Throughout the period betweenthe late 1800s to 1930, commercial geography existed, which concerned commoditiesaccording to their places of origin and their paths of transportation (MacKinnonand Cumbers, 2007, pp23).
Post World War 1, a decline in colonial empires powerscould be seen (MacKinnon and Cumbers, 2007, pp24). Realisation of the need formajor growth was globally apparent. 1930s saw a rise of Fordism,a system based on mass production and consumption, bringing high rates ofproductivity in the workplace and expanding wages (Mackinnon and Cumbers, 2007,pp31). This was possible through fixed expenses being shared over a largernumber of outputs thereby reducing unit costs and exploiting the division oflabour (Thompson, 2007). Years of sustained high economic growth and economicadvancements was present throughout most major world economies due to Fordism (Thompson,2007). Keynes emphasised just howimportant government control over the level of demand in the economy to reachfull employment. States took on interventionist approaches (Mackinnon andCumbers, 2007, pp 31).
The Keynesianeconomic theory, that consisted of two components: raising governmentexpenditure and lowering tax rates, aimed to stimulate demand and get economiesout of an economic downturn (Investopedia, n.d.). Fordism experienced manyproblems leading up to the 1970s. A new form of ‘post-Fordism’ saw a largeremphasis on the role of small firms, ICT and individualised forms ofconsumption (Mackinnon and Cumbers, 2007, pp32). Neoliberal approaches becamevery apparent in the 1970s as we shifted away from Keynesianism, towards thereduction intervention by the state and the increase in popularity of freemarkets, promoting competition (MacKinnon and Cumbers, 2007, pp32). A rise in Marxism came abouttowards the end of the 1960s (Mackinnon and Cumbers, 2007, pp30).
In its early stages, focus was based on howcapitalism can create certain geographical landscapes; there is both need forcapital to be fixed in one place and for it to be able to move around(MacKinnon and Cumbers, 2007, pp31). Productive environments need to be built upover a period of time, which is done through keeping capital immobile however,if capital doesn’t eventually move, it will be unresponsive to changingeconomic conditions and miss out more profitable locations (MacKinnon andCumbers, 2007, pp31). Spatial fix, which is “the establishment of relativelystable geographical arrangements that facilitate the expansion of thecapitalist economy for a certain period of time” (MacKinnon and Cumbers, 2007,pp302), saw North America and Western Europe deindustrialise in the late 1970s andexpansions in certain industries in newly industrialising countries (MacKinnonand Cumbers, 2007, pp.
31). In the 1980s, Marxism became criticisedfor being too out of touch with modern times and thought (MacKinnon andCumbers, 2007, pp32). Three important critiques included the view of humanbeings as their class instead of their individual person, too much stress oneconomic forces and relations and too much attention to class, with little togender or race (MacKinnon and Cumbers, 2007, pp33). The post war welfare stateagreed with Keynesianism theories to surge economic growth. Keynes rejected thethought of a classical market economy and was for state fiscal policy to reachmaximum employment (MacKinnon and Cumbers, 2007, pp93). Spatial Keynesianismwas enforced to close the widening gap between richer and poorer regions. Factoriesand office spaces were positioned in locations that saw need for growth anddevelopment of financial core hubs was halted to even out the development(MacKinnon and Cumbers, 2007, pp95).
These was prominent until the stagflationcrisis of the 1970s, when attention shifted towards neoliberalism (MacKinnonand Cumbers, 2007, pp96). Neoliberalism concerns theunderlining free market competition and is non-interventionist (Smith, n.d.).It reinvented regulatory techniques since the early 1980s, introducing newexperiments and reforms, based on private enterprise and liberty for the people(MacKinnon and Cumbers, 2007, pp103). Three main policies due to neoliberalismare privatisation, liberalisation and deregulation in order to open up newmarkets (MacKinnon and Cumbers, 2007, pp103).
When Prime Minister Thatcher waselected in 1979 and President Reegan in 1981, the reduction of stateintervention was put into practice, the International Monetary Fund also spreadneoliberalism across the world through grants and loans and by the early 1990sneoliberalism was considered normal and the correct way to go about controllingthe economy (MacKinnon and Cumbers, 2007, pp104). During the mid 1990s, a newbalance between state socialism and free market capitalism was sort due to theuneven implementation of neoliberal policies, as states had produced some partsof policies whilst completely discarding other parts (MacKinnon and Cumbers,2007, pp104). Neoliberalism has created problems which ultimately resulted in the2007 – 2008 financial crisis.
Due to the implementation of neoliberalistpolicies such as deregulation and liberalisation 20 to 30 years prior, worldtrade dropped and developing countries whose economies were built on exportingraw materials saw a great downturn (MacKinnon and Cumbers, 2007, pp106 &218). Countries that saw economic growth during the 2000s suffered dramatically,a real chnange for Ireland the ‘Celtic Tiger’, whose growth rate suddenly plummeted(MacKinnon and Cumbers, 2007, pp218). However, one country in particular didnot see such problems, China, due to its vast amount of infrastructurespending, was still able to keep production and growth rates high during thisperiod (MacKinnon and Cumbers, 2007, pp218). The expansion of MultinationalCorporations (MNCs) was mainly to do with state policy changes brought about sinceKeynesianism was discarded (MacKinnon and Cumbers, 2007, pp106).
The opening upof national economies led to governments turning their focus to low tax andinflation rates and more malleable labour (MacKinnon and cumbers, 2007, pp107).In order for developing countries to receive loans and grants from the IMF andWorld Bank, strict rules and conditions were imposed, including partaking inStructural Adjustment Programmes, which are designed to advance a countriesforeign investment climate in three ways: ridding of trade and investmentregulations, cutting spending by the state and promoting exports (Chebucto,n.d.).