By Shahab Sabahi –
Energy and Environment for Development – Research Group
The sociology of development literature identifies four
phases in the development of the capitalist world system; the
mercantile phase in the 16s and 19s, it was the transfer of an
economic surplus through looting and plunder, disguised as trade. The
characteristic commodities of this period were gold, sugar, spices and slaves.
The characteristic institutions were slave plantations and the plunder of
central and South American societies. Between 1800 to1950, the colonial
period, that witnessed the transfer of an economic surplus from
peripheral regions to the center through ‘unequal terms of trade’, by virtue of
a colonially-imposed international division of labor. In this harsh
perspective, the developed center provided the under-developed periphery with
simple manufactures, which were exchanged for food and raw materials, but the
colonies had to provide increasing volumes of primary exports to by the same
quantity of manufactured imports. The characteristic institutions were east
European wheat fields, Brazilian coffee plantations, Argentine beef ranches and
Lancashire cottons. The neo-colonial period took place between 1950 to1970 when the
transfer of an economic surplus from the periphery to the center through ‘technological
rents’. It means that when former colonies were given political independence,
they were ‘encouraged’ to retain economic links with their former occupying
power, and in some respects these economic linkages were strengthened through
aid and assistance packages. The latter occur when first world companies
establish plant in third world countries, to utilize their advanced
technologies and cheap, unskilled labor, thereby making high profits. The
characteristic institutions were ‘tied aid’ and ‘foreign direct investment’
(FDI). The main ideological terrain ranges over modernization theory and
dependency theory. The modernized trend is so-called: post-imperialism
has set out since 1970 onwards It
witnesses the transfer of an economic surplus from the periphery to the center
by debt repayments. The characteristic institutions were syndicated sovereign
lending and are debt rescheduling packages, with ‘IMF loans’. The main
ideological terrain concerns the differing interpretations of globalization.
What about now, the age of free trade and globalization? How
does the international socio-economic work? Who are dominant powers? How do
dominant powers control the socio-economic system?
The debate has been hot for and against the Marx’s
perspective on political economy. Marx believed that ultra-competitive nature
of capitalism would tend to depress the levels of profit in the capitalist
system. Industrial companies would tend to become dominated by the banks and
other financial institutions, which in turn would pour money into the
development of new markets and new sources of production overseas, where
materials were more abundant, labor cheaper, and demand for basic products
potentially infinite. As dependency theory concerns, there are those who have
followed Marx to argue that the capitalist powers did more damage in the
structure of economy through their dominance of politics and institutions,
leaving the structure and ideas that had much more to do with the needs of the
powerful banks than with other elements of the . Perhaps one can expect, after
the age of classic imperialism (annexation of colonies) and direct rule which
turned to be costly, the emergence of powerful banks and financial institutes
(in the shape of free trade and capital flow), which is cheaper, and involved
domination by unequal exchange.
In short, it sounds, nowadays, that the powerful institutes
(e.g. banks) use their control of trade and finance to gain excess from free
trade even by manipulating political systems. It may be thought, as some
suggests, much more of a political than an economic phenomenon; essentially a
political response to disturbances. But I am not convinced by this sort of
arguments and sill I believe that this stems from the nature of competition.
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