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
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
What are the main similarities and difference between the various theories of wealth accumulation?
Similarities
The south is lagging behind the industrialized north
World System and the Dependency Theory believe that the North acquire their wealth by exploiting the south
The south, most often disadvantaged, does not have the power to arise from their current situations
Differences
Economic Liberalism: The creation of wealth in the north doesn’t conflict with the creation of wealth in the south.
World System: The North gains their wealth by exposing the peripheral regions
Dependency Theory: The accumulation of capital
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.