Chapter 12 To what extent can globalization bring sustainable prosperity to all people? Sustainable Prosperity – Challenges and Opportunities

In this chapter we will explore answers to the following questions: What is sustainable prosperity? What political and economic challenges and opportunities are associated with globalization? What choices are associated with sustainable prosperity? Key Terms Sustainable prosperity Sustainable development Knowledge economy Privatization Global Climate Change

Sustainable Prosperity – Challenges and Opportunities It is in this chapter that we tie everything together and ask the question… To what extent can globalization bring sustainable prosperity for all people?

Sustainable Prosperity – Challenges and Opportunities Turn to page 278 and 279. Examine the images and read the captions. Now read the top three paragraphs on page 279

What does “prosperity” mean to the young people in these photographs?

Sustainable Prosperity – Challenges and Opportunities What is sustainable prosperity? This term can mean different things to different people. Turn to page 280 and read the two “Voices” boxes. Here are two differing opinions on what it means to be sustainable prosperous. We have seen that the predominant view of prosperity connects it to free trade. Is this view still relevant today in light of current knowledge of the environment and human society?

Sustainable Prosperity – Challenges and Opportunities How can we measure prosperity? Gross Domestic Product: measures the total economic output in a country. Gross Domestic Product Per Person: measures the total economic output per person in a country.

Sustainable Prosperity – Challenges and Opportunities What is the problem with using GDP as a measure of prosperity? Turn to page 282 for an explanation of why GDP is not an accurate measure by itself.

Sustainable Prosperity – Challenges and Opportunities The Human Development Index as a measure of prosperity. HDI is more complete than GDP because it measures more than one aspect of prosperity Longevity: life expectancy at birth Knowledge: school enrollment and literacy Standard of Living: GDP per person What aspects of prosperity are still missing from this measure?

Sustainable Prosperity – Challenges and Opportunities

There is still no adequate tool to measure the “sustainable prosperity” of a society, but some other ideas have been suggested. Turn to page 285 and read the section entitled Other Measures of Prosperity.

Sustainable Prosperity – Challenges and Opportunities Reflect and Respond List five non-economic factors that should be included in determining a nations level of sustainable prosperity. Be prepared to explain why you included them.

Sustainable Prosperity – Challenges and Opportunities What political and economic challenges and opportunities are associated with globalization? The rapid expansion of globalization provides many opportunities and challenges. The ideas of Friedrich Hayek and Milton Friedman continue to create free markets and free trade that create wealth (at least for a few) and limit the interference from government.

Sustainable Prosperity – Challenges and Opportunities There are five basic challenges and opportunities that are offered by expanding globalization. Economic Growth Trade Liberalization The Knowledge Economy Privatization Foreign Investment

Sustainable Prosperity – Challenges and Opportunities Economic growth and sustainable prosperity Economic growth depends on the production and sale of goods on an ever increasing scale of volume and speed. Many economists believe that continuous economic growth will lead to prosperity. There are problems with using this criteria for determining prosperity. What are they?

Sustainable Prosperity – Challenges and Opportunities Trade Liberalization and Sustainable Prosperity The head of the IMF believes that sustained trade liberalization will lead to prosperity around the globe. Do you agree with him? Why? Trade liberalization has made many people and countries very rich, but it has left even more people behind in an ever increasing income gap.

Sustainable Prosperity – Challenges and Opportunities The Knowledge Economy The knowledge economy refers to businesses and people who use knowledge, research, education, new ideas and information technology for practical purposes. This type of economy has led to great advances. But it leaves poorer countries behind because they can’t afford the high tech expertise required.

Sustainable Prosperity – Challenges and Opportunities Privatization Another feature of rapid globalization is privatization of services. Traditionally basic services were provided by the government (Post offices, water, gas, electricity, etc.). There is a push by those who agree with Hayek and Friedman that these services should not be run by the government.

Sustainable Prosperity – Challenges and Opportunities What do you think the upsides would be to privatizing these services? What are the drawbacks? Turn to page 292 and read about Privatizing Water.

Sustainable Prosperity – Challenges and Opportunities Foreign Investment Globalization opens borders and countries are now open to corporations and investors that come from other places. This may increase business and productivity but it takes money out of the host country to be spent or saved somewhere else.

Sustainable Prosperity – Challenges and Opportunities What choices are associated with sustainable prosperity? There is considerable debate around the world on how to create sustainable prosperity The ultimate success or failure in these areas will depend on the choices made by international organizations, governments, industry, and individuals.

Sustainable Prosperity – Challenges and Opportunities There are two aspects to sustainable development. The sustainability of the human population. The sustainability of the environment.

Sustainable Prosperity – Challenges and Opportunities The sustainability of the human population can be summed up by the UNs Millennium Development Goals. Turn to page 294

Sustainable Prosperity – Challenges and Opportunities

The primary threat to the sustainability of the earths environment is Climate Change. Turn to page 295

Sustainable Prosperity – Challenges and Opportunities