GEO 273 1st Edition Exam 1 Study Guide Lectures 1 13 Disclaimer this review guide does not cover every aspect of the material discussed in class nor does it aim to It would be most helpful to review class readings personal notes using this review guide as a supplement to your study Lecture 1 January 12 What is Political Economy Describe the key differences between traditional economics and geographical political economy Economics Equilibrium based on supply demand Unit of analysis individuals rational according to theory of maximizing utility Free exchange between buyers sellers Emphasis on market exchange processes Geographical Political Economy Dynamic changes instabilities crises Systematic crises every 3 4 years Unit of analysis social relations institutions social classes People are not atomized consumers but are rather dynamic and make economic decisions based on complex social factors Inherent conflict between different groups with specific interests Emphasis on production distribution exchange Central theme Economic processes does not occur in a vacuum Rather they form and are formed by the geographic space and time in which they occur Viewing economic processes through this lens allows us to study economics in a more comprehensive social context thus challenging our concept of a good economy The geographical political economy perspective shifts our attention away from GDP figures and towards society s overall wellbeing as the central measure of an economy s success Lecture 2 January 14 Commodities and Value Describe the key ideas from which commodities derive their value Marx defines value as the socially necessary labor time used to produce a commodity at an average level of intensity and skill Harvey delineates an essential distinction between use value and exchange value wherein the former relates to the value extracted from the consumer s use of a commodity and the latter is associated with the price at which the commodity is bought sold Commodity fetishism is a tendency for participants in the economy to define a commodity s value in terms of only its price This view does not take into account the various factors that play into a commodity s price listing especially not those that pertain to social relations in the supply chain Lecture 3 January 21 What is Money List the key forms and uses of money Money exists in the form of deposits currency and credit Its key uses include store of value facilitator of exchange means of payment unit of account Give an example of a way in which money is used as a commodity unto itself What might be the ramifications of this In the financial sector bankers make a profit by collecting and loaning money in the form of deposits To break it down Person X deposits 500 in the local bank In this scenario the Federal Reserve mandates that the bank preserves 10 of the deposit i e 50 and is free to loan out the remaining 450 to Person Y Meanwhile the bank must pay a microscopically low Annual Percentage Yield APY to Person X let s call it 01 As the bank loans the 450 to Person Y it ensures that the interest rate it charges him much higher than the APY it s paying to Person X we ll call the interest rate 12 incurred at the end of every month In this fashion in one year the bank will have paid 4 50 to Person X in APY and will have earned an additional 648 on top of the 450 from Person Y If during this transaction Person X decides to withdraw his deposit and the local bank could not reimburse him past the essential 10 preserved the Federal Deposit Insurance Corporations would back the remaining 90 thus deeming the speculative transaction stable Financial investment becomes more complicated as it is coupled with issues of credit This leads to increased speculation on the market typically at the expense of the less powerful borrower For example Person Y uses the 450 in the form of credit in order to purchase a new puppy If at the end of each month he doesn t pay back his credit he will incur an additional 648 at the end of the year driving him further into debt Meanwhile if Person X decides he wants to withdraw his original deposit of 500 the bank will not go into debt as the overseeing FDIC will cover up to 90 of the original deposit In this fashion the bank can continue to speculate and loan and make superfluous profit while borrowers as Person Y sink deeper and deeper into debt Lecture 4 January 26 Property the State and Public Wealth Main features of capitalist state Institution that sets the conditions of the market based on private forms of wealth appropriation o I e the purpose of the state is to protect and perpetuate capitalism Introduces a necessary divide between politics and economics in history this dichotomy is unique to capitalism Invention of territorial nation states including scales of governance to make investment in specific geographic regions safer 8 steps to forming a capitalist state 1 Destroy the commons 2 Create legal institutional framework for private property 3 Enforce private property and markets 4 Produce consent without coercion force 5 Deal with social costs externalities 6 Issue currency 7 Provide National Defense 8 Respond to popular pressure Lecture 5 January 28 Capital and Labor In the theory of capital as a class system capital gains profit via production and labor is paid for its services but does not gain direct access to means of production i e profit Social reproduction entails the lives of the labor force outside of the workplace This may include housework leisure biological reproduction education health etc The perceived value of labor in society is influenced by historical and moral elements i e the good life American dream I e labor may contend that it is worth more than the wages allotted to them a statement that is rooted in political and cultural ideology Surplus value is extracted from the difference between the real value of labor and the price of labor wage I e capital s goal is to generate the most surplus value possible by increasing intensity lowering wages and introducing labor saving innovation Lecture 6 February 2 Accumulation as a Whole Capital can be defined in 3 ways Process used to make more money constant flow of capital Thing commodities means of production money Class system capital is the class that owns the means of production and directly benefits from the profit generated by it Contradiction between fixity and motion Roughly stated capital must be in constant motion in order to