ECONOMIC LIBERALISM
- The south is lagging behind the industrialized north, but it’s not significant compared to the total economic growth
- Most efficient for maximizing capital accumulation and economic growth
- Believes in positive gain, mercantilism, and neoliberalism, concentration of wealth
- Promotion of economic freedom and limited government intervention
- Wants an open world economy where there’ free trade and free capital flow
WORLD SYSTEM
- Class divisions are regionalized
- South extract raw materials, work that uses much labor and little capital with low wages
- Industrialized regions manufacture goods, work that uses more capital, requires more skilled labor, and pas workers higher wages
- Core: regions for manufacturing
- Periphery: Regions for extraction
- Semiperiphery: Area in which some manufacturing occurs and some capital concentrates, though not as advanced as cores
- The core uses its power to concentrate surplus from the periphery
- Capitalist World Economy
- The industrialized West exports more than it imports in machinery, chemicals, and heavy manufactured goods
- Having exportable natural resources would seem a big plus for an economy, but the problems of basing economic growth on resource exports have been called the resource curse
DEPENDENCY THEORY
- Accumulation of capital cannot sustain itself internally
- Enclave economy:
- Foreign capital invested in a third world country to extract raw material
- Leaves the country’s economy untouched except to give employment to a few local workers and to provide taxes to the state
- State’s natural resources depleted
- Second form of dependency:
- Local capitalists class controls a cycle of accumulation based on producing export products
- The cycle depends on foreign markets, but the profits accrue to the local capitalists, building up a powerful class of rich ownership
- This class tends to behave in a manner consistent with the interests of rich industrialized countries
- Third form of dependency:
- Penetration of national economies by MNCs
- Capital is provided externally, but production is for local markets
- The cycle depends on local labor and local markets, they take out much of the surplus as profits
- Class struggle as a source of social change
What are the main similarities and difference between how various theories of wealth accumulation explain the North-South gap? There are a few main similarities and differences between the various theories of wealth accumulation: Economic Liberalism, World System, and the Dependency Theory. Firstly, the south is lagging behind the industrialized north is agreed upon. Even though the World System and the Dependency Theory believe that the North acquire their wealth by exploiting the south, it is for different reasons. Economic liberalism believes that the creation of wealth in the north does not conflict with the creation of wealth in the south. The World System theory believes that the North gains their wealth by exposing the peripheral regions. The Dependency Theory believes in the accumulation of capital.
Which theory (or theories) the video implicitly employs to explain the causes of wealth accumulation and poverty.
The theory the video implicitly employs to explain the causes of wealth and accumulation and poverty is the world-system theory. The video includes the different classes: the core countries such as United States, and the United Kingdom, periphery countries such as Africa, and semiperiphery countries such as Taiwan and most of Eastern Europe. The video explains that the causes of wealth and accumulation and poverty is due to raw material extractions from the periphery countries which is then exported to the core countries. Meanwhile, the semiperiphery countries act as the barrier between the core and the periphery since it gives the periphery countries an opportunity to rise out of poverty. This is why this video uses the World System theory.