Transcript Development of the World Economy and Core

Development of the World
Economy and Core-Periphery
Characteristics of Capitalism
• Markets
– Consist of buyers and sellers of commodities (goods and services
bought and sold for a price)
– PROFIT is incentive for selling goods and services
• Class relations
– Capitalist class system based on money and earned status (not
tradition and born rank)
– As merchants gained wealth in the 15th century, they also gained
political power
• Aristocracy (hereditary) resisted
– Labor itself became a commodity, gave some power to workers
Characteristics of Capitalism
• Finance
– Money became standardized, and ubiquitous as a
measure of value
– Organization and control of money became an industry
in its own right (banking, investment, insurance,
commercial credit)
• Territorial and Geographic Changes
– Capitalism creates uneven spatial development
– Capitalism and colonialism are closely linked, and
created a system with Europe at the center and the
colonies in the periphery
– As capitalism spread, urban areas became more
developed, and more people moved to cities
Characteristics of Capitalism
• Long-Distance Trade
– Buying and selling goods and services over long
distances is a key element of capitalism
– Long-distance trade links producers and
consumers in capitalism
– In 16th – 18th centuries, Europe built many roads,
canals (and later railroads) to facilitate trade
• Accelerated time-space compression (takes less time
to get someplace)
– Led to development of comparative advantage
• Comparative advantage stresses relative advantage
of one place over others; e.g., countries export the
goods they can produce at the lowest relative cost
Characteristics of Capitalism
• New Ideologies
– Capitalism is a set of economic, political,
geographic relations simultaneously
– Printing press (1450) helped new ideas circulate
more freely
• Shift from God-centered view to human-centered
• Protestant reformation (emphasized role of individual,
stressed delayed gratification, savings, and material
success as a sign of God’s grace, elevating work to a
moral obligation, paving the way for capital
accumulation)
• Science (16th century) restructured view of the world
• Enlightenment emphasized science and secular
political thought
Characteristics of Capitalism
• The Nation-State
– Rise of Nation-State
• Nation: group of people who share a common culture,
language, history, territory, identity
• State: Land, people, government, transportation, and
communication system; economic system;
sovereignty, recognition
• Nation-State: where political and national boundaries
coincide
– Capitalism came long before the rise of the
nation-state
• Not necessarily a causal relationship
The Industrial Revolution
• Introduction
– Industrial Revolution occurred long after
capitalism began
– Industrialization includes transformations in
inputs, outputs, and technologies
• Inanimate Energy
– Industrialization may be defined as the
harnessing of inanimate sources of energy
• Running water, wood, coal, petroleum, and natural
gas (fossil fuels); each had spatial outcomes
The Industrial Revolution, continued
• Technological Innovation
– Innovation helped reduce costs and increase revenues
• Technology: means of converting inputs to outputs
– Development of the factory system
• Began with textile industry
• Increased capital (machines), interchangeable parts, many
workers under one roof
• Productivity Increases
– Productivity: level of output generated by a given
volume of inputs
– Cost to produce goods declined, consumption of
material goods increased
– Industrialization of agriculture made food progressively
cheaper; people ate more and better food
The Industrial Revolution, continued
• Geography of the Industrial Revolution
Fig. 2.17: Spread of the
Industrial Revolution
across the European
Continent. Well after
Britain had industrialized,
the new form of
manufacturing led to the
formation of industrial
complexes in France, then
later in Germany and
Italy.
The Industrial Revolution, continued
Global Diffusion of Industrial Revolution
• Fig. 2.18: Global diffusion of the Industrial Revolution. Began in England, then
spread to continental Europe; then to North America and Japan (1870s); reached
Russia 1920s
Creation of an Industrial Working Class
• Creation of a working class through labor
unions
• Urbanization: cities as centers of capital and
labor
Fig. 2. 21: An
urbanization
curve expresses
the proportion of
a country’s
population that
lives in cities.
Urbanization
rose with
industrialization.
Growth of Global Markets and
International Trade
• Transportation faster and cheaper; imports
and exports increased; international finance
grew; early industrializers had little
competition
Colonialism: Capitalism on a World Scale
• “Age of Exploration” -- colonialism was
economic, political, cultural
• Colonized nations fought rule by foreign
colonizers
– Inca against Spain; Zulu against Dutch Boers; Indian Sepoys against
British (1857); Boxer Rebellion in China against British (1899-1901)
– Only Japan escaped colonization
• Europe became a world power through
colonization
Colonialism: Capitalism on a World Scale, cont’d
• Effects of Colonialism
– Annihilation of indigenous peoples
– Restructuring around primary economic sector
– Formation of dual society
• Co-optation of native elites (often ethnic minorities) exacerbated rivalries
(e.g., Hutu and Tutsi in Rwanda)
– Polarized geographies
• Colonial port cities became dominant
• Transport networks met needs of colonizers, not indigenous peoples
– Transplantation of the nation-state
• Colonial powers created states (Iraq, Afghanistan, etc.) with no respect for
indigenous cultures
– Cultural Westernization
• Beginning of homogenization of local cultures, including missionary
conversions
Colonialism: Capitalism on a World Scale, cont’d
Fig. 2.33: Railroads in
Nigeria, Burma, and
Angola show
colonial
Transportation
networks that link
coastal port cities
with interior
resources (usually
mines or
plantations)
Colonialism: Capitalism on a World Scale, cont’d
• The End of Colonialism
– Latin America gained independence early (after
Napoleonic Wars)
– Africa and Asia gained independence after World Wars I
and II
• Communist governments sometimes took control
• Intellectuals educated in the West played a role in
some places (Kwame Nkrumah in Ghana; Ho Chi Min
in Vietnam; Mohandas Gandhi in India)
• Some independence movements were violent
(Vietnam, Algeria); others were peaceful (India)
• Today, there are few colonies