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Sustainable Prosperity –
Challenges and Opportunities
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
Sustainable Prosperity – Challenges
and Opportunities
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
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
Sustainable Prosperity – Challenges
and Opportunities