Social 10 - Unit 3 Notes

Social 10: Unit 3 - Economic and Environmental Impacts of Globalization Important Terms to Know:   Economic Globalization: The way countries depend on each other for resources, an umbrella term for the way governments have become interdependent on each other's economies Economic Nationalism/ Protectionism: When a country wants to develop their economy first before expanding to other countries. This can help local businesses greatly but raises prices for consumers because local production costs more. Foreign Investment: A company investing/ taking ownership of a company in another country. Eg. Southeast Asian investment of Canadian lumber and oil industries Free Trade: The movement of exports and imports without restrictions, quotas, or tariffs(taxes) Anti-Globalization: The perspective that opposes globalization and believes global trade agreements are not made in the best of less developed countries and the environment Subsidiaries: Companies controlled by a parent company Outsourcing: When a company hires another company(sometimes from another country) to fulfill certain tasks for production. Eg. Technology companies outsourcing their customer services to Asia Privatization/ Deregulation: When government-owned businesses are sold to private companies Eg. Alberta Liquor stores used to be government regulated but now are owned privately Subsidy: Financial help(government loan or grant) given to industries Eg. Government support for COVID Crown Corporation: Government-owned businesses in Canada Eg. Canada Post Tariff: A tax on imports to increase the price and reduce competition with domestic products Trade Liberalization: The process of removing trade barriers Ethical/ Fairtrade: Trades between companies in more developed countries with producers from less developed countries where the producers are paid adequately Consumerism: The promotion and protection of consumers, allowing them the freedom to control the economy. The desire for consumers to buy stuff to fill their wants and needs Undeveloped/ Developed Nations: A developed nation has a higher quality of life, a working economy and more technological advancements than developing nations. Sustainability / Ecological Footprint: The amount that human life affects the natural environment, the "footprint" left behind on the environment after every action a citizen takes. Sustainability is the balance between human development and environmental health, trying to find a situation where both can prosper. Eg. "Carbon neutral" means to offset the carbon emissions produced when doing something by donating or supporting a service that helps the environment Agribusiness: Large scale agricultural business or groups of smaller family farms put together, such as Hutterite colonies Supply-side economics/ the “Trickle-Down Effect”/ neo-conservatism (Friedman, Hayek): Supply-side economics is when taxes are lowered for the highest wealth class to allow them more money to reinvest in the economy. This would then "trickle" down into the lower classes of the economy and allow economic recovery. This is the ideology of Friedrich Hayek. Demand-side economics - Keynesian Economics: Demand-side economics is allowing more government spending to invest in the economy and allow the lower and middle classes to recover.  This is currently what is happening during COVID, the government is created programs to allow businesses and individuals to stay afloat during the pandemic. This may also involve raising taxes for higher wealth classes.  Social programs (‘universality’ of social programs): Goods and services provided by governments and funded by government taxes. These services are available to everyone for free and sometimes referred to as "universal". In Canada, healthcare, public schooling, public libraries, police stations and fire departments are all social programs and funded by the government.  The Gold Standard: Created in the Bretton Woods Agreement that stated that all printed money must be convertible to gold in that country. This means that a country's gold reserve dictates how much money can be printed. For example, if a country only has a billion dollars worth of gold, only a billion dollars of printed money(currency) can be printed. Basically, a country's gold reserve determines how much that country is worth. This made it hard for governments to deal with crises and needing more money, so it was no longer enacted in the 1970s. Floating/ Fixed Exchange Rates: A fixed exchange rate is when a currency's value is set by the government. A floating exchange rate is when a currency's value is determined by what it's worth on the foreign market, basically determined by how many countries are investing and buying it Equalization Payments: A tax taken by Canada's federal government from each province that is then redistributed to equally distribute wealth among the provinces. Basically, the government takes money from more wealthy provinces and distributes it to less wealthy provinces Self Determination/ Sovereignty: A country's independence and ability to make decisions for themselves. Eg. Because Canada has subsidized industries(such as lumber and dairy) the United States regulated the trading in those industries. This was an example of infringing on Canada's sovereignty. Stewardship: Environmental responsibilities  

