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THEORIES OF DEVELOPMENT I

( CLASSICAL THEORIES OF SOCIAL CHANGE AND DEVELOPMENT)

COMPARATIVE THEORIES OF DEVELOPMENT II


(CONFLICT AND MODERNIZATION THEORIES)

COMPARATIVE THEORIES OF DEVELOPMENT III


(HUMAN CAPITAL THEORY AND CAPITALISM)

1 FEUDALISM
i. Characteristic/Definition
The definition of Feudalism is described as land is an exchange for service given and
loyalty is rendered in exchange for protection and power. Society in a decade lived in
different classes of hierarchy.
Levi Roach, (2015) explained in his abstract that Feudalism has a wide variety of
meanings. Traditionally it refers to the socio-political order of Western Europe in the
central and later Middle Ages (c.9001500), though it has also been used to characterize
pre-modern Asian and African societies displaying similar features. The nature and
relevance of feudalism as a model has been a subject of much debate and it is important to
distinguish between three distinct (though broadly related) understandings of the term: the
Marxist conception of feudalism as an economic system based on the feudal mode of
production, the social historical model of feudal society as something approximating a
Weberian ideal type, and the legal definition of feudalism as a form of service tenement
based on the property of land (fief historical word for land).
A simple definition of feudalism from Merriam-Webster's Learner's Dictionary ; it is a
social system that existed in Europe during the Middle Ages in which people worked and
fought for nobles who gave them protection and the use of land in return the dominant
social system in medieval Europe, in which the nobility held lands from the Crown in
exchange for military service, and vassals were in turn tenants of the nobles, while the
peasants (villains or serfs) were obliged to live on their lord's land and give him homage,
labour, and a share of the produce, notionally in exchange for military protection.
Therefore, Feudalism society more focused on the power of protection.
According to the legal model, feudalism is characterized above all by feudal tenure: it is a
system of land holding based on fiefs/property or benefices (beneficia (singular:
beneficium): the latter term predominates in sources before the eleventh century),
a form of conditional tenure, generally for one or more lifetimes. For tenure to qualify as
truly feudal, however, the tenant must not only hold his land as a fief or benefice, but
also be the vassal of his landlord. Thus feudalism combines a tenure agreement with a
social bond (in the technical language of feudal law these are referred to as enfeoffment
and vassalage respectively). Traditional teaching holds that enfeoffment and vassalage
were originally distinct, but came to be associated in the course of the seventh and eighth
centuries, when the powerful Carolingian dynasty came to prominence in mainland
Europe. This period saw much infighting within France (a region encompassing much of
modern France as well as parts of Germany, the Low Countries, Switzerland, Austria, and
northern Spain) as well as the rapid expansion of the Frankish realm from 751 onward.
As a consequence, the traditional wisdom vassalage and fief-holding became associated:
in order to attract ever larger numbers of warriors, the Carolingian rulers rewarded their
followers with temporary landholdings in the form of benefices (generally taken from the
Church). The result was that benefice-holding (or enfeoffment, as it would later be known)
became related closely with vassal status, eventually leading to the unification of the two
phenomena (Ganshof, 1961: pp. 1650, esp. 1619; Mitteis 1933: pp. 521524). This
union of fief and vassalage, of a tenure agreement and a personal bond of lordship, was
the foundation of European feudalism. Although this first emerged in the Frankish
heartlands, it was soon exported across the rest of Western Europe by means of conquest
and settlement.
Historians call system of exchanging land for service the feudal system or feudalism.
ii. Types
When discussing about types of feudalism, there are three types of feudal people, the
categories as follows.

i. Fought : Nobles and Knights


ii. Prayed : Men and women of the church
iii. Worked : Peasants

In other hand, if we look at the feudal societies or country, the feudal systems of Europe
and Japan were similar, just their cultures were very different. Actually, feudal societies
shared common element in Europe and Japan. Europe and Japan different of their culture
elements such as religion and art.
iii. Phase
Searching for the actual phase or time of these theories, it came across the feudalism
started from the classic societies with 2 classes of society. It is the Lord and Vassal : from
8th Century until 12th Century, then Feudal Europe:10th Century until 15th Century, then the
next phase where there is Complexity and Declining the Feudalism from 12th Century until
15th Century. Which mean that the dynasty remained through seven centuries that is from
800 A.D to 1492 A.D.

Thus there develops the relationship between lord and vassal which is at the heart of
feudalism. The lord gives the vassal an income-yielding fief (fehu-od in Frankish, the
basis of the word 'feudal'). The vassal does work to the lord, formalizing the relationship

By the end of the 12th century the papacy has more feudal vassals than any temporal
ruler. Although feudalism develops as early as the 8th century, under the Carolingian
dynasty, it does not prevail widely in Europe until the 10th century - by which time
virtually the entire continent is Christian (Gascoigne, Bamber, 2001)

Frank Li (2011) in his article has described that the loop theory is to simply and clearly
define the relationship between capitalism and socialism. It was formulated by simply
modifying Karl Marxs theory of societal development.

He also come up with the idea about the Marxs Theory, and explained as below:

Marxs Theory
Figure 1 highlights Marxs theory of social development was evolution from some early
societies (e.g. slavery) to feudalism, to capitalism, to socialism, and finally to communism.
From the above diagram, we can see that the idea of all the theories of development started
from feudalism that is also known as slavery era. No doubt that the classification of
humans started from Europe, America even Asia and also throughout all over the world.

Gascoigne, Bamber, 2001, ended the article by explaining that, thereafter the strong
authority of kings, taxing and ruling from a central base, becomes for a while the norm in
European government. But feudal customs and rights remain enshrined in the law of many
regions (including France, Germany, Austria and Italy) until abolished either by the French
Revolution or by the reforms of Napoleon.

iv. Term (Differentiate/Focus)


Military, social, and political customs all followed the feudal system, in which land
was exchanged for work. In a feudal system, a peasant or worker known as a vassal
received a piece of land in return for serving a lord or king, especially during times of war.

The main focus of feudalism is the classifications of societies that only given the upper
level people. Those slavery or working people do not have any voice in these kind of
society. They will remain in their class of society until the end of their live. The lower
level of people cannot marry the upper level or vice versa.

