SHELAGH JOSEPH POLB90 READINGS Page 1 of 10
Week 7 Promises Not Kept (Chapter 4) – John Ibster
Modernization seldom pays attention to imperialism.
• Implied in their conviction that the third world is societies are “traditional” is the view that
imperialism had few lasting effects and certainly did not transform the third world in any
o For Marxists and dependency theorists, the history of imperialism is critical in understanding
the third world and its poverty today.
o It is a current common denominator of the third world.
• At times imperialism was marked by the dominance of a single European country, at times by
competition among several.
o It features massive overseas settlement, administrative and military control in other, and
informal economic domination in still others.
1492 – 1776: Global expansion
The first period of imperialism followed the voyages of discovery.
• Prior to the development of better shipping techniques, many communities were isolated.
o The first phase of European imperialism can be traced in the succession of world maps the
• Before the might of European weaponry, ancient empires crumbled and were destroyed
o The Aztecs by Cortez in Mexico, the Incas by Pizzaro in Peru.
The soldiers were followed by Friars, whose sacred mission it was to salvage souls
who succeeded at the expense of wiping out whole cultures.
• The Spanish forced the Native Americans into bondage both in agriculture and in the mines.
o They established a system of agriculture ecomienda, under which the natives worked on the
Spanish estates for four days a week leaving them three days to tend to their own
When the Native Americans proved unable to withstand the rigors of their new
situation, their labour was supplemented by African slaves
• The discovery of silver sealed the fate of the blacks and native Americans to
one of slavery, disease and death
• The Spaniards record of destruction was exceeded by that of the British Empire societies in North
o The British did not merely administer South America, they settled in North America.
In a series of wars, the British overcame their competitors and took control of the
• The culture and living standards of the United States are founded, therefore,
on the most genocidal imperialism the world has known. SHELAGH JOSEPH POLB90 READINGS Page 2 of 10
o White Americans are the beneficiaries of an unparalleled destruction
that almost totally eliminated an entire race.
The Causes of imperialism
British economist J.A. Hobson ascribed the new imperialism to under consumption, to the failure of the
European masses to buy the goods produced by European industry.
• As a consequence, the European industrialists had to export their capital abroad in search of new
markets: to secure those capital investments and markets, they needed to acquire imperial control.
o Lenin argued that the export of capital to foreign lands, of imperialism represented the last
futile attempt of the capitalist system to avoid its demise.
The Hobson – Lenin thesis ultimately fails as an explanation of late- nineteenth-
century imperialism because, although the Europeans invested heavily abroad, very
little of their investments went to the newly acquired colonies.
On National Culture – Frantz Fanon
Frantz Fanon foregrounds the following paradox: "national identity," while vital to the emergence of a Third
World revolution, paradoxically limits such efforts at liberation because it re-inscribes an essentialist,
totalizing, fetishized, often middle-class specific understanding of "nation" rather than encouraging a
nuanced articulation of an oppressed people's cultural heterogeneity across class lines.
o In other words, although the concept of "nation" unfairly characterizes colonized subjects as
historically unified in their primitiveness or exoticness, the term's promise of solidarity and
unity often proves helpful nonetheless in their attempts at political amelioration.
Fanon encourages a materialist conceptualization of the nation that is based not so
much on collective cultural traditions or ancestor-worship as political agency and the
collective attempt to dismantle the economic foundations of colonial rule.
Colonialism, as Fanon argues, not only physically disarms the colonized subject but
robs her of a "pre-colonial" cultural heritage. And yet, if colonialism in this sense
galvanizes the native intellectual to "renew contact once more with the oldest and
most pre-colonial spring of life of their people," Fanon is careful to point out that
these attempts at recovering national continuity throughout history are often
contrived and ultimately self-defeating.
