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Each country reaches the “take-off” for industrialization when a market economy emerges. Britain reached that stage in 1800. Non-western nations will reach that stage when their productive investments grow. How? Through foreign aid and technology transfer.
By the 1950s, the US reached the stage of “high mass consumption.”
Rich and poor nations are linked economically. “Modernization” of countries cannot be considered in isolation from each other.
During colonial period, European countries extracted raw materials, mineral and food from their colonies. this enabled them to industrialize
Exploitation of their resources left colonized societies poor. They were dependent on imports of industrial goods from Europe. Most of the peasantry worked on farms or mines from which products were exported to Europe
The capitalist world economy consists of a “core,” a “periphery,” and a “semiperiphery.”
Historically, the core was western Europe, which became industrialized by “extracting surplus” (funneling raw materials and precious metals) from the “periphery.”
The semiperiphery stood in-between the core and the periphery in terms of incomes and levels of industrialization.
In this world economy, the core exploited, or extracted surplus from the periphery in terms of cheap labor, natural resources, raw materials and as markets for European manufactures.
Example: In the 19 th century, the Ottoman Empire was an exporter of dried fruits and nuts to Europe and was dependent on imports of manufactures (“English cloth,” for example). It was heavily indebted to European countries.
What is the role of multinational corporations and global financial institutions in perpetuating global inequality?
Examples: the World Trade Organization and the IMF?
WTO (established in 1995) ensures that international trade takes place in a “liberal” environment. But by doing so, it prevents poorer countries from protecting their agricultural and manufacturing sectors.
IMF (established in 1945) extends “stabilization” loans to countries, but in turn, it requires them to cut down on social spending (education, healthcare, public sector jobs) and open up (liberalize) their economies.