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§ 15 The modern world economy. International geographical division of labor (MPPU). (textbook)

Topic 4. World economy

For the study themes you find:

  • stages of the global economy;
  • placement of leading industries and agriculture of the world;
  • trends in transport, international tourism,
  • directions of foreign economic relations;
  • concepts: the world economy, international geographical division of labor, scientific-technical revolution (STC).

§ 15 The modern world economy. International geographical division of labor (MPPU).



  1. What is meant by the notion of "economy"?
  2. What is meant by the notion of "territorial division of labor"?
  3. What are the processes within human history, influenced the economic activity of man?

History of the World Economy.

Economic  activity is leading to all kinds of human activities. It provides the means for existence, organizing his time and a particular way forms a worldview.

Economy - is a science, the type of relationship that made between people the production of economic goods and economic complex of a country.

The world economy has passed a long path. Seeking help his work, man vynahodyla, and ahead with improved tools labor, hardware. Maintenance of new equipment needed thorough knowledge. Therefore, during the whole history of humanity on the one hand improved their economic activities, on the other - has been developing thing.

Glossary of Terms and Concepts

World Economy (World Economy) - Historically formed aggregate of national economies around the world, linked economic ties.

International division of labor - Specialization of individual countries in the production of certain products and services and trade exchange between them on the world market.

Transnational Corporations (TNCs) - Company (Corporation) which has production units in several countries. TNCs establish a system of international production, distributed among several countries, but controlled from one center - the parent company.

As defined by the UN Conference on Trade and Development (UNCTAD) transnational corporations (TNCs) - A "company, consisting of parent and its foreign affiliates.

World Economy - A set of national economies of individual countries. Since they all have general and specific features of development, the world economy as a graduate economic processes at several levels: the global economy as a whole, group of countries, individual countries, major regions within countries.

Now the world economy encompasses more than 240 national economies,  dozens of influential international organizations, thousands of large transnational corporations. Thus, the world economy - global system of farm and non-State entities related international division of labor and interacting in various forms. Feature world economy is its integrity, provided that the mechanism international relations, support the activities of international organizations and powerful transnational corporations. Modern World Economy has a complex structure: on the development of multilevel, multi-by  spatial organization, asymmetric - due to distorted relations.

Define a clear date of the global economy is difficult. If  starting point to consider beginning the commercial activity In general, it is necessary to start from the rise of tribal communities. If lead back to the start of the global economy as an integral organism, the starting point would be the era of large geographical discoveries (XV-XVI centuries.). During this era took accumulation initial capital for the future of industrialization in Europe countries attracting significant overseas territories into a single economic mechanism.

Formation of the global economy - a long historical process that can be divided into stages that are connected with certain events in history humanity. Among the important stage of which include:

  • separation of plant breeding, the conditions for the emergence of barter;
  • separation of crafts from agriculture, formation market and trading activities and as a result - the emergence of private property, separating the city from rural areas;
  • world market after formation epoch of great geographical discovery (late XV - XVII in the middle.) market expansion through development of transport, including sea;
  • transition from manual labor to machine production, development industry and facilitate trade relations between countries (End of XVII? XIX centuries).
  • expansion of railway network, which contributed to the internal connection part of the continent and the strengthening of the intracontinental relationships (second  half of the XIX century)..

So at the end of the nineteenth century. world economy was formed, but its development continues today.

Accordingly, in the history of the world economy entails the following stages.
  • Pryvlasnyuvalne economy. Most long stage, which covers the early (Paleolithic, 2 million years ago - up to 10 thousand BC) and middle (Mesolithic, 10 - 5 thousand years BC) stone ever. While the first man cared about getting food and then major types of economic activities were hunting, fishing, gathering wild fruits and berries, beekeeping. At this stage the man was part of nature and practically do not cause noticeable damage to it. For social order characterized by birth community with equality of all its members.
  • Agrarian economy. This is the second period phase, which includes several historical eras - from the new stone age (Neolithic, 5.3 thousand years BC) to the new time (late fifteenth century - the middle Eighteenth century.). The main objective of getting people remained food, but they are not excluded from wildlife, and organized manufactured. Accordingly there is a new kind of human activity - production. The leading industry is agriculture. Crafts and trade, born, only served it. For a social system characterized by  inequality and exploitation of man by man, dominion and slavery feudalism. Active Human activities contributed to the aggravation environmental situation.
  • Industrial'ne economy. Beginning stage comes at a time the English Industrial Revolution (70-80 years eighteenth century.)  and the end - with 70 years of the twentieth century. The leading branch of this stage is industry. The development of commodity production orientation was determined manufacturing products for its sales and profit. Businesses always seek to reduce the price of production, finding resources as  own country and others. Under the country objectively divided into  colonies that supply resources and metropolis that these resources processing. Expansion of production of goods and services leads to of consumer society. Social system - capitalism. Intensive development of the economy leads to a significant deterioration environmental situation.
  • Postidustrialne economy. This stage started in the 70 years of the twentieth century. and continues today. Attribute - predominant development of the service sector and agriculture and industry lose their positions. Among service industries leading role played by financial transactions. The largest gains received in the financial market, particularly in such sectors as Monetary, credit, investment.