We can see that the term of feudalism itself have cruelly pressure the workers society
that made the workers society came up with revolution. The original feudalism, a structure
of personal relationships, tends in one direction towards centralized monarchy - and in
another towards anarchy.

In some regions kings successfully use the feudal hierarchy to reinforce their own
position at the top of the pyramid. This happens in England (where William I starts with a
clean slate, distributing conquered territory on his own terms to his followers) and in
France (where the Capetian house has the accidental benefit of a long unbroken
succession of direct male inheritance).
v. Diagram Example
A pyramid of loyalty is thus created, in which each man - except at the very top and
bottom - is a vassal to one lord and a lord to several vassals. At the very peak of
European feudal society is the pope.

The top players in feudal Europe come from a small group of people - an
aristocracy, based on skill in battle, with a shared commitment to a form of Christianity
(at once power-hungry and idealistic) in which the pope in Rome has special powers as
God's representative on earth. As a great feudal lord with moral pretensions, holding the
ring between secular sovereigns, the pope can be seen as Europe's headmaster.

Bishops and abbots are part of the small feudal aristocracy, for they are mostly
recruited from the noble families holding the great fiefs. Indeed bishops can often be
found on the battlefield, fighting it out with the best.
The pyramid diagram will definitely shows the classifications of people in the
country that still remain the Feudalism Society. Certain countries in the world without
doubt are still using it.
In conclusion, all theories of development began with the theory of Feudalism. Therefore,
all power began from the upper level that is the king. If we infer with development,
actually feudalism has created the society that been used for all the countries in the world.
Definitely this theory can be used in development and still been practised until today. We
can also parallel it with our own country, The Malacca Sultanate was a Malay sultanate
that practice the Feudalism theory. Most of the Sultans in Malaysia actually from the
hierarchy Malacca Sultanate that have been designated before this.

What I can learn from this theory? I can learn from this theory is feudalism is not an
ending story, we had been practising this theory long ago and it is still continue. No
doubts, people adapting this theory even in modern day that human already civilise. They
seem to like it so much when there are levels of people that think, they are better from
others. Rich and poor people, black and white people, educated and uneducated people, all
these are the level that been practising years ago.

In other hand, the adaptation of feudalism theory is a continuous process that we can
obviously see in this world.

Lets look at Capitalism Theory, any similarity or huge differences.


2 CAPITALISM
The word capitalism is now quite commonly used to describe the social system in which
we are now living in. It is also often assumed that it has existed, if not forever, then for
most of human history. In fact, capitalism is a relatively new social system. For a brief
historical account of how capitalism came into existence a couple of hundred years ago,
( Marx and Engels' Communist Manifesto.)

i. Characteristic
The origins of capitalism: 13th - 16th century

The underlying theme of capitalism is the use of wealth to create more wealth. The
simplest form of this is lending money at interest, reviled in the middle Ages as the sin of
usury. At a more sophisticated level capitalism involves investing money in a project in
return for a share of the profit.

Capitalism is a system of largely private ownership that is open to new ideas, new firms
and new ownersin short, to new capital. Capitalisms rationale to proponents and critics
alike has long been recognized to be its dynamism, that is, its innovations and, more
subtly, its selectiveness in the innovations it tries out. At the same time, capitalism is also
known for its tendency to generate instability, often associated with the existence of
financial crises, job insecurity and failures to include the disadvantaged.

There are basic questions about capitalism that have hardly begun to be studied. What
economic and social institutions engender innovation in the more capitalist of todays
advanced economies, and what institutions function badly in this regard? How large are
the benefits of this system both in productivity and more broadly in the rewards to its
participants? How much worse (if at all) is this system with respect to stability and
inclusion - compared with corporatist systems found in continental western Europe and
east Asia? What changes or additions to those institutions and policies could be hoped to
improve its dynamism, stability or inclusiveness? Are capitalists systems more or less
prone to financial crises than corporate ones? The mandate of Columbias Center on
Capitalism and Society is to advance our scholarly understanding of capitalisms
workings, its social benefits and costs, and its place in a democracy.

ii. Types
Class division
Capitalism is the social system which now exists in all countries of the world. Under this
system, the means for producing and distributing goods (the land, factories, technology,
transport system etc) are owned by a small minority of people. We refer to this group of
people as the capitalist class. The majority of people must sell their ability to work in
return for a wage or salary (who we refer to as the working class.)
The working class are paid to produce goods and services which are then sold for a profit.
The profit is gained by the capitalist class because they can make more money selling what
we have produced than we cost to buy on the labour market. In this sense, the working
class are exploited by the capitalist class. The capitalists live off the profits they obtain
from exploiting the working class whilst reinvesting some of their profits for the further
accumulation of wealth.
This is what we mean when we say there are two classes in society. It is a claim based
upon simple facts about the society we live in today. This class division is the essential
feature of capitalism. It may be popular to talk (usually vaguely) about various other
'classes' existing such as the 'middle class', but it is the two classes defined here that are the
key to understanding capitalism.
It may not be exactly clear which class some relatively wealthy people are in. But there is
no ambiguity about the status of the vast majority of the world's population. Members of
the capitalist class certainly know who they are. And most members of the working class
know that they need to work for a wage or salary in order to earn a living (or are dependent
upon somebody who does, or depend on state benefits.)

iii. Phase

The claims for capitalism differ from the classical case for a competitive market economy.
Adam Smiths thesis two centuries ago was that the presence of many buyers and many
sellers competing with one another in the marketplace would weed out wasteful resource
allocations as if by an invisible hand. (So, in equilibrium conditions, one persons
earnings could not be further increased except at the expense of anothers.) This valuable
ability of unimpeded markets could not be matched by a central government bureau, as
Ludwig von Mises warned the socialists in the 1920s. But Smiths insights left it unclear
how or whether economic change might be generated. Would competition among firms
suffice to generate change, with or without private ownership?
A few central European economies twice became laboratories in recent decades for testing
competition without private ownership. From the late 1960s to the late 1980s they allowed
each state-owned firm to set their own prices, outputs, wages and workforce in competition
with the others. Whether or not efficiency improved, it was clear that economic dynamism
did not ensue. It was said in defence of these state firms that their managers plans for
them were often blocked by the state and that the managers knew they could get their
losses covered by the state so they didnt need to take chances. In the 1990s, the state
firms were put on their own. This time, with their backs to the wall, they began innovating
like mad, hoping that with luck it would be their ticket to survival. But these state firms
were not able to innovate successfully.1 Competition, it appears, is not sufficient for
economic dynamism.

