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How the West got Rich - Outlier or Model Cosmopolitical View, Mercantalism, Smithian views etc. Good for essay #2.

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Political Science
Jeffrey Kopstein

Outliers of Models? Dependent Development What is development?  Human development  dimension taken seriously by organizations  looking at micro level—individual human beings  i.e. heath outcomes, literacy, education, mortality  Equitable development  Distributive or redistributive consequences of development  aggregate  how this income, wealth, is distributed through political-economic system from high income to low income houses  also looking at things like health chances  Capacity  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 before—a 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  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  Protestant (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” – List  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 relationships—that 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 it’s 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. 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 SOCIETIES  leaving economies is ruins  economies underdeveloped, little infrastructure, leaving people without skills education “Structure” of Global Capitalism  Dominant “core” countries, versus dependent “periphery” countries  Structural dependency  system whereby core countries and peripheral countries are locked in, and how peripheral countries are locked into structural dependency—locked into a system which exploits them 1. On mono, low-value exports 2. On global north  they are the only ones who will buy your stuff  Not only exploitative, it’s unchanging The Implications of Global Capitalism (i) Cosmopolitical view—not about dominance; about a system where everyone benefits, if you work hard like the Protestants, and are not irrational, everyone will benefit in specialization (ii) Mercantilist view—preventing dominance. It is a unfair world, it is a world of dominance. How do we prevent this dominance? (iii) Marxist/Leninist view—Has to be about dominance. About negative sum. It is about dominance, and there is no way around it The Appeal of World Systems Theory
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