lecture 5 - capitalism Flashcards
2 ways to interpret the global capitalist economy as an international system
- as a market
- as a capitalist world system
global economy as a market
global market in which:
- sovereign states and private actors make choices
- to manage their interdependence
- based on prices and regulations at national and int’l levels
generally assumes that market-based cooperation produces joint gains (outcomes that benefit all participants)
global economy as a capitalist world system
focus on structures of power and exploitation
- not on choices of states, firms, IOs, others
focus on conflicts of interest at national level (between social classes) and global level (between core and periphery states and economies)
- not on ‘joint gains’
= various versions, some drawing on Karl Marx, some not
early theorists of capitalism as a national and int’l system
- Marx
- Hobson
- Lenin
- Gramsci
Karl Marx
(Das Kapital)
‘historical materialist’ analysis of society
society is based on the mode of production (how wealth is created)
- changes over time: slave -> feudal -> capitalist (predicted: -> communist)
- changes the identity and interests of social classes, dominated by a ruling class
- ruling class = nobility -> lords -> bourgeoisie (owners of capital)
- under-class = slaves -> serfs -> proletariat (workers, owners of labor)
interests of the ruling class -> government, religion, morality, ideas = superstructure
theory of history = contradictions in mode of production -> class struggle -> social change
expectation for capitalism:
- maximizes profits by paying minimum wages
- impoverishment of workers
- reduced demand for products
- loss of profits
- economic crisis
- revolt by working classes
- end of capitalism, rise of communism
Hobson - imperialism
capitalism produces great concentrations of wealth
capitalist elites manipulate power of the state to advance their own interests
when a capitalist society’s production capacity is greater than consumer demand, elites (owners of capital) have 2 options:
- redistribution = increase demand at home by redistributing wealth to the poor
- imperialism = acquire foreign lands for profitable investment opportunities
!Hobson not a ‘marxist’: not focused on historical materialism, class struggle and revolution etc.
Vladimir Lenin
imperialism as the highest stage of capitalism
combined ideas of Marx and Hobson
capitalism will eventually end in communist revolution, but this hasn’t happened yet bc capitalist states pursue imperialism
dynamics:
- falling profits
- capitalist seek new investment opportunities and markets abroad
- imperial competition between capitalist states
- war
Antonio Gramsci
(Prison Notebooks)
agreed with Marx that a bourgeois social class dominates capitalist society
rejected Marx’s economic determinism + Lenin’s expectation of upcoming communist revolution
emphasized cultural hegemony: ruling class uses ideas and ideology to sustain capitalism and maintain power
- social change requires counter-hegemony = promotion of alternative, critical values and norms
how does global capitalism shape global governance?
- Cammack 2003
Global governance serves global capitalism
uses 2 concepts from Marx
- capitalist accumulation: existence of reserve labour (i.e. people reasonably healthy and skilled but willing to accept low wages if employed workers quit or are fired) -> low wages -> extraction of profits from labor
- relative autonomy of institutions: int’l institutions serve capitalism, but not particular groups of capitalists or capitalist states
argument: WB and IMF promote and sustain conditions of global capitalism:
- WB: anti poverty agenda ensures reserve labor pool (minimally healthy and educated workforce)
- IMF oversight national budget ensures manageability of sovereign debt, repayment of loans to public and private lenders
how does global capitalism shape global governance?
Chimni 2004
transnational capitalist class supports and benefits from an imperial global state
- transnational capitalist class bridges first world and third world
- first world states have established a network of international institutions
(decentralised ‘imperial global state’) that benefits the transnational capitalist class and disadvantages dominated, marginalised classes in first and third worlds
-> institutions legitimate particular policies, reduce policy autonomy of sovereign states, resist democratization of global decision-making
capitalism and global inequality
why is wealth distributed so unevenly around the world?
5 authors + their thing
- Prebisch 1950 = dependent development / dependency theory
- Rodney 1972 = imperialism and under-development
- Wallerstein 1974 = the ‘modern world system’
- Philipps 2017 = capitalism and global value chains
- Baker 2005 & 2017 = global capitalism and financial secrecy
why is wealth distributed so unevenly around the world?
dependent development - dependency theory
Raul Prebisch
- rejects David Ricardo’s theory of mutual development via gains from trade
in contemporary world system, periphery exports raw materials to center, while center exports finished products to periphery
over time concentration of wealth in the center because:
- declining terms of trade = raw materials get cheaper, finished products get more expensive
- center is powerful so retains profits: periphery is weak so easily exploited
results = center gets richer while periphery gets ‘dependent development’
why is wealth distributed so unevenly around the world?
imperialism and under-development
Walter Rodney: how Europe underdeveloped Africa
imperialism = integrated social system in which wealthy capitalist states dominate and exploit less-powerful regions of the world
poor countries are not developing, they are under-developed
under-development = global capitalism restructures the societies and infrastructure of less-powerful countries and regions in order to exploit their resources for the benefit of more powerful countries and regions
Africa developed Europe while Europe under-developed Africa
infrastructure of ‘under-development’: Africa’s railways at independence early 1960s = all railways (except for South Africa) run to coastal ports = good for exporting raw materials, but bad for developing integrated national economies
why is wealth distributed so unevenly around the world?
the modern world system
Immanuel Wallerstein
modern world system = global capitalist economy (since C16) characterized by division of labour that systematically benefits certain economies and states more than others
- core = advanced tech, strong states, tightly inter-connected to each other and to the periphery
- semi-periphery = middle tech, semi-strong states, semi-connected to core and periphery
- periphery = raw materials, weak states, connected to core but not to each other
economic exchange on unequal terms -> redistribution and concentration of wealth in core economies -> uneven political development
capitalist elites control the policies of core states: elites in periphery and semi-periphery share interests and values with elites in core states
semi-periphery reduces polarization -> less resistance to the system
the effects of the modern world system (as described by Wallerstein)
Rob Clark and Jason Beckfield (2009). A New Trichotomous Measure of World-system Position Using the International Trade Network. Int’l Jnl of Comparative Sociology 50(1): 5-38
Question =
Is the development experience of states shaped by their position in the core, semi-periphery and periphery zones of the world system?
method =
- trade data 1980-90 to position states in core, semi-periphery or periphery zones
- statistical analysis of relationship between position and growth in GDP per capita
- control variable: levels of secondary education
findings:
- divergence between zones: core states grow faster than semi-periphery, core and semi-periphery states grow faster than periphery
- secondary education affects growth in all 3 zones
- position affects growth, even when controlling for education
