1. Global Economy in Historical Context Early Patterns of Global Finance and Trade, largely supported state building, war making, and colonization. –14 th C.-Florentine Merchant Banks (Peruzzi Company) Financed Trade with Asia “Supercompany”: also produced cloth transnationally –16 th -18 th C.- Antwerp, Belgium financial center Bank of England financed Britains war with France British and Dutch East India Companies Hudson Bay Company –18 th C.-Amsterdam and London are global cities

2. Global Economy in Historical Context: 1850-WWII MNCs establish colonial operations –Extractive and Primary Industries; Mining, Logging –Agriculture: Plantations and Ranches; Fruit and Tea –Oil companies emerge –MNCs import textiles and decimate indigenous industries Industrial Age: 1870-1914 –Classical Gold Standard Period: Skeptics argue that this was the only truly globalized era. –Telegraph drastically improves communication

3. Global Economy in Historical Context: Interwar Years Interwar years: Global Monetary Disorder –Collapse of the Gold Standard –German Hyperinflation –Domestic investments predominate Trade protectionism and cartels dominate remaining international business Soviet Union withdraws from int’l market

4. Global Economy: The Bretton Woods Years 1944 Meeting in Bretton Woods, New Hampshire Marshall Plan IMF: short term loans, also administered global financial order –Compromise between free trade and social democrats –Discrepancies between European and developing world World Bank: Infrastructural Development GATT: General Agreement on Tariffs and Trade

5. Global Economy: Development 1950’s- 1960’s Decolonization: finished by early 1960’s: however global capital is afraid of conflict and turmoil Marshall plan is completed, IMF and World Bank turn to new independent states. “Progress, modernization, infrastructure” Development embedded in Cold War conflicts; used as geopolitical strategy

6. Global Economy: Big Changes in the 1970’s 1971: Nixon delinks dollar from gold standard  floating exchange rates OPEC cartel quadruples oil prices  ”petrodollars” US/Euro Banks have $50 billion to loan Developing countries receive this boon in the forms of government and private loans

7. Global Economy: Neoliberal 1980’s Early 1980’s-Debt crisis begins: world wide interest rates soar/ global recession/fall in commodity prices IMF imposes Structural Adjustment Policies (SAPs) to justify additional loans. “Green Revolution,” Industrial Agriculture and commodity “dumping” drive small farmers out of business Rural-Urban Migration in Developing World IMF riots 1989-Fall of USSR and end of Cold War Market economy is the only game in town

8. Global Economy in the 1990’s Structural Adjustment continues and critique intensifies Global Assembly Line-MNC’s Export Processing Zones “Free” Trade and Financial Flows Industrial/Export Agriculture Internal and External Migration continues Rise of the Megacity and the Informal Economy Rise of Transnational Communities

9. The Global Assembly Line

10. VW’s Global Assembly Line

11. Country v. Corporate Economic Size: World Ranks-GDP and Sales

12. The Rise of Multinationals Overheads

13. Differences in Wage Rates Average 1996 wages of workers who make Suburbans U.S. $18.96/hr. Mexico $1.54/hr. # of Suburbans produced Mexico 80,400 U.S. 83,000 Comparative Wage Rates: US/Mexico

14. The Cost of a Shoe

15. Early 1960s - Oregon 1967 – Japan 1972 - S. Korea and Taiwan 1986 – Indonesia, China and Thailand 1994 - Vietnam Globe-trotting Nike

16. Industrial relocation: non-labor factors Government incentives and regulations –Provision of infrastructure (Export Processing Zones) –Reduced cost of land, water, electricity –Tax breaks and tariff reductions –Lower environmental pollution standards –Lower health and safety standards

17. Global Growth in EPZs Region (No. of EPZs) Key Countries (No. of EPZs) Latin America and the Caribbean (240) · Central America and Mexico (148) · Caribbean (51) · South America (41) Mexico (107) Honduras (15) Costa Rica (9) Dominican Republic (35) Colombia (11) Brazil (8) Europe and NIS (81)Slovenia (8) Bulgaria (8) Asia and Near East (264)Turkey (11) Philippines (35) Indonesia (26) Jordan (7) China (124) Africa (47)Kenya (14) Egypt (6) Oceania (2)Fiji (1) Total (633)

19. Map of world trade interconnectedness

20. Exports - 1982 36 % 1994 50 % Imports – 1982 31 % 1994 42 % Intra-Firm Transfers - U.S. Corporations Data

22. 61% MFG - 77% EXPORTS

23. Global Production: Social Issues Health and Safety of Workers Coercive Working Conditions Anti Union Environment Government Involvement in Coercion and Lack of Participation/Democracy in Decisionmaking Child Labor http://www.ilo.org/public/english/standards/decl/i ntro/ilo_movie/index.htm http://www.ilo.org/public/english/standards/decl/i ntro/ilo_movie/index.htm

24. Blue Jeans in Torreon From: gap.com [gap@gap.m0.net] Sent: Tuesday, July 16, 2002 3:54 AM To: RUBINOFF@colorado.edu Subject: Get Our New Boot Cut Washes

25. Torreon, Coahila, Mexico

26. Blue Jeans in Torreon Shifting Power: better local development? Commodity chain approach –Production, Marketing, also Social Movements, Governments Gereffi, 2001: “By focusing on the chain or organizational network as the unit of analysis, rather than the firm, interesting questions about power, governance and the dynamics of chains emerge.”

27. Maquiladora Growth

28. Table 1. Apparel industry indicators for Torreon /La Laguna

29. Table 2. Main clients for Torreon apparel exports

30. Pre-Nafta Manufacturer Dominated Assembly Network in Torreon

31. Post Nafta Full Package Networks in Torreon

32. US ¯ Torreon apparel commodity chain activities and location.

33. Top 10 apparel manufacturers in Torreon, Mexico ¯¯ July 2000

34. Maquila Solidarity Network Critique “Toxic Fashions” and “Blue jean blues” require toxic chemicals Mercerization: Sulphur, caustic soda, acid Tinting and Overdyes-manually crunched, rubbed and sponged Bleaching and Stonewashing: Amylase, Laccase Drying and Baking: Toxic fumes from ovens Pollution of water Supplies

35. Code Initiatives in North UK: Ethical Trading Initiative (ETI) US: Fair Labor Association (FLA) Workers Rights Consortium (University Clothing) US/Europe: SA 8000 (Social Accountability 8000) WRAP (Worldwide Responsible Apparel Production) Lower Standards

36. Changing Labor Conditions?-upside Labor “shortages” due to more skilled labor High turnover- Labor wars Higher wages Upscale labels promote improved working condition New factories are often better than US apparel factories Codes of Conduct displayed (but in English!!)

37. Changing Labor Conditions?-downside Concentration of Ownership in few extended families Men more readily promoted to management positions Mexican Government has reduced the power of unions to a minimum Higher wages must be seen in context of 1994 devaluation of peso  decline in living standards over last 5 years

38. Steps to Socially Just Production “Network of Central American Women in Solidarity with Maquila Workers” negotiate code of conduct with Nicaraguan Labor Ministry

39. Torreon Chamber of Commerce http://www.torreon.gob.mx/index2.htm