- [Instructor] Hey, folks,
thanks for coming out.
What we're gonna do in this lecture
is talk a little bit about
economic processes of globalization.
This of course is going to setup
our work on the world economy
but also our work more generally
in other units of this course.
So, our major goal is going to be
to overview some of the economic
processes of globalization
historically and in contemporary terms.
And the way I'd like to go about this
is that first we're gonna talk
a little bit about the backstory
to trade and development in
the world system overall.
Second, we'll get into Wallerstein's
key arguments from the
chapter of your reader
regarding core, periphery
and semi-periphery.
And get some of the mechanisms
through which Wallerstein's
approach really works.
So the ideas of monopoly, oligopoly,
competition and so forth.
Last, we will wrap up with
a few notes on dependency
and the way in which the system can change
as we go forward and as we go
more and more into this material.
Well, to start this off
you have a reading in
this section of the class
from Kenneth Pomeranz.
It's basically an early chapter
of The Great Divergence,
the book he wrote back in the 1990s
which really made a great many waves
in terms of how we think
about market economies
and market societies.
And he wants to make a few key points,
I'd like to start this
off thinking about it.
The first really is that
well, almost every
society in human history
has had some kind of a market for exchange
and trade and so forth.
We've only been living
in true market societies,
in other words, societies
that are defined by markets
for the last 150 or so years.
And this is something he really has
to specify and spell out.
Yeah, pretty much all
societies have had economy
but it's only relatively recently
that we thought it good to
define society through economy.
And he flushes out some
of the distinguishes
and differences in talking for example
about how for a long time,
reciprocity and redistribution
were more guiding concepts
than profit and accumulation.
Secondly, that most trade occurred
not simply through market logics
but through ethnic logics
and through community-based logics.
Ethnic networks for
example were very common
not because they made sense
in strictly economic terms
but because they were functional ways
of protecting and advancing
a given social order.
And third, the trade networks
weren't just really there
to accumulate more wealth,
they were there as protectors of existing
social structures and social hierarchies.
So, the move to a true marketplace society
or true market society,
a society in which the society as a whole
is defined through its
relationship to the free market
is relatively recent.
And just to use Lechner's chapter
in your reader as a guiding post here,
this more or less corresponds
in the second wave of globalization.
Now, the idea here is not that
this isn't all necessary good
or that's all necessarily bad.
But that defining society
through the market
has a whole series of
consequences and implication
and people are only becoming conscious of
and aware of in lots of ways even today.
And this has attracted more
and more critical scrutiny
through Pomeranz' own works.
The book has been
reissued a number of times
and through the work of the
Hungarian sociologist, Karl Polanyi
whose image you see in black and white
at the bottom of the slide.
And even economist like Thomas Piketty
whose book Capital in
the Twenty-First Century
has gotten a lot of
press precisely because
he gets into some of the
paradoxes and implications
of what it means to live
in a market society today.
And to use one easy example of this
and so I'm a geographer,
I tend to focus on issues of land
and space and territory.
If you look at the
question of homelessness
and you look at the way
in which homelessness
is governed in this frame,
well, for all intents and purposes
we treat land and we treat
property like a commodity.
Land along with labor and capital
is one of the factors of production.
You have it there roughly
at the middle of the slide
but of course land is also the
context for people's lives,
people have to live somewhere.
So, we frame land, we
frame space as something
to be bought and sold
and then it creates all of these complex
outcomes and consequences
for homeless people
for displays to the
marginalized populations,
and so on and so forth.
And then there are other
implications of this as well,
for example on the case
of gated communities
where it's been
demonstrated in many studies
that gating a community basically
makes of line neighborhoods poorer
than they would otherwise be
without the gates being
installed in the first place.
Well, the right to gate a community
is a very market-based way
of thinking about space and
thinking about property.
And of course, there are other
social and cultural ways of thinking
about space and property
that therefore get
ignored or pushed aside.
I could go on for a
while about universities
and the transformation of the university
into a tool of the marketplace
but I think you get the broader idea here
on the broader implications.
Now none of this to be
really clear is to say
that governments never
destroy or harm society
or that governments are always innocent
of any harm they might cause.
Obviously that's not the case.
But since we're looking at economic
and economy-led processes
of globalization,
in one of the ideas I'm gonna introduce
and that Wallerstein
and some other writers
are going to reintroduce as
we read through the material
is that by definition, markets
are destructive of society.
They feed off society,
they profit off of society.
Again, that doesn't necessarily
mean that they're bad
or this is a horrible situation
but then we have to be conscious
of what it means to live in
a market society to that.
Moving on from Pomeranz' arguments
into those of Wallerstein
and you read them.
To introduce Wallerstein,
to introduce the world systems theory
I like to start with a
really simple problem.
Let's compare two countries,
I've chosen Brazil and
Canada in this case.
And we know of course just from being,
from knowing a few basic
things about the world
that Canada is much richer than Brazil.
