From Global Commodity Chains to Global Value Chains

From Global Commodity Chains to Global Value Chains how the concepts evolved from its most direct progenitor, the “global commodity chains” (GCC) framework as developed by Gary Gereffi (1994, 1999). Gereffi’s framework lays out four key structures that shape GCCs (input-output, geographic, governance, and institutional) The GCC concept was first developed by Hopkins and Wallerstein (1977, 1986) who highlighted the power of the state in shaping global production systems, exercised in large part in the form of tariffs and local content rules affected at the point where goods crossed borders (see also Wallerstein in this volume). Gereffi (1994) revived the GCC concept by refocusing it on the strategies and actions of firms, in part because of the restricted ability of states to set tariffs and local content rules in the context of trade liberalization.

1. Global corporatization has integrated children/ youth in the Core and Peripheral countries into a global commodity chain. CHILD LABOR/SLAVERY: NIKE, APPLE, GAP, MICROSOFT -- CHINA, INDIA, PAK http: //www. youtube. com/watch? v=57 v_v 6 o. SGZI 2010 4 min

• Single division of labor: core accumulates capital as periphery supplies labour

WST & Global Commodity Chain (GCC): Commodity Chain Research HD http: //www. youtube. com/watch? v=bs 65 d. Ic. RKXE Core: Capital rich MNCs’ corporate Head Office: R&D Product design Customization Market distribution Products Retail Ads

GCC Peripheries: Labour surplus Production process: • • Vertically integrated GCC

Vertically integrated Model: MNCs’ GCC Foreign subsidiary or Subcontracting local company Manufacturing factories or Sweatshops Extract raw materials from resource rich areas Extract surplus from labour Household labour of the poor (low/no wage or slavery): Men, Women, Youth & Children

Hidden Inputs of the Peripheries’ child & women in the global Commodity Chain Typical Production Node of a Capitalist Commodity Chain Cheap Labor Working class child & women subsidize the Production Process Capitalist Costs that are Externalized to Households Inequitable Impacts on children & women Economic Costs to the Periphery Surplus extraction from labour: No-wage, Unpaid & Low-wage subsidize commodity production State Subsidies: in providing societal Infrastructure of maintaining stable social order State Subsidies to Capitalist Enterprises External costs: http: //www. youtube. com/watch? v=y. C 5 R 9 WPId 0 s (7. 39 min)

Inequitable Impacts of global Commodity Chains on workers in Canada (Core): Wilma A. Dunaway, Wealth & Capital Concentration Economic Costs In Commodity Production, lower wages for the workers Low Remuneration for Non-Wage Labor (e. g. household work) Educational & cultural costs Critical individual costs Conspicuous Consumption Devaluation of Arts & Humanities Commodification of Youth, child, women as Ads, Logo Health Civic freedoms Discrimination: gender & Age Human rights Law & Order (prejudice against the poor)

Differences between the Great Depression 1929 -33, and the Great Recession of 2008

GDP Growth: what is recession? a recession is when economic growth contracts for two quarters straight Significant decline in economic activity is spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A depression is broadly defined as a drop in 10% of the GDP. Between 1929 and 1933, the United States’ GDP dropped more than 30%.

Global Industrial Production During the Great Depression industrial production had a massive three-year decline. Today’s global markets experienced an initial shock, but since then global trade and global production have continued more slow than previously but nonetheless remains unabated. … World industrial production is much more vibrant in today’s Great Recession than it was during the Great Depression.

Unemployment The unemployment rate at the height of the Great Depression was at a staggering 25%. After 2008 crisis, under recession, unemployment is around 9. 80%.

Length of Average Unemployment Very much as in the Great Depression, people are currently experiencing a long duration of unemployment. By January of 2010, Americans were waiting an average of 35. 2 weeks to find employment.

Exam Review of Course Kit articles Foster, J. B. & Magdoff, F (2010), “The Great Financial Crisis— Three Years On” Thesis: Capitalist development involves a dual process: Industrial maturation Monopolistic accumulation What is ‘Financialization’: the shift from production to finance for making profit Result: Financialization lifts the economic system but the system becomes fragile and the real economy gets trapped in stagnation , e. g. capital gains without real production of goods creates debt. Causes of Fin. crisis: The secular decline in economic growth rates and the long-run increase of financial fragility and instability within the capitalist structure.

