CICS 101 Lecture Notes - Lecture 5: Subsistence Agriculture, Economic Mobility, Economic Nationalism

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Published on 10 Oct 2014
Module Five
Guide to Module Five: Human Development
1. What are mercantilism and economic liberalism?
a. Mercantilism:
i. follows Peace of Westphalia
ii. aggressive pursuit of export outlets & protection of domestic
iii. economic nationalism for the purpose of building a wealthy and
powerful state
iv. restraining imports and encouraging exports
1. states’ goal is to maintain a positive trade balance
b. Economic Liberalism
i. Adam Smith, David Ricardo
ii. “Invisible hand” of the market - Adam Smith
iii. minimal state intervention - free and open market - David Ricardo
2. When and why did the concept of “development” as we know it today take
a. Post-WW2 context
b. It took off because of the need to recover economically from the war
i. post war recovery sparked industrialization and modernization
c. new international institutions
i. bretton woods: IMF, World Bank, WTO
1. encouraged deregulation, open markets,
d. truman doctrine (1947) → Marshall Plan (1948--) -- they said it is our
obligation but they didn’t say that its also our best defense
i. Truman Doctrine - states that the US would support Greece and
Turkey with economic and military aid to prevent them from falling
under soviet interest. Historians sometimes consider it to be the
start of the cold war underpinned the USAs policy during the cold
ii. Marshall Plan - American initiative to provide aid in Europe after the
end of World War II. This was in order to prevent the spread of
communism to these decimated countries
3. Our thinking about development has evolved considerably over time. What
are four theories or approaches to development and their main
a. Modernization theory: societies move more or less inevitably through
five distinct stages. “Traditional” countries can be brought to development
in the same way that developed countries have. Attempts to identify the
social variables which contribute to social progress and development of
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countries. Stresses the process of change but also the response to that
change. It also looks at internal dynamics while referring to social and
cultural structures and the adaptation new technologies.
i. arrive at “high mass consumption”
ii. influenced by economic liberalism
iii. underlying assumption “west is the best”
b. 5 stages
i. traditional society
1. characterized by subsistence agriculture or hunting and
gathering: almost wholly a “primary” sector economy
2. limited technology
3. a static or rigid society: lack of class or individual economic
mobility, with stability prioritized and change seen necessary
ii. preconditions for take-off
1. external demand for raw materials initiates economic change
2. development of more productive, commercial agriculture and
cash crops not consumed by producer and/or largely
3. widespread and enhanced investment in changes to the
physical environment to expand production
4. increasing spread of technology and advances in existing
5. changing social structure, with previous social equilibrium
now in flux
6. individual social mobility begins
7. development of national identity and shared economic
iii. take-off
1. manufacturing begins to rationalize and scale increases in a
few leading industries, as goods are made both for export
and domestic consumption
2. the “secondary” (goods-producing) sector expands and
ration of secondary vs. primary sectors in the economy shifts
quickly toward secretary
3. textiles and apparel are usually
iv. drive to maturity
1. diversification of the industrial base; multiple industries
expand and new ones take root quickly
2. manufacturing shifts from investment-driven (capital goods)
towards consumer durables and domestic consumption
3. rapid development of transportation infrastructure
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4. large - scale investment in social infrastructure (schools,
universities, hospitals)
v. age of high mass consumption
1. the industrial base dominates the economy; the primary
sector is of greatly diminished weight in economy and
2. widespread and normative consumption of high value
consumer goods
3. consumers typically (if not universally) have disposable
income, beyond all basic needs, for additional goods
c. Systems Theory: traditional social and political institutions will need to be
i. intervention needed-models successful in “modern” countries to be
ii. foreign expertise will be required and foreign investment is good
d. Dependency Theory:
i. influenced by Marxism
ii. new terms: “core” and “periphery”
1. the core countries are those that are industrialized and
developed. They exploit the peripheral countries, which are
the underdeveloped, less industrialized and traditional
countries. The trade relationships are unbalanced as the
Core countries take advantage of the subordinate position of
the peripheral countries
iii. there is no single path
1. cultural, social, political differences in countries makes it
impossible to institutionalize the process of development.
iv. one-size-fits-all solutions don’t work
v. problem: unequal trading relationships
vi. assumption: “blame” may lay with core countries
e. World Systems Theory:
i. Multidisciplinary, macro-scale approach to world history and social
change that stresses that the world - system (and not naton states)
should be the primary (but not exclusive) unit of social analysis.
ii. refers to the inter-regional and transnational division of labor, which
divides the world into core countries, semi-periphery countries, and
the periphery countries.
iii. Core Countries
1. own most of the world’s means of production
2. focuses on higher skill, capital intensive production
3. five important benefits core countries receive as a result of
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