POLI 227 Lecture Notes - Subsistence Economy
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JANUARY 23, 2012:
Subsistence economy→ people grow to eat, and trade their surplus for goods they
cannot produce (ex. Wheat for pots). European traders come and buy surplus and sell
their own European goods. The European imported goods marginalize those selling
similar products in the developing areas. European traders bring new products and
introduce them (ex. Cotton seeds, which would enable peasants to grow and sell a new
Eventually colonial rule is introduced. Missionaries open schools and provide medical
care, irrigation and mechanization cost money but increase yield, railways are built to
export products, local elite is appointed as a local magistrate, taxation emerges, and land
must be registered.
When engaging with globally traded commodities, world prices going up and down with
global supply and demand will affect you. When peasants engaged in subsistence
farming, they can eat their own goods (wheat) and not be affected by world price
It is possible to have peasants that do very well in the shift from subsistence farming to
cash crops at the world price (for example, Punjab, India) but this depends on their level
of productivity as well as other factors.
Improvement in life expectancy can create push migration because there is less land per
Urban migration is occurring because of the pull of urban centres are well.
If you calculate the gross national product, it increases and massive development occurs
in terms of GNP when cash crops and mechanization, etc. are introduced, but the
benefits of that development are not evenly distributed.
Medium producers are most able to resist the world price fluctuations than small
The emergence of very productive large scale farming (plantations), which sometimes
benefited the peasants. For most peasants, the problem with a product on the world
market is their vulnerability, particularly if they are only making enough to survive.
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