THERE IS NO ALTERNATIVE? The rise of global capitalism
Our progress ¨
We have considered how global social structures are challenging local iden8fica8ons ¤ Is the na8on state s8ll relevant?
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We examined the development of a global media system ¤ Do we hear more voices or fewer in the global sphere?
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We asked: Are becoming more or less similar? ¤ How does this impact your family and your cultural
iden8ty?
From individual to collective ¨
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The predominant aCtude of the young in Western socie8es is of increasing acceptance of individual expression – ‘be who you want to be’ This individualism has led to greater acceptance of, and rights for, minority iden88es and lifestyles We oHen respond to global problems like poverty and climate change in the same way: individual ac8ons can make a difference Over the next three weeks we will consider the social consequences of our individual ac8ons, asking whether we are responsibile for global problems and what capacity we have to enact change
Do you feel any responsibility for global poverty and/or climate change ?
Our pathway Today: An introduc8on to global capitalism
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Next week: Capitalism, wealth and poverty
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In two weeks: Capitalism, climate change and the global poor
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Then: Urbanisa8on and terrorism
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Essays Assessment 2: One essay, which should be 1500 words in length and is worth 70% of the final grade. 1. To what extent do we live in an increasingly economically ‘flat earth’? 2. To what extent should developing na8ons be forced to reduce their carbon emissions? 3. To what extent does London promote post-‐na8onal cultural iden88es? 4. To what extent is the possibility of terrorism a threat to democracy in the UK? Due: Monday 25th April, 3pm
Today ¨
An introduc8on to the dynamics of capitalism
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Globalisa8on as global capitalism
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The global dominance of the logic of capitalism
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The rise, shame and fall of financial capitalism
To what extent does global capitalism work primarily for the wealthiest?
What is economics? ¨
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Capitalism, and economics, can oHen seem very abstract Economics concerns the material reproduc8on of our lives Material reproduc8on is the ways in which we organise our lives in order to eat, drink and reproduce our socie8es There is no ‘natural’ way to materially reproduce our society The currently dominant system is ‘capitalism’
What is capital(ism)? ¨
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Capitalism is the social system in which capital is accumulated Capital is money deployed to buy commodi8es in order to sell them for more money This money can be accumulated to become more capital, which is then reinvested to make more money This is the cycle of capitalism – a successful capitalist economy will con8nually expand
The cycle of capital Commodi8es II
Money II
Money
CommodiGes
The corporation ¨
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Corpora8ons, those who control capital, are privately owned, whether by individuals or by shareholders The primary purpose of a corpora8on is to make profit for the owners All business decisions should be taken with this in mind
A corporate community ¨
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Corpora8ons dominate our lives Our economies require both corporate investment and con8nuing corporate profit
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Corpora8ons demand favourable tax and employment laws
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What is good for corpora8ons is thought to be ‘good’ for society
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Corporate values have seeped into everyday parts of our lives
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Services that were once run for the public good are now run for profit
The professional sport business… ¨
Is owned privately by individuals
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Has a primary purpose of accumula8ng profit
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Sport is the product to be sold to consumers
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Spor8ng decisions become business decisions
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Club culture becomes brand value
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Sportspeople become employees
Do sports teams ever feel like businesses to you?
Corporate universities ¨
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As university fees have risen, students are becoming more concerned with their employment prospects In response, universi8es are becoming more concerned with ‘employability’ Rather than being a ‘public good’, universi8es are focusing on the demands of employers
Should you be taught about how to write a CV at university?