Onaran, O (2010). “The Crisis of Capitalism in Europe, West and East” 1. Capitalism is facing a major realization crisis—an inability to sell the output produced, i. e. , to realize, in the form of profits, the surplus value extracted from workers’ labor. 2. Recovery efforts have been centered on maintaining growth and employment through high consumption. 3. To sustain our environment, long-term economic growth must be zero or low—equal to the growth rate of “environmental productivity 4. Financial sector profits displaced the profits from actual production 5. From “retain and reinvest” to “downsize and distribute” occurred. 6. Unregulated financial markets and the pressure of financial market investors created a bias in favor of asset purchases as opposed to asset creation

Wilkinson, J ( 2009). “Globalization of Agribusiness and Developing World Food Systems” 1. Increasing global concentration of agribusiness 2. Poor countries have been a target of corporate investments from the outset of the industrial food system 3. Metropolitan (core) corporate capital is still subjugating the agriculture and domestic food markets of many developing countries

Wilkinson, J ( 2009). “Globalization of Agribusiness and Developing World Food Systems” (cont’d) 4. Developing countries importance in the supply of foods in the “nutritional transition” (shift to a diet of high animal protein, fresh fruit and vegetables) 5. Domestic agribusinesses emerge in the LDCs due to Global Agrifood Economy: large domestic food companies, e. g. , in Brazil, Argentina, Thailand as major suppliers of animal feed and meat: esp. white meats sector (poultry and pigs) – rise of large domestic agribusiness firms—Sadia and Perdigão in Brazil; the Charoen Pokphand Group in Thailand.

Wallerstein, I (2011), “Structural Crisis in the World-System. Where Do We Go from Here? Arguments: 1. The cyclical rhythms are sets of systemic fluctuations (upturns and downturns), in which the system regularly returns to equilibrium. 2. Structural crisis of the system: Chaos or new equilibrium stability is sought as the system is unable to continue its normal, regular, slow upward push. 3. Capital accumulation requires the appropriation of surplus value through quasi-monopoly of world-economy-wide production. 4. Like quasi-monopolies of leading industries, quasimonopolies of geopolitical power are self-liquidating. Other states improve their economic positions, and then their political and cultural positions and become less willing to accept the “leadership” of the erstwhile hegemonic power.

Wallerstein, I (2011) cont’d) Arguments 5. Hegemony has lasted only, on average, twenty-five years. A hegemonic power achieves a quasi-monopoly of geopolitical power 6. The hegemonic state imposes its rules, its order, on the system as a whole. 7. It favours maximal capital accumulation for the enterprises located within its borders. 8. Achieved three times in the five-hundred-year history of the modern world-system — • 17 th C the Dutch Republic • 19 th C the United Kingdom • 20 th C the United States

Lea Caragata in “Neoconservative Realities” 1. Changes to labour markets as a result of globalization profoundly gendered and racialized. 2. Marginalization of poor families from the economic marketplace to render an underclass not seen in the developed world since the 1930 s. 3. Massive labour force changes 4. Current neoconservative economic and social context 5. Women are also more likely than men to hold multiple jobs – a consequence of part-time work. Women accounted for about 70 percent of all multiple job holders

Quintero-Ramirez, “The North American Free Trade Agreement and Women” Thesis: The effects of NAFTA on women workers in Canada and Mexico : 1. Mexican maquiladoras - the gap between the economic importance of maquiladoras in Mexican manufacturing and labour conditions of the workers, especially women. 2. Global capital’s mobility that has led to de-industrialization in developed countries and a precarious industrialization, with lower labour standards, in developing countries. 3. Aggressive government economic policies have inserted Mexico into the international economic order. The most prominent among such policies is the support for export industries, e. g. , maquiladoras, where workers’ wages are controlled.

Ronald L Mize (2008), “Interrogating Race, Class, Gender And Capitalism Along The U. S. -Mexico Border: Neoliberal Nativism And Maquila Modes Of Production. ” Thesis: 1. Neoliberal nativism defines state-society relations under late capitalism and neoliberal development projects. 2. The processes of disposable Mexican bodies are subjected to border militarization, border crossings and citizenship, maquiladora production, and the non-actualized transformative potential of cross-border labor coalitions. These processes define the terrain as gendered, raced, and classed.

Ronald L Mize (2008), “Interrogating Race, Class, Gender And Capitalism Along The U. S. -Mexico Border: Neoliberal Nativism And Maquila Modes Of Production. ” Thesis: (cont’d) 3. The neoliberal nativism in the Mexican political economy racialises the border relations – the less developed and more developed articulations of production on the border sharpens the inequalities of race, class and gender. 4. In the post-NAFTA era, the border region is being reshaped by female labour in the circuit of commodities through Mexican assembly and distribution in the US.