More recently, it has come to be argued that the corporatist economies of east Asia, which
had achieved wonders when there was a yawning gap with the West, ran into trouble in the
1990s because state intervention in the corporate sector through permissions, subsidies and
guarantees led ultimately to mass overinvestment and insolvency.2 On this thesis, private
ownership is not sufficient for dynamism either: capitalism, in which capital is free to go
in new directions without a green light from the state, becomes necessary at some point in
economic development if dynamism is to continue.

How does capitalism do it? The mechanism of capitalisms economic advances became the
leading object of economic research early in the twentieth century and remained so for
decades. With the upheavals of the late 19th century still in their thoughts, the German
School, led by Arthur Spieth off and Gustav Cassel, linked innovations to technological
developments and the opening up of overseas markets and materials.3 A new discovery
creates new outlets for investment. The investments made express the zeal of employers
to profit by meeting the increased demand of the community for fixed capital.4 This
made macroeconomic sense of big waves of innovation: they are exogenous and markets
react constructively to them.5 But it failed to identify the institutions crucial to fostering
early and decisive responsiveness to the newly arrived opportunity. And it did not provide
an economics of innovations in normal times, when capitalism has to generate endogenous
innovations, if there are to be any at all.

iv. Term (Differentiate/Focus)


Taking these accounts as a whole we can identify three fundamental elements, or
institutional clusters, of the capitalist economy: A. monetary system for producing bank-
credit money; B. market exchange; and C. private enterprise production of commodities.
v. Diagram Example

From the diagram, we can say that capitalism is overall. It seems like a paradigm
shift that will transform the social and ecological relationships inherent to capitalism.
We are living at one of the greatest turning points in history, in which a system that has
just finished colonizing the entire planet is already facing its imminent demise. Like the
Babylonian, Mayan, and Roman Empires before it, now Capitalism, seemingly secure in
its global triumph, is in fact crumbling before our very eyes, and nothing can reverse the
deterioration. Yet there remains a stark choice facing us: will the powerful succeed in
coercing us into an even ghastlier slavery, or will we free ourselves and secure a more
democratic future? Never before has humanity found itself at such a profound crossroads,
and never will it again.
I believe strongly that we will win the future by mass noncooperation with the forces of
fear and violence. The demise of capitalism and empire is closing the curtain on corporate
globalization, and people the world over are going to seize the opportunity to redefine how
they want to live with each other and in connection to the Earth, on a local level.
Ultimately technology, the economy, and even culture will need to be appropriate to its
surroundings. This is exactly as it should be; it is impossible to construct a uniform
formula that all individuals and communities should follow. The best we can lay out are
core values to guide us on the journey we are about to undertake. And if we look inside
ourselves, five such core values immediately present themselves:democracy, justice,
sustainability, freedom and love.
3 COMMUNISM

The political theory of socialism, which gave rise to communism, had been around for
hundreds of years by the time a German philosopher named Karl Marx put pen to paper.
Marx, also known as the father of communism, spent most of his life in exile in Great
Britain and France. He wrote the Communist Manifesto in 1848, which later served as
the inspiration for the formation of the Communist Party. Communism is also known as
"Marxism."

Marx believed that a truly utopian (a perfect place, in reference to social, moral and
political issues) society must be classless and stateless. (It should be noted that Marx died
well before any of his theories were put to the test.) Marx's main idea was simple: Free the
lower class from poverty and give the poor a fighting chance. How he believed it should be
accomplished, however, was another story. In order to liberate the lower class, Marx
believed that the government would have to control all means of production so that no one
could outdo anyone else by making more money. Unfortunately, that proves to this day to
be more difficult than he might have realized.

i. Characteristic

In the communist society that Marx described, the government has supreme authority
through its total control of land and means of production. This is because the government
distributes land and property among the people, communism sets a standard of equality --
both economically and socially -- among its followers.

The system seems to work in theory, but how did communism work in practice? Read on
to learn about the rise of the first communist nation.

Marx also detailed the 10 essential tenets of communism, namely:

i. Central banking system


ii. Government controlled education
iii. Government controlled labor
iv. Government ownership of transportation and communication vehicles
v. Government ownership of agricultural means and factories
vi. Total abolition of private property
vii. Property rights confiscation
viii. Heavy income tax on everyone
ix. Elimination of rights of inheritance
x. Regional planning
ii. Types
Modern day Communism is based on the writings of two German economists, Karl Marx
and Fredrich Engels, who answered the question What is Communism? in their
collaboration, The Communist Manifesto published in 1848. In it they declare that
many problems in society are due to the unequal distribution of wealth. To bring
about happiness and prosperity for all, the distinctions between the rich and poor of
society must be eliminated. And since the rich will never give up their goods or status
voluntarily, a rebellion of the poor -- the working class -- is necessary.(Katz, 1993)

Thus, Communism is a distinct socio-political philosophy that is willing to use


violent means to attain its goal of a classless society. If capitalism is defined as a
social system based on individual rights (and individual wealth), then communism is
its direct opposite. Communism believes in equality through force. In its system,
individual rights are ground to powder and used to build its idol of absolute
government control. It is indeed like the tusk of the elephant. It is sharp. It is
dangerous. And it has gored millions of men in its rage through history(Katz,
1993)Alexiou, C., & Lecturer, S. (n.d.). IS CAPITALISM GOOD FOR THE, 29.
Katz, C. J. (1993). Karl M a r x on the transition from feudalism to capitalism, 363389.
.

Communism embraces atheism and dismisses religion as the opiate of the masses, a
system designed by the rich and powerful to keep the poor in their place.

