world systems theory vs dependency theory

04 dez world systems theory vs dependency theory

For some versions of dependency theory, this led to the argument that development could take place, but it was somehow subordinate or dependent, while others suggested that development was impossible so long as the nation-state remained part of the capitalist-dominated world economy. It was further developed in the 1970s by Walter Rodney (1972), Samir Amin (1976) and Arghiri Emmanuel (1972b). These two approaches are diverse from each other; however there are notable similarities between them too. This section takes issue with this view and suggests that, theoretical weaknesses notwithstanding, in a time of neoliberal globalization, the utility of the concepts of dependency and the world-system is potentially greater than ever. Indeed it will be … Unless accompanied by radically different social policies, ISI is unlikely to alter this growing trend. Both theories were also problematic in their assumption that unit labor costs are lower in the poorer countries than in the richer ones. In the core, strong central governments, extensive bureaucracies, and large mercenary armies enabled the local bourgeoisies to obtain control of international commerce and accumulate capital surpluses from this trade. However, world-systems analysis retains considerable influence, and it developed in new ways, less as a rigid theory based on three zones in the world economy, and more as a looser frame of analysis. Dependency writers rejected this approach, suggesting that developed and backward regions could not be divided in such a fashion, and that instead there was a close, and perhaps even a causal, relationship between development in some eras, and so-called backwardness in others. In other words, the trade deficit was insignificant from Europe’s point of view. But it does mean that the globalization of circuits of capital has undermined the prospects of the emergence of a “national bourgeoisie,” committed to nationalist, productive capitalist development. The existence of the Soviet Union, and the capacity of states to play off one superpower against another, gave further impetus to ISI policies. Though there are important differences among proponents of this approach (see Bair 2009), the basic argument is that production processes are no longer confined to national boundaries, but are instead linked through a chain, “a transnationally linked sequence of functions in which each stage adds value to the process of production of goods or services” (Dicken 2003:14; see also Gereffi and Korzeniewicz 1994; Dicken et al. In the field of development studies, globalization tended to be regarded as something that simply existed, to which particular localities responded in ways which would enhance or hold back development. Journal of World-Systems Research. Maddison (1998:25) suggests that per capita income in China remained unchanged from 1280 to 1700. Frank also repeats his arguments that the extraction of surplus from the periphery was the crucial factor in financing the development of the (new, European) core (1998:294–7). In the postwar period, with the emergence of the multinational company and foreign investment in manufacturing, extraverted accumulation continues in new forms. This site contains many data-led publications. Second, this does not necessarily mean that such development has replicated earlier processes of capitalist development in the developed countries. Thank you for your attention! The argument of the dependency theorists is that, during the colonial period, the countries at the core have exploited the colonies and developed greatly. Ironically, the return of “big picture” analysis such as that associated with the idea of globalization did not reverse this picture, not least because that particular concept continually suffered from a lack of clarity, above all in terms of its status as an explanatory concept (Rosenberg 2005; Kiely 2005). Although there are clear differences between the two (Arrighi 1999), Giovanni Arrighi (2007) also argues that the era of European–US dominance is coming to an end. World Systems Theory was developed by Immanuel Wallerstein (1979). In particular, it will briefly suggested that while theories of both dependency and the world-system were full of problems and deserved a great deal of criticism, the concepts of dependency and the world-system may retain some valuable insights in their attempts to theorize concrete situations of dependency in the context of uneven development in the capitalist world-system. The essay then moves on to review and critically examine world-systems analysis, focusing on the rise and fall of hegemonic powers, and specifically the rise (or revival) of East Asia, and the utility of commodity chains analysis. World-system theory is in many ways an adaptation of dependency theory (Chirot and Hall, 1982). On the other hand, the assumption that the expansion of capitalism will mean a progressive convergence between countries is also problematic, and here we can locate the strength of dependency and the world-systems as a method of analysis. However, both theories remain useful for understanding the current global order. Like Rodney, Frank developed a grand theory of underdevelopment, which argued that the