Brazil isn't the poorest
country in the world
by any structure of the imagination
but it's not one of the
richest ones either,
and the gap is important.
And if we go through some other health
and development indicators,
infant mortality rates,
literacy rates, the Gini index
which is an income distribution metric.
The higher is the Gini index
the less equal is the income
distribution in the country.
We see some pretty big
difference and divergences.
So the question is why?
Both countries are big landmasses
with relatively small populations.
Both populations are concentrated
in a few select areas of the country
rather than throughout the territory.
They're both ex-colonies
and so on and so forth.
So for Wallerstein, the
problem with this comparison
is that we're looking at this
on a country by country basis.
What we need to do is understand
the position of Brazil and Canada
within the world system
and this is exactly what
we're gonna start to do next.
For Wallerstein, in
Wallerstein's approach,
the world has classically
been made up of systems,
respectively, mini and world systems,
which are a lot more important than any
national borders and boundaries
people have carved off and defined.
Mini-systems are basically integrated
trade and production networks
within a single cultural framework.
They existed for long
periods of human history
and really for all intents and purposes,
don't exist today anymore
and haven't for the last
hundred years or so.
The reason for this, Wallerstein argues,
is that for the last 150 years of course
we've been living in a world economy
and within the world system.
Defined by a global division of labor,
in other words labor being
partitioned all around the world,
constant accumulation for
more and more and more growth
and more profit and so forth.
And in theory, respect for free markets
but that doesn't always
quite work out in practice
and I'll explain what I mean by that.
Wallerstein looks at the
longer historical picture
in building up to this point in history
with the world economy the
triangular system of trade
which enriched Europe
at the expense of Africa
and North America and the Caribbean
being one example of this,
where you have a clear
pattern of exploitation
in the form of slave trade.
And then in the form of
the use of slave labor
to manufacture commodities
in the Americas.
And this is part of the broader prehistory
of the world economy
and the sort of working up to this point
where we have a truly
integrated world economy
on a global scale.
However, moving more into
the contemporary picture,
these processes lead us with a world
that is less defined by national borders
but by the concepts of core,
periphery and semi-periphery.
Core economic processes and a lot of times
spells this out pretty
clearly in your text,
are the uncompetitive ones.
And what I mean by uncompetitive here
is that they function within industries
for which competition
is basically controlled.
Leading edge industries,
high-tech, pharmaceuticals,
things like this don't face
according to Wallerstein
true free market competition.
As a result, they are free to innovate,
to charge higher prices
and so on and so forth.
Peripheral countries and peripheral places
are defined by the fact they have
peripheral economic processes.
In other words, economic processes
where there is lots of competition.
The textile industry is a
fairly good example of this.
The scales are available,
lots of people know how to sell
and fact remains that
it's pretty unlikely for
any one manufacturer,
any one supplier to be able to dictate
the rules of the industry as a whole.
As a result, those
processes are peripheral.
The core doesn't face
true market conditions.
The key industries in core countries
basically control competition
generating either monopolies,
in other words, the rule of the one
or the domination of the
single firm let's say.
Or more realistically, oligopoly
is the rule of the few.
In peripheral places and with
peripheral economic processes
that kind of concentration isn't possible
and facing competition over price,
those kinds of economic processes
are less able to act as
motors for development
and motors for a country's advancement.
Now we're gonna talk
about the semi-periphery
just here in a little bit
and in just a little bit.
Well, how does this actually work?
Well, if we look at something
like Intellectual Property Law
this is really interesting
because we see all of these tactics
through which countries
basically use their advantage
and use their position within IP law
in order to force competitors
out of the marketplace.
Amazon's probably the
most notorious example
where they use the buy
now with one click feature
claiming it was their
intellectual property
and used it to force
other online resellers
and other online sellers
out of the business,
establishing themselves in the
marketplace for many years.
Until it was determined
that lo and behold,
excuse me, until it was
determined that lo and behold
they didn't really hold
the patent on this,
somebody else had so to
speak of there first.
But by then most of Amazon's
would be competitors were defunct.
Wallerstein's argument is that
this is not strange or exceptional,
it's actually normal.
The core is able to use
intellectual property law
instruments like the Trade-Related
Intellectual Property Rights or TRIPS.
Institutions like the World Intellectual
Property Organization or WIPO
in order to define the
terms of competition
within those industries.
Politicians and political
authorities tend to listen
and the result is that
they're able to assume
a leading edge position precisely because
they do not face real
competition from others.
Some implications of this.
One, for Wallerstein,
hegemony or preeminence
basically being first or
being the most powerful
is not gained so much by force
so much as by setting
the rules of the game.
GM, Ford and Chrysler
are the old big three
of the U.S. auto industry
didn't literally have to
go to war with anybody.
They just had to engage in
anti-competitive behavior
that blocked rivals
from competing with them
until eventually the world
auto industry caught up,
and there are lots of examples of this.
