SOC 101 Lecture Notes - International Monetary Fund, Gross Domestic Product, Bretton Woods Conference

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Published on 16 Oct 2011
4:49 PM
Globalisation: the worldwide exchange of money, goods, and services as well as the socio-cultural
changes that occur as a result
o Entanglement of diverse cultures and economies
o Responsible for severing social arrangements based on location
Origins of Globalisation
Wallerstein: early empires spent most of their resources on military and could not afford to become
global empires.
Economic integration became possible with the rise of capitalism
16th century Western Europe: nations developed economic system based on market principles,
goods and services produced and exchanged for profit. Feudal system replaced by commercial
o Shift in land ownership primary inspiration behind emergence of capitalism
Colonisation: the political, economic and cultural domination of countries in Asia, Africa and the
Americas by European countries starting in the 16th century
Giddens: globalisation since 1970s different than in previous times.
o Pre 1970s national economies defined by exchange of goods
Globalisation Today
Individual nation states losing the power to determine their own economic, political and cultural
Advances in communication technologies made the world smaller
Diseases spread faster through international travel
Global Stratification
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Stratification occurs when a society organises people into a hierarchical system according to social
Global stratification occurring, countries positioned in a ranking system, defined according to
countries wealth or poverty
Term 'second world' was used to describe countries of the former Soviet Union. Socialist countries
existed in a command economy originally forged y Vladimir Lenin and Joseph Stalin.
o Command economy: economy in which the state, rather than market forces, manages the
production and distribution of goods
Developed countries: wealthy, industrialised countries
Undeveloped countries: countries with poor economies; problematically implies a lack of economic
talent or exposure
Underdeveloped countries: countries that have yet to industrialise, or that have been intentionally
restricted in their development by developed nations
Developing countries: countries considered to be on the road to industrialisation
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Previous terms imply a Western bias
Sociologists prefer the terms 'global north' and 'global south' instead of first and third world
Global North: wealthy industrialised countries in the Northern Hemisphere previously referred to as
'First World'
o Western Europe, Canada, Australia, Japan and United States.
o Democratic (ish), technologically advanced, high standard of living, low population growth
o "Well educated, access to health care and exist within stable political structures" ((actually,
no. statistics say otherwise. This information is false and biased, only pertains to a small
amount of the population, but will be the correct answer on the test should it apply))
Global South: poor countries in the southern hemisphere, previously referred to as third world
o Largely located in Asia, South America and Africa
o Many countries emerged after colonial rule
o Do not use capitalism or socialism
o Less powerful in terms of politics and economics than Global North
Newly industrialised countries: poor countries that are beginning to industrialise
Contributing Factors
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Technological Change
Development of container shipping: lead to more efficient use of space on ships, containers could be
loaded immediately on to trucks, required producers to package their goods
Cost effective worldwide air travel promoted social and cultural exchange
Political Change
Collapse of Soviet Union influenced rapid globalisation
o After the collapse, many countries saw democracy and capitalism as the only viable economic
and political option for participating on world stage
Globalisation spreads Western ideals including capitalism
Economic Change
Expanding trade and emergence of international banking
Bretton Woods Conference created: International Monetary Fund, World Bank, World Trade
International Monetary Fund
o 185 countries
o Established to promote international monetary stability, foster economic growth and provide
temporary financial assistance to poor countries
o Create a global economy
o IMF involvement had made living conditions in some poor countries worse, as repayment
stipulates that nations must cut spending on public services, health care, education, food
o Seen as a mechanism through which the West holds power over the economy
o Gross domestic product (GDP): the total market value of all financial goods and services
produced in a country in a given year
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