manufacturing mass production of goods for sale us dominant 1880- 1950 small markets, industrial...
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GLOBALIZATION
Manufacturing Mass production of
goods for sale
US Dominant 1880-1950
Small markets, industrial revolution, EU trade organization
Banana republics, textile industry
Inexpensive everyday items, electronics, cars
Natural resources Raw materials found
in the environment
Gold, ports Oil, Coal, Gas Poppy, opium,
ancient trade route Diamond Water Timber
Human Resources Skills, background,
knowledge, and training of workers
China is the largest population (coasts are developed, villages are not)
India will be most populous (caste system)
Some populations are not prepared due to war, famine, genocide, communism, cold war
Physical Capital Man-made items
used in production of others
Heavy industry Light manufacturing War vs. consumer
goods Political instability
Specialization Focus on production
of one or few products that the country is most efficient
Oil Luxury items
(marble, wine, leather)
Lumber, chemicals, financial services, food stuff
Why Trade?
Absolute Advantage
Comparative Advantage
Ability to out produce another country USA Fuel
○ Fossil○ Renewable
Food Cars
Ability to produce at a lower opportunity cost Value of the alternative
choice Saudi Arabia UAE
○ Burj Kalifa○ Masdar City
Free Trade?
US Imports US Exports
Textiles Electronics Plastic Steel Cars
Chemicals Technology Financial Services Food Business Management
Protectionism Tools used to limit foreign imports (save
domestic jobs?)Tariff – tax on importsQuota – restrict number or percent of g/s
from a specific placeStandards – regulate quality and production
Opening Up Trade
MFN – Most Favored Nation1 on 1 trade agreement with no barriers
NAFTA EU APEC CAFTA MNC
Multi-national Corp.
Exchange Rates
Fixed – set % Flexible – based on GDP growth Strong Dollar
More imports, more foreign investment Weak Dollar
More exports, less interest in US dollar
Reflection
What is your recommendation for US trade policy, specifically concerning NAFTA, CAFTA, the EU, China, India, and APEC? Be sure to identify why you favor free trade or trade with restrictions.
Statistical Comparisons Oil Reserves
Venezuela Saudi Arabia Canada USA #13
Coal Reserves China USA Australia
Natural Gas Reserves Russia Iran Turkmenistan USA #5
Car/1000 Monaco, Lichenstein, US -100 Togo - 2
Radios/1000 US, Finland, Guam - 2000 Azerbijan - 220
TV/1000 US, Malta, Canada – 800 Rawanda - 0.162
Internet/1000 Greenland, Netherlands, Antiqua and Barbuda – 900 US - #13 Liberia – 0.32
More Stats GDP (trillion)
World $60 USA $15
○ EU $17○ China, Japan○ Tuvalu - $32 million
Sq Miles (million sq. mi.) Russia 6.5 Canada 3.8 USA 3.7
Population China 1.3 B India 1.2 B USA 313 M
GDP/Capita Lichtenstein $141,100 Qatar %102,700 Luxembourg $84,700 USA $48,100 Congo $300
Growth rate Qatar – 18.7% Ghana – 13.5% Mongolia – 11.5% World Average – 3.7% USA – 1.5% Greece – -6%
Final Comparisons Life Expectancy
Mozambique/Japan Adult Literacy
Barkino Faso/Finland Enrolled in School
Tanzania/USA Infant Mortality
Afganistan/Monaco Per Capita
GNP - MozambiqueCalories - EthiopiaEnergy - Nepal
Credit Risks Singapore Iraq Hong Kong Zimbabwe Chile Myanmar
Youngest Oldest Yemen Italy Niger Greece Uganda Germany Congo Japan
Democratic Sweden N Korea Iceland CAR Netherlands Chad
Peaceful Norway Syria New Zealand Sudan
Less Developed Country (LDC)
Problems Solutions
Population Education Health
Infrastructure Resources Human capital Physical capital
Politics Debt
Not simple Cannot just give away Lasting help Part of global market Exploitation Resentment
$251 B – 2007 USA = 17% UK = 7.5 %
Foreign Aid
Direct InvestmentIndividuals/PortfoliosMicro-businessNGOs – Non-governmental organizations
United NationsWorld Bank – loans to countriesIMF – monetary/currency stabilizationUNDP – development aid for infrastructureWFP – food to poorest
Reflection After considering all the comparative
statistics and the problems LDCs face, write a list of the specific initiatives that you think should be done to help the people who live in these countries.
Homework Assignment
Choose one advanced country around the world and explain its level of manufacturing and its endowed natural, human, and capital resources.
Choose one LDC around the world and describe the biggest problems and most creative solutions being offered in relief.
CIAworldfactbook.org