GEOG 121 Lecture Notes - Starbucks, Walmart, Commodity Fetishism

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20 Apr 2013
How we got here from the South
Lecture 10
Classic international division of
International division of labour = the
geography of global specialization and
“Classic” form: colonial countries specialise
in manufacturing, colonies in the
production of primary goods (natural
New International Division of
Labour (NIDL)
• F. Fröbel, J. Heinrichs and O. Krey, The
New International Division of Labour
• Increasing emergence of industrialising
countries in the Global South: the “Newly
Industrialised Economies (Countries).”
“Four Tigers:” Sinapore, Hong-Kong,
Taiwan, S. Korea
Export-led industrialisation
Export oriented manufacturing sector powers the
Global South to development. Possible
1. Liberalisation of trade
2. “Shrinking” of geographical distance by
enabling transportation and communication
3. Prevalence and willingness of multinational
corporations to invest
4. Strong states (“development states”) e.g.,
Korea and Taiwan
Export processing or special
economic zones
Small, separated areas dedicated to the
production of exports usually by MNCs
1. No export/import duties
2. Tax holidays
3. Repatriation of full profits
4. Provision of physical infrastructure
5. Abundant cheap labour
> 3500 world-wide, > 66m workers, 2006
(International Labor Organization)
The ironies of export
processing zones
enterprise in China
1. Production sites are carefully placed. Globalization
and the market are hardly free.
2. High proportion of export zone labour is female
working long hours for little money (= Marxist
exploitation). Is this back to the future?
The solution: to come up with better alternatives that
really are better, then there would be no irony at all.
Global corporations: Wal-Mart
as an example
Lecture 11
Global corporations
• Seem to offer the possibility of bringing the
world together
• But their rationale as institutions depends
upon keeping the world apart
The Multinational
Corporation (MNC) and Space
• Almost as old as capitalism itself: British
Hudson Bay Co., British East Indian Co.,
Dutch East Indian Co.
• Marx predicted growing size of
corporations would cause the collapse of capitalism.
Multinational Corporations
• MNCs (or Transnational Corporations,
TNCs) are firms “that own, control and coordinate
activities in more than one
country” (Dicken)
• Growth in numbers:
1970 ≈7,000; 2006 ≈ 63,000
• Growth in size:
Three advantages from the tactical
use of space: 1) Cheap and pliant
labour: wage costs for factory workers in Indonesia,
Thailand, and the Philippines are 2.5-5% of the cost
of US workers.
2) Dodging corporate Taxes: -Amazon, Google, and
Starbucks paid almost no corporate taxes in the UK
despite making billions of dollars over a sustained
period. -Starbucks paid no tax in14 out of 15 years
-Artificially manipulates costs with its other
international subsidiaries to make it seem it loses
money in the UK
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