Transcript
Tuesday May 11 2010 Week 2 –Economic development, uneven developmet MAJOR PERSPECTIVES ON DEVELOPMENT modernization Theory Rostow’s Model -5 stages of the modernization process 1. traditional society (limited technology) 2. preconditions for take-off 3. take off 4. drive to maturity 5. high mass consumption -economies progress through a series of stages, culminating in mass consumption -others criticize this approach as ethnocentric and ignoring the global and historical context of development -linear change of progression leading to high mass consumption globalization of trade, degrees of specialization (countries who are more proficient in a certain material will trade= comparative advantage= more efficient and effective) Does every society have to go through linear stages of progression? Or can some societies skip some of the stages ? No. Schools of Thought on Development -sequence of ideas as to how countries/regions can develop successfully 1950’s= growth pole theory (free trade zones, export processing zones i.e. Brazil- industrial area set aside- creates jobs, infrastructure, development- belief is that class of industries will stimulate a spin off effect= job creation of other smaller businesses and therefore growth in the country/city/region 1950s-60s= modernization- progression from pre industrial societites to industrial and advanced economics- believes that developing countries need to follow the same path as advanced countries i.e. invest in resources (energy, industry, machinery etc.) -need to invest in direct foreign aid -flaws= assumes that when money is invested in a country, there will be a spiral effect i.e. wealth will be distributed from the top of the hierarchy to all levels but not always the case- -can mean economic growth but leaves money in the hands of the people who own the businesses/industries -suggests that there is a need for a bottom up approach to give greater ownership of development projects to local people – should be smaller projects rather than mega projects 1970s= dependency- advanced countries are constantly dependent on developing countries for raw materials and primary commodities (cocoa, raw sugar etc.) and developing countries are dependent on advanced countries for the importation of manufactured goods -negative= when you keep supplying raw materials they have lower value and developing countries keep exporting basic raw material and price fluctuations from world market- and developing countries do not have any alternative trading partners so they depend more on advanced countries -may run into a deficit (total value/revenue of export commodities is less than total value of expenditure/cost on importing commodities) or surplus (you can higher foreign exchange from exported commodities and spend less to import) -states that the only way countries can break away from this is to invest in import substitution industries -stop dependence on developed countries by reevaluating what you want 1980-2000= world systems theory – proposes one global system and all countries are competing for better or for worst -some countries at advantage position and some disadvantaged position -powerful companies= ripple effect -powerful countries= ripple effect -companies and industries connected (i.e. financial crisis in the USA effects rest of the world) 1980s= neo-liberal counterrevolution movement – implemented by former Prime Minister of Britain and Ronald Ragen- believe that State ownership of industry is not good- so deregulation is needed for low/zero government intervention in demand and supply- rather required that competition between private entrepreneurship be the driving force -is it good for entrepreneurship to own resources? I.e. private companies own water resources without any government intervention? i.e. leaving national park in hands of private companies? This may lead to large charges for visitors 1990s= sustainable development- expansion in knowledge of sustainable development (States that we meet the needs of present generations without compromising the ability of future generations to meet their own needs 2 schools of thought: those who believe cornucopia (horn) - notion that can use resources forever- renewable those who are cassandras (princess of troy) - bad things will happen if you don’t take care of the environment -can use up resources ** need to find a mix between the 2** -90-95% of the worlds wealth found in 2% of population -sustainability requires fair distribution of world’s resources and balance of wealth -Need to use less material resources into the material process i.e. energy efficient technologies ANTHROPOCENTRIC VIEW POINT (sustainability) - people that believe natural resources are there to be extracted to meet human needs and wants for housing, clothing, food, safety and security -believe have to extract more resources to meet needs of human wants -utilitarian BIOCENTRIC VIEW POINT / ECOCENTRIC -believe that all resources (biotic or abiotic) have intrinsic values and must be preserved/conserved -advocate groups protesting- challenging authority of government i.e. logging growth and cleanliness harmoniously 1992- Earth Summit – follow up of sustainable development (7-9 countries met to deliberate on best way for sustainable development) 2002- came out with new form of development (based on sustainable development) PROCESS OF ECONOMIC DEVELOPMENT Advantages of Economic Activities Agglomeration Effects- happens when industries cluster a group in an area that already has growth Forward Linkages – new firms emerge and take finished products of already existing companies as an input to their production process i.e. barb wire production and take advantage of steel production- there is a forward linkage to steel from barb wire i.e. winery’s- sell out their wines to restaurants = forward linkage Backward Linkages – firms emerge that provide the basic raw materials i.e. mining industry (mine minerals in order to create other materials) i.e. winery’s- wine made from grapes Ancillary Activities- supporting activities to support main industry Economies of Scale (external economies) Fixed social capital- social amenities – infrastructure for hospitals, good sanitation, good community services, Urbanization economies- constant migration of people to cities and this creates more labor force- increased housing development, businesses, Gunnar Myrdal (Swedish economists) 1974 -cumulative causation in core regions -“Spread effect” (or trickle-down effect in peripheral regions) -import substitution industries -i.e. creating more jobs DISADVANTAGES OF ECONOMIC ACTIVITIES Crumbing Infrastructure – too much pressure on infrastructure than ability and capacity to provide then the system will crash= cascading effect Agglomeation diseconomies- drop in productivity, inflammation, pollution (acid, smoke signs of diseconomies of scale) De-Industrialization- gradual decline in levels of employment – can result from industrial activities i.e. home industries based on primary resources- have the capacity to create development and generate growth as resources are extracted – over long term as resources decline, the industries begin to collapse- can lead to de industrialization (unemployment) Creative Destruction- transfer of investment capital from region experiencing decline to areas experiencing boom- can create new innovation in terms of technology and innovation- will lead to collapse in area from where area where resources/money being transferred from Brownfield Sites- partially abundant or totally abundant industrial areas – regions that experience proper closure (ie. Old mining towns, old railway stations, unable to recycle old parts) i.e. junk yards – old automobiles- piling up and have nothing to do with them sites for led pollution - Gunnar Mydral – backwash effect in peripheral regions – deprived of higher labour opportunities -limited available materials for development WORLD DEVELOPMENT PROBLEMS -cycle of poverty in less developed countries -low per capita income leads to low savings and low investment in human and physical capital which results in low productivity, unemployment and low per capita income VIDEO Economic Development and Global Issue GDP to measure economic development and growth -PPP takes into account differences in living costs in dif countries -almost ½ world pop lives on less than $1 a day determinants of income and growth -norway, can, USA, Switzerland a) increased productivity = higher per capita income b) increased Equipment= increased output her hour c) increased in capital stock (investment)= higher savings rate increases productivity= diminishing returns d) human capital= education, training, experience (why developed countires increase productivity and living standards e) technological innovation= increased productivity f) geographic factors- climate, landscape, closeness to developed countries (large industrial regions) ~90% of pop growth taking place in poorer countries -developed countries pop increasing due to immigration -inequalities in wealth -in developing countries- richest receive most income and poorest receive very little income -inequality increases at early stages of development and dereases at later stages - HOW ECONOMIC DEVELOPMENT IS MEASURED AGRICULTURAL SYSTEMS -subsistence rural agriculture -shifting cultivation -slash and burn (swidden agriculture) -pastoral ( groups of herders to have a permanent settlement but they move their cattle around to look for pasture and water) -nomadism (to roam, looking around for food and pasture- Fulanis, Kenya, Masai) -intensive subsistence- Transhumance- during winter move to warmer light valleys and summer move to cooler higher areas commercial agriculture- to get highest yield (large production for sale) -one crop for large yield production and exportation -mixed crop and livestock- use droppings of animals for compost to grow crop -livestock, grain, dairy, cattle- feeding units -horiculture and fruit farming- taken on greater degree of specialization – several green houses-making crops available for workers and city dwellers Agricultural Systems Continued Industrial Agriculture-chemical fertilizers, pesticides, innovations in biotechnology, genetically modified organisms, aquaculture, input prodution and output processing- includes manufacturing of food, converting i.e. raw tomatoes to tomato sauce, innovation in transportation, innovation in warehouse retail of food, additives for food, AGRIBUSINESS (input production and output processing of crops) Agro-forestry- mixture of crop cultivation and forestry- diversified- farmer can produce crops and grow trees (woods) Plantation Agriculture- large scale cultivation of cash crops i.e. sugar cane used for ethanol production what are the key agricultural innovations? Are they environmentally safe/sound? What are the negative implications of agriculture? And healthy ecosystems? -there was a need for domestication and pressure on resources -communal down heap hypothesis did agriculture start bc there were too many ppl struggling for the same resources or was there a environmental condition i.e. drought (climate hypothesis)? Population pressure hypothesis as pop grows more pressure on resources (rivalry and competition among people) Climate change hypothesis extreme drought (low rain fall) could have caused a decline in agricultural yield Cultural Progression every society can move from primitive (hunting and gathering) traditional states to more advanced state -down heap hypothesis place where you put garbage or materials that not wanted -saw that you can grow and cultivate (in soil) -no theory is conclusive Agricultural Revolutions - the adoption and spread of farming took place through occupation and transformation of natural environments -Early Subsistence (traditional) agriculture, the product of the first agricultural revolution - Market-oriented agriculture developed in close relationship with the emerging industrial revolution (high capital investment) -we are using chlorines, fertilizers that are not biodegradable- chemicals are building up in tissues of plants/crops and raising a lot of problems LONG LOT PARISH LANDHOLDINGS (SEIGNEURAL) AGRICULTURAL SYSTEMS Industrial Agriculture (cultural europhication= oxygen depletion in water bodies) -the manufacturing of agricultural inputs and processing of output collectively called agribusiness, were industrial in character -industrialization is an exclusive and highly selective process -industrial agriculture tend to affect rural systems of agriculture and other livelihoods -notion that DDT was good for farming (1940’s) was advertised on TV etc. 3 decades later found it was harmful when saw birds dying -ecosystems have their own thresholds- and agro ecosystems have thereshold- limit to which environment can support (inorganic materials) Genetically Modified Crops and Their Implications The VON THUNEN MODEL - location-rent gradients for competing crops -farmers choose the highest-profit crop at each distance from the market -most early societies with less transportation systems- grew many fruits and vegetables close to markets (horticultural practices)- located close to city areas -as you move away from city centre- highly perishable commodities move to grazing lands -model rules of government policies and their effect on agriculture -government subsidies that increase acquisition of agricultural input by farmers -can increase cost of production -cost and distance= not the only determinants of agricultural activities (cost of transportation is a critical factor as well) -in modern times- using faster methods of transportation i.e. air travel -population growth can stimulate innovations in agriculture (when need to feed more people become conscious of land use- will use mixed crop rotation, increase productivity, land use changes ) Green Revolution -describes effort to increase and diversify crop yields in agriculturally less advanced regions of the world -high-yielding modern varieties (MV) of wheat, maize and rice characterized the green revolution -green revolution seeds were more responsive to controlled irrigation and synthetic fertilizers and the miracle seeds spread throughout developing world -ADVANTAGE- produced very rapidly growing crops - increased survival rate of crops in harsh conditions -produced crops that were resistant to diseases - in soils that are nutrient deficient can still grow (re-engineered and have further health benefits) CRITICISMS Biodiversity Loss: -the UN food and agricultural organization estimates that 1,900 (75%) of crop genetic diversity has been lost -globally of the 4000 breeds of livestock believed to exist, 27% are at risk of extinction (moved from cross breeding to cloning) -approximately 70% of the world’s marine species are fully exploited, depleted or in the process of recovering from over-fishing 10 reasons why people are concerned about Franken food 1. no short or long term safety testing (no proper testing and no labels saying it’s a GMP) 2. no decrease in pesticide use 3. creation of GE super weeds and super pests (-because crops are being genetically modified- insects are becoming mutated—they are becoming stronger therefore increased amounts of pests in the long run) 4. antibiotic resistances (can create degenerative diseases, Lowering our immune systems) 5. allergic reactions 6. toxicity 7.declining food quality 8. genetic pollution and bio-invasion 9. terminator technology 10. north profits at the expense of south farmers 11. ethical problems 12. consumers are denied the right to choose PROS Of GMC’s -all season round -high yield CONS of GMC’s -taste -unknown long term side effects -some seeds engineered seeds are sterile -morale and ethical issues -decline in quality (lower nutritious value) -negative impact on the Environment can be grouped under ecological diseases associated with intensification of food production 1-8 (on slides) 1. soil erosion (DIRTI)
