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GEO 273: EXAM 2
Forms of money |
currency, deposits, credit
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Uses of money |
1. means of payment and exchange
2. unit of account
3. store of value
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Banks, credit and the creation of money |
Banks hold money/deposits(liabilities) and customers pay interests on deposits(interest). Banks loan money/credit (assets) and charge interest rates, therefore making a profit
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Instability of banking |
Fractional reserves: There is a required percentage of deposits to stay on-hand in banks
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Inflation- causes and losers |
causes: demand and economic expansion, labor costs, profits, raw materials/energy
losers: fixed income people, workers without cost of living adjustments can't keep up with inflating market, lenders(banks), rich people
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Monetary policy |
Central banks not subject to congressional oversight/control. US Federal Reserve control inflation. High interest rates slow down economic activity.
Neoliberal monetary policy(Monetarism): fight inflation and forget full employment; control money supply with interest rates to fight inflation
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Federal Reserve |
1977 Dual Mandate: to control inflation and full employment
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International gold standard(mid 19th c--1930s) |
gold was form of currency. Great Britain was the hegemonic leader. Gold standard collapsed because of the financial crisis(Depression) and distrust of globalization from the depression
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Bretton Woods Regime(1944-1971) |
Concerns about post-war economy. Conference about global monetary system. Money geography- free trade but national policy autonomy. US the hegemonic leader. Strict regulation on finance and global flows of capital. Dollar-gold standard ($35/0z): fixed price
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Post-Bretton Woods Regime(1971-present) |
Money geography- globalization. *Nixon gets rid of money/gold standard.* Financial crisis endemic: 1974-1975; 1987; 1997-1998; 2000; 2001-2002; 2007-2009.
Floating exchange rates. Increased power of financial centers(especially NY)
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Dollar Hegemony? |
US can run massive balance of payment deficits. Wall Street as the center of global finance. Petro-dollars(oil sold in dollars). Challenges to dollar: euro, yen, bitcon
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The dollar and global imbalances |
US and China.
China mass produces cheap goods for US consumption(US dollars go to China).
China holds huge reserves of dollars, used to buy oil and invest in dollar-based investments.
US Treasury borrows dollars from China(T-Bills).
Dollars flow back(as interest payments) to China(from US).
US national debt= $13 trillion
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Forms of corporate finance |
1. Bank loans: give out loans with interest rates
2. corporate bonds: similar to stocks, but has a maturity date and promises a % back to bond owner
3. equities(stocks): ownership in corporations
4. profits: money made after company pays expenses
5. other "investments":
derivatives(futures, options, swaps) ex: oil futures(speculative and prediction based); credit default swaps
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Financialization |
Deregulation of financial markets.
Massive growth of financial sector.
Massive shift of whole economy(including productive enterprises) into financial forms of profit-making.
Speculative accumulation.
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Speculative accumulation |
(M-M') To predict based on derivative process/stock markets. Involves financial system: Investments into stock market with assumption it'll increase in value
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Everyday financialization |
Anyone can be an investor.
Debt.
Pensions(retirement plans)
Paygo(government) pay as you go.
Pre-funded(private sector) defined benefit plans, defined contribution plans.
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Student loan debt: education circuit of capital |
Combination of federally subsidized loans and for-profit lenders. Private loans have variable interest rates. No bankruptcy protection. Rising cost of education. University-Loan Agency Coalition
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Gramm-Leach Bliley Bill |
Repealed Glass-Stegal. Broke down compartmentalization. Octupus arms joining together, making it too big to fail. Got rid of separation between banks.
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Commodity futures modernization act |
2000. Deregulated derivatives(contracts for future money--speculative) market
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Securitization food chain |
3/19**
Home buyers- buy homes through mortgage lenders as subprime loans increase--> Mortgage lenders pay investment banks who are involved in: Collaterized debt obligations(CDOs) and Credit Default Swaps
Insurance companies involved in credit default swaps--> CDOs--> Investors; credit rating agencies
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Craft Production(3 models of production) |
By hand, or brainwork. Workers have monopoly on skills and maintain some control. Old school and new school.
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Mass Production(3 models of production) |
Fordist, mechanized. Less product differentiation. De-skilled workers. Vertical integration(centralized control).
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High Volume Flexible Production(3 models of production) |
"just in time" production; small batches. Information technology; niche markets. Skilled workers and high tech machinery. Vertical DISintegration(decentralized control)
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Localized clusters |
Transport(near key locations)
Labor(need useful sources of labor)
"knowledge was in the air"
Cultures of trust.