But Communisms quest for a classless society is bound to fail. As Frank Zappa, 60s
rock star, succinctly said, Communism doesnt work because people like to own
stuff. Furthermore, someone has to hold the money bag even in a communist-style
society. And whoever holds the bag becomes not only a target for those looking on
but for the subtle interior demons of pride, avarice, and self-preservation.

If there will always be the poor, then there will always be the rich. There will always
be division, the haves and the have-nots, and any attempt to establish a classless
society this side of heaven, particularly through the violent and godless ways of
Communism, is destined to frustration and failure.

iii. Phase

Marx described three necessary phases toward achieving his idea of utopia.

Phase 1: A revolution must take place in order to overthrow the existing


government. Marx emphasized the need for total destruction of the existing system
in order to move on to Phase 2.
Phase 2: A dictator or elite leader (or leaders) must gain absolute control over the
proletariat. During this phase, the new government exerts absolute control over the
common citizen's personal choices -- including his or her education, religion,
employment and even marriage. Collectivization of property and wealth must also
take place.
Phase 3: Achievement of utopia. This phase has never been attained because it
requires that all non-communists be destroyed in order for the Communist Party to
achieve supreme equality. In a Marxist utopia, everyone would happily share
property and wealth, free from the restrictions that class-based systems require. The
government would control all means of production so that the one-class system
would remain constant, with no possibility of any middle class citizens rising back
to the top.

Communism, which is also described as "Revolutionary Proletarian Socialism" or


"Marxism," is both a political and economic philosophy. The abridgment of Communism
is enclosed in two primary writings: (1) The Communist Manifesto, which was first
published in 1848 by Karl Marx, and (2) Principles of Communism, by Friedrich Engels.
At the request of the Communist League, an activist group they were members of, Marx
and Engels together authored The Communist Manifesto. The main goal of The Communist
Manifesto was to focus on class struggle and motivate the common people to riot. Even
more so, it was designed to envision a model government, whose economics would
destroy the upper class - freeing the lower class from tyranny. According to The
Communist Manifesto, Communism has ten essential planks:

Abolition of Private Property.


Heavy Progressive Income Tax.
Abolition of Rights of Inheritance.
Confiscation of Property Rights.
Central Bank.
Government Ownership of Communication and Transportation.
Government Ownership of Factories and Agriculture.
Government Control of Labor.
Corporate Farms and Regional Planning.
Government Control of Education.

Fundamentally, The Communist Manifesto was a rebellion against the extreme


poverty of the lower class.
iv. Term (Differentiate/Focus)

The Russian bourgeois or Capitalist-class revolution of 1905 revealed a


highly original turn in world history: in one of the most backward capitalist
countries, the strike movement attained a scope and power unprecedented
anywhere in the world. In the first month of 1905 alone, the number of
strikers was ten times the annual average for the previous decade (1895
1904); from January to October 1905, strikes grew all the time and reached
enormous proportions. Under the influence of a number of unique historical
conditions, backward Russia was the first to show the world, not only the
growth, by leaps and bounds, of the independent activity of the oppressed
masses in time of revolution (this had occurred in all great revolutions), but
also that the significance of the proletariat is infinitely greater than its
proportion in the total population; it showed a combination of the economic
strike and the political strike, with the latter developing into an armed
uprising, and the birth of the Soviets, a new form of mass struggle and mass
organisation of the classes oppressed by capitalism.

The revolutions of February and October 1917 led to the all-round


development of the Soviets on a nation-wide scale and to their victory in the
proletarian socialist revolution. In less than two years, the international
character of the Soviets, the spread of this form of struggle and organisation
to the world working-class movement and the historical mission of the Soviets
as the grave-digger, heir and successor of bourgeois parliamentarianism and
of bourgeois democracy in general, all became clear.
v. Diagram Example

In conclusion of Communism is a socioeconomic structure and political ideology that


promotes the establishment of an egalitarian, classless, stateless society based on common
ownership and control of the means of production and property in general Karl Marx
posited that communism would be the final stage in human society, which would be
achieved through a proletarian revolution. "Pure communism" in the Marxian sense refers
to a classless, stateless and oppression-free society where decisions on what to produce
and what policies to pursue are made democratically, allowing every member of society to
participate in the decision-making process in both the political and economic spheres of
life.

As a political ideology, communism is usually considered to be a branch of socialism; a


broad group of economic and political philosophies that draw on the various political and
intellectual movements with origins in the work of theorists of the Industrial Revolution
and the French Revolution.
Communism attempts to offer an alternative to the problems with the capitalist market
economy and the legacy of imperialism and nationalism. Marx states that the only way to
solve these problems is for the working class (proletariat), who according to Marx are the
main producers of wealth in society and are exploited by the Capitalist-class (bourgeoisie),
to replace the bourgeoisie as the ruling class in order to establish a free society, without
class or racial divisions. The dominant forms of communism, such as Leninism, Stalinism,
Maoism and Trotskyism are based on Marxism, but non-Marxist versions of communism
(such as Christian communism and anarchy-communism) also exist.
In order for communism to happen for real, we really need a lot of rules and centralised
planning, in which sometimes leads to totalitarianism. Why? This is because in order for
communism to happen you need everyone in there to live for the good of the community
and not oneself. Its against human nature so you need a powerful central power to
maintain the status quo. Thats why both Soviet and China invariably lead to
totalitarianism and the ones in power want to stay in power, This, is human nature.

So that's why you have the iron curtain and the Cultural Revolution. in cultural revolution
they go the furthest in ensuring allegiance to the state (the community) where they
encourage red youths to denounce their parents and look to chairman Mao as their
common patronage. This is the extreme of ensuring allegiance to the ideology.

