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Three Elements of the Global Economy: Production, Consumption, and Trade

Explore the key components of the global economy: production, consumption, and trade. Discover how these elements shape the world GDP, international trade, and foreign direct investment. Gain insights into the inherent globalizing tendencies of capitalism and the consequences it brings, such as the differentiation between core and periphery regions and the impact on jobs and the environment.

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Three Elements of the Global Economy: Production, Consumption, and Trade

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  1. Review • Three Elements of the Global Economy: • Global system of production • Global system of consumption • Global system of trade (global market)

  2. World GDP, Trade, FDI

  3. Not JustAny Global Economy… • Capitalist economy, organized around: • Private ownership and private profit System tooled to maximize private profit for private gain Compare communist, family, barter economies

  4. Inherent globalizing tendencies • Globalize production in order: • To attain the lowest price for natural resources • To attain the lowest price for labor • Globalize consumption: • To bring new products • To new markets

  5. Consequences of Global Capitalism • Differentiation of Core and Periphery • Core – concentration of capital ownership • Periphery – concentration of labor, natural resources

  6. Export High-Pay Jobs to Periphery

  7. Wage Decline in Core (U.S. 73-97)

  8. Export Degradation to Periphery

  9. More Palm Oil Production, Less Orangutan Habitat

  10. Orangutan Orphans

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