THEORIES OF GLOBAL INTERCONNECTIONS

APWH – Unit 6 Part 4 1900 to Present

Myth of Isolation◦ Truly isolated cultures have never existed

◦ 1000s of years, human groups have been in contact with each other (ex. West Africa traded with Northern Africa and Europe since before 1000)

◦ Local societies have always participated in a larger system, which today is a:

◦ “Global System”—nations are economically and politically interdependent

DUALISM (1400-1800)TRADITIONAL societies

◦ Subsistence economy

◦ Closed circuits of exchange

◦ Labor Intensive

◦ (activities that transform nature into things for use or exchange)

◦ Static

◦ Hierarchical

◦ Spiritual

MODERN societies

◦ Export markets

◦ Capital intensive

◦ Entrepreneurial

◦ (resources invested in business to make profit)

◦ Dynamic

◦ Egalitarian

Colonial Thinking: Europe attempted to build islands of “Modern” enterprise within a sea of unchanging “Tradition”

Today - Four Models of Development

1. Self Sufficiency Approach 2. International Trade Approach3. Rostow’s Modernization Model4. Wallerstein’s World Systems Model

Choices for LDC (Less Developed Countries) to become MDC (More Developed Countries)1. Self Sufficiency Approach

aka “Keep your greedy little hands off my country you capitalist bastards!”-- versus –

2. International Trade Approachaka “Uh, maybe we could use just a little help (you capitalist bastards!)”

Self Sufficiency Approach International Trade Approach

Other names Balanced Growth / anti-neocolonialism

Modernization Model / Rostow

When? Most of 20th Century Late 20th Century to Present

Main Points 1. Spread investment as equally as possible through all regions of country and all industries and sectors of economy2. Protect domestic (home) industries through tariffs, import quotas and import licenses

Identify one or a few distinct or unique economic assets and resources, develop those industries, and… Use profits from your strong sector or sectors for more general development of country

Advantages 1. Promotes balanced, diversified economy2. Promotes independence from MDCs (More Dev. Countries)3. Slow but fair growth (fighting poverty is # 1 goal)

Local industries benefit from international competition (forced to innovate)

Self Sufficiency Approach International Trade Approach

Problems 1. Protects, rewards inefficient industries that don't have to compete or innovate on quality or price of their products2. Increases prices of consumer goods3. Huge government bureaucraciesCorruption

1. NEOCOLONIALIST! (still dependent on MDCs markets (buy my oil!) and for necessities (can't live off oil or copper!)2. Economy not diversified (oil in Middle East, coffee, minerals in Africa) therefore vulnerable to market fluctuations3. Profits from extraction don't get evenly distributed (corruption)

Examples 1. India (best example but only up to 1990's)2. China (until 1990's)3. Africa4. Eastern Europe

1. India (after 1990's)2. “Asian Tigers/Dragons”: S. Korea, Singapore, Hong Kong, Taiwan (clothing/electronics)3. Arabian Peninsula (oil)

Rostow’s Modernization Theory(aka “Rostow’s Ladder of Development” Model)

◦ Walt Rostow's model from the 1960's assumes that all countries follow a similar path to economic development, passing through identifiable stages.

◦ Goal of Game: Advance from Tradition to Modernity

◦ Players: Nation-States

◦ Acknowledged Rule: Advanced nations may help Backward nations by offering “Aid”

◦ Unacknowledged Rule: Only advanced nations may win

◦ MAIN POINT TO COURSE: THIS IS THE THEORY THAT LATIN AMERICA ADOPTED!

Rostow’s Development Ladder

Rostow's Modernization Model of Development

Key Characteristics Criticisms/Problems• Basic idea: All countries follow

a similar path of development through five predictable stages

• Based on post WWII economic miracles in Europe and Japan (worked for them, why not for LDCs?)

• Money from natural resources in LDCs will fuel their development

• No context. Treats countries as autonomous units isolated from global forces. Development is not just based on what happens within a country (Mali not equal to Japan!)

• Has a Western, Industrial Revolution bias (conditions for "takeoff" for Great Britain in 1750 don't apply to LDCs.)

• No place in Rostow's model for war, political and cultural decision making.

• Model assumes development is all good (what about social disruptions, loss of culture, environmental costs).

• Need sixth stage: deindustrialization? Small is beautiful.

Immanuel Wallerstein’s World Systems Theory(aka Wallerstein’s “Core-Periphery Model”)

◦ Three related concepts:1. The Self-Sufficiency Model (as one way of avoiding the exploitation predicted by Wallerstein) 2. Neo-Colonialism (explains roots of today’s exploitation)3. Dependency Theory (another name for this theory; periphery is dependent on core)

◦ Capitalist World Economy = A single world system committed to production for sale or exchange, with the object of maximizing profits rather than supplying domestic needs (i.e. sugar and cotton plantation economies) since 15th and 16th centuries

◦ Unit is no longer the “nation-state” but a social system based on political and economic relations—“class”

Core•Regions with higher levels of education, higher salaries, more tech

•Generate more wealth in the world economy

•Exploits Semi-Periphery and Periphery by exploiting cheap labor and raw materials and by doing so gains and maintains dominant position.

Semi-periphery • Regions where core and periphery processes are both occurring

• Exploited by the Core but then exploits the Periphery

• Serves as a buffer between Core and Periphery

Periphery•Regions with lower levels of education, lower salaries, and less tech

•Generates less wealth in the world economy

•Exploited by Core and Semi-Periphery

•(Think: “Periphery sells low and buys high.”)

Wallerstein Four Key Points:

◦ 1. Exploitation is a function of the basic drive for profit in an interconnected global capitalist system. Development must be seen in this context.

2. The global capitalist market includes an international division of labor. This means industry can and will shift production from MDCs to LDCs in search of lowest labor costs (i.e. maquiladoras)

3. Raw materials and cheap labor flow from periphery to core. High profit consumption goods flow from core to periphery.

4. Wallerstein's model can be applied not only at global but also at local scale. (US Northeast= Core, US South = Periphery, etc.)

Who’s who in Wallerstein? Depends on who you ask. Here’s one interpretation.

Wallerstein's and Rostow's Modernization Theory are fundamentally different in two ways:

1. Wallerstein, unlike Rostow, doesn't say development is inevitable or predictable. In fact, Wallerstein holds that not all places can be equally developed or wealthy at the same time. In other words, Wallerstein, unlike Rostow, assumes an exploiter requires and “exploitee”.

2. Wallerstein, unlike Rostow, doesn't assume development will occur the same way in all places.