If you forward in time and look at the effect of communism on Chinese society. Times you
can still feel the powerlessness among the people because they're used to having
everything decided by the state? So they don't need to work so hard because it doesn't
make a difference one way or another. Theres no incentive to do better or work smarter or
faster. The recent economic boom or capitalism has changed that of course.
4 DEPENDENCY
A common term used in the news and social media today is the 'developing world'. This
term is used to indicate countries that are less economically developed than the United
States or European nations. The term is an odd one, isn't it? It suggests that there is a
process that leads to economic development, and the expectation is that eventually all
countries will become industrialized. A number of sociologists and economists, however,
believed that this is not the case, and instead they developed dependency theory.
Nevertheless, due to some of the major objections to dependency theory, it has fallen out
of favor among today's sociologists and economists. Still, elements of dependency theory
exist today, and it may prove useful in an understanding of current social trends.
i. Characteristic
Vincent Ferraro (1996) said that Dependency Theory developed in the late 1950s under the
guidance of the Director of the United Nations Economic Commission for Latin America,
Raul Prebisch. Prebisch and his colleagues were troubled by the fact that economic growth
in the advanced industrialized countries did not necessarily lead to growth in the poorer
countries. Indeed, their studies suggested that economic activity in the richer countries
often led to serious economic problems in the poorer countries. Such a possibility was not
predicted by neoclassical theory, which had assumed that economic growth was beneficial
to all (Pareto optimal) even if the benefits were not always equally shared
The debates among the liberal reformers (Prebisch), the Marxists (Andre Gunder Frank),
and the world systems theorists (Wallerstein) was vigorous and intellectually quite
challenging. There are still points of serious disagreements among the various strains of
dependency theorists and it is a mistake to think that there is only one unified theory of
dependency. Nonetheless, there are some core propositions which seem to underlie the
analyses of most dependency theorists. Dependency can be defined as an explanation of
the economic development of a state in terms of the external influences--political,
economic, and cultural--on national development policies (Osvaldo Sunkel, "National
Development Policy and External Dependence in Latin America," The Journal of
Development Studies, Vol. 6, no. 1, October 1969, p. 23). Theotonio Dos Santos
emphasizes the historical dimension of the dependency relationships in his definition:
[Dependency is]...an historical condition which shapes a certain structure of the world
economy such that it favours some countries to the detriment of others and limits the
development possibilities of the subordinate economics...a situation in which the economy
of a certain group of countries is conditioned by the development and expansion of another
economy, to which their own is subjected. (Theotonio Dos Santos, "The Structure of
Dependence," in K.T. Fann and Donald C. Hodges, eds., Readings in U.S. Imperialism.
Boston: Porter Sargent, 1971, p. 226) There are three common features to these definitions
which most dependency theorists share. First, dependency characterizes the international
system as comprised of two sets of states, variously described as dominant/dependent,
center/periphery or metropolitan/satellite. The dominant states are the advanced industiral
nations in the Organization of Economic Cooperation and Development (OECD). The
dependent states are those states of Latin America, Asia, and Africa which have low per
capita GNPs and which rely heavily on the export of a single commodity for foreign
exchange earnings. Second, both definitions have in common the assumption that external
forces are of singular importance to the economic activities within the dependent states.
These external forces include multinational corporations, international commodity
markets, foreign assistance, communications, and any other means by which the advanced
industrialized countries can represent their economic interests abroad. Third, the
definitions of dependency all indicate that the relations between dominant and dependent
states are dynamic because the interactions between the two sets of states tend to not only
reinforce but also intensify the unequal patterns. Moreover, dependency is a very deep
seated historical process, rooted in the internationalization of capitalism. Dependency is an
ongoing process: Latin America is today, and has been since the sixteenth century, part of
an international system dominated by the now-developed nations.... Latin
underdevelopment is the outcome of a particular series of relationships to the international
system. Susanne Boden heimer, "Dependency and Imperialism: The Roots of Latin
American Underdevelopment," in Fann and Hodges, Readings, op. cit., p. 157. In short,
dependency theory attempts to explain the present underdeveloped state of many nations in
the world by examining the patterns of interactions among nations and by arguing that
inequality among nations is an intrinsic part of those interactions.

ii. Types

1. Third World countries do not exist in isolation. They can only be understood in the
context of the world economic and political system. Political events in Third World
countries are directly related to events in First World countries. However, relations
between First and Third World countries are asymmetrical. T he flow of power and control
is from the First World (center or core) to the Third World (periphery). Political and
economic events in the First World have a huge impact on the politics and economics of
Third World countries, but Third World political and economic events usually have little
impact on the First World.

2. Within the world political and economic system there is a tremendous amount of
interaction among core countries and peoples, and between the core and the periphery.
There is very little interaction just among periphery countries. The consequences of this
are great, resulting in an isolated and weak periphery country having an unequal
relationship with the united and strong core.

3. Politics and economics are related. They cannot be understood apart from each other.
Economic ties and relationships between core and periphery countries are particularly
important. These are advantageous for the core, and disadvantageous for the periphery.
Core-periphery trading patterns result in continuous growth of political and economic
power for the core at the expense of the periphery. Economic trade causes a widening of
the gap between developed and developing countries, rather than a narrowing of that
gap. Historically, lower priced raw materials have been exchanged for higher priced
finished goods.

4. It follows from #3 that underdevelopment is not a natural state, but rather a condition
that is caused. The fact is that developed nations are actively underdeveloping Third
World countries as a result of the systems of interactions between them.

5. Put another way, the underdevelopment of weak Third World countries is directly
related to, and makes possible, the "development" of the powerful countries of the
industrialized core. Both the center and the periphery are part of the world political-
economic system, and neither would exist without the other.

6. Furthermore, so long as capitalism remains the dominant world economic system, there
is no reason for the situation of developed and underdeveloped countries to change.
Underdevelopment is not a temporary condition, as had been thought in the past, but is a
permanent condition. In fact, if the present world system does not change we can expect
the core to become more powerful and the periphery weaker in the future. Rather than
"catching up" to the developed countries, most currently underdeveloped countries
will fall farther behind. (In a limited number of cases, where exceptional circumstances
exist, it may be possible for an underdeveloped country to move from the periphery to the
core.)

