GBH 3

18 flashcards · Other · by Daniel F.

1. globalization

   Process: intensified interactions leading toward a more interconnected and integrated world (‘soft globalization’) Outcome: market integration across world regions (‘hard globalization’)

2. hard economic globalization

   integration of national economies through trade and the international flows of capital, labour, and technology Market integration convergence of commodity and factor prices Price convergence falling transaction and transportation costs

3. first wave of globalization

   Between 1870 and WWI economies became globally integrated increased trade within eu and internationally Increased labour mobility: mass migration International transfer of technology and knowledge New transportation and communication technologies Transaction and transportation costs fall

4. Why did trade increase

   declining freight costs faster sailing, steam, canals faster train in larger territories e.g. us rus colonial empires - direct control from metropolies extend markets by removing trade barriers secured property rights and 3rd party enforcement contracts core-periphery dynamics Raw materials were sourced from peripheral territories and then processed and manufactured into finished goods in core regions, which were subsequently exported back to the colonies for sale Most Favoured Nation System of…

5. Gold standard

   Governments/central banks guaranteed that they would redeem any amount of paper money for its value in gold currency value is fixed and cannot be devalued exchange rates are fixed countries must have gold reserves covering their volume of paper money volume of paper money is constrained by gold stock Prices increase if more gold becomes available drop if output rises but there is a gold shortage increased interest rates so ppl wouldnt actually redeem money for gold

6. Gold standard pro and con

   Pro: No currency fluctuations Free movement of capital Stable prices Restriction on governments (ability to print money) Increased trust Transparent financial system Con: Fluctuations in availability and value of gold Limits government to stimulate economy (out of depression/recession) Limits choices national governments can make (defense for example)

7. British Empire spreads the Gold Standard

   london financial centre international elites Pound sterling is good as gold earned recognition as a credible and reliable currency gold rushes Doctrine of Economic Liberalism minimal government intervention in economics unrestricted trade, coupled with openness to foreign investment, fostered prosperity and development globally International Investment and Capital Flows trust, reputation, and liberal economic ideology, international investments and capital transfers escalated

8. Colonization of Africa

   Resource driven Africa is rich in Gold Rubber Oil Iron Copper Cotton Ivory Diamonds Intensified colonization occurred between 1884/1885 Congo Leopold II of Belgium controlled the Congo Free State from 1885-1908, promising development but exploiting the region for rubber, ivory, and other resources Berlin Conference: The Congo was recognized as a free-trade zone governed by the Congo Free State, privately controlled by Leopold through the International African Association Brutal Exploitation: Un…

9. De Beers company

   Established in 1888 with Rothschild & Sons' funding, chaired by Rhodes, and merged with Diamond Syndicate in 1889. Formed cartel by agreeing to buy a fixed quantity of diamonds at a steady price to stabilize output and prices. Controlled approximately 85% of global diamond distribution from 1888-2000, holding a virtual monopoly. Currently headquartered in London, producing roughly 30% of global diamonds in 2022.

10. British South Africa Company’s rule in North and South Rhodesia

    Chartered in 1889 by Queen Victoria to acquire, govern, and develop Rhodesia north of South Africa. Rhodes was the Managing Director with power of attorney, enabling direct rule and freedom from the 'inefficient London government.' Colonization 'on the cheap,' funded by administration fees and a local hut tax. Territorial expansion through treaties, concessions, and violence, consolidating mineral rights. Built railways but left little money for territorial development. The charter was revoked…

11. long-term effects of colonial licenses: Shell

    started business in Nigeria in 1938 as "Shell D'Arcy" and was granted an exploration license Oil was found in 1956 Nigeria became independent in 1960 Incomes are 30 % Shell, 55 % Nigerian National Petroleum Company Enormous environmental pollution today

12. role/goal of the colonial state

    Empire Geopolitical competition with France, Germany, Portugal Finding new markets for (British) goods manufactured in (British) factories Economic Development Guarantor of property rights necessary for the concessions Availability of resources for manufacturing and investment opportunities Stable investment environment Build colonial economies to finance state colonization efforts Civilization of other cultures Spread of Christian religion

13. Managerial capitalism’s development US vs UK

14. Managerial capitalism’s consequences

    Positive: Managerial capitalism meant that managers were drawn from a wider pool and were qualified (the owner could not know all) Different tasks assigned to specialised managers. Negative: Principal-agent problems imply that separation might lead to misdirection of managerial effort

15. The M-form

    Multidivisional organizational structure The firm is separated into several semi-autonomous units/divisions By geography, product, etc. Part of the same legal ownership structure Central office Provides managerial expertise and capital for the divisions Develops overall strategies Pioneered in 1920s by DuPont and General Motors. Slow growth in inter-war in US and Europe. Rapid growth after 1945, particularly during “golden age of capitalism” (1950-1973).

16. The M-form: causes

    Key development: multidivisional strategy As limits of demand are reached, big business goes bigger by expanding scope (monopoly => monopolistic competition) Initiate process that was going to culminate in the conglomerate in the post-war years As the product range expands top management can no longer follow all product lines M-form allows top-management to focus on strategy with division managers following the day-to-day operations

17. The M-form: consequences

    Power: The M-form upsets existing power structures within the firm. Sales & marketing stand to gain, production and owners stand to lose. Imitation: As the M-form becomes the new norm, firms adopt it regardless of its efficiency

18. Managerial capitalism vs ownsership capitalism

    Decision Making: Managerial Capitalism: Salaried managers, who typically don't have equity ownership, make the majority of decisions relating to production and distribution. Ownership Capitalism: Business owners, who hold significant equity stakes, make most of the crucial decisions regarding the company's operations and strategies. Leadership Style: Managerial Capitalism: Professional managers lead the organization and implement strategies, following structured procedures and protocols. Owners…