Page 3 of 5
Study Guide: Unit Test
Related Issue 3
To what extent does globalization contribute to sustainable prosperity for all people?
1. 20th Century World Events Shaping Economic Globalization
i. World War I
2. Economic Uncertainty after the war – production down
3. Income Tax
ii. The Treaty of Versailles
1. Government Economic Policies – Germany’s reparation payments
iii. The Russian Revolution
1. Changing Government Policies
a. Russian Revolution
b. Communism – USSR & Joseph Stalin
3. War – civil war
iv. The Great Depression
1. Changes in Investors’ Confidence
2. Natural Disaster – Drought
3. Economic Uncertainty – High Unemployment
v. World War II
vi. The Cold War
2. Key Ideas of Contemporary Global Economics
a. John Maynard Keynes
i. Argued against unrestricted capitalism and for government control of economies. Governments could provide to those citizens with relief and provide money to increase demand.
b. Friedrich Hayek
i. Mistrusted government control and argued that governments should not interfere in competition between businesses. Economy is healthy when there is competition.
c. Milton Friedman
i. At first agreed with the ideas of Keynes but then began to change his mind in the 1950s. He believed people would experience the greatest political and economic freedom when they are free to choose.
d. What is a market economy?
i. A market in which individuals are free to choose and make their own decisions without government intervention.
3. The organizations leading economic globalization
a. Bretton Woods
i. United Nations Monetary and Financial Conference
b. World Bank
i. Mapped out at the Bretton Woods Conference
ii. Supported by the United Nations
iii. Work to help expand international trade
iv. Lends money to nations in need for industrialization and economic progress, reduce poverty rates
v. Governs international trade
c. International Monetary Fund
i. Provides emergency short term loans
ii. Demands for reforms in countries to promote good governance and eliminate corruption.
iii. Promotes foreign trade
iv. Sets dependable international exchange rates to world currencies
i. Communism and applying market economy ideas
ii. Trade – dependency on foreign markets
iii. Environmental factors
5. Forces of Globalization
a. Changes to Commuications technologies
b. Trade – reshaping trade patterns
i. Developing nations beginning to trade with other developing nations.
i. Advertising encouraging the purchase of goods
i. Foreign owned factories within Mexico
ii. Offering jobs to help economy
iii. Jobs abuse lower worker standards and labour laws (women and children)
iv. Impact on environment
1. Weaker environmental laws
7. International Agreements and expanding globalization
a. World Trade Organization
i. Established to increase international trade by lowering trade barriers and trade rates more universal.
ii. Works with governments to settle disputes and conducts the trade negotiations
iii. Arguments state that the WTO
1. has too much power
2. protects the interests of developed nations
3. is not democratically accountable – the general public has no role in the final decision
4. does not focus on the needs of developing nations
5. ignores environmental, child labour, labour rights, health care, etc, issues.
iv. Sanctions imposed by WTO – economic actions to enforce change to economic policies or trading agreements.
b. North American Free Trade Agreement
i. At first between US and Canada, then extended to include Mexico
1. Eliminated tariffs and trade barriers between the three nations.
2. Led to the movement of production facilities to Mexico.
3. Much debate as to who benefits from this agreement.
c. European Union
i. Liberalized trading area on the European continent
ii. Established a common currency between the nations
iii. Removed trading obstacles between the nations
8. Influence of Transnational on expanding globalization
i. Can make reduce poverty rates by bringing employment to national economies
ii. Take responsibility for action
1. Talisman Energy
i. Abuses loose labour and environmental laws
ii. Developing nations with no resources to offer miss out on the opportunities of employment
c. Who is in control the governments or transnationals?
10. Ecological Footprint
a. The demand placed on environment and its resources by human actions.
b. Bangladesh vs Canada
i. Life expectancy
ii. Resource gap
iii. Population Growth
11. The Shipping, Ship Building and Ship Breaking Industries
a. Environmental Impact
b. Flags of Convenience
i. Connection to Transnational Corporations
c. Benefits of Industry – works to improve standards of ship breaking
12. Efforts to Promote Sustainability
a. Kyoto Protocol
b. Alberta Tar Sands
c. Alternative Energy Sources
13. Sustainable Prosperity
a. Practicing stewardship with the resources of the present day to ensure their availability for the present need and the need of future generations.
i. Sustainable development – UN
ii. Global Interdependence
1. Balancing global economics and prosperity can be challenging – Gildan Industry
14. Measures of Prosperity
a. GDP – Gross Domestic Product
i. Measures the health of a nation’s economy and the prosperity of its people – average income of nation’s income
1. Can be deceiving
b. HDI – Human Development Index
i. Uses GDP, life expectancy at birth and school enrolment and adult literacy
1. Ignores the differences between groups within a nation and access to resources – clean water
c. GNH – Gross National Happiness
i. Promotes sustainable and equal social and economic development
ii. Promotes and preserves culture
iii. Promotes and preserves environment
iv. Good governance
d. GPI – Genuine Progress Index
i. Measures sustainability, well being and quality of life
ii. Includes environmental and social assets (family life)
15. Challenges and opportunities of Globalization
a. Economic Growth & Sustainable Prosperity/ Trade Liberalization & Sustainable Prosperity
b. Aspects of economic globalization help achieve sustainable prosperity?
i. The knowledge economy
2. New technologies
iii. Foreign Investment
1. Unstable – South Korea, Kurdistan
16. Choices involved in sustainable prosperity
a. Millennium Goals
b. The greenhouse effect
17. Key Terms
h: - social 10c0 - social 10-1 sept 2012\related issue 3\r i 3 general and review\related issue three review.doc