7. The worldwide system of relationships is duplicated within individual Third World


countries. There is a core area (usually the capital) which dominates and exploits the
periphery (interior) of the country. The nation's centers of economic, political, cultural, and
military power are found in the national core, and the core's power and wealth grows more
rapidly than that of the interior as a result of contacts and interactions between the two
areas. The urban sector becomes increasingly powerful, while the rural sector becomes
increasingly weaker. Resources flow from the periphery to the center. The core profits at
the expense of the periphery as a result of the movement of products and resources. The
passage of time does not bring a growing equality within the country, but rather brings
about an increasing gap between life in the capital and that in the countryside. 8. In a
sense, national leaders in the capital exploit the people for their own personal benefit and
power. Consequently, these "national" leaders could really be conceptualized as agents of
the international system. Their national power and prominence derive from their
international contacts. It is they (the military, government officials, and commercial and
financial leaders) who act as links between the Third World country and the world political
and economic system. They direct the country's contacts with the world, and they direct
those contacts in such a way that the world core benefits more than their own country,
although they themselves clearly benefit at a personal level. These national leaders may
actually have more in common with their counterparts in London or New York than they
do with interior citizens of their own country. (style of dress, food, literature, housing,
travel, economic interests, etc.)

iii. Phase
Even though it started as early of 50s but the theory was popular in the 1960s and 1970s
as a criticism of modernization theory, which was falling increasingly out of favor because
of continued widespread poverty in much of the world. It was used to explain the causes of
over urbanization, a theory that urbanization rates outpaced industrial growth in several
developing countries. (Shandra, John M., Bruce London, and John B. Williamson., 2003)
Frameworks and Problems
Issues are found with nearly every theory, and dependency theory is no exception. As we
discussed a moment ago, one of the major issues with dependency theory is that its
adherents rely upon different theoretical frameworks. Some rely upon Marxist critiques of
capitalism. From the Marxist view, the inequality of wealth distribution is part of the
function of capitalist business. This makes development partly reliant upon global events.
Other dependency theorists rely upon Latin American structuralism approaches, like those
of the ECLA (Economic Commission of Latin America). Through this type of analysis, it
is the developing nation's lack of infrastructure and other mechanisms for distributing
wealth that are responsible for the economic state of dependency.
In both situations, the government of the developing country is urged to take greater
control of commerce. This leads us to the objections that most economists have with the
theory, objections to government control over business. Detractors argue that government
control tends to lead to corruption in business, which has costs in terms of productivity and
sustainability. The fall of communism at the end of the 20th century led to government-
cantered solutions falling out of favour with many economists. The development of other
theories, such as neoliberal and statist approaches, has caused dependency theory to fall
out of favour as well. In order to better understand these rather abstract theoretical
frameworks and perspectives, and dependency theory in general, let's discuss some
examples of the theory in action

iv. Term (Differentiate/Focus)


The foundations of Dependency Theory was laid in 1950s by Economic Commission
for Latin America and the Caribbean (ECLAC). Prominent authors of this approach had
argued that, in order to secure a healthy development, countries should create conditions
for development. For instance, Raul Prebisch suggested that, a country should take
important economic and political measures to create what he called as conditions of
development. Some measures of this kind are as follows:

o To control the monetary exchange rate, placing more governmental


emphasis on fiscal rather than monetary policy;
o To promote a more effective governmental role in terms of national development;
o To create a platform of investments, giving a preferential role to national capitals;
o To allow the entrance of external capital following priorities already established in
national plans for development;
o To promote a more effective internal demand in terms of domestic markets as a
base to reinforce the industrialization process;
o To generate a larger internal demand by increasing the wages and salaries of
workers, which will in turn positively affect aggregate demand in internal markets;
o To develop a more effective coverage of social services from the government,
especially to impoverished sectors in order to create conditions for those sectors to
become more competitive; and
o To develop national strategies according to the model of import substitution,
protecting national production by establishing quotas and tariffs on external
markets (Bodenheimer, 1970: 49-53; also cited in Reyes, 2001).
Initially principals and proposals developed by Prebish were accepted as representative
ideas of the Dependency Theory. However, towards 1960s, a new group of authors who
claimed to be new generation of dependency theorists emerged, arguing that the Prebish
Model fails to reflect the realities of the Third World. The prominent representatives of
New Dependency Theory are Andre Gunder Frank, Theotonio Dos Santos, Enrique
Cardozo, Edelberto Torres-Rivas, and Samir Amin (Reyes, 2001).
Raul Prebish and the other dependency theorists, agreed, to some extent, with the
classical, and also neo classical, theory, that foreign trade without question was
beneficial to both parties engaged in it as importer and exporter, as the logic of
comparative costs and comparative advantages determined. But they disagreed on
several grounds, and among them were:
a. The static nature of the analysis. The advanced Western countries
would continue to buy primary products from the Third World countries, and export
manufactured goods in payment. This pattern of production and exchange was not
accepted by the dependency school to be given once and for all. Their position derived
from the conviction that the pattern was forced on their countries in the unequal
relationship (military, political, economic, financial and technological) between the
advanced industrial countries and the underdevelopment countries especially under
the influence of colonialism. Important factors like technology, financial resources,
labour skills, market openings and certainly policies could all undergo substantial
changes, and affect the situation to become a dynamic one.
b. Empirical analysis. Neoclassical economists argued that the
underdeveloped countries were the beneficiaries of the trade, because they made their
products less and costly to produce. This, it was acclaimed, would provide them with
more financial resources to invest domestically or yet to import more goods for the
same volume of exports. It was challenged by the dependency theorists, because their
research showed that the underdeveloped countries were not benefiting from
technological advances and the drop in the cost of manufactures, and that the structure
of the supplying markets, and the power imbalance in favour of the supplier, enabled
the latter to retain the fruit of technological gains and the savings achieved in the cost of
manufacturing.
c. A third dissatisfaction with the classical analyses was that the
logic of this analysis suggested that the underdeveloped would remain underdeveloped
or at best, develop very slowly, while the developed would develop much faster and
become much richer. The direct causal link between foreign trade and economic
growth, as the neo-classical analysis saw it, was very much in contrary with
this view (Raghavan, 1994).
The distinctive notions and positions that characterise the Dependency Theory are
as follows:
a. The structure of the world economy and the pattern of
relations between the two main groupings of countries. A very small grouping of
advanced Western countries on the one side, called the centre states, and a much
larger group of underdeveloped countries which were at the periphery, called the
peripheral states.
b. The relationship as one of domination and exploitation by the
few centre countries, and of helpless acquiescence and dependence by the many
peripheral countries. Gradually the dependence came to be seen as much more
than foreign trade, including political, cultural, technological and financial
dependence.
c. Development in the advanced capitalist countries did not
automatically mean development for the underdeveloped countries associated
with them. And because of the restrictive policies and measures adopted by the
industrial countries, development in these countries necessarily led to
underdevelopment in dependent countries, was the assertion from the dependency
school.
d. Although the logic and impact of the nature of the relationship
between centre and peripheral countries, or the impact of external factors yet
these factors, though predominant, were not all alone in operation. There were
internal factors that operated inside the peripheral country, and they added to a
stronger dependence as they had an important grip on the economy, the society
and the polity, and used it to their own and the centre countries benefits. These
internal factors were basically structural in nature; they related to class structure
and relations, vested interest groupings, institutions designed to serve the
powerful, the rich and the influential (Sayigh, 1991).

