Final answer:
Deindustrialization is the loss of industrial production, usually to other countries where costs are lower. It leads to job losses and a shift from manufacturing-based to service-based or information-based economies. Dependency theory explains how core nations exploit peripheral nations, hindering their economic growth.
Step-by-step explanation:
Deindustrialization refers to the loss of industrial production, usually to peripheral and semi-peripheral nations where the costs are lower. It is when companies move their industrial processes to other countries, resulting in job losses in the original country. This phenomenon is often associated with the shift from a manufacturing-based economy to a service-based or information-based economy.
For example, in the 1970s and 1980s, many American factories closed, leading to job losses in cities in the Eastern and Midwest regions, which were dubbed the Rust Belt. Large manufacturers moved their factories to countries with cheaper labor and lower operating costs, such as China and Brazil.
Dependency theory explains that global inequality is primarily caused by core nations exploiting semi-peripheral and peripheral nations. The exploitation creates a cycle of dependence, preventing stable and consistent economic growth in the peripheral nations. Core nations and organizations like the World Bank have the power to decide which countries receive loans and for what purpose, further perpetuating segmented labor markets that benefit the dominant market countries.