Economic Geography

1. Economic Geography Fiat Factory, Italy Chemist in Laboratory New York Stock Exchange

2. Overview • Economic Sectors • Changes in the U.S. and Global Economy • Trading Blocks • Economic Location Theory

3. What makes a place developed? • LDCs – Less developed; periphery • Lacking infrastructure (roads, clean water sources, advanced energy technology), industry, healthcare and educational opportunities • MDCs – More developed; core • Infrastructure, industry, healthcare and educational opportunities

4. Human Development Index (HDI) • Where are high HDIs – in MDCs • Where are low HDIs- in LDCs • The HDI takes: • One Economic Factor (GDP – Gross Domestic Product) • Two Social Factors (literacy rate and educational level) • One Demographic Factor (life expectancy) • Used to calculate the level of development

5. Highest  and Fails  • Highest: Norway (2009) .971 • Lowest: Niger (2009) .340 • LDCs: • 30 in Sub-Saharan Africa • MDCs: • Canada and the US

6. Gender Differences • Gender Empowerment Measure (GEM) • Compares the ability of women and men to participate in economic and political decision making • Lower scores (Africa and Asia) • Higher scores (W. Europe and the US) • Gender Related Development Index (GDI) means that women have more share of resources than in other countries • Compares the development of women with that of both sexes

7. How did the MDCs/Core World Develop?? • The History of the Industrial Revolution: • - 19th century: 1800s • - Begins in England • 19th Century England- called • “The Victorian Age” • A) Why England? • 1. Natural Resources: • -Coal - Iron Ore • 2. New inventions:

8. The History of the Industrial Revolution (19th Century) cont: a) James Watt-Steam Engine b) Henry Bessemer – Steel refining Furnace II. Spread of the Industrial Revolution - United States: used to refine cotton

9. The Industrial Revolution in the US. A) New Inventions in the U.S - Eli Whitney: Cotton gin - Alexander Bell: Telephone - Thomas Edison: light bulb extra credit: African-American assistant created the filament that makes the light bulb operate (LewisLattimer)

10. Levels of Economic Activity • The Industrial Revolution creates levels of • economic activity: • - Primary • Secondary • Tertiary

11. Primary Activities Direct removal of natural resources such as mining, forestry, and agriculture -most important in the LDCs. • Subsistence Agriculture • Fishing and Forestry • Mining and Quarrying

12. Primary Products The percentage of people working in agriculture exceeds 75% in many LDCs of Africa and Asia. In Anglo-America and Western Europe the figure is <5%

13. Trade in Primary Products • Importance to Developing Economies • Danger of Commodity Trade Dependence Puerto Rico Coffee Plantation

15. Secondary Activities: Manufacturing Secondary - Processing and transforming natural resources: steel, textiles, auto assembly. These used to be most important in MDCs, but increasingly important in the semi-periphery (Korea, Mexico, Brazil, Singapore)

16. Tertiary and Beyond: Services Provision of services in exchange for payment. Includes retailing, banking, law, education, and government. Education, R & D, and information technology becoming most important in the postindustrial core regions. Less-developed countries often focus on tourism. Services historically were clustered into settlements. Increasingly the most important service centers are massive world cities.

17. Tertiary and Beyond: Services Less-developed countries often focus on tourism. Vendors, Bali Club Med, The Bahamas

18. Tertiary and Beyond: Services

19. Can What Kind of Economic Activities You Have Determine Wealth? • YES!! • MDCs have more 2nd and 3rd tier economic activities (Japan, the US and Europe) • LDCs have more 1st and some 2nd tier economic activities (Latin America, Africa and S.E. Asia) • Frontline Video (Coffee) Guatemala

20. Resources and Technology • Resources affect patterns of development: cultivable land, energy sources, minerals. But changes in technology affect the value of these resources. Also, trade or lack of it can offset lack of resources (Japan) or make them less relevant (Brazil). • Technology Systems: roughly every 50 years since 1790 a new complex of technologies has revolutionized the world economic system and its structure. The most recent of these is the system which includes biotechnology, advanced materials (superconductors, solar power) and information technology. Which parts of the world benefited from the shift from coal to oil? Which suffered? Which parts of the world will benefit from the inevitable end of our reliance on petroleum and the necessary shift to wind, hydro, tide, or solar power ?

21. International Trade Models Rosteau’s Model – Only works with WESTERN POWERS • Doesn’t allow for Imperialism and exploitation of raw materials • FOUR STAGES: • Rudimentary • Education of the Elite • Beginning of Industry (Textiles) • Beginning of Tertiary Activities • Mass Consumption

22. Rosteau’s Continued: • Mass Consumption: • When markets fall, the countries that provide goods for mass consumption fall apart (their markets) • If your market relies on ONE thing, what happens when that thing is no longer needed? • The Rust Belt in the US

23. Flaws in Rosteau’s Model • Some countries only have ONE major (needed) export • The Arab States (Dubai) • Some Countries SKIP Stages – From Rudimentary to Tertiary Activity • The FOUR Asian Dragons: • Japan (influenced • South Korea • China (Hong Kong) • Singapore • Taiwan

24. Flaws Continued: • Self Efficiancy • Doesn’t Work (post-colonial Africa) • Rwanda

25. New International Division of Labor • Transnational Companies have been very aggressive in using low-cost labor in LDCs. • Seek elimination of trade barriers (Tariffs) • No minimum standards in place • A “rush” to the bottom? • Loss of U.S. jobs - “a great sucking sound” after NAFTA?

26. New International Division of Labor

27. Trading Blocks • International agreements that eliminate barriers to trade within regions: • North American Free Trade Agreement (NAFTA) • European Union (EU) • Oil Producing and Exporting Countries (OPEC) Trading Organizations • International agreements that eliminate barriers to trade among members: • World Trade Organization (WTO) for the UN member nations

28. Principals of Location Industrial Location: Site and Situation Factors • Raw Materials • Energy • Labor • Market • Transport In order to succeed industries must have some comparative advantage in one or more of these factors. Moreover, demand must exist for the product.

29. Industrial Location: Transport Characteristics (Bulk-Reducing)

30. Secondary Activities: Manufacturing Industrial Location: Site and Situation Factors • Transport Characteristics (Bulk-Gaining)

31. Service Location Theory Convenience Store Locations • Market Areas - circular or hexagonal area from which customers are drawn. • Range - maximum distance people will go for a service • Threshold - minimum # of consumers needed to support the service.

32. Service Location Theory Grocery Store Locations • Market Areas - circular or hexagonal area from which customers are drawn. • Range - maximum distance people will go for a service • Threshold - minimum # of consumers needed to support the service.

33. The industrial centers of Japan, for example, depend on imported raw materials and access to markets via the Pacific. Industrial Location: Site and Situation Factors • Labor Supply versus Access to Markets Woven Cotton Production Why are so many wovens produced in the less developed world? East Asian Manufacturing Centers

34. Great Economists of the 19th Century • Adam Smith • Capitalism: “The • Wealth of Nations” • - father of modern capitalism • - agreed with laissez faire • economics and free-market • trade • - also: Thomas Malthus and • David Ricardo

35. More Theories • Jeremy Bentham • Utlitarianism: Do what is best • for the greatest group of people • Karl Marx • - “The Communist Manifesto • & Das Kapital” • - history has been a struggle • of the “haves” and the • “have nots” • - only radical social transformation • ation can change the owner-

36. Marx can change the owner- ship of the means of production • economic interpretation of history