world systems theory vs dependency theory

04 dez world systems theory vs dependency theory

The implications for my argument should be clear. 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). His argument rests on the idea that a process of surplus extraction occurs through trade and investment relations between rich and poor world. The work of Emmanuel (1972a; 1972b) and Amin (1976) was important in that they attempted to explain some of the mechanisms of underdevelopment that were largely absent in the work of Frank. 1998). Frank argues that the world-system has historically been centered on Asia, and that Europe only became the dominant power in the nineteenth century. Thus, from 1550 to 1800, Britain’s population tripled while the proportion of the labor force engaged in agriculture declined from 80 percent (1500) to 20 percent in 1850 (Overton 1996:8). Dependency and world systems theories share a common emphasis on global analysis and similar assumptions about the nature of the international system and its impact on national development in different parts of the world, but they tend to emphasize different political dynamics. These two approaches are diverse from each other; however there are notable similarities between them too. Indeed, since 1990, the growth of China’s exports in absolute amounts has exceeded that of the rest of the top ten leading manufacturing exporters from the developing world, and since 2000, the latter nine countries’ combined export share has fallen whilst China’s has risen (Eichengreen et al. The Intellectual Heritage of Dependency Theory 2.1. For Prebisch and Singer then, there were structured inequalities that pervaded the world economy, and modernization was a far more complex process than any simplistic modernization theory allowed. It typically treats the entire world, at least since the 16th century, as a single capitalist world economy based on an international division of labour among a core that developed originally in northwestern Europe (England, France, Holland), a periphery, and a semiperiphery consisting of core regions in decline (e.g., Portugal and Spain) or peripheries attempting to improve their relative position in the world economy (e.g., Italy, southern Germany, and southern France). 1991) applied not only to the developed countries, but also to many third world countries which experienced high rates of growth. It does, however, promote the crudest aspects of underdevelopment theory. World-system theory is in many ways an adaptation of dependency theory (Chirot and Hall, 1982). In the process, though, something was lost, not least a critical analysis of the neoliberal context of the world-system, which development studies was increasingly taking for granted by the 1990s. The semiperiphery had limited access to international banking and the production of high-cost, high-quality manufactured goods but did not benefit from international trade to the same extent as the core. If this was the case, then it is not clear why China did not develop and leave Europe (further) behind. This fact – and especially the rise of East Asia – was central to Marxist critiques of Frank which suggest that imperialism is the pioneer of capitalism (Warren 1973), but also neoliberal approaches briefly discussed (and challenged) below. This critique relates back to the argument that one needs to first focus on the relations of production rather than trade relations, in order to show that the early development of capitalist social relations led to the shift from absolute to relative surplus value extraction, and thus development based on the dynamic accumulation of capital. The increase in productivity and output allowed for a movement away from the countryside and into the towns, which could be sustained by increased agricultural output. But in practice, upgrading has occurred by states deliberately protecting themselves from import competition from established producers, via a process of import substitution industrialization. Third world industrialization was thus still development which ultimately reflected the interests of western (and Japanese) multinational companies, which were said to be the main agents of imperialism. 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). The ECLA The formulation of a distinctly Latin American school of development is intimately related to the ECLA. The argument of the dependency theorists is that, during the colonial period, the countries at the core have exploited the colonies and developed greatly. This argument has been implicitly revived in the context of debates over the origins of the great divergence between West and East within the capitalist world-system, as we will see below. Essentially, as we have seen, developed countries still tend to dominate in high value sectors, based on high barriers to entry, high startup and running costs, and significant skill levels. 