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Time-space compression |
as communications and technology improve, the less time it will take to transport goods/services
example: the internet
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Global production systems |
information technology: Wal-Mart
global supply chains: logistics industry
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Vertical integration |
centralized control
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Vertical Disintegration |
decentralized control. subcontracting and outsourcing. specialization in markets.
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Politics of subcontracting |
Movie: China Blue. Big retailers use subcontractors in poor countries: cheap labor means they can sell product at higher price and make a profit
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Forms of labor struggles |
1. legal- laws for better wages, collective bargaining. safety standards
2. unions- advocate for workers rights
3. strikes
4. geographical coordination
5. upscaling- urban to larger, national labor movements
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Forms of displacement(1980-now) |
-Stagnation and unemployment in the global north. unemployed population rose from 10 to 50 million between 1973 and today.
-Depeasantization in global south. People were forced out of subsistent livelihoods into capital/wage labor life. structural adjustment policies(export based commodity model, dumping of commodities, infrastructure development)
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Global wage compression |
Expansion of wage labor supply(rural to urban labor migration). International labor organization estimates a global wage, labor force expanded from 1.9 to 3.1 billion people from 1980-2007
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Informalization of labor |
Precarious labor: no rules or protections, formal contracts, rights or regulations, bargaining power.
Human trafficking.
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Option 1: Internal migration to cities |
many 3rd world megacities. Informal property rights. slums as hazardous landscapes. survival strategies in informal economy-cooperation and entrepenurerialism.
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Option 2: Global migration |
Receiving countries(US). Migrants take jobs that citizens aren't willing to take. Economic insecurity and xenophobia(fear of immigrants). commodification of "care work"(housework, nanny)
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Migration economy |
remittance economies?
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China: new workshop of world? |
China has the 2nd largest economy in world(after US). World's largest exporter and more than just cheap labor
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Urbanization boom |
47% urban due to export oriented industrialization. geographical inequality in the city and country-side
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Commodification of labor |
From "iron rice bowl" to wage labor. 350 million wage workers. Feminization of proletariat.
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Role of migration |
Mass influx of migrant workers due to usually displacement, into cities from countryside
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Hukou system |
In China, a system that ties people to their county of residence, don't have rights if you're in another county, basically an immigrant
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Labor abuses in China |
Non payment of wages
Unpaid overtime
Unfair conditions(6,000 deaths a year in coal mining in early 2000s)
Long hours
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A New Deal for China? |
Workers in China have more power with labor shortages
Wages won.
Viral strikes and riots.
Strategic disruption.
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Challenges for labor activism |
"Rule of Law" and the bureaucratization of labor disputes and individualized resistance.
State monopoly control of trade unions.
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The work of consumption |
Distribution- moving goods from sites of production to sites of consumption
Retail- workers, property developers, lawyers, finance
Product Design- planned obsolescence(companies plan on making products that'll be obsolete in a few years--cars, phones)
Marketing- advertising, market research of buyer personas and demographics of target consumers
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Different Theories of consumption |
1. consumer sovereignty- consumers are independent choosers, free to control what they buy
2. consumer as dupe- consumers are easily manipulated by corporations
3. culturalist view- both theories together. consumers are part of larger structural idea about culture, class, identity. shaping and shaped by cultural/social forces
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Geographies of retail |
From city centers to suburbs(and back again?)
1800s-1945: city center was site of consumption; Central Business Districts
1945-present: suburban retail(malls, shopping centers)
1980-present: renewed gentrification in urban centers
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Producer-driven commodity chains |
producers have the most power and control over entire commodity chain
ex: automobile industry
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Buyer-driven commodity chains |
Consumers have power as buyers. Manufacturers compete for retail contracts.
Monopsony power?(single buyer)
ex: Wal-Mart
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Consumption identity(conformity or difference? local culture?) |
Consumer identity is geographical(ex: Portland hipsters).
One's home place shapes consumption identities(websites, influences in friends' homes, places)
Globalization and the end of local culture?
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How are cities more than capitalist spaces? |
Cities are public space- a contradiction to capitalism
Cities as neighborhoods and social life- Jane Jacobs
Cities as diversity and immigration
Cities as working class resistance
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Gentrification |
Rooted in British 'gentry' class. Upper-middle class moved into neighborhoods and drove up prices for everything(houses, goods, services). The previous working class residents suffered and were forced to be displaced elsewhere.
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Frontier myth |
Manifest destiny: conquer the beastly Western US. Back to the City Movement. Rationalizes social differentiation and exclusion as natural or inevitable.