international order had been capitalist since the sixteenth century. They are also compatible with the idea that dependency retains some utility as an idea that attempts to think critically about understanding concrete situations of uneven development in the capitalist world-system today (Palma 1978; Saul and Leys 2007). As industrialization (and now post-industrialization) has swept the globe, measured in terms of proportion of total employment, the absorption of labor forces by manufacturing has gradually declined. The shares of transnational manufacturing affiliates in China’s exports increased from 17.4% in 1990, to 55% in 2003 (Hart-Landsberg and Burkett 2005:125). This is also the view of another writer working in a broadly world-systems framework of analysis, Giovanni Arrighi (1994; 2007). Rather it suggests that if one focuses on the social relations of production, then it is clear that the emergence of capitalist social relations in Europe were the main reason for the divergence between Europe and Asia. This is the subject of the final section. He also suggests that the period of Euro-American dominance is coming to an end. By signing up for this email, you are agreeing to news, offers, and information from Encyclopaedia Britannica. Europe did run a trade deficit with Asia, but as Frank himself at one point suggests, Europe’s share of world trade was 69 percent, while Asia’s share stood at only 11 percent (Frank 1998:198). Nonetheless, his argument that capitalism is a world-system remains influential and is discussed in depth below. Emmanuel argued that poorer countries lose out in relative, rather than absolute terms (Frank’s argument), due to a process of unequal exchange. As world-systems analysis has pointed out (Hopkins and Wallerstein 1986), these chains are not necessarily new, and production processes have long drawn on the supply of raw materials from overseas producers. Focusing on the ways in which imperialism allegedly held back capitalist development played into the hands of nationalist mythologies (Kitching 1989; 2001), which could become self-fulfilling prophecies as states adopted policies which held back further capitalist development in the name of a spurious anti-imperialism. Modernization theory vs Dependency theory While many theorists have numerous explanations towards underdevelopment, experts like David Brooks and Peter Hallward have described the natural disaster in Haiti to be brutally destructive primarily due to its poverty. But the rise of global production networks does at least qualify notions of China’s rise, and its economic success must in part at least be located in the context of the globalization of manufacturing production. In terms of their specific development in the 1960s onwards, dependency and worldsystems theories emerged in part out of a critique of modernization theory. Oxford Research Encyclopedia of International Studies, School of Politics and International Relations, Queen Mary University of London, The Origins of Dependency and World-Systems Theory, Dependency Theory I: Underdevelopment Theory. The first of these theories is Andre Gunder Frank’s Dependency Theory, which revolves around the idea of resources from poor, underdeveloped states (the periphery) going to the wealthy states (core), giving the wealthy states most of the benefits. Underdevelopment theory is particularly associated with Paul Baran’s The Political Economy of Growth, and even more with the 1960s and 1970s work of Andre Gunder Frank (1969a; 1969b). He made a number of assumptions that challenge orthodox trade theory: capital is internationally mobile while labor is (relatively) immobile, and this led to a tendency for profit rates to equalize across countries. The practical premises of both are the same, as one should expect given that world-systems theory is essentially building on top of and with dependency theory. The problem with such arguments, however, is that while such practices may indeed occur, they are not sufficient to establish as stark a dichotomy as that of development in one location, and underdevelopment in another. However, a more nuanced approach to understanding dependency suggested that development and dependence were in some respects compatible (Cardoso and Falletto 1979; Evans 1979). At the same time, parts and components in China’s share of exports to the US (4.3% to 9.1%) and to the EU (2.9% to 10.9%) increased from 1992 to 2000, but from far lower bases and the total shares remained low (Athukorala 2003:48–9). The implications for my argument should be clear. Other studies have supported the claim that the price of simple manufacturing exports from developing countries have tended to fall against more complex manufacturing and services from developed countries (Maizels et al. The pattern we now see is one of urbanization without high rates of industrialization, and the development of cities of slums (Davis 2004; Bernstein 2004; Kiely 2008). At http://jwsr.ucr.edu/index.php, accessed Jul. Both dependency and world-systems analysis suggest that this is not the case, and (as well as outlining further the contentions of both approaches), the rest of this essay discusses why they argue this, and why they are right to do so. be achieved through either the Modernization Theory, a view from the Global North, or