"I am ready to concede," he admits, "that on the plane of factual being the past
existence of an Aztec civilization does not change anything very much in the diet of
the Mexican peasant of today." In the passage below, Fanon explains that "national
identity" only carries meaning insofar as it reflects the combined revolutionary efforts
of an oppressed people aiming at collective liberation:
“A national culture is not a folklore, not an abstract populism that believes it can discover the people's true
nature. It is not made up of the inert dregs of gratuitous actions, that is to say actions which are less and
less attached to the ever-present reality of the people. A national culture is the whole body of efforts made
by a people in the sphere of thought to describe, justify, and praise the action through which that people
has created itself and keeps itself in existence.”
Week 8 The Promise of Global Institutions – Joseph Stiglitz SHELAGH JOSEPH POLB90 READINGS Page 3 of 10
Why has globalization-a force that has brought so much good-become so controversial?
• Opening up to international trade has helped many countries grow far more quickly than they
would otherwise have done. International trade helps economic development when a country's
exports drive its economic growth.
• Exported growth was the centerpiece of the industrial policy that enriched much of Asia and left
millions of people there far better off.
o Because of globalization many people in the world now live longer than before and their
standard of living is far better.
People in the West may regard low-paying jobs at Nike as exploitation, but for many
people in the developing world, working in a factory is a far better option than
staying down on the farm and growing rice.
Globalization has reduced the sense of isolation felt in much of the developing world and has given many
people in the developing countries access to knowledge well beyond the reach of even the
wealthiest in any country a century ago.
• The antiglobalization protests themselves are a result of this connectedness.
o Even when there are negative sides to globalization, there are often benefits.
Opening up the Jamaican milk market to U.S. imports in 1992 may have hurt local
dairy farmers but it also meant poor children could get milk more cheaply
• Foreign aid, another aspect of the globalized world, for all its faults still has brought benefits to
millions, often in ways that have almost gone unnoticed
o Guerrillas in the Philippines were provided jobs by a World Bank-financed project as they laid
down their arms; irrigation projects have more than doubled the incomes of farmers lucky
enough to get water; education projects have brought literacy to the rural areas; in a few
countries AIDS projects have helped contain the spread of this deadly disease.
Those who vilify globalization too often overlook its benefits. But the proponents of globalization have
been, if anything, even more unbalanced. To them, globalization is progress; developing countries
must accept it, if they are to grow and to fight poverty effectively. But to many in the developing
world, globalization has not brought the promised economic benefits.
• A growing divide between the haves and the have-nots has left increasing numbers in the Third
World in dire poverty, living on less than a dollar a day.
o Despite repeated promises of poverty reduction ~ made over the last decade of the
twentieth century, the actual number of people living in poverty has actually increased by
almost 100 million. This occurred at the same time that total world income increased by an
average of 2.5 percent annually.
• If globalization has not succeeded in reducing poverty, neither has it succeeded in ensuring
stability. Crises in Asia and in Latin America have threatened the economies and the stability of all
o There are fears of financial contagion spreading around the world, that the collapse of one
emerging market currency will mean that others fall as well. For a while, in 1997 and 1998,
the Asian crisis appeared to pose a threat to the entire world economy. SHELAGH JOSEPH POLB90 READINGS Page 4 of10
The critics of globalization accuse Western countries of hypocrisy and the critics are right. The Western
countries have pushed poor countries to eliminate trade barriers, but kept up their own barriers,
preventing developing countries from exporting their agricultural products and so depriving them
of desperately needed export income.
IMF and WB
Founded on the belief that there is a need for international pressure on countries to have more
expansionary economic policies-such as increasing expenditures, reducing taxes, or lowering
interest rates to stimulate the economy-today the IMF typically provides funds only if countries
engage in policies like cutting deficits, raising taxes, or raising interest rates that lead to a
contraction of the economy.
