AMS 207 Lecture 7: AMS 207 Notes 3-8

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11 May 2017
- While the Uited “tates’ idustrial produtio has reaied ostat oer the last 40 or so
years, the percent of people employed by industrial production has dropped from 35% to 20%
(real loss).
- Effects have been dire on many communities (Detroit, MI; Gary, IN, Cleveland, OH).
- Yet industrial growth has become global.
Concentration of capital
- Keynesianism focuses on high employment and state intervention
o Neoliberalism focuses of private capital and the avoiding of inflation
- Outcome has been a severe reconcentration of wealth in the upper most strata of society
- In 1996, the net worth of the 358 richest people in the world was equal to the combined income
of the poorest 2.3 billion people
- Income share of top .1% of US earners has grown by almost 300% since 1980
- 35-37% of wealth is controlled by top 15 in US; bottom 85% controls about 155 of wealth
- Increasing importance of financial markets
- Tied to globalization of production and deregulation of banking and financial institutions
- Some liberal economists argue that wealth tends to be more concentrated under financial
dominant economies than under production dominant economies. 90% of financial wealth is
controlled by 10% of the population. Wall St/Main St.
- Who take the blame when markets tank?
Foreign Direct Investment (FDI)
- The migration of work to the developing world (Brazil, Russia, India, China) as countries such as
china and India liberalized has improved economic conditions in those areas.
Transnational Corporations
- Have grown from a few thousand in the late 1960s to 90,000 today.
- They account for 70% of world trade and roughly $1.5 trillion in foreign direct investment
- Power allows them to dictate policy
IGOs and NGOs
- International government Organization (WHO, International Court of Justice, UNICEF, United
- Non-Governmental Organization (over 3 million today, must be non-profit)
- These entities help to create a sense of global awareness
Deelopig World’s Det
- According to Steger, in 2007 the developing world owed about $3.3 trillion to outside sources,
up from $618 billion in 1980 (between 1980-2006 these countries paid off $7.7 trillion in loans)
- Liberal economists argue that this keep developing countries indebted to those giving them
loans and allos IMF et. to ditate their eooi poliy. Austerity.
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