in Oklahoma. - **Price Differentials**: - Alberta's oil prices are lower due to transportation costs and heavier oil (e.g., WCS -- Western Canada Select). - Heavy oil like WCS and Dilbit (bitumen + diluents) are discounted compared to lighter oils like Brent and WTI. - **Spot Transactions**: - Involves single shipments purchased for prompt delivery at market prices. **5. Environmental Concerns** - Petroleum production and transport create pollution and land disturbances (e.g., pipelines). - Oil refining emits harmful chemicals and contributes to global warming. - Alternatives like solar, wind, and biofuels are gaining prominence. **6. Global and Political Impact of Oil** - **Geopolitical Events**: - Oil supply disruptions cause price volatility. - Historical events tied to oil: - 1973 Arab Oil Embargo. - Iranian Revolution and Iran-Iraq War. - 1990 Gulf War. - **1953 Iranian Coup**: - Organized by the CIA and British Intelligence to favor oil interests. - **Strategic Resource**: - Essential for war machinery like tanks, planes, and ships. - Can lead to international conflicts over control. **7. Canada's Oil Industry** - Early development in **Southwestern Ontario**. - Alberta is now the center of Canadian oil production, especially with oil sands. - Companies like Imperial Oil and Petro-Canada play a major role. - Petro-Canada was initially a government-owned corporation during the 1970s crisis. **8. The \"Seven Sisters\"** - Refers to the seven major oil companies that dominated the industry in the 1950s and 1960s. - Included corporations like Exxon and Royal Dutch Shell. **9. Oil Reserves and Extraction** - **Top Countries by Reserves (2022)**: - Venezuela: 303.8 billion barrels. - Saudi Arabia: 297.5 billion barrels. - Canada: 168.1 billion barrels. - **Extraction Methods**: - **Developmental drilling**: Accessing known reserves. - **Exploratory drilling**: Searching for new sources. - **Directional drilling**: Drilling at an angle to reach specific reserves. **10. Oil's Economic Influence** - Economic growth increases oil demand, especially for transportation and industry. - Prices fluctuate based on supply, demand, and geopolitical stability. - Futures markets and spot transactions are used for trading oil. Week 12 ======= **The Service Economy** - **Definition**: Includes intangible activities like transportation, healthcare, education, finance, tourism, and consulting. Services don\'t involve physical goods but provide experiences, advice, or attention. - **Key characteristics (\"Five I\'s\")**: - **Intangibility**: Cannot be touched or owned. - **Inseparability**: Produced and consumed simultaneously. - **Inventory**: Cannot be stored for future use. - **Inconsistency**: Each service is unique. - **Involvement**: Provider and consumer must participate. - **Global Importance**: - Accounts for **63.6% of the global economy**. - Makes up **two-thirds of global GDP** and **half of global employment**. - The **US** contributes **30% of global service sector output**---more than the next four largest countries (China, Japan, Germany, UK) combined. - **Economic Trends**: - Transition from industrial to service economies began in the 1950s, accelerating in the 1970s with deindustrialization. - Service economies dominate in developed countries and are expanding in developing regions. - The service economy includes traditional sectors (e.g., transportation, hospitality) and advanced sectors like IT, finance, and R&D (quaternary and quinary sectors). **Deindustrialization** - **Definition**: A decline in manufacturing and industry, leading to a rise in services. - Caused by technological advancements (e.g., mechanization, mass production) that increase productivity, reducing labor needs in farming and manufacturing. - **Case Studies**: - **Detroit**: - Once a hub for auto manufacturing. - Population peaked at 1.8 million in 1950 but dropped to 700,000 by 2010 due to job losses starting in the 1940s. - Issues: Poverty, inequality, and city bankruptcy in 2013. - **Pittsburgh**: - Famous for steel production, with 60% of US steel output in 1910. - Lost 95,000 jobs in the early 1980s; unemployment reached 27%. - Shifted to healthcare as the largest employer by 1980. However, healthcare jobs were mostly lower-paid and less secure compared to unionized steel jobs. - **Global Cities (New York, London, Tokyo)**: - Rose as centers of advanced services (law, finance, accounting) in the 1980s. - Centralize decision-making for multinational corporations. - Workers in these cities fall into a \"U-shaped\" income distribution: highly paid professionals and low-paid service workers with few middle-income jobs. **Offshoring** - **Definition**: Moving production or services to foreign countries to lower costs. - **Difference from outsourcing**: Offshoring involves a company maintaining control of overseas operations, while outsourcing uses independent foreign suppliers. - **Drivers of Offshoring**: - **Technological Advances**: Improved shipping, telecommunications, and logistics. - **Global Agreements**: Post-WWII frameworks (e.g., Bretton Woods system) reduced trade barriers and facilitated global production. - **Key Developments**: - Began with electronics in the 1960s in East Asia (e.g., Japan, Taiwan, Hong Kong). - By the 1970s, global production systems spread tasks across countries for efficiency. - **Effects**: - Benefits: Lower production costs, access to specialized skills. - Drawbacks: Job losses in home countries, poor working conditions in offshore locations, increased inequality. **Offshore Financial Centers (OFCs)** - **Definition**: Locations that provide financial services to non-residents at a scale disproportionate to their local economies (e.g., Cayman Islands, Panama). - **Purpose**: - Tax avoidance. - Secrecy and regulatory evasion. - **Impact**: - Loss of global tax revenue (\~\$500-\$600 billion annually). - Highlighted by scandals like the **Panama Papers** in 2016. **Environmental Impacts of Services** - Despite their intangibility, some service industries are highly polluting. - **Example**: Cruise Industry. - Generates 200,000 gallons of sewage and 1 million gallons of greywater per ship weekly. - Emits as much pollution as **350,000 cars**. - Waste incinerators release hazardous toxins. **Supply Chain Resilience: The ADDAPT Framework** - **Purpose**: Helps companies prepare for and respond to supply chain disruptions. - **Components**: 1. **Anticipate**: Identify potential risks (e.g., \"what-if\" scenarios). 2. **Detect**: Monitor for disruptions (e.g., abnormal delivery patterns). 3. **Diagnose**: Analyze and address issues effectively. 4. **Activate**: Mobilize resources quickly to restore operations. 5. **Protect**: Develop strategies to prevent future disruptions. 6. **Track**: Monitor performance and improve processes. - **Case Study**: Loblaw during COVID-19. 1. Struggled initially but adapted by creating a pandemic task force, rerouting logistics, and communicating with suppliers.