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University of Toronto St. George
Political Science

Dependent Development Lecture #17 For countries, the core of the process of becoming wealthy is development. A developed country is always wealthier than an undeveloped country. What is Development? Development can be defined as progress. Progress is improvement – people’s lives are improved through development. Human development is development on the micro-level. We are thinking of humans not as a species, but as individuals. - Infant mortality rate and literacy are examples of human development. Equitable development examines the distributive consequences of development. - Economies may grow 10% a year, but if households are not earning more money from this growth, it is not helpful for people. - Income is distinct from wealth. Income is the actual salary a person takes home. Wealth includes all stock and shares, etc. - Life chances – will you have opportunities to move up in life? - Gender – one of the clearest markers of structured equality in society. Capacity: the capacity of a country to upgrade and develop. - How accessible is education? Is it available to all for a reasonable price? Is it available at the university and professional level? - Are you able to develop the technical and management skills that will allow you to upgrade? Sustainable development is development that occurs over the long term. - Environmental impact – are resources being depleted at an irreplaceable rate? Political development concerns democracy, human rights, and the rule of law. - Political development is the pinnacle of development. As countries move from being agricultural to becoming industrial, they become more interested in politics and equality. Aggregate economic growth A Theoretical Conversation: The Cosmopolitical View Adam Smith: The most efficient way for a market to work is for the government to leave it alone. Free commerce. - Under a system of free commerce, each country naturally devotes its capital and labor to such employments as are most beneficial to each.  Specialization: Focus on producing the things you can make well, let other people produce what you cannot make. The cosmopolitical view is a theory of individualism: it is about what you are good at making and what your individual comparative advantages are. - It is only under this system that we see a productive global capitalist system form. This leads to prosperity and peace for everyone. - The invisible hand of the market – the positive sum theory. If you just allow markets to work, everyone will benefit. The Mercantilist View Economic hegemonies would benefit the most from free markets because they have the most advanced industries in the world. List: Nations matter. It does not matter that you are a textile producer, it matters that you are an English textile producer. - The world is inherently unfair, and there can be no positive sum relationship; rather, the world is a negative sum relationship. Global capitalism disproportionately benefits some nations over others. Were the United States to have specialized in its early days, it would have become no more than an agricultural nation. - It would be impossible for a new country to challenge an old and rich country while relying solely on the invisible hand of the market. What is needed in the market is government intervention. You need the visible hand of the state to provide policy and productive intervention. - You need governments to create or to help create comparative advantages. Because you are not endowed with advantage, you must create advantage. Government intervention creates comparative advantages for otherwise disadvantaged nations. Manipulating exchange rates, imposing tariffs, and implementing market policies are among the ways a state can create their own advantages. The Leninist View Lenin holds a theory inspired by Marxism. It was, however, less of an analysis of the contradictions of capitalism and more on the consequences of capitalism. Imperialism is “the substitution of capitalist monopolies for capitalist free competition… Monopoly is exactly the opposite of free competition… Monopoly, which has grown 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.” Because of the need for monopolies to keep growing, their capital becomes transnational. - A big company cannot remain in one nation. It has to expand, and by expanding, it grows in new countries and becomes transnational.  From this, we see imperialism: first-world countries colonizing other lands simply because the monopolism of capitalism requires them to go out and extract more capital. Capitalism does not erode itself; capitalism requires imperialism. - Capitalism has to be exploitative to survive. World Systems Theory World systems theory is not a theory of imperialism, but a theory of the consequences of imperialism. - Capitalism is a system that is inherently unequal and requires exploitation. - Capitalism is not a national phenomenon, but a global phenomenon. - Capitalism creates a certain structure to the global economy. World systems theory is a systemic view of global capitalism. The world is dominated by a liberal ideological hegemony. - For all the efforts of mercantilists, we see a world dominated by free trade. In the global capitalist system, we see the rise of monopolistic producers (often knows as multinational corporations). They must become transnational because capitalism requires it. - These corporations are massive conglomerate firms, which is far from the small producers that Adam Smith predicted and dealt with in his theories. Along with monopolistic producers, there are monopsonistic purchasers. These purchasers buy goods made by the monopolistic producers. - The monopsonistic purchaser decides how much he will spend to buy what monopolistic producers create. If a producer says he will sell his goods for a dollar, the purchaser has the power to say that he will only buy it for fifty cents. Dependency theorists say that most of the poor countries in the world are post-colonial societies. Colonialism ruined their economies and left no industry or infrastructure for these nations to develop. “Structure” of Global Capitalism Global capitalism’s structure is made up of a dominant “core” versus a dependent “periphery”. - The core is made up of the first-world nations, such as America and Europe. - The peripheries are the underdeveloped nations, such as South America and Africa. The peripheries are dependent on singular, low-value exports. They can only sell what they produce well, and they must accept what the core nations will pay for it, however low the price is. - As such, peripheral countries are dependent on the North. Peripheral countries are locked in their structural dependency to the co
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