POL101Y1 Lecture Notes - European Economic Community, Cuban Missile Crisis, World-Systems Theory

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Published on 22 Apr 2013
School
UTSG
Department
Political Science
Course
POL101Y1
February 4, 2013
Outliers or Models? Dependant Development
What is development?
Progress (ones condition at time 2 is better than its condition at time 1) +
Transformation (fundamentally different at time 2 than at time 1)
^We are concerned with human development (rich countries can have
disparities on the individual level)
Equitable development [individual GDP’s, per capita] [distribution income
how is it distributed? Who gets what?] [Distribution of wealth, social
mobility ie. Born into a poor family=lower chance of higher social
standing]
Capacity [economic profile, etc] [can people become more educated?]
Sustainable development [development visa vie the environment] [can we
sustain the supply of development, how is the economy diverse?]
Political development [democracy, human rights modernization theory]
Today: Focus on aggregate economic growth + how do we explain that some
countries are developed while some countries remain undeveloped? (there are
some rich countries, there are some very poor countries rich are getting richer,
poor are getting poorer) to do this we will use theory
Theory: helps us explain (why?), allows us to predict, helps us prescribe
The Theoretical Conversation:
1) The cosmopolitical view Smith free market under a system of
perfectly free commerce each country naturally devotes its capital and labor
to such employments as are most beneficial to each. This pursuit of
individual advantage is admirably connected with the universal good of the
whole” – David Ricardo key is specialization (do what you are good at
doing) everyone will become prosperous in their own way peace
works in positive sum ways (everybody gains, allow the market to reign)
2) The mercantilist view ie. List and Hamilton Smith could be correct, but
you are ignoring power of the hegemony (you believe in the free market
because you are a part of the English) it is not just about the individual,
nations and countries matter “to maintain b/w the recent establishments
of one country and the long matures… without the extraordinary aid and
protection of government”–Hamilton he is stressing it is about countries
(ie. England versus Germany) and that Smiths view is unequally, it is not
positive sum, but negative sum (one gains at someone else’s expense)
America cannot possibly compete with England without the extraordinary
aid of government (visible hand of government create comparative
advantage to disrupt nature)
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3) The Leninist view Lenin is shaking his head saying you’re all so naive
inspired by Marx (who predicts the end of capitalism) theory of
international relations argues: imperialism is “the substitution of capitalist
monopolies for capitalist free competition… Monopoly is exactly the opposite
of free competition… monopoly, which grows out of free competition, does
not abolish the latter, but exists over it and alongside of it, and thereby gives
rise to a number of very acute, intense antagonisms, frictions and conflict”-
Lenin he is saying capital needs to expand
World Systems Theory
Inspired by Marxist/Leninist tradition
Looks at the consequences of imperialism
3 characteristics:
1)
2) Global economy is actually global (not just about Europe anymore)
3) For world systems people it is a structural theory (structure of global
capital makes them need to expand)
Immanuel Wallerstein (dependency school of thought):
1) A systemic view of global capitalism
2) Liberal ideological hegemony
3) Capitalism produces monopolistic producers (MNCs)
4) Also about Monopsonistic purchasers (the north) big buyers (ie. You
can set the price ie. Wal-Mart has ability to set the price)
5) Colonial Legacy when colonial governments left, the countries were left
with little capacity for transformation
“Structure” of Global Capitalism
Dominant “core” versus dependant “periphery”
Structural dependency (countries in periphery are dependant on countries in
the core)
Periphery: on mono, low-value exports, therefore, you are dependant on the
global north
The Implications of Global Capitalism
All 3 theorists agree we live in a global capitalism world BUT they respond
differently
(I) Cosmopolitical view not about dominance as long as you work hard
then you will prosper
(II) Mercantilist view preventing dominance
(III) Marxist/Leninist view has to be about dominance
World systems theory carries with it great appeal: helps us explain variation,
why some countries are poor while some remain rich.
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The Appeal of World Systems Theory
On one level, it is appealing b/c of the post colonial moment (explanation of)
Underdevelopment as empirical reality
Soviet alternative and self reliance (Marxist alternative during 50s and 60s)
Key point: Development became a global “project” Brandt Commission
we begin to see things like development assistance, foreign aid, subsidies and
credits, etc
However, fact of the matter is poor countries stayed poor
BUT then something curious happens
While the rest of the developing world stays poor, you have a group of
economies experiencing extreme rapid economic growth
Average GDP growth rates:
Taiwan (9.8%), South Korea (9.6%), Singapore (10.1%), Malaysia (7.3%),
Thailand (7.2%)
While places like Africa experience 0%
Getting Richer (GNP per capita):
Japan, Singapore, Taiwan, South Korea
The East Asian Miracle
Rapid economic growth
Growth with relative equity
Industrial upgrading and diversification (global value chain)
Export-led economic development
How do we explain this?
Getting the prices RIGHT
Cheap skilled labor
Infrastructure
Stable foreign exchange rates (no crazy banking)
Low tax rates extremely low income tax rates
Open to foreign direct investment
Up the export value chain
Getting the process WRONG
Infant industry protection growing globally competitive firms
o Government subsidies, interest free loans, credit (created incentives)
o Government investment in other words, government deliberately
invested
o Disciplined labor
o Import substitution tariffs (taxed in areas they wanted to develop)
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Document Summary

Progress (ones condition at time 2 is better than its condition at time 1) + Transformation (fundamentally different at time 2 than at time 1) ^we are concerned with human development (rich countries can have disparities on the individual level) Equitable development [individual gdp"s, per capita] [distribution income. [distribution of wealth, social mobility ie. born into a poor family=lower chance of higher social standing] Capacity [economic profile, etc] [can people become more educated?] Sustainable development [development visa vie the environment] [can we sustain the supply of development, how is the economy diverse?] Political development [democracy, human rights modernization theory] ), allows us to predict, helps us prescribe. The theoretical conversation: the cosmopolitical view smith free market under a system of perfectly free commerce each country naturally devotes its capital and labor to such employments as are most beneficial to each. Lenin he is saying capital needs to expand.

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