What about globalisation? ¨
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Globalisa8on and global capitalism have developed concurrently The major trends of globalisa8on have matched the expansion of capitalism ¤ Imperial trade and colonisa8on
¤ The development of global economic ins8tu8ons that
established a shared economic framework aHer World War II ¤ The emergence of transna8onal corpora8ons ¤ Electronic communica8on and financial trading
Globalisation as global capitalism ¨
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Capitalism is naturally expansive In order to find places to invest money, the owners of capital are always searching for new markets and new consumers Going in search of these markets, capitalism has expanded across the world through mul8-‐na8onal companies and global economic reform In turn, capitalist expansion has created a shared culture of corporate values
“The need of a constantly expanding market for its products chases the bourgeoisie over the en8re surface of the globe. It must nestle everywhere, seble everywhere, establish connec8ons everywhere” (Karl Marx, Communist Manifesto, 1848)
Instituting Capitalism ¨
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AHer the catastrophe of World War II, new global economic ins8tu8ons were established These ins8tu8ons, the Interna8onal Monetary Fund (IMF) and World Bank, were established at the ‘Brebon Woods’ conference of 1944
These ins8tu8ons abempted to create global economic stability by establishing a shared economic framework
Global economic ideas ¨
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The IMF seeks to manage the world economy by ensuring a predictable economic system Whilst it mainly seeks to advise, it also makes loans – with strong condi8ons that enforce economic policy upon poorer na8ons Decisions are made by votes, but votes are based on financial contribu8ons ¤
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The US has 16.75% of the vote, the UK 4.29% and China has 3.65%
The United States also has veto control of the World Bank
Global Corporations ¨
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The most visible aspect of global capitalism are transna8onal corpora8ons Transna8onal corpora8ons do not have a specific ‘home’ loca8on The development of transna8onal corpora8ons (TNCs) has been a significant element of globalisa8on as power moves beyond the reach of the na8on-‐state
How are transnaGonal corporaGons involved in your life?
Transnational power ¨
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Transna8onal corpora8ons bring Foreign Direct Investment (FDI) to na8onal economies, which compete for these funds These companies have come to dominate capitalism and drive globalisa8on Whilst this can distribute wealth globally, many TNCs have become immensely wealthy and powerful
Corporate control ¨
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Researchers at the University of Zurich found that there are 43,060 transna8onal corpora8ons Of this 1,318 companies dominant the global market 147 of these companies, mostly banks, control 40% of the wealth These companies are intensely interconnected, oHen owning parts of other companies and leaving the system vulnerable to collapse
Source: Daily Mail, 2012
Problematic control ¨
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Because of this power they are oHen able to dictate poli8cal condi8ons in host countries Countries are finding it increasingly difficult to gather tax from transna8onal corpora8ons ¤ ¤
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In 2012 Starbucks made a loss of £30million in the UK, despite doing £414 million in sales In 2014, Apple had £10.5billion in revenue and paid £11.4 million in tax
The material reproduc8on of a par8cular locality is oHen conducted by and for the benefit of those with no stake in that locality
The rise of finance capital ¨
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Since the 1990s the global economy has become increasingly ‘financialised’ Rather than being orientated around trade of goods and services, advanced economies are dominated by the complex trading of currency Instead of using money to buy commodi8es, the financial economy uses money to buy money
Source: Spiegel, 2011
You are a banker too! ¨
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Any money you have in the bank is a loan to the bank Banks invest this money into financial markets They are only required to maintain a small amount of deposits They make a profit by gaining more from your money than they pay in interest
How did you choose your bank?
The shame of financial capital ¨
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Any commodity can be traded within the financial economy This includes basic items like food – trading in cereals and rice can greatly increase prices, par8cularly in famines when supply is low People might be dying, but profits are rising
The fall of financial capital ¨
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Beginning in 2007, a crisis developed in the global banking system from which we have not recovered Whilst the causes of the crisis are complex, banks had taken such high risks with their debt that when one ins8tu8on could not pay, others also collapsed The collapse of the financial sector spread throughout the economy, leaving us wallowing in debt and having to make ‘difficult decisions’ Despite all of this, almost no bankers have been jailed and tax dodging con8nues
There really is no alternative ¨
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Former Prime Minister Margaret Thatcher famously said, ‘There is no alterna8ve’ When the banks collapsed they were ‘too big to fail’
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Alterna8ve or transgressive cultures are encouraged within capitalism
Summary ¨
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Capitalism and corpora8ons have an unprecedented dominance in the contemporary world The expansion of capitalism is driving globalisa8on The power of capitalism and corpora8ons have subsumed alterna8ve ways of life
Next Week WEEK 6 THE FLAT EARTH HYPOTHESIS: DEVELOPMENT, INEQUALITY AND POVERTY Core readings: Chapter One, Friedman, T. (2005) The World is Flat: A Brief History of the 21st Century. New York: Farrar, Straus and Giroux. Millennium Development Goals: hbp://www.un.org/millenniumgoals/