the Dependency Theory, a view from the Global South. This strategy gives priority to the growth of manufacturing production aimed at world markets and the development of a particular comparative advantage as a basis for success in world trade. For Frank this divergence occurred because higher wages in Europe stimulated innovation, while lower wages in China made it rational for innovation not to take place. … This will be illustrated by examining the relationship between the globalization of production and neoliberalism. The first-tier East Asian NICs, or at least South Korea and Taiwan, essentially took off through state-directed policies in alliance with national capital, a strategy which broke down in the early 1990s (prior to the financial crash of 1997). The internationalization of capital after 1945 was actually characterized by the increasing concentration of capital within the rich world, and most trade (measured in value terms) was between rich countries. For example, it was possible for multinational companies to promote development in the third world, but this development remained dependent on the core countries. Dependency theorists tend to focus on the power of transnational classes and class structures in sustaining the global economy, whereas world systems … In particular, A. G. Frank proposed the idea that development and underdevelopment are two sides of the same coin. In effect, the virtuous circle of capitalism, industrialism, and militarism driven by interstate competition was eroded by a crisis of legitimacy, a new Asian hybrid of industrious and industrial revolutions, nationalism in the third world, and, in the context of increased global integration, the erosion of the synergy between financial and military capabilities which had served to keep West ahead of East. In contrast to Warren, this meant recognizing that uneven development was not simply a product of the backwardness of capitalism in some places, but was intrinsic to the way that capitalism functioned throughout the globe. Drawing on Marx’s apologies for colonialism on the grounds that this led to capitalist development in the “backward countries,” Bill Warren (1980) argued that it was clear that in the post-1945 period, imperialism was indeed the pioneer of capitalism. 2009. ECLA argued that colonization restructured former colonies’ economies so that they specialized in producing raw materials, cash crops, and foodstuff for export at low prices to the colonizers’ home countries. This is not to deny the importance of foreign capital or trade to poorer countries, but it is to deny the starkness of a theory which suggests that the developed world is only developed because it has underdeveloped the poor world. The section thus starts by outlining the broad claims of the theories, challenging them, and then showing potential responses to these problems. The second theory, Wallerstein’s World Systems Theory, divides the…show more content… However, it does not explain on a global scale where the resources, … Dependency theory, sometimes called foreign dependency, is used to explain the failure of non-industrialized countries to develop economically despite investments made into them from industrialized nations. Economic growth was controlled by forces outside the national economy. What then of the current era? The essay then reflects on the discussion and suggests that, despite some serious weaknesses, both theories remain useful for understanding the current global order. Some “stronger” versions of dependency, associated with underdevelopment and world-systems theory, have been introduced in recent years. We can start by returning to the Prebsich–Singer thesis, but updating it to take account of new realities in the global economy. Frank argued that this process of surplus extraction occurred within countries too, but it was also clear that his hierarchy of metropoles exploiting satellites could be applied more to the division between rich and poor countries. Modernization theory claimed that once developing societies came into contact with western European and North American societies, they would be impelled toward modernization and, eventually, would achieve the economic, political, and social features characteristic of the nations of western Europe and the United States. According to Griffiths (2005;169) it challenged the dominance of the modernization strategies in the mid 20th century as the integration of the peripheral countries into the world system led to neo-colonialism … (15) Dependency theory was developed by a man named A.G. Frank. In this way, aid too was a postwar manifestation of capitalist imperialism (Hayter 1971; 1985). He suggested that there was a tendency for the terms of trade to decline as against those of manufactured goods, and argued that this was because of the intense competition that existed between many primary goods producers, as opposed to the relatively few manufactured goods producers. Over time, the world has been turning into a global scene in which various transformations have been made in respect to the way people, entities, institutions and governments carry on their transactions. Its main tenet is that the periphery of the international economy is being economically exploited (drained) by the centre. This concentration reflected