Glossary Terms. History Of Globalization

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Tendency to turn goods and services, even land and labor, into products for sale in market; used critically to describe loss of human qualities in capitalist production and exchange

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Commodification

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Narrowly defined: disposition on the part of the state to use military power to obtain territorial acquisitions (colonies). Broadly defined: all forms of unequal exchange, including both private and military forms of coercion, and the drive for the accumulation of capital as well as territorial acquisition.

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Imperialism

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A national policy of tight money supply and reduced government spending, often imposed by the International Monetary Fund (IMF) as a condition for receiving loans

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Austerity

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A policy of national economic self-sufficiency or independence and non-reliance on imports or economic aid.

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Autarky

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Town in New Hampshire, U.S., where WW II allies agreed in 1944 on shape of post-war world economic order. Name used to describe that order, in particular two organizations founded there- International Monetary Fund and World Bank-designed to promote exchange rate stability and economic development within free market system. Key change in early 70s: from fixed exchange rates set by governments to floating rates set by supply and demand for currencies

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Bretton Woods

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A “system in which goods and services, down to the most basic necessities of life, are produced for profitable exchange, where even human labor power is a commodity for sale in the market, and where, because all economic actors are dependent on the market, the requirements of competition and profit maximization are the fundamental rules of life” (Ellen Meiksins Wood, The Origins of Capitalism, Monthly Review Press, 1999, p. 2)

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Capitalism

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Standard economic concept accounting for gains from trade due to tendency of countries to export goods they produce relatively efficiently. "A country has comparative advantage in producing a good if the opportunity cost [value of opportunities forgone in making a choice] of producing that good in terms of other goods is lower in that country than it is in other countries" (P. Krugman and M. Obstfeld, International Economics: Theory and Policy, 1997, p. 14). In particular cases, used to justify specialization by countries in international division of labor.

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Comparitive Advantage

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Wealthy countries with dominant role in world economy. Geographic equivalent of capitalist ruling class. World-system theory designation for areas that control capital, operate with leading-edge technology and free labor, are supported by strong states, can set global terms of trade and exploit regional division of labor.

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Core

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A critique of global capitalism advanced in the 1960s and 1970s that the least developed countries (LDC) of the world are kept dependent on the wealthy ones by the structural necessities of capitalism.

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Dependency theory

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An alternative approach to conventional international trade. It is a trading partnership that aims to promote sustainable development for excluded and disadvantaged producers. It includes paying fair prices to producers that reflect the true cost of production; supporting producer organizations in their social and environmental projects, such as developing health facilities and tree planting; promoting gender equality in pay and working conditions to change the traditional low position of women in society; advising on product development to increase access to markets; committing to long term relationships to provide stability and security; and campaigning to highlight the unequal system of world trade which places profit above human rights and threatens our environment.

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Fair Trade

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Investment by firm based in one country in actual productive capacity or other real assets in another country, normally through creation of a subsidiary by a multinational corporation. Measure of globalization of capital. Effects on growth and inequality in developing countries disputed.

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Foreign Direct Investment

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Trade of goods and services across national borders without duties or other restrictions like tariffs and quotas

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Free Trade

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Established in 1945 after the Second World War to manage world trade with a mandate of "raising standards of living, ensuring full employment and a large and steadily growing volume of real income" for the residents of the countries that lower their trade barriers and open their economies; replaced with the World Trade Organization (WTO) in 1995.

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General Agreement on Tariffs and Trade (GATT)

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The name given to a process in which trade, money, people, and information travel across international borders with increasing frequency and ease. The word is used most often in reference to economic globalization, the process of the merging of world markets.

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Globalization

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The center of power for determining international economic policies. The ____ consists of the top producing nations: Britain, Canada, France, Germany, Italy, Japan and, in dominant role, the United States. Originally an elite and closed group of 6 countries that first met in 1975 as the G6 and continue to meet annually to discuss political and economic issues. In 1998 Russia also joined as a non-voting participant, creating the G8.

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Group of Seven G7

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Named for the British economist John Maynard Keynes (pronounced "Kanes"), this theory rejected classical economics and argued that in a recession the government needed to intervene in the economy through increased expenditures and lower taxes (fiscal policy) to increase total spending which would lead to full employment.

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Keynesian Economics

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The world of commercial activity where goods and services are bought and sold.

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Market

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An economic system usually associated with the period (1500-1750) between feudalism and the rise of the Industrial Revolution. _________ involves the economy’s subordination to the needs of the state, especially its need for power. Mercantilist nations strive for protectionism, a positive balance of trade, the accumulation of gold, and a global system in which colonies’ primary job is to supply natural resources to the factories of the home country

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Mercantilism

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Involving more than two nations or parties. ________ lending agencies include the World Bank, the International Monetary Fund and the Inter-American Development Bank.

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Multilateral

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The attitude that the members of a nation, consisting of a common ethnic or cultural community, have when they care about their national identity, and the actions that the members of a nation take when seeking to achieve (or sustain) some form of political sovereignty

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Nationalism

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Late-twentieth century variant of theory that competition among businesses in market with limited state regulation best fosters growth; specifically, advocacy of free enterprise in competitive global markets and movement of goods and capital unburdened by tariffs and regulations. Critics argue that neo-liberal policies prioritize corporate profits over the welfare of the working majority and society at large.

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Neoliberalism

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Poor, exploited regions, historically dominated by strong, wealthy countries. World-system theory concept denoting militarily weak regions economically dominated by capitalist core, subject to unequal exchange, limited to raw material exports, reliant on labor-intensive production.

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Periphery

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The list of budgetary and policy changes required by the IMF and World Bank in order for a poor countries to qualify for a loan. This “conditionality” typically includes reducing barriers to trade and capital flows, tax increases, and cuts in government spending. Through SAPs, the IMF and World Bank can force poorer countries to prioritize macroeconomic stability over programs for public well-being. The IMF claims that this is important since countries cannot afford to spend as much money as they were spending. The result has been that governments have greatly cut the amount of money they spend on education, health care and other basic social services. The U.N. estimates that six million children a year die because of policies imposed by the IMF and World Bank.

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Structural Adjustment Programs (SAPs)