notes on pages 226 - 229
modernisation theory
neo-liberalism
dependency theory
alternatives to the neo-liberal dominance of world trade
page 229
page 228
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page 226
modernisation theory highlights the role of trade when climbing the ladder to economic development.
Rostow (1971) argues that as countries start to industrialise in the "take off" stage of development, they will take their place within the international trade system and start to trade their manufactured goods with the developed world.
full development implies that societies which successfully climb the development ladder become equal trading partners in the global marketplace.
Reid-Henry (2012) argues that neo-liberalists see global free-trade markets as both the means and the desired end of development.
Neo-liberal development policy sets out to do whatever is necessary to make local markets and societies 'fit' with this free-market vision. Reid-Henry notes that this usually involves four key organisation principles:
the governments of developing countries are expected to pull down all barriers to western investments.
workers in the developing world are expected to work hard and cheaply without complaint for transnational corporations.
social life should be organised around the profit motivate.
public services need to be privatised.
marxists argue that the neo-liberal economic policies of the WTO and FTAs can only work on a level playing field. unfortunatly the terms of world trade encouraged by the WTO mean that poor countries are disadvantaged:
Frank (1971) argues that modernisation theory neglects the fact that modernisation theory neglects the fact that developing societies already occupy a place in the world trading system as producers of cash crops and materials.
marxists argue that world trade is just another aspect of neo-colonialism.
raw materials often do not accumulate value until they have been processed in the west, and consiquently it is western TNCs that reap the benefits.
Ellwood notes that the WTO does little to stop western nations from imposing tariffs, quotas and giving massive subsides to their own farmers.
Ellwood argues that the neo-liberal policies of the WTO encourage farmers in the developing world to grow more for export in order to clear their "black hole of debt".
often the value and price of a commodity is totally out of the hands of the producer country and is actually set by commodity speculators located in western organisations such as the London metal exchange.
the economies of developing countries are often over-dependent for their export earnings on a narrow range of commodities made up of cash crops or raw materials.