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. Thus, beginning in the 1970s, theorists and practitioners heralded an export-oriented strategy as the way out of dependency. It may be the case that the rate of extraction of absolute surplus value is greater in poorer, than in richer countries (Dore and Weeks 1979), but this is offset by higher rates of relative surplus value in richer countries. Based on a study of trade in manufacturing goods from 1970 to 1987, Sarkar and Singer (1991) have claimed that the price of manufacturing exports from developing countries fell by an average of 1% a year. Both dependency theory and world systems theory suggest that resources are moved from an economic periphery to a central, First World economy. Dependency Theory II: Dependent Development? He is therefore sympathetic to Abu-Lughold’s (1989) argument that there was an Asia-dominated world economy from 1250 to 1350, but he challenges her claim that this went into decline after this period. If you need assistance with writing your essay, our professional essay writing service is here to help! In Dependency Theory the relationship is a simple colonizer-colony relationship. The result is that the ratio of advanced country prices to poor country prices is greater than the ratio of advanced country labor time to poorer country labor time, as embodied in specific commodities. And these concrete situations must be situated in the context of the capitalist world-system. Similarly, a process of surplus extraction may occur through unequal trade, in which the benefits of such transactions accrue to the rich country. The division of labour among these regions determined their relationship to each other as well as their type of labour conditions and political system. During the 1970s there also emerged a perspective that elaborated an account of capitalist exploitation of the periphery from the perspective of the system’s core. There are problems with these accounts, however, both historically and as an assessment of current realities. The critical discussion of the theories outlined in this essay suggests that we need to recognize the following. With some small variations, there has been a significant increase in shares by East Asian exporters to the rest of the region, while EU and US shares (either taken together or individually) have generally fallen or stagnated (Athukorala 2003:40–1). Emmanuel argued that poorer countries lose out in relative, rather than absolute terms (Frank’s argument), due to a process of unequal exchange. At www.rrojasdatabank.org, accessed Jul. As we saw earlier, world-systems theory was developed by Wallerstein in the 1970s and, initially at least, had quite similar arguments to those of Frank’s underdevelopment theory. 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. Once again, if dependency is regarded less as a dogmatic theory of underdevelopment, and more as a starting point for understanding concrete situations of uneven development, then the idea appears to retain some relevance. It was also further reinforced by higher wages in the core countries, an argument further (problematically) made by theories of unequal exchange associated with Emmanuel and Amin in the 1970s. At the same time, land productivity increased in China through an increase in the land under cultivation, but labor productivity did not (Elvin 1973; Allen 1992:73–4). be achieved through either the Modernization Theory, a view from the Global North, or the Dependency Theory, a view from the Global South. In the case of buyer-driven chains, barriers to entry are generated at more intangible levels, such as marketing and design (Gereffi 1994; Dicken 2003; Kaplinsky 2005). In Asia, and especially East Asia, things were different, however, and this region is now set to challenge US hegemony, which is in decline, and which has further been eroded by the military adventurism of the Bush II administration. It was further reinforced by aid practices by the rich countries, which were often tied to strategic (Cold War) and/or commercial interests, so that for instance aid was often tied to the recipient country buying goods from the sending country. This brief discussion demonstrates that later capitalist development does indeed differ from earlier periods of capitalist development, and this was one of the main issues highlighted by the idea of dependency. The second theory, Wallerstein’s World Systems Theory, divides the …show more content… The Dependency Theory can be applied to this situation, as most resources were going to Britain from colonies under their control, such as India. At www.cepr.net, accessed Jul. Modernization theory is subject to criticism originating among socialist and free-market ideologies, world-systems theorists, globalization theorists and dependency theorists among others. 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. Drawing on themes developed in his earlier work (Arrighi 1994), Arrighi argues that an ongoing sequence of capital accumulation has historically been accompanied by the rise and fall of hegemonic powers. The critique to Modernization theories centers to its conception of linear, progressive and cumulative time. Initially, the logic of these perspectives supported a strategy that came to be known as import-substitution industrialization (ISI). For dependency theory proper, the argument concerning structured inequalities was accepted, but the solution to this problem – ISI – was regarded as being part of the problem by later dependency writers. Gereffi (1994) has argued that there are two types of commodity chain, those that are producer driven and those that are buyer driven. The crucial point is that the fact of capitalist development is indisputable, whatever one thinks of the social consequences of such development. There is some disagreement as to whether it will be Europe (Wallerstein 2003) or (part of) Asia that will replace it, but some of the most interesting work focuses on the rise of Asia. Moreover, while growth rates did diverge considerably among developing countries, with East Asia doing particularly well in this period, they were still quite high throughout the developing world. This argument was even be applied to the success stories in East Asia, as these were said to be the result of multinational companies relocating from first to third world, in order to “super-exploit” cheap labour in