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Consumer explanation of gentrification |
People moving into places to buy "high class" commodities.
Buying property, pay high rents.
Raises prices and things become unaffordable to original working class.
Cultural ideologies.
Economics: Market for housing was dictated by who was willing to pay for higher priced houses. Geographical demographics and shifts into places of cities can shape the gentrifying process. Consumer Sovereignty:people making choices.
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Producer explanation of gentrification(rent gap theory) |
Gentrification happens when rent gap(difference between potential rent and actual rent) is so wide that developers can purchase cheap structures.
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Investment in the built environment |
Rent gap theory.
Private property and monopoly control over land and improvements(landlords).
Land and improvements are fixed in space, but value fluctuates(higher prices of rent near a public park).
Built investments are generally long term and require access to credit and financial circuits.
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Value in property markets |
House value- the amount of labor necessary to produce a house determines its value.
Sale price- what a house will sell for; land it's on affects price(rent+house value)
Capitalist ground rent- when you pay rent, it's payment for the right to use the landlord's land.
Inner city disinvestment and the "Valley curve"- sale prices and land rent in cities plummeted(white flight or suburbanization), city values plummeted, valley curve(disinvestment, city devaluation).
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Disinvestment in cities |
New construction and first cycle of use.
Landlordism and home ownership increased= lack of investment in housing.
Blockbusting and blowout- real estate developers go in middle class cities and convinced them to sell their homes; resell houses for higher prices to lower class people.
Redlining- places where developers and banks won't invest in.
City abandonment.
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Rent Gap Theory |
Gap between potential rent and actual rent(actual rent declines as house value declines; potential rent stays same).
Gentrification happens when gap is so wide(potential rent is MORE than actual rent) that developers can purchase cheap, nice structures and sell them for a higher price than what they bought it for. Need wealthy people to buy houses and drive up the rent.
Displaces poor and depends on poverty and geographies of urban decay and abandonment.
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Contradiction #1- markets and nature |
Can market see nature?
Ecological systems- no one pays for protection, consequences in nature
Ozone layer- degrading and thinning from social/human activities; market doesn't care/pay attention to ozone
Environmental externalities
Global carbon cycle- natural through plant life, decay, release oxygen, etc
Greenhouse effect- The Ultimate Externality
Anthropocene-6th extinction?
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Environmental externalities |
Human/social activities affect the environment indirectly.
ex: factory that leaks waster into water or air doesn't pay for the consequences
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Contradiction #2- growth |
Earth is finite.
Oil production- peak oil in 1970s, yet consumption increases.
Fordism as "suburban solution" that creates a problem; car is good for economies but bad for environment.
Growth and waster- Pacific Garbage Patch
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Contradiction #3-Technology against nature |
Industrialized agriculture- monocoltures; good for capitalism: specialization, economies of scale, mechanization. Turn towards commodified inputs(chemical fertilizers, pesticides, gene seeds) Bad for environment: soil, erosion, pest problems, blight.
Agro-economy- crop rotation; waste is good(re used); building soil; more expensive products than cheap, mass monocultures
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The case against capitalism |
Stark inequality and human deprivation. Market failures and environmental crisis.
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Capitalism and human nature? |
Humans are selfish and greedy. Adam Smith: pursue own interests to better society as a whole. Greed= incentive to work harder
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New vs Old social movements |
Old- movements focused on class, labor, unions. State-based, legal rights were main issues.
New- Women's rights: equality in social aspects(sports, university); Civil Rights(minorities); environmental movements(Earth Day); identities beyond class: feminism, food sovereignty. Carving out autonomous spaces beyond state and capital
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Ongoing work of social movements |
social change is an uneven process, so social movements are ongoing work.
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New old social movements |
Fast food US workers fight for better wages. Bangladesh factory workers organize for rights.
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Feminism |
Old movements- political sphere(suffragists); workplace(discrimination and equal pay for equal work; feminization of industrial labor(rosie the riveter); social reproduction(Wages for Housework Campaign, protection of social services like healthcare and education)
New movements- Development Alternatives with Women for New Era; Defense of land and subsistence practices
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Environmentalism |
Old movements- legal and regulatory regimes. EPA(Nixon); endangered species act, clean air/water acts; mainstream nature protection, national parks and forests.
New movements- environmental justice. environmentalism of the poor. protecting livelihoods, healthy living environments. from local to the global commons(atmosphere, environement is shared)
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Occupy movement |
focus is on inequality. end of American dream? self-organized social reproduction(hurricane sandy relief). connections to global austerity
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