POL101Y1 Lecture Notes - World-Systems Theory, Tsmc
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Pol101Y1 - Outliers or Models?
What is development?
Human development: population growth,
Equitable development: [wealth] distributive consequences of development
Capacity: having the skills, education, experience and technology in order for economy
and society to sustain development
Political development: e.g. transition of political regime, authoritarianism democracy
**therefore development is a sense of improvement, a progress for better lives
Focus on aggregate economic growth
How to explain? : We use theories because they describe world, prescribe how world
should work, endeavour to predict
A theoretical conversation
1.The cosmopolitical view: [Smith & Ricardo] key to the global economy is specialization.
Through specialization, we see division of labour. Each firm specializes in a certain thing
and it is effective. It leads to global productivity global prosperity global peace.
2.The mercantilist view: [List & Hamilton: German & American] what matters in global
economy is nation, the individual. In order to create more equal term and comparative
advantage against other nations, it requires the visible hand of the government.
3.The Leninist view: Lenin was inspired by Marx. Highest order of capitalism is not its
own demise, but rather monopoly capitalism. Monopoly, the huge firms, accrue capital
over the course of time until they can no longer invest in own economy. The capital then
leaves through imperialism, moves to other countries, finances development, etc.
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World Systems Theory
Inspired by Marxist/Leninist tradition
A systemic view of global capitalism
Liberal ideological hegemony
Monopolistic producers (MNCs): exploitative, scour world for natural resources, cheap
labour, mobile-pick up & go
Monopsonistic purchasers (the north): a huge single purchaser; mirror image of MNCs
above. These purchasers, by virtue of their scale, set prices. It is a big problem according
to the world systems theory because they purchase in overwhelmingly large price.
Colonial legacy: after years of extractive period, colonizers leave the colonies in tatter;
little infrastructure, uneducated people, no health structure
This theory suggests that world system is…
1.Inherently exploitative: not everyone benefits within the system but only those who have
means of production.
2.It is a global system. it is the nature of system of itself, not a country’s or a firrn’s
3.Structural theory. It is the structure that governs world system
“Structure” of Global capitalism
Dominant “core” versus dependent “periphery”: rich countries in the “core” and poor in
Structural dependency: systems whereby core and periphery countries are locked into a
system that inherently exploits periphery countries. It cannot be fixed; once peripheral,
On mono, low-value exports: dependent on the poor products they specialize in, on a
single cheap export
On global north: only ones who are going to buy your rubber, cheap products the
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