The NorthSouth Gap Chapter 12.1

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The North-South GapChapter 12.1

• PSC 124
• Northrup
• Spring 2007

Impoverished diamond miners in Sierra Leone NYT
Article
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Overview

• Facts of poverty
• Explanations for N-S gap Theories of
  accumulation
• capitalism,
• Socialism and Marxism
• Explanations for gap Imperialism, colonialism,
  and dependency

3
World Poverty

• People who die from malnutrition die because
  they cannot afford to buy food
• A third of the worlds population are
  malnourished
• Half the worlds population has inadequate water
  supply, live in substandard housing or are
  homeless
• Almost half are illiterate
• 99 dont have a college education
• Half of all people globally have incomes of less
  than 2 a day
• About a billion people live in abject poverty
  concentrated in Asia and Africa
• Every 6 seconds a child dies as a result of
  malnutrition (14,000 each day) dying,
  ultimately, from poverty

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Explanations for N-S Gap?

• Theories of accumulation
• Capitalism
• Socialism
• Economic class
• Imperialism
• Globalization of class
• World system
• Colonialism and anti-imperialism
• Post-colonial dependency

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Theoretical Perspectives

• Liberal economic perspective capitalism
• Maximizing economic growth
• Global South merely lags behind North
• Growth in both North and South is good
• Government should basically stay out of the
  market
• Revolutionary economic perspective socialism
• Concerned with distribution of wealth
• Creation of wealth in the North comes at the
  expense of the South
• Government has a role in redistribution of wealth

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Accumulation

• Economic development based on accumulation of
  capital
• Capital standing wealth
• Buildings, factories
• Roads, infrastructure
• i.e., things of value that contribute to building
  more wealth
• So not consumer goods
• Growth comes from investing capital in creating
  more capital
• Measure of economic growth doesnt indicate how
  much wealth has been accumulated in the past
  (e.g. US vs. Mexico

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Concentration of Wealth is Self-Reinforcing

• Possession of standing wealth makes possible
  efficient investment, and this generates more
  wealth
• When wealth is concentrated in some states, this
  gives those states power and the ability to
  dominate politically (i.e. establish policies and
  regimes that favor themselves over others)

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Capitalism

• Basic principles
• System of private ownership
• Relies on market forces rather than government
  intervention
• Surplus profit for private owners of capital
• Reinvestment is encouraged because private owners
  want to increase their wealth
• Does not seek equity in distribution of wealth
• No state is purely capitalistic rather some
  form of mixed economy
• Both private and public ownership
• Government regulation to prevent abuses and to
  redistribute wealth to some extent

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Socialism - Principles

• Focus on workers having political power
• Favors redistribution of wealth from private
  owners to workers
• Favors government planning to manage a national
  economy
• Some forms favor state ownership of industry
  but this hasnt worked well where tried
• There are also strong disadvantages of pure
  private ownership, however (e.g. water,
  communications)
• Does not exist in pure form anywhere
• Mixed economies have an element of socialism in
  them

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Socialism Economic Classes

• Politics are structured by unequal relations
  between economic classes
• More powerful classes exploit less powerful
• Less powerful (e.g. workers) are denied their
  share of the surplus that is created
• Bourgeoisie are owners of capital, proletariat is
  the class of workers
• Marx said this leads to class struggle and
  revolution
• (although Marxist analysis has often been wrong
  in its predictions about stages of development,
  class alliances, and who would engage in
  revolutions)

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Imperialism

• Lenins theory of imperialism
• European capitalists invested in colonies to make
  large profits
• Meanwhile bought off workers at home to keep
  them from revolting
• This idea of industrialized states exploiting
  developing countries is common today (still
  contrasts with the liberal notion of the free
  market)
• Referred to as globalization of class relations
• Many colonized people took part in revolutions to
  achieve independence

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World System Approach

• Theory to explain current global situation
• World system is considered a capitalist world
  economy where class divisions are regionalized
• Postulates a core and a periphery
• Core industrialized countries which produce
  manufactured goods, uses capital, required
  skilled workers, pays higher wages to workers
• Periphery developing countries where raw
  materials are extracted (e.g. ore, diamonds,
  agricultural products), using unskilled labor
  with low wages and little investment in the local
  economy
• Class struggle is between core and periphery

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Dynamic of World System

• Semiperiphery some manufacturing, some
  concentration of capital
• Eastern Europe and Russia
• Some newly industrializing countries e.g. Asian
  tigers (Taiwan, Singapore, S. Korea)
• Actual patterns of world trade are consistent
  with this theory

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Commodity Structure of World Trade by Region
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History of Colonialism

• Deeply relevant to current world politics and
  economy
• 12th to 15th centuries European development
• Rise of capitalism in Europe
• Scientific and technological progress
  agriculture, industry, military
• Able to dominate other world regions

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Conquest of the World
Former Colonial Territories of European States
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Colonial World 1898
Pink Britain Navy France Yellow Spain Dark
green Portugal
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Cape-to-Cairo Empire for Brits

• Racist and imperialist views embodied in Cecil
  Rhodes

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The Red Line from Cape to Cairo
The path of the proposed Cape-to-Cairo road and
railway
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Colonialism End of WWII

• Colonialism at the end of WWII - 1945

Link Interactive Map of History of Colonization
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Decolonization and Anti-Colonial Movements

• Decolonization only 25 to 50 years ago in Asia,
  Africa, and Middle East
• Anti-colonial independence movements took off
  after WWII

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Areas of White Minority Rule in Africa, 1952-1994
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Postcolonial Dependency

• Free at last?
• Structural legacy of colonization and imperialism
• Training and experience re management of economy
  only colonizing group
• Narrowly developed economies single and dual
  commodity economy, resources for the North
  (vulnerability)
• Borders and ethnicity and history
• New governments puppet governments
• New governments - inefficiency, corruption

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Independence? Borderlands, Railroads, and
Resources in Angola and Namibia
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Elements of Dependency

• Dependency theory explains lack of accumulation
  of capital in 3rd world
• Dependency inability of a country to sustain
  itself internally through accumulation
• Must borrow to produce goods
• Debt payments - reduction in accumulation of
  surplus
• Cant invest in new economic infrastructure
• Lenders can dictate terms, conditions inside
  developing country (e.g. World Bank, IMF

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Configurations of Dependency

• Enclave economy
• Oil in Cabinda province, Angola
• Exxon Mobil oil production in Aceh, Indonesia
• Diamonds in Sierra Leone
• Nationally controlled production
• Penetration by MNCs to create local markets