Social 10: Unit 3 - Economic and Environmental Impacts of Globalization Chapter 10 - Foundations of Economic Globalization   1944, Bretton Woods Agreement: As WW II continued, democratic allied countries of the United States were concerned about how the global economy would be once the war ended. So, 44 allied countries met in the United States at Bretton Woods, New Hampshire to come up with a plan and created the Bretton Woods Agreement. An international monetary system was born out of this, along with: - The Gold Standard: each country had a fixed exchange rate that was based on the gold standard. This meant that a country could only print money up to a value in their gold reserves. This system gave some people confidence because it meant that their money could be converted to a physical object, but never worked because countries needed to borrow money in times of crisis. Now, currencies have a floating exchange rate where their value is determined by how much people buy or invest in it in the global market. - The World Bank: an agency of the United Nations that gives less developed countries financial assistance by giving out loans. They work with these countries long-term to get them back on track. However, to eligible for these loans, the country must have a stable, fair government, free market. Is made up of the International Bank for Reconstruction and Development(IRBD) and the International Development Association (IDA). Some criticisms of the World Bank: - Free markets are bad for the environment and the World Bank encourages it - Less developed countries are exploited by the World Bank - Considered undemocratic because they support more developed countries Some benefits of the World Bank: - Ensures world peace - Because of lower tariffs(trade taxes), the cost of living is lower - Encourages good governments - Improves the quality of life in many countries   - The International Monetary Fund (IMF): An agency that works with the World Bank to bring stability to international monetary affairs. Offers short-term monetary assistance. Is funded through quotas provided by members. Some criticisms of the IMF: - Allows failing firms to go bankrupt - Creates higher taxes and lower spending in the government, making it harder for citizens to live Some benefits of the IMF: - Promotes employment - Helps reduce global poverty - Facilitates international trade   1947, General Agreement on Tariffs and Trade (GATT) or World Trade Organization (WTO) At the end of WW II, 50 countries created the United Nations. It aimed to encourage peaceful relations between countries and open up trade borders. The General Agreement on Tariffs and Trade(GATT) was created in 1947 as an agency of the United Nations(later changed to the World Trade Organization in 1995).  It began with 23 member countries and operates on these four principles: - Conducting trade in a non-discriminatory manner - Treating imported goods from a member country the same as similar domestic goods - Protecting domestic industries through tariffs, not import quotas or fees - Requiring a country seeking membership to present a list of tariffs and other trade restrictions posed on member countries Some criticisms of the GATT: - Domestic industries may struggle to compete - Exposes more of the world to risks within a given domestic industry - Governments give up some level of control to an international agreement Some benefits of the GATT: - Encourages international trade - Reduces the likelihood of war(better relations between countries) - Improves communication   1994, North American Free Trade Agreement (NAFTA) After the creation of the Free Trade Agreement(FTA) between Canada and the United States, Mexico wanted to join in too. This led to the creation of NAFTA, the largest free trade area in the world, with a total population of over 450 million. Benefits of Free Trade Agreements: - Cheaper prices for consumers - More choices for consumers Negatives of Free Trade Agreements: - Domestic industries find it harder to survive - The environment can be negatively impacted from constant transportation of goods  

  Social 10: Unit 3 - Economic and Environmental Impacts of Globalization Chapter 11 Transnational Corporations positives: - high-quality products(drives competition) - create jobs   negatives: - takes away other small businesses - operate in less regulated countries where workers and environment and can be exploited

Social 10: Unit 3 - Economic and Environmental Impacts of Globalization Chapter 12   European Union (EU)

Social 10: Unit 3 - Economic and Environmental Impacts of Globalization Chapter 13   OPEC

Social 10: Unit 3 - Economic and Environmental Impacts of Globalization Chapter 14   Sustainability   HDI