Pantaleo, K (2010). “Gendered Violence: An Analysis of the Maquiladora Murders. ” Thesis: 1. 1. Three different groups, the news media, human rights organizations, and academic researchers differ in their social construction of the murders. Did the narratives suggest NAFTA, globalization and Maquiladoras, as major factors in the construction of the maquiladora murders as a social problem? 2. In both the human rights and the newspaper narratives, the most common cause was indicated as corruption of the criminal justice system. The academic journals claimed NAFTA as a cause in all but one narrative. 3. Gender issues are intertwined with the trade agreement that has aided in the disruption of the social fabric of Mexican society.

UNICEF Report Card 10: Measuring Child Poverty CANADIAN COMPANION (excerpts)

• The Children Left Behind : measures the gap between the average child (what a country may consider 'normal') and the child near the bottom. • It examines how far children are falling behind in three dimensions of their lives: 1. material well-being, 2. educational achievement 3. physical health • These differences in a country’s performance both within and between countries can be measured and compared. http: //www. unicef. ca/en/create-content/press-release/rich-countries-includingcanada-letting-poorest-children-fall-behind-sa

Child benefits in Canada’s 2012 budget: $13. 2 billion (low) Elderly benefits: $40. 4 billion (higher) Index of intergenerational justice: Canada ranks below the OECD average (Indicators in the index of intergenerational justice : level of national debt, child and pension policies, and investment in research) Government action is the key to reduce child poverty: • Canada must use two measures of child poverty – relative income poverty measure, and Child Deprivation Index –to guide policy & action to reduce child poverty

• Poverty rate in Canada is almost halved while the rate in USA remains almost unchanged • Canada spends about 1. 25 percent of GDP on family benefits and tax breaks.

Canada: • Relative child poverty: 13. 3 % (represents an income threshold below which a family will likely devote a larger share of its income on the necessities of food shelter and clothing than the average family) • Child poverty rate is 25. 1% before taxes and transfers • After taxes and transfers, child poverty in Canada is cut by about half, to 13. 3 % • Poverty gap i. e. , the depth of child poverty: 23 rd among the 35 industrialized countries

Labour Force Profile Of Youth 2003

1994 -2004: a higher proportion of young people aged 15 to 24 have been participating in the labour force working or looking for work: 68% in 2004, compared to 64% in 1994 More Young men than women in the labour force in 2004.

In 2004, 58% of young people were employed. The rate was the same for men and women 39% of full-time and 72% of part-time students aged 15 to 24 were employed The unemployment rate for young adults aged 20 to 24: 58% It was higher than the rate for adults aged 25 to 44 Despite being more highly educated than ever before in Canadian history

Little gender gap in youth employment: 2004 Employed: 72% of young adult men 70% of women Rate of part-time work among youth increased steadily since 1976 : 30% have part-time jobs 2004 a result of the economic recession in the 1990 s primarily due to increased post-secondary enrollment Teens have different employment experiences, depending on where they live. In 2004: Alberta: the highest teen employment rate Newfoundland: the lowest

Economic Security Of Canadian Families: 2006 (excerpts)

Economic security: an assured standard of living provides families with the resources necessary to participate in their community’s activities with dignity • economically • politically • socially • culturally .

During the decade (1993 -2003): gap grew between families with the highest incomes and those with the lowest incomes Pre‐tax income of: The wealthiest 10% of families with children rose by 35% The poorest 10% of families average annual income rose only by 7%.

Precarious forms of employment are rising: Temporary work, part‐time, contract, and seasonal jobs. 2003: these non‐standard forms of employment make up 37% of all jobs, compared to 25% in the mid‐ 1970 s.

In 2003 18% of Canadian children under age 18 were poor (1, 207, 000 children) Across Canada, child poverty rates ranged from: PEI: 11. 3% BC 23. 9% Would be much worse without government transfers. Child poverty rate would have been 27% (transfers allowed 628, 000 children escape poverty )

1. Female lone‐parent families have the highest poverty rates. Children in lone‐parent families : 4ó times that of children in two‐parent families. 2. 2003: Almost one‐third of poor children had at least one family member who worked full‐time for the entire year. 3. Aboriginal youth aged 15 to 24 had a poverty rate of 37% in 2001, compared to 19% among non‐Aboriginal youth. 4. 2001: 42% of immigrant children under age 15 were poor compared to 17% of Canadian‐born children. 5. 1996 -2001: For children with activity limitations, the poverty rate dropped by 23%, and among Aboriginal children, by 21%.