the increased capitalist nature of English farming, which meant that the context of competition encouraged investment in new, productivity-enhancing methods, which was further facilitated by the concentration of farmland which arose out of the competitive process. World-systems analysis has developed a broad programme for understanding the rise and fall of hegemonic powers. According to Wallerstein himself, critique of the world-systems approach comes from four directions: from the positivists, the orthodox Marxists, the state autonomists, and the culturalists. These problems are most clear when we actually examine the nature and direction of capital flows and trade in the postwar international order. These include Andre Gunder Frank, Fernando Henrique Cardoso, Theotonio Dos Santos, Walter Rodney, Samir Amin, Arghiri Emmanuel, and Immanuel Wallerstein. A transfer of surplus thus occurs from the poor to the rich countries because profit rates equalize in the context of international capital mobility. How then can the ideas of dependency and the world-system retain any validity in this context? Then, despite Africa's troubles, other countries thrived despite the influence of foreign dependency. Much the same point can be made in distinguishing between world-systems theory and world-systems analysis, as shown below. Building on ECLA’s perspective, dependency theorists argued that colonialism recast economies in the Third World in a highly specialized export-producing mold, creating fundamental and interrelated structural distortions that have continued to thwart development. It does, however, promote the crudest aspects of underdevelopment theory. Wallerstein draws heavily from dependency theory, a neo-Marxist explanation of development processes, popular in the developing world, and among whose figures are Fernando Henrique Cardoso, a Barzilian. Liberally borrowing from Baran’s concept of economic surplus, Frank argued that the developed countries were developed because they extracted the economic surplus produced by the poorer countries. World systems theory is a response to the criticisms of Dependency Theory (and for the purposes of the exam can still be treated as part of Dependency Theory). While both Emmanuel and Amin made a more rigorous attempt to explain processes of surplus extraction, their explanations were still unconvincing. Thus, beginning in the 1970s, theorists and practitioners heralded an export-oriented strategy as the way out of dependency. On the other hand, this then begs the question of whether the expansion of capitalism beyond national borders leads to the progressive diffusion of a dynamic capitalism throughout the world-system. What is relatively novel, however, is that now (parts of) manufacturing production can be located in different parts of the world, so that final products can be made up of industrial components from different parts of the globe. However, the period from the 1970s, and especially the early 1980s, onwards, saw a period of neoliberal restructuring which radically altered the context in which capitalist development took place. Indeed, between 1992 and 2000, these accounted for 55% of the export growth of Indonesia, Thailand, Malaysia, Singapore, the Philippines, and Vietnam (2003:33). The critical discussion of the theories outlined in this essay suggests that we need to recognize the following. In World-System Theory it is a more complicated relationship where domination is accomplished through financial institutions, exploiting cheap labor, making high margins on capital investment, buying talent, international institutions, and finding consumer markets. 4.8K views Collectively, these theories contrast modernization A movement out of agriculture into manufacturing, in which the latter was characterized by increasing returns, linkages, and higher productivity, and was reinforced by the rise of organized labour as production was socialized, was a recipe for some form of progress, albeit with many social costs along the way. First, neoliberal policies exaggerate the ease by which liberalization policies will lead to countries breaking into export markets, and thus ultimately converging with already rich countries. For China, the figure was 17% (Athukorala and Yamashita 2005:33). Economic Commission for Latin America and the Caribbean. Both agreed that this resulted in surplus extraction from satellite to metropolis. In opposition to earlier debates over the links between deindustrialization in the developed world and the rise of manufacturing in the developing world, one interesting development in recent years (1995–2002) has been a decline in formal sector manufacturing, not only in the developed world, but also, it appears, in China (1995–2002) and India (1996–2002). Does, however, dependency theory and world systems theory by Nasrullah Mambrol on 12! Societies were not so much undeveloped as underdeveloped, and suggested that development and underdevelopment it on capital! From 1945 to the Prebsich–Singer thesis, but this is even more has. More with the views outlined in this contemporary context problems are most clear when we actually examine the and. Player in the postwar international order had been capitalist since the capitalist world evolved! 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