Author:
Alfredo Bocanegra
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Date Posted: 12:12:19 05/20/02 Mon
29) Neoliberalism: Neo-liberalism is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarely heard in the United States, you can clearly see the effects of neo-liberalism here as the rich grow richer and the poor grow poorer....Around the world, neo-liberalism has been imposed by Powerful financial institutions like the International Monetary Fund (IMF), the World Bank and the Inter- American Development Bank. Neoliberalism is a philosophy in which the existence and operation of a market are valued in themselves, separately from any previous relationship with the production of goods and services, and without any attempt to justify them in terms of their effect on the production of goods and services; and where the operation of a market or market-like structure is seen as an ethic in itself, capable of acting as a guide for all human action, and substituting for all previously existing ethical beliefs.
30) Stages of Dependency: There are three stages of dependency: Colonial, Imperial, and Technological Industrial. These basically all have ties with financial dependence. This theory states that the reason Latin American countries don't perform better is because outside trade influence does not let them. The center (U.S. or Europe) takes in all of the profit and exploits the periphery (Latin American countries and Third World Countries)
A) Colonial dependence, trade export in nature, in which commercial and financial capital in alliance with the colonialist state dominated the economic relations of the Europeans and the colonies, by means of a trade monopoly complemented by a colonial monopoly of land, mines, and man power (serf or slave) in the colonized countries.
B) Financial-Industrial dependence which consolidated itself at the end of the nineteenth century, characterized by the domination of big capital in the hegemonic centers, and its expansion abroad through investment in the production of raw materials and agricultural products for consumption in the hegemonic centers.
C) In the postwar period a new type of dependence has been consolidated, based on multinational corporations which began to invest in industries geared to the internal market of underdeveloped countries. Technological industrial.
31) MNC’s: Multinational Corporations is a form of industrial and technological dependence. These corporations invest in Third World country industries and monopolize the industry from the outside. MNC's do not let local industries grow within their countries because they are more experienced companies than the ones found already there. An example of this are the maquiladoras found in the border between Mexico and the U.S. Drawing upon large capital, marketing, and technological resources in the West, MNC's established subsidiaries throughout Latin America with the aim of distributing and/or producing products for local consumption, thereby avoiding tariff barriers.
32) Imperialism: During the 16th to 19th century Imperialism has produced a chronic condition of perpetual underdevelopment in the Third World. Definition: The process whereby the dominant politico-economic interests of one nation expropriate for their own enrichment the land, labor, raw materials, and markets of another people or country. Example: U.S. imperialism over Latin American countries or simply taking over Puerto Rico.
33) Modernization Theory (as it applies to economic development): This theory held that all societies are alike at the “traditional” stage and that eventually they would pass through the same set of changes that had led the West to the “modern” stage. Modernization occurred when economic and technological change made the traditional social and status structures obsolete. In short, Third World countries would be able to adopt already established social and economic patterns and would move quickly on the path to development already followed by the West. The only thing that modernists did not take into account was the effect that trade has on the development of these Third World countries, eventually this led up to the Dependency theory. Latin America is then expected to grow faster but to go through all of the same stages of development that Europe and the United States went through in order to reach the modern stage.
34) Kuznet’s curve: The Kuznet's theory goes like this: when a country begins developing economically, its income inequality worsens. But after a few decades when the rich begin investing more in the economy and wealth begins to "trickle down," income equalizes and people are wealthier then they would have otherwise been. The multilateral financial institutions, which have adhered to this theory, namely the IMF, enforce structural adjustment programs (SAP's) on heavily indebted third world countries which drastically worsen socioeconomic inequalities. Yet, this promise of economic salvation often can't quiet dissent in and of itself, and so there is one government expenditure which isn't cut, but actually raised, and that is the military. The military's role then becomes to maintain the ever-important requirement for foreign investment--order and stability. This requirement of order and stability has entailed state terror and death squad brutality in order to protect and allow the economic reforms to evolve.
35) All good things go together in Development: In order for a country to develop it must be strong in all its aspects. These include: Education, Rule of Law, Politics, Economic institutions, the Economy, Civil War conflicts, and a stable separation of powers between the government. When one of these fail to function we can see in the examples of class what can happen to a nation for example Chile where the military had too much power. It basically says the nation needs stability in all aspects in order to develop.
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