Abboushi, S (2010). “A trade dispute between the USA and Canada. ” • Since 1981, conflict over softwood lumber exports to the US • In 1983, the DOC found that Canada’s stumpage system was a “reasonable method of establishing stumpage prices” which does not vary widely from US prices. • In 1986, the US lumber producers petitioned for (counterveiling duty) CVDs on Canadian softwood lumber. The DOC lumped all forest product industries such as wood products, pulp, and paper industries as one “vertically integrated” industry, even though Canadian lumber producers were not involved in paper-derivative industries. • Since 1986, Canada voluntarily imposed 15 percent export duties on Canadian softwood

Abboushi, S (2010). “A trade dispute between the USA and Canada. ” US lumber producers argue: 1. stumpage fee is non-market based, decided by provincial governments, and is below market prices. 2. Even a small per unit cost differential advantage enjoyed by Canadian producers results in substantial cost advantage over US producers. Timberland in the USA, is auctioned in a marketbased system of bidding. In Canada, such auctioning is limited. 3. Canada does not allow non-Canadian companies to acquire Canadian logs harvested in Canadian public timberlands and, consequently, does not allow non-Canadian companies to export Canadian logs. Stumpage is the fee paid to the government for the harvesting of provincially owned timber. The price is on a cubic metre basis.

Abboushi, S (2010). “A trade dispute between the USA and Canada. ” Findings of the article: 1. Canada’s public ownership of timberland is not a trade issue. 2. Canada’s Constitution assigns exclusive authority to provincial governments over natural resources like timberland. 3. Stumpage fee is not lower than the “market price”

Gandasegui, M. A (2006). Latin America and Imperialism in the 21 st Century, Critical Sociology, 32 (1): 45 -66 (excerpts) Imperialism is the struggle between capitalist nation-states for rule over the expanding capitalist world system.

Free Trade Area of the Americas (FTAA) and Bilateral/Sub-Regional Free Trade Agreements 1964– 1989: The period of U. S. military aggression that accompanied the populist development model in Latin America had shifted to trade and economic agreements

Neolib policy in LAm – total market utopia or authoritarian utopia: the economic realm and invades the remaining spheres of public, private and everyday life. Polanyi refers to this the market society, a construct that signifies that the operation of society should become an appendix of the market. Instead of the economy being framed in social relations, social relations are framed in the economic system (Polanyi 1997).

• The United States has closed in on more than twenty different countries in order to formally initiate bilateral free trade treaties. • Discontent and global protests against US drive to expand free trade agreements

The bilateral or sub-regional free trade agreements are simply an attempt to accelerate the pace of hemispheric consolidation. The United States has been very explicit in this respect and its strategy has been termed “competitive liberalization. ” This consists of approaching and pressuring weaker or submissive countries to sign on with them so that as the process advances, those countries that continue displaying some interest in maintaining a measure of sovereignty must eventually cede on account of the threat of economic isolation.

Europe and the US are keeping their subsidies – goes beyond FT includes investments, intellectual property rights, govt. purchases, services, competition policies and other crucial domestic econ policies

Privileges profits over human rights and ecological sustainability

US wants to have advantages over 4 areas: • Government contracts • Pharmaceutical markets • Agricultural markets • Intellectual property (GRAIN 2004).

Wise, Carol (2009), ” The North American Free Trade Agreement. ” Arguments: 1. 99 per cent of all tariffs on those goods and services covered by NAFTA have basically been eliminated 2. NAFTA’s key innovations were the protection of IPRs, the liberalisation of investment and trade in services, and the creation of mechanisms to resolve investment disputes based on binding international arbitration 3. Along with the side agreements on labour standards and environmental protection, NAFTA promoted the free flow of goods, investment and services within the North American bloc over a 15 -year timeline

Wise, Carol (2009), ” The North American Free Trade Agreement. ” 4. NAFTA still fell short of its mandate to liberalize all trade between the three partners 5. Persistence of administered protection in the setting percentages for local content under NAFTA’s rules of origin in autos, high-tech products and textiles and apparel. 6. Little progress has been made toward the elimination of antidumping policies and countervailing duties.

Wise, T. A. (2011). “Mexico: the cost of U. S. dumping. ” Thesis: 1. Result of U. S. dumping on Mexico after NAFTA: 2. Mexican farmers lost more than S 1 billion per year (19972005) 3. Half the losses suffered by the country's embattled corn farmers. 4. Use of subsidies, U. S. government's preferred means of supporting agriculture 5. Deregulation of U. S. agriculture -larger surpluses of corn and other commodities 6. NAFTA opened the floodgates to unrestricted dumping into Mexico. 7. Dumping margin was high 8. Until 2008. Mexican govt could have counteracted against dumping.

York, et al (2009), “ A tale of contrasting trends …. ” Arguments: 1. What is Jevons's paradox? • declining ratio of EF to economic activity & lower costs per unit of production • Increasing efficiency of coal use in production & coal consumption 2. Far from contributing to resource conservation, improvements in efficiency may actually expand resource consumption 3. Nature’s capital and services are being threatened by global endless consumption. 4. Economic efficiency makes ecological concerns a cost or a negative externality that can be ignored