the latter countries. They also did not occur in independent Latin America, where dominant classes happily imported manufactured goods and derived their wealth from ownership of land (Cardoso and Falletto 1979). This site has links to articles that, to varying degrees, are influence by world-systems analysis. Unless accompanied by radically different social policies, ISI is unlikely to alter this growing trend. In many ways, Warren’s view was simply an inversion, a mirror image of the crudest version of dependency theory: both constructed a norm, and then argued about whether or not third world countries were conforming to, or deviating from, that norm (Gulalp 1986). More generally, in contrast to NIDL theory it could be argued that dependency reflected the concentration of capital in the already developed world, rather than its dispersal to the developing world. With the world growing rapidly all across the globe and the enhanced integration of countries there has been very brisk development in the past six decades. A more nuanced approach to understanding dependency suggested that development and dependence were in some respects compatible. First of all, dependency theory is the study of world perception. For China, the figure was 17% (Athukorala and Yamashita 2005:33). Dependency and world system theory propose that the poverty and backwardness of poor countries are caused by their peripheral position in the international division of labor. China’s growth in manufacturing exports must at least in part be explained through its (subordinate) role in East Asian production networks, and it essentially concentrates on exporting the lower value end of such goods. If this was the case, then we would expect the direction of capital to flow from rich to poor world, and most trade to take place between these two regions, in order to facilitate the process of surplus extraction that is said to lead to development and underdevelopment. Arrighi has himself usefully shown (Arrighi et al. John Rapley (2007) too has tried to explain that the new theories like Modernization Theory and Dependency Theory form the past try to explain the relationship existing between various countries in the world and why there exist a difference between the Third World countri… 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. In the context of the increased global integration that characterizes the current world-system, dominant economic and political actors in the developing world want access to international circuits of capital, and therefore may support neoliberal policies (Albo 2003). In development studies, these challenges have generally been viewed as so great that the theories have effectively ceased to be of any use in the discipline – a view that this essay challenges. While both Emmanuel and Amin made a more rigorous attempt to explain processes of surplus extraction, their explanations were still unconvincing. Contra Arrighi, however, it can be argued that China’s rise is not so much a break from this trend, but rather is compatible with it. 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. The strategy is based on lower wages and levels of domestic consumption (at least initially) to foster competitiveness in world markets, as well as to provide better conditions for foreign investment and foreign financing of domestic investment. Both dependency theory and a world‐systems perspective arose from perceptions that theories derived from the historical experiences of the peoples of northwestern Europe and their offshoots in North America were not universal and were not applicable to the peoples of the non‐Western world. The second theory, Wallerstein’s World Systems Theory, divides the…show more content… Both agreed that this resulted in surplus extraction from satellite to metropolis. This hardly paints a picture of efficient China and inefficient Europe, however. (15) Dependency theory was developed by a man named A.G. Frank. 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. The mechanisms of how surplus is extracted are not entirely clear, but they could presumably refer to the fact that multinational companies may invest so much in a poor country, but they export more money in terms of profit repatriation. In this context, an unequal exchange occurs because poor countries exchange goods in which more labor time is embodied for goods which are the product of less labor time. This in turn meant that there was a need to concretize uneven development, both internationally and within specific nation-states. The central argument of this theory is that the world economic system is highly unequal in its distribution of power and resources due to factors like colonialism and neocolonialism. Once this reshaping was accomplished, market forces worked to perpetuate the relationship of dominance and exploitation between centre and periphery. 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. This essay examines the rise and apparent fall of two related “radical theories” of development, dependency and world-systems theory. This has clear implications for understanding development in the current era, and this will be discussed below. In the period from 1992 to 2003, parts and components accounted for 52% (Taiwan), 44% (Malaysia), 70% (Philippines), 59% (Singapore) and 31% (Thailand) of the total manufacturing export growth for particular countries. 2009. Taken together, these figures suggest that China has increased its role as a manufacturer of final goods produced within the East Asian region, which are exported to the EU and US (and Japanese) markets. 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