This situation is possible due to a high level technological and technical equipment of agricultural and industrial production.

International geographical division of labor.

World economy - a body of economic interdependence all countries and peoples, based on international division of labor financial-credit and transport and communication systems.

International geographical division of labor - A peculiar  engine of world economy. It has emerged in parallel with trade production, which replaces the natural. Because no one country or territory, even the most developed, fail completely independently provide conditions for efficient production of all goods and services. History of the World - a history of division work.

Thus, the international division of labor - the highest level of development socio-territorial division of labor between countries, a core economically beneficial specialization of individual countries and the exchange of products specified quantity and quality. Specialization determine natural-geographic, socio-economic, scientific, technical, historical,  national factors that make it possible to produce specific types of goods and services, or the same goods and services, but cheaper or higher quality.

WFP development necessitates increased productivity and lower costs of production. WFP provides implementation advantages country in the exchange of a difference between international and domestic  price of exported goods and services, and domestic savings costs of reducing domestic production by use cheap imports.

The basis of division of labor is the international specialization of production, which developed on four main areas: cross-sectoral, subject, technological and podetalna.

Inter-industry specialization covers products primary sector (mainly agriculture and mining industry). Leading countries in world production and oil export natural gas, iron ore - examples of inter-sectoral specialization.

Subject specialization characteristic of the manufacturing industry, ie production and export of finished products (cars, marine vessels, plastics).

Technological specialization resulting "Territorial gap" of a chain in manufacturing certain product (eg, aluminum: alumina produced in countries where extract bauxite, aluminum and metal - in countries with large Electricity power).

Podetalna specialization - Is cooperating, sharing production of specific products. The best of the international cooperating in  engineering, chemical industry.

Areas of the country - Is it a specific "card".  Yes, Japan is associated with us in an electronic technique, France - with fashion, perfume, wine, Kuwait - of oil, Cuba - with sugar reed, Switzerland - with banks, cheese, watches.

International division of labor is the result of centuries of development productive forces, strengthening of national and international division of labor  cooperation based on material interests, growth world market production, development of world population economic relations, regional integration and internationalization production and globalization of world economy.

Regional integration is reflected in the formation of neighborhood economic grouping certain level: the free trade area, customs union, common market or economic union. The effect achieved through the reduction or complete abolition of customs duties and quotas specialization of individual countries and territories in the production of a certain type products and increased competition between business entities.

FTA easier conditions of mutual trade between partner countries. Example: NAFTA, which includes U.S., Canada, Mexico.

Customs Union implies acceptance of the requirements in Trade with countries outside it. Example: Andean Group: Bolivia, Colombia, Ecuador, Peru and Venezuela.

Common market provides a single market goods, capital, labor Yi. Example: Mercosur: Brazil, Argentina, Uruguay and Paraguay.

Economic Union - The most mature form of integration,  It is characterized by development of a uniform policy, a national economic bodies, the maximum relief perception of the state borders. Economic Union in the world until one - European Union (EU).

Today, the processes of integration groupings cover all regions of the world - Europe, Asia, North America, Latin America, Africa. In economically developed regions of the world communities are not so much  but here they are the most mature.

Tab. Major economic integration groupings of regions of the world

Region The economic integration groupings
Europe European Union (EU)
European Free Trade Association (EFTA)
Asia Association of Southeast Asian Nations (ASEAN)
Association of Regional Cooperation in South Asia (Saar)
Council Gulf Cooperation
North America Free Trade Association of North America
Latin America Latin American Economic System (LAES)
Latin American Integration Association (LAAI)
The Central America Common Market (TSASR)
Caribbean Common Market (Caribbean Community)
Commonwealth of Andean Countries (CAN)
Southern Cone Common Market (Mercosur)
Africa Economic Community of West African States (ECOWAS)
West African Economic and Monetary Union (UEMOA)
Economic Community of Central African countries (EKKAS)
Economic and Monetary Community of Central Africa (KEMAK)
Common Market for Eastern and Southern Africa (COMESA)
Southern African Development Community (SADC)
Economic Community of the Great Lakes (SEPHL)
Union Mano River basin countries (NRM)

Internationalization expressed in bringing together countries to produce various kinds of goods and services. It was possible after the majority of developing countries, held liberal economic reforms, which resulted in the unification took place legal norms of business, buo improved job market institutions, removed restrictions on entry of foreign capital into the country etc.. Recently the process of internationalization of production came zahalnoplanetarnyh rice, objectively grew into globalization economy.

Globalization of world economy - The process of gradual  interpenetration and growing majority of farms world into a single world economy. Globalization of world economy expressed in the further concentration of capital in the formation through the merger increasingly powerful corporations and financial-industrial groups (TNC) activities are not limited to the territories of their countries, and goes to global level.

In TNCs account for over 1 / 3 of world industrial production and World Trade, 4 / 5 of all patents for new equipment and technology. Of the 500  85 largest TNCs control 70% of all foreign investment. These 500 giants sell 80% of all industrial products and electronics chemistry, 95% pharma, 76% of production engineering. In turn, each of the 500 largest TNCs have, on average, companies in 11 industries and  most powerful to cover 30-50 branches (diversification production), that is diversified.