GEOG 254 Economic Geography_2globalization PDF

GEOG 254 Society and Environment 02 Economic Geography GEOG 254 Society and Environment 02 Economic Geography Part 2a: European Rise to Industrialization  European Pre-Industrialization History: Land & Power Structures Small-scale and subsistence agriculture → Growing hierarchies of land own...

GEOG 254 Society and Environment 02 Economic Geography GEOG 254 Society and Environment 02 Economic Geography Part 2a: European Rise to Industrialization  European Pre-Industrialization History: Land & Power Structures Small-scale and subsistence agriculture → Growing hierarchies of land ownership and power led to European feudalism ~ 5th to 15th century Based on customs and traditions, BUT with strong social order based on “trifunctionality” of societal classes: Clergy (church): owns land, sets social rules and moral values, collects taxes Land-owning aristocrats: owns land, sets practical rules, collects taxes The peasants (serfs): pay rent, produce food European Feudal Society Social order: Not based on performance or contractual relationships, but on birth, customs/traditions and the personal relationships between the landowner and the peasant. Typically: – Peasants were not allowed to leave the land – No choice regarding their livelihood, costs or production – No social mobility between classes Peasant duties: Subsistence food production PLUS payments and work for upper classes – Pay rent in the form of a percentage of the crop they grew – Unpaid labour services – Banal obligations of inheritance taxes, marriage taxes, milling fees, etc. Feudal Towns and Cities Few towns and cities due to low agricultural productivity rates (not enough food surplus to support towns) Within cities, feudal guilds and artisans produced a variety of goods Guilds developed: skilled workers with years of experience Merchants ~12th century: increasingly important class of urban merchants emerged → Bourgeoisie Travellers between settlements, regions and countries Bourgeoisie grew alongside growing mobility and infrastructure BUT: small, limited and personalized market (aristocracy); peasants were usually too poor to buy goods  The Demise of Feudalism: Three Key Reasons REASON 1: Magna Carta (“Great Charter” in Latin) Signed 1215 by King John of England Strengthened royal authority Limited the power of knights and nobles Shifted some rights and privileges to the common people Led to more democratic forms of government The Demise of Feudalism: Three Key Reasons REASON 2: The Bubonic Plague “Black Death”, plague bacterium (Yersinia pestis), spread by infected fleas on rodents. Most fatal pandemic recorded in human history, causing the deaths of 75–200 million people Originated in Asia around the 1300s, peaking in Europe from 1347 to 1351 → Caused trade, travel and commerce to slow  The Demise of Feudalism: Three Key Reasons REASON 3: The 100-Year War Roughly 1337 - 1453 Fought between the English and the French Shifted power from feudal lords to monarchs and the common people Monarchs on both sides collected high taxes to build large professional armies Therefore, the monarch didn’t need the feudal lords for the army, thus rendering them with less power  From the 15th to the 19th centuries, feudalism was gradually replaced In many ways, capitalism Emergence (especially in England) of emerged out of feudalism Capitalism Most important institution became the market, amid a strengthened class of commoners  Emergence of the Working Class Under Feudalism Under Capitalism Over several Labour Labour centuries, obligations obligations determined by determined by peasants were customs and contractual forged into a traditions relations working-class Peasants had no Worker is free to choice where they sell their services situation lived to the highest In the context of However, the bidder peasant can However, a industrial Europe, expect the worker cannot this population landlord to expect an provide a employer to became known as livelihood provide a the “proletariat” livelihood  Evolution of Capitalism Capitalism encouraged commodification of labour Made money to be the measure of all worth Personal / trust relationships depersonalized, now mediated by money (and contracts)  Capitalism Continued As capital seeks out the highest rate of profit, it flows into some regions and out of others Some regions become rich, others poor Capitalism and colonialism are intertwined Created a system of commodity production and consumption on all levels Wallerstein’s World Systems Revisited Mini systems: predominant economic systems in pre-agricultural societies. World empires: predominant economic systems from earliest civilizations to the 15th century. A single world economy: has dominated since the fifteenth century. World regions have been drawn into a single division of labour a single economic system based upon a globally integrated network of production, circulation, and consumption.  Wallerstein Revisited: Growing Core- Periphery Complexity Core regions exploited the raw materials of peripheral areas and sold manufactured goods back to these areas → unequal relationship accumulated wealth and riches in the core. Peripheral regions were subordinated and marginalized by the core, while exploited by the core and the semi-periphery for cheap raw materials and unskilled labour. Semi-peripheral regions lay between these two extremes. Often exploited by core regions, but in turn themselves exploited truly peripheral regions. External areas managed to steer clear of the European world capitalist economy (e.g. Russia) and continued to exist as separate world empires.  ‘Core – Periphery’ Histories of European World Capitalist Economy  Transformation of Economies Feudalism Capitalism Trade largely confined to In market-based societies, precious goods (e.g., spices, trade occurs in all sorts of silk, porcelain) goods from luxuries to Consumers were only everyday goods aristocrats who had the Long distance travel is means to purchase goods integral to the economic Long distance trade was system peripheral Expansion of trade networks was a major incentive to the growing networks of land and sea routes Capitalism and Growth Market societies encouraged the growth of not only economies, but of countries in several ways: Rising wealth Mass literacy National banking system with a national currency  Industrial Revolution Began ~ mid-18th century explosive increase of capitalist production in Europe and North America through jump in – speed of productivity – volume, diversity, and applications of new technologies complex growth of inputs, outputs, and technologies Early Industrialization Industrialization started in Northwestern Europe with Britain BECAUSE: Steam engine invention Massive amounts of coal Iron located in close proximity to coal High concentrations of labour, capital, and output → central Great Britain became the centre of textile workshops and metal working industries – Manchester – Sheffield – Leeds  Material flows in the steel industry required commodities: – coking coal – iron ore – limestone steel mills at – Gary, Indiana – Cleveland, Ohio preferred location – point of lowest transportation costs in between North American Core and Periphery 1911 GEOG 254 Society and Environment 02 Economic Geography Part 2b: Location Concepts and Globalization  Geographical considerations for economic activities: location factors situation factors: site factors: relative location, i.e. ‘absolute’ location, i.e. – spatial proximity to – resource availability at resources and markets the site: transportation costs land for input labour transportation costs capital for output  Principles of Location 1. spatially fixed costs: – relatively unaffected in their amount/importance no matter where the industry is located, e.g. wage rates set by national labour contracts electricity costs 2. spatially variable costs: – significant differences from place to place in their amount/importance, e.g. overcoming distance (transport) attracting labour (competition)  Market area of a service market area: range: maximum area surrounding a distance people are service from which willing to travel to use customers are a service attracted (‘hinterland’) threshold: minimum number of people needed to support the service  Central Place Theory (Christaller 1933) Key concepts: price for goods and services Central place: centre with certain functions Range is the maximum distance consumers are prepared to travel to acquire particular goods or services. Threshold is the minimum size of at what distance, and what price, are residents around the centre willing to population or income, needed to purchase goods/services from the centre? make a business viable. → system of centres of various sizes will emerge over space, each supplying particular types of goods → hierarchy of central places. distance from central place  …cont’d 3. profit maximization → under perfect economic conditions: least total cost location → under imperfect competition: sales and market may be more important than ‘best’ location 4. minimization of variable costs - locational choice according to variable cost with largest spatial variation 5. transportation costs - often the most dominant variable cost driving decision of the plant site 6. interdependence linkages - industrial agglomerations and supply networks influence spatially variable costs immensely  Locational Rent Concentric circles develop based on - market (“receivable”) price - transportation costs - production costs von Thuenen’s Concentric Model Industrialization and von Thuenen  Location strategies I location near input resources – bulk-reducing industries input particularly heavy or bulky, but output much smaller, e.g. copper, steel – energy-intensive industries electricity or water (power, cooling, cleaning) Transportation Charges spatially variable costs determine the carrier, depending on distance break-of-bulk point: combined multi-good shipments are broken into smaller parts (e.g. at seaports, airports, train stations) typical break-of-bulk point: goods are re-packed from overseas transport onto trains and trucks  Location strategies II location near markets – bulk-gaining industries soft-drink bottling fabricated metals industry – single-market manufacturers component manufacturers – perishable products dairy products newspapers  Central Place Theory (Christaller 1933) Key concepts: price for goods and services Central place: centre with certain functions Range is the maximum distance consumers are prepared to travel to acquire particular goods or services. Threshold is the minimum size of at what distance, and what price, are residents around the centre willing to population or income, needed to purchase goods/services from the centre? make a business viable. → system of centres of various sizes will emerge over space, each supplying particular types of goods → hierarchy of central places. distance from central place  Central Place Theory: thinking further How does the model develop when there is more than one center? Central Place Theory: Layered Webs and Hexagons  Central Place Theory: Layered Webs and Hexagons Christaller's Development of First-, Second-, and Third-Order Settlements in a Hexagonal Model That Grew from a Circular Boundary Line Approach. Source: Harland 2011. The Dimensinos of Graphic Design and Its Spheres of Influence. Central Place Theory: Layered Webs and Hexagons Source: https://www.geographyrealm.com/central-place-theory/ Central Place Theory by German geographer Walter