1. Development of the World Economy and Core-Periphery

2. Characteristics of Capitalism Markets –Consist of buyers and sellers of commodities (goods and services bought and sold for a price) –PROFIT is incentive for selling goods and services Class relations –Capitalist class system based on money and earned status (not tradition and born rank) –As merchants gained wealth in the 15 th century, they also gained political power Aristocracy (hereditary) resisted –Labor itself became a commodity, gave some power to workers

3. Characteristics of Capitalism Finance –Money became standardized, and ubiquitous as a measure of value –Organization and control of money became an industry in its own right (banking, investment, insurance, commercial credit) Territorial and Geographic Changes –Capitalism creates uneven spatial development –Capitalism and colonialism are closely linked, and created a system with Europe at the center and the colonies in the periphery –As capitalism spread, urban areas became more developed, and more people moved to cities

4. Characteristics of Capitalism Long-Distance Trade –Buying and selling goods and services over long distances is a key element of capitalism –Long-distance trade links producers and consumers in capitalism –In 16 th – 18 th centuries, Europe built many roads, canals (and later railroads) to facilitate trade Accelerated time-space compression (takes less time to get someplace) –Led to development of comparative advantage Comparative advantage stresses relative advantage of one place over others; e.g., countries export the goods they can produce at the lowest relative cost

16. Characte ristics of Capitalism New Ideologies –Capitalism is a set of economic, political, geographic relations simultaneously –Printing press (1450) helped new ideas circulate more freely Shift from God-centered view to human-centered Protestant reformation (emphasized role of individual, stressed delayed gratification, savings, and material success as a sign of God’s grace, elevating work to a moral obligation, paving the way for capital accumulation) Science (16 th century) restructured view of the world Enlightenment emphasized science and secular political thought

17. Characteristics of Capitalism The Nation-State –Rise of Nation-State Nation: group of people who share a common culture, language, history, territory, identity State: Land, people, government, transportation, and communication system; economic system; sovereignty, recognition Nation-State: where political and national boundaries coincide –Capitalism came long before the rise of the nation-state Not necessarily a causal relationship

18. The Industrial Revolution Introduction –Industrial Revolution occurred long after capitalism began –Industrialization includes transformations in inputs, outputs, and technologies Inanimate Energy –Industrialization may be defined as the harnessing of inanimate sources of energy Running water, wood, coal, petroleum, and natural gas (fossil fuels); each had spatial outcomes

19. The Industrial Revolution, continued Technological Innovation –Innovation helped reduce costs and increase revenues Technology: means of converting inputs to outputs –Development of the factory system Began with textile industry Increased capital (machines), interchangeable parts, many workers under one roof Productivity Increases –Productivity: level of output generated by a given volume of inputs –Cost to produce goods declined, consumption of material goods increased –Industrialization of agriculture made food progressively cheaper; people ate more and better food

20. The Industrial Revolution, continued Geography of the Industrial Revolution Fig. 2.17: Spread of the Industrial Revolution across the European Continent. Well after Britain had industrialized, the new form of manufacturing led to the formation of industrial complexes in France, then later in Germany and Italy.

21. Global Diffusion of Industrial Revolution Fig. 2.18: Global diffusion of the Industrial Revolution. Began in England, then spread to continental Europe; then to North America and Japan (1870s); reached Russia 1920s The Industrial Revolution, continued

22. Creation of an Industrial Working Class Creation of a working class through labor unions Urbanization: cities as centers of capital and labor Fig. 2. 21: An urbanization curve expresses the proportion of a country’s population that lives in cities. Urbanization rose with industrialization.

23. Growth of Global Markets and International Trade Transportation faster and cheaper; imports and exports increased; international finance grew; early industrializers had little competition

24. Colonialism: Capitalism on a World Scale “Age of Exploration” -- colonialism was economic, political, cultural Colonized nations fought rule by foreign colonizers –Inca against Spain; Zulu against Dutch Boers; Indian Sepoys against British (1857); Boxer Rebellion in China against British (1899-1901) –Only Japan escaped colonization Europe became a world power through colonization

25. Colonialism: Capitalism on a World Scale, cont’d Effects of Colonialism –Annihilation of indigenous peoples –Restructuring around primary economic sector –Formation of dual society Co-optation of native elites (often ethnic minorities) exacerbated rivalries (e.g., Hutu and Tutsi in Rwanda) –Polarized geographies Colonial port cities became dominant Transport networks met needs of colonizers, not indigenous peoples –Transplantation of the nation-state Colonial powers created states (Iraq, Afghanistan, etc.) with no respect for indigenous cultures –Cultural Westernization Beginning of homogenization of local cultures, including missionary conversions

26. Fig. 2.33: Railroads in Nigeria, Burma, and Angola show colonial Transportation networks that link coastal port cities with interior resources (usually mines or plantations) Colonialism: Capitalism on a World Scale, cont’d

27. The End of Colonialism –Latin America gained independence early (after Napoleonic Wars) –Africa and Asia gained independence after World Wars I and II Communist governments sometimes took control Intellectuals educated in the West played a role in some places (Kwame Nkrumah in Ghana; Ho Chi Min in Vietnam; Mohandas Gandhi in India) Some independence movements were violent (Vietnam, Algeria); others were peaceful (India) Today, there are few colonies