Development and the Cold War struggle between freedom ...bev.berkeley.edu/ipe/Outlines/Outlines...
Transcript of Development and the Cold War struggle between freedom ...bev.berkeley.edu/ipe/Outlines/Outlines...
Development and the Cold War struggle between freedom,
equality, and community:
how it led to the rise of neoliberalism
Three Theories of Development…..
• Freedom: Liberal and modified Liberal Theory – Developing countries – Less Developed Countries (LDCs) – Emerging markets – Late Developers – Newly Industrializing Economies (NIEs)
• Equality – Explanation for Global inequality (Wallerstein) – Dependency Theory
– Underdeveloped Countries – Periphery and core
– The Socialist path to development
• Community – Nationalism and Economic Nationalism
The First World: A contest of the two paths to economic growth in Europe
•in France and Italy, 25% of the people had voted for the Communists, and communists held important positions in labor unions. Europe could not be written off; its combined population exceeded that of either of the superpowers, and even in ruins it possessed one of the world's leading industrial plants. •One of the chief postwar questions was therefore the rescue of Europe, or, in practical politics, who Europe's "rescuer" would be. • only two candidates, the UUSSR and the US. •Europeans did not want to be rescued by either. •Not too many Europeans wanted Europe to be remodeled according to the economy and culture of the United States. •Dependency, even on the benefactions of the U.S., they feared as a gamble; remembering the depression of 1929, and how all Europe had gone down after the cessation of American loans, they had no desire to be dependent upon American capitalism. •Europe wanted to preserve its identity, but it was too weak to do so. •But The weak condition of the European economies became a cause for concern, because it was believed that weak economies would make these countries more susceptible to communist takeovers.
So the US provided Military security and economic aid to the First world
• Aid for the development of European export industries: Marshall Plan
• Encouraged European cooperation in the European Community
• Why? • Military security • Financial backing • US as generous dad pulling the chteaching the child
how to ride a bike • Took in Europe’s distressed goods
The role of dependency Theory
• Franz Fannon
• Capitalism and Imperialism
• The demand for equality and socialist ideals
Western sticks and carrots in the Cold War battle for hearts and minds
• Sticks
– Overthrow of governments
– Assignations
– War
– invasion
• Carrots
– Military aid
– Economic aid
Freedom vs. Equality and Community: Western “sticks” to defeat nationalism and socialism in
the Cold War
Maybe “carrots” are better! Liberal and Modified Liberal Theory and The accumulation of
Capital as the Key to Capitalist development
• Aid!
• Anti communist strong men
• Important in countries on the front line with communist states….
• To show them that capitalism was a better system (even if it had to be installed)
• Eventual Growth of a Middle Class with a preference for capitalism
It worked in Asia……but not like the economic liberals predicted. It failed in the Middle East and Latin America
Planning and ISI
• Five year plans:
• Agricultural products and construction of domestic infrastructure for industry
• Protection of light industry….beginning of domestic consumption (textiles, footwear)
• ISI and move into heavy industry + export of light industry products and small electronics
• Export of chemicals, steel, ships
• Export of electronics…..
FDI
• Started in the mid 1960s
• Technology transfer – First in light industry, then in more sophisticated
industry
• A local bourgeois could also thrive
• An alliance between the State, the large conglomerates, and MNCs
• Korean conglomerates shared the risk
• An ever greater opening to foreign firms
…..as a test of dependency theory
• Troublesome because
– Dependent on the world economy (terms of trade worked in their favor
– Developed with massive amounts of Cold War aid
• Aid was used wisely
• Military burden carried by American taxpayers
Why Wallerstein would not like the “tigers”
• His theory is static and the “Tigers” developed dynamically
• They were able to enact land reform policies
• They developed with very little income inequality
• Their colonial legacies helped development
But why Gerschenkron would like them…….
• They conform most to his theory of “modified liberalism”
• They show that timing and technology are everything
• They show that state planning can be conducive to development
• And that the market can benefit development with institutional constraints and incentives
• But he didn’t reckon with the benefits of Cold War to Asian Development
But what about liberal theory?
• No modern country has developed according to Rostow’s “stages”
• Late developers Undermine generalizations of liberal theory
• These countries had strong, repressive, developmental states
• But they show that it is crucial to accumulate capital.