Second, occasionally a single country
will have a huge head
start in core processes.
The United States after World War II
is probably a good example of this.
Most of the time though this is shared
by a group of countries.
So you see a cluster of
different places in the world
sharing a series of core processes
and as a result getting ahead of the rest.
Number three, core and
periphery are relational.
It can only be peripheral in
relation to somewhere else
and in relation to something else.
If we look at global
soccer or global football
is a really good example here,
we have this very clear division
of the world into core,
periphery and semi-periphery
in footballing terms, let's
be really clear about this.
The core is the UK.
The English Premier league is the biggest,
it's the richest, it's
the most powerful league
in global soccer or global football.
They have both the market power
to buy up the youngest,
most talented, best players
but also to keep other clubs from
basically trying to join the league,
and infringing on their
gig and on what they do.
The periphery is a country like Brazil.
Brazil produces amazing footballers
and of course, this is no big surprise.
But virtually all of them
play on European teams.
Brazil does not really have a true
high level professional
soccer or football league
that competes on equal basis
with what goes on in Europe.
As a result in footballing terms,
Brazil is peripheral
because just like a peripheral country
might send raw materials to
be refined somewhere else,
Brazil sends young footballers
to be developed somewhere else
for somebody else's profit.
Semi-periphery, this is
where I quickly introduce
the concept of
semi-periphery a little bit,
is a case of a country
like France for example.
Where on the one hand,
yes you have some great core processes.
Training facilities, competitive
opportunities and the like.
But elite players still tend to leave
for England or Spain.
Yes, they leave later
than they would leave
if they were Brazilian
but they still leave.
France is relative to Brazil,
a core country in footballing terms.
Relative to England and relative to Spain,
it's a peripheral country.
This is what it means to
be in the semi-periphery.
It means to have both core
and peripheral processes
going on at the same time.
And I can give you a few other examples
that are a little bit less silly
and more serious than this one.
For example, in the context
of the global arms industry
where you have a few core
countries and core players.
The United States, Germany,
Italy and a few others
really dominating the industry.
You have peripheral
countries that buy the arms
but don't really produce very many
or don't produce any at all.
And you have semi-peripheral countries
that in a sense are in the core relative
to the most peripheral ones
but still not really in
the leading position.
An easy example of this is India.
India has been developing its military
at a very, very rapid pace
over the last decade or so.
Prime Minister Modi has made it very clear
he intends to turn India
into a global arms exporter
but when it comes to
the really leading edge
high-tech technology,
the Rafale jets, the F-16s,
the MiG-35s and so on and so forth,
India has to buy these from overseas.
Relative to countries that
buy a lot of small arms,
a lot of military grade
weaponry but don't produce it,
India is in the core.
Relative to the U.S. and the UK,
India is in the periphery.
This is what it means to
be in the semi-periphery
of the global arms industry.
I could go into a lot more detail on this
and a lot more and develop
this a lot further.
Basically if you look for example
like regions of the U.S. like Appalachia,
on the one hand relative
to the world as a whole
that's still the core
'cause it's still in the U.S.
and the U.S. is a rich country.
But domestically relative to
New York City or Los Angeles,
Appalachia is peripheral.
Has really high poverty rates,
it has really high early mortality rates.
People live but don't live as long,
they develop diseases that
you don't see elsewhere
and so forth.
Appalachia is a semi-peripheral region.
So are the Maritimes in Canada
where again, relative
to the rest of the world
they're doing pretty well,
but relative to Canada as a whole
they're actually relatively poor.
Ultimately, it's the kind of
economic processes you have
that shape your ability to
relate to other countries
and other places in the world,
and that define how well you can do
in terms of your status
and standing in the world.
Let's wrap up here on a few key points.
One, Wallerstein's point
is that underdevelopment
and poverty are relational concepts
driven by structural
relations of inequality.
Basically do individual countries
sometimes grow and prosper?
Oh yeah, absolutely.
Taiwan, South Korea, India
were once upon a time, a lot
poorer than they are today,
they go out rich and their
relatively recent past.
But the system as a whole
remains basically unchanged.
What this means is that
to have a core, you must have a periphery.
Wallerstein's point is done by world doom,
this is a horrible, terrible, no good,
very bad world that we live in.
But that the nature of living
in a global market economy
demands the structural existence
of core, periphery and semi-periphery.
Two, most of the time we live in a world
without a clear hegemon.
True primacy in world affairs
is the exception, not the rule.
Most of the time it's a bunch of countries
taking a leading role.
Three, this is obviously
gonna have subsequent,
this is obviously gonna have implications,
pardon me, for our units
on the global economy
but also migration and development
and a whole series of other issues
where for example the migration,
people between different
regions of the world
goes to this question of core,
periphery and semi-periphery,
and all kinds of complicated
and interesting lesson.
Okay, thanks very much for listening.