As can be seen thus far, the Dependency Theory combines elements from a neo-
marxist perspective with Keynes economic theory (Reyes, 2001). The neo-Marxism was
urged into being and growth as a critical reaction not so much to neo- classical thought as
to orthodox Marxism, as understood, practised and translated into political reality by Latin
American communist parties. The central criticism was that the textual Marx was not
relevant to the capitalism of the twentieth century which had witnessed many changes in
class power relations and orientation since Marxs time (Raghavan, 1994). In addition to
economic factors, non-economic factors affecting development and growth are also
significant in many cases. As Sayigh (1991: 58) rightly suggests, This involved the
recourse to a historical perspective and to the structure and content of relations between
the capitalist industrial countries and the underdeveloped countries standing at the feudal
stage or somewhere between feudalism and capitalism. A predominant feature of this
relationship was the skimming by the colonial power of the economic surplus generated in
the colonised country.

v. Diagram Example

Diagram 1. Dependency Theory View of the World

Diagram 2. Dependency Theory View of the Relationship between


the National Core, the Rest of the Nation, and the World System
Gone are the heydays of the 1970s when dependency theory was considered one of the
most convincing critiques of dominant economic development strategies. Now, it is
shunned by academics and practitioners, who find its pessimistic world view, and
"outdated" language of "exploitation", unbefitting of a world where we are all on course to
"win" eventually.
Once upon a time, economic debate was fierce between free-trade promoters, who saw the
push for global economic liberalism as the best way of securing universal growth, and
dependency theorists, who saw this "integrated" relationship as exploitative, rather than
mutually beneficial. As growth picks up around the developing world, and the long-
predicted convergence between rich and poor countries appears to be occurring, ideas of
exploitation are akin to conspiracy theories in some quarters, and debate has shifted
towards how poor countries can internalise and promote liberalisation policies, mitigating
their most pernicious aspects where possible.
But there are two good reasons not to drop dependency theory from the development
lexicon just yet. First, whether or not one believes the theory to be relevant to today's
globalised economy, it is an important lens when trying to understand our collective
history. The fact that some countries seem to be breaking out of the dependency trap does
not mean that a trap never existed.
5 GLOBALIZATION
The globalization hypothesis asserts that there has been a rapid and recent change in the
nature of economic relations among national economies which have lost much of their
distinct claim to separate internally driven development, and that domestic economic
management strategies have become ineffective to the point of irrelevance.
Internationalization is, in this view, seen as a tide sweeping over borders in which
technology and irresistible market forces transform the global system in ways beyond the
power of anyone to do much to change. Transnational corporations (TNCs) and global
governance organizations, such as the World Bank and the IMF, enforce conformity on all
nations no matter their location or preferences. The corollary to such thinking is that
radical alternatives are not possible, and that in Margaret Thatcher's memorable phrase,
TINA, "There is no alternative." (Vincent Ferraro ,1996)

The term globalization comes from English, as base of the word globalization which
refers to the emerging of an international network, belonging to an economical and social
system1 . One of the earliest uses of the term "globalization", as known, was in 1930 - in a
publication entitled Towards New Education - to designate an overview of the human
experience in education2 . A near-term "giant corporations" was used in 18973 by Charles
Russell Tazel to describe the big national trusts and other large enterprises of the time.
Since 1960 both terms began to be used interchangeably by economists and researchers in
social sciences and were used until about mid 1980.

i. Characteristic

Scholars also occasionally discuss other, less common dimensions of globalization, such
as environmental globalization (the internationally coordinated practices and regulations,
often in the form of international treaties, regarding environmental
protection)[87] or military globalization (growth in global extent and scope of security
relationships).[88] Those dimensions, however, receive much less attention the three
described above, as academic literature commonly subdivides globalization into three
major ares: economic globalization, cultural globalization and political globalization.[11]
2 Globalization of the world's food supply
3 Since 1961, human diets across the world have become more diverse in the consumption
of major commodity staple crops, with a corollary decline in consumption of local or
regionally important crops, and thus have become more homogeneous globally.[89] The
differences between the foods eaten in different countries were reduced by 68% between
1961 and 2009. The modern "global standard"[89] diet contains an increasingly large
percentage of a relatively small number of major staple commodity crops, which have
increased substantially in the share of the total food energy (calories), protein, fat, and food
weight that they provide to the world's human population,
including wheat, rice, sugar,maize, soybean (by +284%[90]), palm oil (by +173%[90]),
and sunflower (by +246%[90]). Whereas nations used to consume greater proportions of
locally or regionally important crops, wheat has become a staple in over 97% of countries,
with the other global staples showing similar dominance worldwide. Other crops have
declined sharply over the same period, including rye, yam, sweet potato (by -
45%[90]), cassava (by -38%[90]), coconut, sorghum (by -52%[90]) and millets (by -
45%[90]).[89][90][91] Such globalization of food supplies is associated with mixed effects on
food security, improving under-nutrition in some regions but contributing to the diet-
related diseases caused by over-consumption of macronutrients.[89]

