‘Global inequality is caused by capitalist exploitation of developing countries.’ Evaluate this view
CAMBRIDGE
A level and AS level
2022
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Introduction
This essay will evaluate the view that global inequality is caused by capitalist exploitation of developing countries. It will examine the arguments of dependency theory, which posits that the capitalist system inherently benefits richer nations at the expense of poorer ones, leading to their perpetual underdevelopment. The essay will also consider contrasting perspectives, such as modernization theory and world systems theory, to provide a more nuanced understanding of the factors contributing to global inequality.
Arguments in Favor of Capitalist Exploitation
Dependency theory argues that global capitalism operates as a system that systematically disadvantages developing countries. This view is supported by:
• Marxist sociologist Andre Gunder Frank's argument that global capitalism has intentionally underdeveloped poorer countries to benefit richer ones.
• The legacy of colonialism, which has left developing countries dependent on Western economies through neocolonialism.
• Political corruption in developing countries, which often hinders efforts to eliminate poverty and modernize.
• Unequal terms of trade, where developing countries receive unfair prices for their raw materials and cash crops, while Western corporations benefit from cheap labor.
Arguments Against Capitalist Exploitation
Critics of the dependency theory argue that other factors play a significant role in explaining global inequality, including:
• Modernization theory, which emphasizes the importance of cultural factors and suggests that adopting Western values and institutions can lead to economic development.
• The positive impacts of globalization, including increased trade, investment, and technological transfer, which have led to improvements in living standards in some developing countries.
• The contribution of transnational organizations, such as the IMF and World Bank, which have provided aid and support to developing countries.
• The success of some developing countries, such as Singapore, South Korea, and the UAE, which have adopted aspects of modernization theory and achieved significant economic growth.
The Interconnectedness of the Global Economy
The essay will explore the complex relationships within the global economy, examining the argument that interdependence can benefit all countries involved. It will also discuss:
• Immanuel Wallerstein's world systems theory, which suggests that global capitalism perpetuates inequality by concentrating wealth and power in core nations while exploiting peripheral nations.
• The potential for mutually beneficial relationships within the global economy, while acknowledging the potential for exploitation and inequality.
Conclusion
The essay will conclude by evaluating the relative strengths and weaknesses of different perspectives on global inequality. It will acknowledge the complexities of the issue, considering both structural factors and cultural influences, while ultimately assessing the extent to which capitalist exploitation is a primary driver of global inequality.
Global Inequality and Capitalist Exploitation
The assertion that global inequality stems primarily from capitalist exploitation of developing nations is a contentious one, deeply rooted in dependency theory. This essay will evaluate this viewpoint, considering arguments both for and against, ultimately concluding that while capitalist exploitation undeniably contributes to the problem, it is an oversimplification to identify it as the sole or even primary cause.
Arguments for Capitalist Exploitation as the Root Cause
Dependency theorists, drawing heavily on Marxist thought, present a compelling case. Andre Gunder Frank, a prominent voice in this school, argues that global capitalism inherently necessitates the underdevelopment of poorer nations to fuel the wealth of the developed world. He posits that this exploitative system, rather than internal factors within developing nations, is the root cause of their inability to achieve substantial economic growth.
Historical context lends credence to this perspective. The legacy of Western colonialism, as Frank and others highlight, casts a long shadow. The systematic extraction of resources and suppression of local industries during colonial rule left many nations ill-equipped for economic self-sufficiency post-independence, creating a state of neocolonial dependence.
Furthermore, the dynamics of global trade often disadvantage developing nations. As these countries primarily export raw materials and low-value goods while importing manufactured goods from developed nations, they find themselves trapped in a cycle of unfavorable terms of trade. Western transnational corporations, seeking to minimize costs, often exploit cheap labor in developing countries, further perpetuating the cycle of inequality.
Counterarguments and Alternative Perspectives
However, attributing global inequality solely to capitalist exploitation risks overlooking crucial nuances. Modernisation theory, while acknowledging historical injustices, posits that internal factors within developing nations play a significant role.
Proponents of modernisation theory argue that cultural factors, particularly the adoption of Western neoliberal values like individualism, free markets, and democracy, are crucial for economic growth. While this view has been criticized for its Western-centric bias, the rapid development of nations like Singapore, South Korea, and China, which have embraced certain Western values while adapting them to their contexts, suggests that culture cannot be discounted.
Moreover, the success of some developing nations in improving living standards, albeit unevenly, challenges the notion of an inescapable cycle of dependency. The role of Western aid, foreign direct investment from transnational corporations, and support from institutions like the World Bank, however flawed, in fostering development in some parts of the developing world cannot be ignored.
