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POLS 3270 Study Guide - Final Guide: Periphery Countries, Cultural Hegemony, Core Countries

Political Science
Course Code
POLS 3270
Hannes Lacher
Study Guide

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POLS 3270 Final Study Guide
The exam will be 2 hours, in class, during regular lecture hours; please be there at 4pm sharp. It will
cover chapters 3-4 and 6-7 of Schwartz: States vs Markets. If you can deal with the following questions,
you should be able to deal with the actual exam questions (which will not be exactly the same):
1. What is the difference between a Kaldorian and a Ricardian strategy of development? Ch. 1&2
Main Strategy
Ricardian Strategy
- Underdeveloped states should specialize in production where they have the comparative
o gain an upper hand through having the cheapest production costs in their specialty and
levy itself as a competitor in the world market
- free trade, comparative advantage (selling what comes easiest with no subsidies or protection)
- Use agricultural or other primary product exports to drive economic development or base on low-
value industrial activities
Kaldorian Strategy
- peripheral countries should focus on building a rival industrial centre using state resources
o would eventually become competitive in the world market
- Export oriented and contained by ability to pay for imports with export
o highly export-oriented and is contained by its ability to pay for imports with export
- Verdoorn effects: the greater the rate of increase of output inside a firm, the greater the increase in
that firm’s productivity
- aims at having the lowest cost of production and high economic growth
o making it impossible for other newly industrializing countries to compete with them
o calls for an increase in skills, experience, investment and production in order to transform
the initial factor disadvantages into advantages
Collective Action Problems
- Success relies on a resolution of Gerschenkronian CAP
o Measures that individuals require but aren’t willing or able to build
State as a collective actor decides to provide these public investments
o state mobilization of capital for social overhead capital
- Additional con States adopting the Ricardian strategies became supplier zones of advanced
countries, and become more and more backward and get locked into underdevelopment
o lead to the increasing gap between the importers and exporters
- Face both Gerschenkronian CAPs (problems surrounding investment) and Kaldorian CAPs
(problems surrounding the growth of productivity)
- requires a lot of investment from the state into the industrial centre
o in order to make a profit the state must subsidize products or place tariffs on foreign
o the tax payers’ money must pay for the difference
o high output does not indicate productivity, as they can be losing money
- Kaldorian Solution: make subsidies conditional on productivity
o Avoids becoming a drain on taxpayer dollars
2. Analyze Schwartz’s theory of international hegemony. Ch.3 & Hegemony and World Markets lec.
- Economic cycles: combining Schumpter and Mandel elements to understand capitalism
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- Emergency of new institutional forms and leading sectors is closely tied to the emergence or
revival of hegemonic states
Schumpeterian Leading Sectors
- Relationship between entrepreneurship and innovation:
o Believes stagnation send entrepreneurs searching for innovation, which creates new
leading sectors and reenergize capitalism by raising the rate of profit above the level
o New leading sectors change the process in production and lead to creative destruction
leads to drop in transportation costs, labor costs, and potential division of labor
o huge risks involved in making large fixed investment
requires government intervention to overcome Gerschenkronian CAP
I. Cotton Textile Workers (1789-1849)
o Water power and canals
II. Railway and Steel Production (1848-1890)
o Steam powered
III. Chemical Production (1890-1930s)
o Soaps, detergents, fertilizers
o Electricity = new possibilities for machine production
Productive day extended beyond sunset
IV. Car Production (1930s-1960s)
o Gas station construction and oil production
V. Information Technology (1960s-present)
Mandel’s Production Cycles
- Overlap with Schumpeter
- Looks at the way the masses are put into different production processes
- Believes workers resistance to exploitation forces capitalist to search for new forms of
organization to restore profitability
VI. Craft Workers (1789-1849)
o Small factories
o People using weaving machines
o Ended with an upheaval for political rights (right to vote and political participation)
VII. Master Craftsmen (1848-1890)
o Privileged position in the firm and accompanied with low-skill workers, most likely
o Led to formation of skilled unions and violent mass strikes
VIII. Taylorization (1890-1930s)
o Master craftsmen either become educated engineers or foremen
o Increased reliance on unskilled workers
o Taylorism: production done in many small parts with many unskilled workers
IX. Post-Depression (1930s-1960s)
o Assembly-line workers
o Rise of union-demands
Economic cycles and hegemony
- Leading sectors usually emerge inside one country and then spread unevenly to others: military and
economic basis for hegemony
- Military:
o Business need security and stability
o Overwhelming naval power
o Schwartz Britain and US was different from their predecessors
Their hegemony usually had the consent of the periphery, unlike Germany and
- Economic:
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