i. Types
Financial globalization
Interconnection of the worlds financial systems e.g. stock markets
More of a connection between large cities than of nations
Example: What happens in Asian markets affects the North American markets.
Economic Globalization
A worldwide economic system that permits easy movement of goods, production,
capital, and resources (free trade facilitates this)
Example: NAFTA, EU, Multinational corporations
Technological Globalization
Connection between nations through technology such as television, radio, telephones,
internet, etc.
Was traditionally available only to the rich but is now far more available to the poor.
Much less infrastructure is needed now.
Political Globalization
countries are attempting to adopt similar political policies and styles of government in
order to facilitate other forms of globalization
e.g. move to secular governments, free trade agreements, etc
Cultural Globalization
Merging or watering down of the worlds cultures e.g. food, entertainment, language,
etc.
Heavily criticized as destructive of local culture
e.g. The Simpsons is shown in over 200 countries in the world.
Ecological Globalization
seeing the Earth as a single ecosystem rather than a collection of separate ecological
systems because so many problems are global in nature
e.g. International treaties to deal with environmental issues like biodiversity, climate
change or the ozone layer, wildlife reserves that span several countries
Sociological Globalization
A growing belief that we are all global citizens and should all be held to the same
standards and have the same rights
e.g. the growing international ideas that capital punishment is immoral and that women
should have all the same rights as men.
ii. Phase

iii. Term (Differentiate/Focus)


The term globalization is derived from the word globalize, which refers to the emergence
of an international network of economic systems.[12] One of the earliest known usages of
the term as a noun was in a 1930 publication entitled Towards New Education, where it
denoted a holistic view of human experience in education.[13] A related term, corporate
giants, was coined by Charles Taze Russell (of the Watch Tower Bible and Tract Society)
in 1897[14] to refer to the largely national trusts and other large enterprises of the time. By
the 1960s, both terms began to be used as synonyms by economists and other social
scientists. Economist Theodore Levitt is widely credited with coining the term in an article
entitled "Globalization of Markets", which appeared in the MayJune 1983 issue
of Harvard Business Review. However, the term 'globalization' was in use well before this
(at least as early as 1944) and had been used by other scholars as early as 1981.[15] Levitt
can be credited with popularizing the term and bringing it into the mainstream business
audience in the later half of the 1980s. Since its inception, the concept of globalization has
inspired competing definitions and interpretations, with antecedents dating back to the
great movements of trade and empire across Asia and the Indian Ocean from the 15th
century onwards.[16][17] Due to the complexity of the concept, research projects, articles,
and discussions often remain focused on a single aspect of globalization.[18]
4 Sociologists Martin Albrow and Elizabeth King define globalization as "all those
processes by which the peoples of the world are incorporated into a single world
society."[1] In The Consequences of Modernity, Anthony Giddens writes: "Globalization
can thus be defined as the intensification of worldwide social relations which link distant
localities in such a way that local happenings are shaped by events occurring many miles
away and vice versa."[19] In 1992, Roland Robertson, professor of sociology at University
of Aberdeen, an early writer in the field, defined globalization as "the compression of the
world and the intensification of the consciousness of the world as a whole."[20]

5 In Global Transformations, David Held and his co-writers state:


6 Although in its simplistic sense globalization refers to the widening, deepening and
speeding up of global interconnection, such a definition begs further elaboration. ...
Globalization can be located on a continuum with the local, national and regional. At one
end of the continuum lie social and economic relations and networks which are organized
on a local and/or national basis; at the other end lie social and economic relations and
networks which crystallize on the wider scale of regional and global interactions.
Globalization can refer to those spatial-temporal processes of change which underpin a
transformation in the organization of human affairs by linking together and expanding
human activity across regions and continents. Without reference to such expansive spatial
connections, there can be no clear or coherent formulation of this term. ... A satisfactory
definition of globalization must capture each of these elements: extensity (stretching),
intensity, velocity and impact.[21]
i. Diagram Example

Globalization and risk. As well as opening up considerable possibility, the employment


of new technologies, when combined with the desire for profit and this world-wide reach,
brings with it particular risks. Indeed, writers like Ulrich Beck (1992: 13) have argued that
the gain in power from the techno-economic progress is quickly being overshadowed by
the production of risks. (Risks in this sense can be viewed as the probability of harm
arising from technological and economic change). Hazards linked to industrial production,
for example, can quickly spread beyond the immediate context in which they are
generated. In other words, risks become globalized.

A further, crucial aspect of globalization is the nature and power of multinational


corporations. Such companies now account for over 33 per cent of world output, and 66
per cent of world trade (Gray 1999: 62). Significantly, something like a quarter of world
trade occurs within multinational corporations (op. cit). This last point is well illustrated by
the operations of car manufacturers who typically source their components from plants
situated in different countries. However, it is important not to run away with the idea that
the sort of globalization we have been discussing involves multinationals turning, on any
large scale, to transnationals:

International businesses are still largely confined to their home territory in terms of their
overall business activity; they remain heavily nationally embedded and continue to be
multinational, rather than transnational, corporations. (Hirst and Thompson 1996: 98).

While full globalization in this organizational sense may not have occurred on a large
scale, these large multinational corporations still have considerable economic and cultural
power.

Conclusion

One commentator has argued that there is a very serious case not against globalization,
but against the particular version of it imposed by the worlds financial elites. The
brand currently ascendant needlessly widens gaps of wealth and poverty, erodes
democracy, seeds instability, and fails even its own test of maximizing sustainable
economic growth. (Kuttner 2002)
The gap between rich and poor countries has widened considerably. However, as Sen
(2002) has commented, to see globalization as merely Western imperialism of ideas and
beliefs (as the rhetoric often suggests) would be a serious and costly error. He continues:
Of course, there are issues related to globalization that do connect with imperialism (the
history of conquests, colonialism, and alien rule remains relevant today in many ways),
and a postcolonial understanding of the world has its merits. But it would be a great
mistake to see globalization primarily as a feature of imperialism. It is much biggermuch
greaterthan that.
Thus, while the reach and power of multinationals appears to have grown significantly,
neither they, nor individual national governments, have the control over macro-economic
forces that they would like. Ecological and technological risks have multiplied.
Globalization in the sense of connectivity in economic and cultural life across the world, is
of a different order to what has gone before. As we said at the start, the speed of
communication and exchange, the complexity and size of the networks involved, and the
sheer volume of trade, interaction and risk give what we now label as globalization a
peculiar force.
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