DVM 2105 Lecture Notes - Lecture 7: Bretton Woods System, Marshall Plan, Modernization Theory
20 Aug 2016
School
Course
Professor
DVM 2105
October 8th 2015
Theories of Development: Capitalism and Marxism
-define modernity with rationality and human ability to understand and reason
-existence is based on one’s capacity to think
-beginning of modernization starts with the Enlightenment, then science and technology,
migration to cities, utilitarianism, low dark wages, demand for products, mechanization
-Smith’s theory of economic progress had two principles of free market and non-intervention
by the government
-principle of individual and free market:
-people are self interest seekers and are also interested in trade
-production of more goods and services lead to economic progress
-free competition is egalitarian
-the most efficient
-freedom in economic transaction amounts to the common good
-principle of non-intervention:
-defence against invasion
-creating infrastructures
-promoting justice by supporting the public sector
-governments should withdraw their public involvement everywhere else
-why did Smith’s theory prevail?
-it is rationally a solid theory (epistemological reasons)
-feasibility and practicability (political/economic reasons)
-however sometimes interventionism and managerialism is required in the event of an
economic crisis (becomes known as the Keynesian system)
-development is envisaged as catching up to the level of the rich world’s welfare
-politically, 1949 was a new era for catch up
-emergence of the US as the most powerful capitalist nation
-urgency of preventing the influence of communism in poor regions
-US support decolonization to be better able to conduct the Cold War pickles against the
former USSR
-intellectually, development was a product of the confrontation between capitalism and
communism
-internationally, development is interwoven with the Bretton Woods system
-modernization theory (50s-60s)
-emerged in the post-WWII period, politically linked to both Marshall Plan and Cold War
strategies
-based on the contrast between modern and traditional societies
-development viewed traditional societies evolving continuously into modern societies over
time (changes in society, values, economy)
-economic developments are part of this broad trend of optimism
-social variables and institutional factors are necessary for this evolution
-economic progress comes out of the drive for modernization; it is the process by which
societies change in their internal structures
-Rostow’s theory of economic growth: all countries go through the same stages of economic
development
-traditional society (1)
-precondition for take off (2)
-take off (3)
-road to maturity (4)
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Document Summary
De ne modernity with rationality and human ability to understand and reason. Existence is based on one"s capacity to think. Beginning of modernization starts with the enlightenment, then science and technology, migration to cities, utilitarianism, low dark wages, demand for products, mechanization. Smith"s theory of economic progress had two principles of free market and non-intervention by the government. People are self interest seekers and are also interested in trade. Production of more goods and services lead to economic progress. Freedom in economic transaction amounts to the common good. Promoting justice by supporting the public sector. Governments should withdraw their public involvement everywhere else. It is rationally a solid theory (epistemological reasons) However sometimes interventionism and managerialism is required in the event of an economic crisis (becomes known as the keynesian system) Development is envisaged as catching up to the level of the rich world"s welfare. Politically, 1949 was a new era for catch up.
