POL101Y1 Lecture Notes - World-Systems Theory, Mercantilism, Hegemony

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16 Oct 2011

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Outliers of Models? Dependent Development
What is development?
Human development
dimension taken seriously by organizations
looking at micro levelindividual human beings
i.e. heath outcomes, literacy, education, mortality
Equitable development
Distributive or redistributive consequences of development
how this income, wealth, is distributed through political-economic system from high income
to low income houses
also looking at things like health chances
having the skills and education and experience, technology, to continually develop
Sustainable development
environmental degradation
sustaining over long term
as we are developing as social systems, and economic societies, we are not destroying the
foundations i.e. the earth
Political development
Democratic reform, in eyes of American policy makers, is political development
a form of progress
Looking at Egypt
Development is about progress, making our societies, lives, politics better than they were
beforea sense of growth over time
Focus on aggregate economic growth
how economics grow, why the grow, and why in the aggregate they grow over time, and as
individuals our experiences and conditions improve over time
How to explain? (Aggregate economic growth)
theories help explain the world
they predict i.e. which economies will grow over long term, and ones that won’t
Represent different advantage points
A Theoretical Conversation:
(I) The Cosmopolitical view
“Under a system of perfectly free commerce, each country naturally devotes its capital and labour to
such employments as are most beneficial to each. This purist of individual advantage is admirably
connected with the universal good of the whole” - David Ricardo
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According to this view, the key to the global economy is specialization
Through this specialization we see a division of labour
Each country/firm specializes, and as a effect we have
In this view that human effradism works; capitalism doesn’t work for everyone—it works for
those who work hard, who are rational; they will excel in capitalism
This will lead to global productivity, will lead to global prosperity, and there will be global peace
As long as we are not lazy we will all benefit from a system of free commerce/trade
(II) Mercantilist View
“All England would thus be development into one immense manufacturing city. Germany would scarcely
have more to supply this English world than children’s toys, wooden clocks, and philological writings” –
Would make sense to Smith because you are the hegemon, you will benefit from it
free trade does not benefit universal whole, benefits hegemon
not about individual, what matters in global political economy is countries
global capitalism is not good
List sees is a negative sum relationshipsthat some nations will benefit at the expense of others
expenses are disproportionate to hegemon
- In Smithian cosmopolitical works for individuals protestant people
“To maintain between the recent establishments of one country, and the long mature establishments of
another country... without extraordinary aid and protections of government” – Hamilton
Idea that new and old countries to compete is false
for smith its the invisible hand of the market, abstract ideas of supply and demand
Hamilton it’s about the visible hand of government
for countries to compete with England requires the visible hand of government, and for them to
create comparative advantages
Countries can manipulate exchange rate, use of customs tariff
efforts by government to grow their own industries
for late developing countries to compete with long establish economies is unrealistic
(III) The Leninist view
inspired by Marx
- Marx argued capitalism was contradictory, because of the exploitative nature of capitalism, which
would lead to the end of capitalism
- Capitalism would sow the seeds of its own demise
- Worker based revolution
Lenin had a different view
argued imperialism is “the substitutions of capitalism monopolies for capitalist free competition.
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Monopoly is exactly the opposite of free competition. Monopoly which has grown out fo free
competition... frictions and conflict” – Lenin
highest order of capitalism is not its own demise, it is a monopoly capitalism
monopoly capitalism: Huge firms
these firms accrue capital
they accrue so much capital they cannot invest in their own economy
“Hot Cash” needs to get out of the system
over abundance of capital needs to leave, and its leaves through imperialism
it moves into other countries, and they pursue their own interests there
explains colonial expansion
it’s about finance capital
World Systems Theory
3 assumptions
1. World Capitalism is exploitative
2. Structural theory, way it is structured
Inspired by Marxist/Leninist tradition
Immanuel Wallerstein
World systems theory takes a systemic view of global capitalism, looks at international system
(smith understood global capitalism of Europe, and the rest of the world was inconsequential.
World systems theory looks at global capitalism, not only looks at hegemons, but also all other
countries, and what colonizers saw as barbarians)
militating against Liberal ideological hegemony
riding in moment where dominant idea is free trade
Monopolistic producers (MNCs)
modern multi-national corporation
firms that don’t have a home
inherently exploitative (scour world for natural resources, capital, etc)
they are mobile
Monopsonistic purchasers (the north)
A huge single purchaser
by virtue of their scale set prices
according to world systems theory this is a problem
Colonial legacy
during 1960s we see decolonization
see the birth of de-colonial south-east Asia
one of the concerns is: what are these colonizers leaving behind?? UNDERDEVELOPED
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