Christaller 1933 The depiction of nested hexagons in Christaller's central place theory. Source: Christaller 1933; digitized by Boris Michel 2016 in http://dx.doi.org/10.1111/geob.12 099  Specialization in economic activity Location quotient: LQ = Ri / Rr Ni / Nn Ri number of workers in the i-th industry in the region Rr number of workers in the labour force in the region Ni number of workers in the i-th industry in the nation Nn number of workers in the national labour force If LQ>1, the region is specialized in this industry, exports the product, …and this industry represents a ‘basic sector’ in this region  Economic base analysis basic industries: a settlement’s distinctive economic structure derived from its basic industries non-basic industries: enterprises whose customers live in the same community (mostly consumer services) economic base: a community’s unique collection of basic industries  Services service: 3 major categories within any activity that fulfills the service sector services a human wants economy: or needs and returns money to those who consumer services provide it – business → individual business services – business → business public services – public → individuals and businesses Economic activities in categories  Geography of talent I: professional education levels measures: percentages of… 1. people with college degrees 2. people employed as scientists or engineers (R&D innovation) 3. people employed as professionals or technicians (R&D implementation)  Geography of talent II: cultural and social diversity measures: 1. cultural facilities per capita 2. percentage of homosexual men 3. ‘coolness’ index 1. percentage of the population in their 20s, 2. number of bars, nightlife and art galleries per capita GEOG 254 Society and Environment 02 Economic Geography Part 2c: Modern Economy and Industrialization Stages Industrial Revolutions in Stages - Starting 1790s: First Industrial Revolution - Mechanical innovations - steam engine, cotton spinning, railroads Industrial Revolutions in Stages - Starting 1790s: First Industrial Revolution - Mechanical innovations - steam engine, cotton spinning, railroads - Starting 1870s: Second Industrial Revolution - Electrification, assembly lines, aviation Industrial Revolutions in Stages - Starting 1790s: First Industrial Revolution - Mechanical: steam engine, cotton spinning, railroads - Starting 1870s: Second Industrial Revolution - Electrification, assembly lines, aviation - Starting 1970s: Third Industrial Revolution - Electronic: Mainframe and personal computing, internet Industrial Revolutions in Stages - Starting 1790s: First Industrial Revolution - Mechanical: steam engine, cotton spinning, railroads - Starting 1870s: Second Industrial Revolution - Electrification, assembly lines, aviation - Starting 1970s: Third Industrial Revolution - Electronic: Mainframe and personal computing, internet - NOW / NEXT: Fourth Industrial Revolution - Digital: synergies of nanotechnology, brain research, 3D printing, mobile networks, quantum computing, artificial intelligence The Fourth Industrial Revolution (IR4.0)  IR 4.0 - Key Technologies DATA Instrumentation is the capability to generate and capture live real‐time data through the use of sensors, meters, appliances, and personal devices. DIGITAL Interconnection is the capacity to circulate, pool, exchange, integrate, and communicate this data, through digitalization and technologies such as the Internet of Things (IoT), 5G, radiofrequency identification (RFID), data platforms, and interfaces. ARTIFICIAL Intelligence The application of data science (statistics, modelling, optimization, and visualization) and computing power (artificial intelligence/autonomous systems/machine learning, and cognitive, quantum, and ubiquitous computing) to enable big data to make decisions and/or assist humans in doing so. Parallels drawn with ‘data as the new oil’ Data is a vital primary raw material for the 21st century economy: Just as oil shortages constitute a serious threat to an oil-fired urban economy, any scarcity of data, particularly well-curated and sensitive data, represents an existential threat to a data-fired economy. Problem: Governments and Society Unprepared. Example: Questions US Congress Members asked Mark Zuckerberg April 2018 "Is Twitter the same as what you do?" South Carolina Senator Lindsey Graham (R) “If I'm emailing within WhatsApp... does that inform your advertisers?" Hawaii Senator Brian Schatz (D) "How do you sustain a business model in which users don't pay for your service?“ Missouri Senator Billy Long (R) "My son is dedicated to Instagram, so he'd want to be sure I mentioned him while I was here with you." Missouri Senator Roy Blunt (R) "Would you bring some fiber, because we don't have connectivity?" West Virginia Senator Shelley Moore Capito (R) “Mr. Zuckerberg, a magazine I recently opened came with a floppy disk offering me 30 free hours of something called America On-Line. Is that the same as Facebook?” Indiana Senator Chuck Grassley (R) "How many data categories do you store, does Facebook store, on the categories that you collect?" Nebraska Senator Deb Fischer (R)  “Artificial intelligence is the future, not only for Russia, but for all humankind…. It comes with colossal opportunities, but also threats that are difficult to predict. Whoever becomes the leader in this sphere will become the Source: Creative Commons ruler of the world.” Vladimir Putin 2017  Strategic Coupling in IR4.0 Produce IR 4.0 Technologies and secure a role in the IR4.0 technology Global Production Networks Embrace of IR4.0 technologies to move up the value chain in established Global Production Networks and to develop new products and establish new Global Production Networks Leaders and laggards in IR4.0