• The IMF and the World Bank became the new missionary institutions, through which these ideas
(free market ideology) were pushed on the reluctant poor countries that often badly needed
their loans and grants. The ministries of finance in poor countries were willing to become
converts, if necessary, to obtain the funds, though the vast majority of government officials,
and, more to the point, people in these countries often remained skeptical.
o In the 1980s, the Bank went beyond just lending for projects to providing broad-based
support, in the form of structural adjustment loans; but it did this only when the IMF gave
its approval-and with that approval came IMF-imposed conditions on the country. The
IMF was supposed to focus on crises; but developing countries were always in need of
help, so the IMF became a permanent part of life in most of the developing world.
Those who valued democratic processes saw how "conditionality"-the conditions
that international lenders imposed in return for their assistance undermined
o A half century after its founding, it is clear that the IMF has failed in its mission. It has not
done what it was supposed to do-provide funds for countries facing an economic
downturn, to enable the country to restore itself to close to full employment. Many of the
policies that the IMF pushed, in particular, premature capital market liberalization, have
contributed to global instability. And once a country was in crisis, IMF funds and
programs not only failed to stabilize the situation but in many cases actually made
matters worse, especially for the poor.
Governments, by and large, have little business running steel mills, and typically make a mess of
it. This is the argument for privatization-converting state-run industries and firms into private
ones. However, there are some important preconditions that have to be satisfied before
privatization can contribute to an economy's growth. And the way privatization is accomplished
makes a great deal of difference.
• Unfortunately, the IMF and the World Bank have approached the issues from a narrow ideological
perspective-privatization was to be pursued rapidly. As a result, privatization often did not bring the
benefits that were promised. The problems that arose from these failures have created antipathy to
the very idea of privatization.
o Perhaps the most serious concern with privatization, as it has so often been practiced, is
Privatization advocates failed to realize that without the appropriate legal structures
and market institutions, the new owners might have an incentive to strip assets
rather than use them as a basis for expanding industry. As a result, in Russia, and
many other countries, privatization failed to be as effective a force for growth as it
might have been. Indeed, sometimes it was associated with decline and proved to be
a powerful force for undermining confidence in democratic and market institutions. SHELAGH JOSEPH POLB90 READINGS Page 5 of 10
The fact that trade liberalization all too often fails to live up to its promise-but instead simply leads
to more unemployment-is why it provokes strong opposition.
• The Hypocrisy - The Western countries pushed trade liberalization for the products that they
exported, but at the same time continued to protect those sectors in which competition from
developing countries might have threatened their economies.
The Political Trilemma of the World Economy – Dani Rodrik
Dani Rodrik’s The Globalization Paradox is a practical book. It describes things as they are and not as
proponents of globalization would like them to be. It defends national sovereignty and democracy against
the threats posed by advocates of free trade. And it rehabilitates government as a necessary element in a
• Economic globalization is both a fact – world markets, heightened trade, and vast increases in
capital flows – and an ideology. Rodrik has no dispute with economic globalization as a real process,
which fosters trade between nations and which sometimes reduces transaction costs. But he is
dead set against the idea, which he calls hyperglobalization, that national and local constraints
are irrelevant impediments to the beneficent operation of free trade.
o As many historical and recent crises have shown, unregulated global markets are unstable,
prone to bubbles and collapse (he uses the example of Argentina).
Rather than irrelevant, national regulatory institutions and practices protect and
o Markets depend on states and cannot work without them. National markets
are “embedded” in states where democratic participation, safety nets, and
anti-trust legislation controls business. In nations, the demos provides a
constituency for the economy, whereas the sole constituency for global
markets are the elites who profit from it.
Rodrik’s trilemma: Economic globalization, political democracy, and the nation-state are mutually
irreconcilable. We can have at most two at one time.
o Democracy is compatible with national sovereignty only if we restrict globalization.
o If we push for globalization while retaining the nation-state, we must jettison democracy.
o And if we want democracy along with globalization, we must shove the nation-state aside
and strive for greater international governance.
• There is a contradiction between “the national scope of governments and the global nature of
• Hyperglobalization works to eradicate national regulatory authority and allow capital markets to
operate without restraint.