World Systems Theory: A Nuanced Perspective
Immanuel Wallerstein's world systems theory offers a more nuanced perspective. It acknowledges the exploitative nature of capitalism but emphasizes the interconnectedness of the global economy. Wallerstein argues that the capitalist system inherently creates a hierarchical structure, with core nations (developed economies) at the top, periphery nations (developing economies) at the bottom, and semi-periphery nations in between. This structure, while exploitative, also implies a degree of interdependence.
Conclusion
In conclusion, while the argument that capitalist exploitation is the sole cause of global inequality is overly simplistic, it undeniably plays a significant role. The historical legacy of colonialism, unfavorable trade structures, and the exploitative practices of some transnational corporations contribute to the economic challenges faced by many developing nations. However, focusing solely on external factors risks overlooking the role of internal factors like governance, corruption, and cultural barriers to development. A comprehensive understanding of global inequality necessitates considering both internal and external factors, acknowledging the complex interplay of historical legacies, economic structures, and cultural contexts.
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Global Inequality is caused by capitalist exploitation of developing countries. Evaluate this view.
This question requires candidates to demonstrate an understanding of different approaches to explaining global inequality. Good answers will be aware that dependency theory attributes primary importance to the role of capitalist exploitation in explaining global inequality. The theory argues that rich countries benefit from a system of global inequality that ensures less economically developed countries remain poor.
Some critics claim that dependency theory exaggerates the importance of structural factors in explaining global inequality. For example, supporters of modernization theory argue that cultural factors play a major role in explaining why some countries develop rapidly while others remain poor. Candidates may draw on contrasts between dependency theory and modernization theory in developing an evaluation of the view on which the question is based.
Comparisons between dependency theory and Wallerstein’s world systems theory could also be used in developing the evaluation.
For:
- Marxist sociologist Frank argues that global capitalism has systematically under-developed the economies of poorer countries in order to benefit the economies of the richer nations. This capitalist exploitation has left poorer countries unable to generate significant economic growth, no matter how hard they try or what value systems they adopt.
- Frank and others have pointed out that Western colonisation has had a particularly destructive and exploitative impact on many poorer countries. Colonisation significantly undermined any opportunity poorer countries had to achieve rapid economic development and it has a lasting legacy in ensuring these countries remain dependent on rich Western countries after the end of the colonial regime (a situation referred to as neocolonialism).
- The dependency of less economically developed countries is exacerbated by political corruption. For example, entrenched religious and military elites often operate in poorer countries and their interests are not necessarily aligned with efforts to eliminate poverty among their people or to modernise the economic base of the country.
- Terms of world trade favor Western economies, and poorer societies consequently do not get a fair price for their raw materials or cash crops. Western TNCs also benefit from the cheap labor available in less developed economies.
Against:
- Modernisation theory draws attention to the importance of cultural factors in understanding the development process. Modernisation theorists may have exaggerated the importance of Western neoliberal values for economic growth in the developing world, but a combination of Western ideas with some traditional values and religious influences has proved a potent mix in helping some poorer countries to advance, China being a particular example. Recognizing the contribution of the cultural dimension in development provides a counter to the emphasis in dependency theory on structural factors as the underlying cause of global inequality.
- Claims by Marxist sociologists that modernisation theory is too optimistic about the chances of poorer countries escaping from global poverty may be unjustified. There have been some improvements in the standard of living of the poor in many developing countries and TNCs, western aid projects, and support from capitalist-leaning transnational organizations, such as the IMF and World Bank, would seem to have contributed to this positive development. Moreover, there is some evidence that the most economically successful countries in the developing world have made a concerted effort to adopt some or all of the cultural changes advocated by modernisation theorists. Examples include Singapore, South Korea, and the UAE.
- 'Dependency' is an extremely difficult concept to operationalize and, therefore, test or measure empirically.
- The interconnectedness of the global economy means that capitalist economies are often interdependent. Some commentators see these relationships of interdependence as mutually beneficial to all the countries involved. However, other sociologists have argued that the interdependence benefits the richer countries at the expense of the poorer ones. This point is developed by Immanuel Wallerstein in his world systems theory. He argues that the capitalist economic system is becoming increasingly global in its search for profit. In turn, this is leading to rich countries increasingly focusing on higher skill, capital-intensive production, and the rest of the world focusing on low-skill, labor-intensive production and extraction of raw materials. This constantly reinforces the dominance of the rich countries and condemns workers in poorer countries to a life of exploitative, insecure low-wage employment.
- It may be mistaken to see the impact of colonization on developing societies as wholly negative. Goldthorpe has argued that the British brought much-needed infrastructure to their colonies in the form of railways, roads, telecommunications, schools, and ports.