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HUMA 1770 (16)


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HUMA 1770
William Gleberzon

TEST 2 STUDY NOTES 1 Neoliberalism With collapse of Communist block at the end of 1980s helped foster political opposition of state intervention o In favour of free market reform policiesRemoval reduction minimization of barriers caused by national policies to global trade and financeo Associated with Adam Smith Margaret Thatcher Ronald ReaganRooted in classical liberal ideals of Adam Smith and David RicardoViewed market as a selfregulating mechanism toward equilibrium of supply and demandAny constraint on free competition would interfere with the natural efficiency of market mechanisms o Lead to social stagnation political corruption creation of unresponsive state bureaucracies Advocated elimination of tariffs on imports and other barriers to trade and capital flows between nationsFree market economies constitute the most civilized form of human competitiono The fittest naturally rise to the topNeoliberal economic order received legitimation with 198991 communism in the Soviet Union and E EuropeAfter collapse economic globalization o internationalization of tradefinance increasing power of transnational o enhanced role of international economic institutions like IMF World Bank WTOInternationalization of tradefinance o Establish single global market through international tradeliberalization agreements NAFTA GATT o Eliminationreduction of trade barriers among nations o Enhance consumer choice increase global wealth secure peaceful international relations o Benefits specialization competition spread of technology During the Free Trade Era 18461880basis of later neoliberalism UK repeals many tariffs on foreign goods initiates economic policy based on laissezfaire free trade Laissezfairelet it be let it do on its own government stays out economy will take care of itselfMarketdriven approach to economic and social policyStresses efficiency of private enterprise liberalized tr ade relatively open marketsSeeks to maximize the role of private section to determine political and economic priorities of the stateUse the language of markets efficiency consumer choice transactional thinking individual autonomy Effects of past 30 years o Growth in international trade and crossborder capital flow o Elimination of trade barriers o Cutbacks in public sector employment o Privatization of previously publicowned enterprises o Transfer of share of countries economic wealth to the top economic percentile of population o Reduction in size of governmentsNeoliberal measures include Steger Removed protective trade barriers developed in nonCommunist world since 1970s o Not worldwide because of barriers erected by the Cold War o End of Cold War collapse of Soviet Union and dtente and trade agreements with China in 1976 o All barriers to worldwide expansion of neoliberalism globalization removed after 199091Adopted by new Russian and E European government economically and socially but not politicallyo Except Communist Chinese government N Korea Cuba Privatization of public enterprisesDeregulation of the economyLiberalization of tradeindustry TEST 2 STUDY NOTESMassive tax cutsMonetarist measures to keep inflation in check even at risk of increasing unemploymentStrict control on organized labourReduction of public expenditures particularly social spendingDownsizing of governmentExpansion of international marketsRemoval of controls on global financial flows 2 Deregulation Fewer government regulations and restrictions in the economy in exchange for participation of private entities Globally competitivepartialfull privatization of government institutions and asserts greater labour flexibility o Less restriction on domestic and foreign capital open markets Removal or simplification of government rules and regulations that constrain operation of market forcesDoesnt mean elimination of laws against fraud or property rightsEliminatereduce government control of how business is doneMoving toward a more laissezfaire free marketDifferent from liberalization where more players enter in the marketContinues the regulation and guarantee of consumer rights and maximumminimum pricesFewer regulations will lead to raised level of competitiveness higher productivity more efficiency lower pricesLiberalized market have few regulations but have regulations to increase efficiency protect consumers rightEx Natural gas is deregulated in most of Canada except Atlantic provinces and some Vancouver Island o Most of this deregulation happened in mid 1980sProvince of Ontario began deregulation of electricity supply in 2002 o But pulled back due to consumer backlash at the resulting price volatilityRegulations can play an important role in the following situations o Create a level playing field and ensure competition o Maintain quality standards for serviceso Protect consumers from fraud o Ensure sufficient provision of info about the features of competing services o Prevent environmental degradation o Guarantee wide access to services ensure poor areas provided with electricityhealth services o Prevent financial instability and protect consumer savings from risktaking by financial institutions 3 Transnational Corporations TNC The vanguard and forefront enginesengineers of globalizationDiffers from MNC because it doesnt identify itself with 1 national home o MNCnational companies with foreign subsidiaries o TNCspread out their operations in many countries sustaining high levels of local responsivenessEx Nestle employ senior executives from many countries and make decisions from a global perspective o No centralized headquartersPowerful firms with subsidiaries in several countries7000 TNCs in 197078000 in 2006 o 300 largest TNC in the world control 25 of the worlds productive assetsEx GM Walmart ExxonMobil Mitsubishi Siemens accountsworlds industrial outputNone of these corporations maintains headquarters outside N America Europe Japan S Korea
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