Globalization and Inequality: A Structuralist Approach

Transcription

1 1 Allison Howells Kim POLS April 2016 Globalization and Inequality: A Structuralist Approach Exploitation, Dependency, and Neo-Imperialism in the Global Capitalist System Abstract: Structuralism is an IPE perspective, which provides a unique voice for the oppressed, developing Third World nations. Scholars provide a perspective with emphasis on the analysis of the inequalities that are produced from globalization. Structuralism, therefore, focuses on the structure of an exploitative, unfair reality: the global economic system. The economic, political, and social institutions are shaped an underlying global capitalism system. Moreover, a system that inhibits economic progress is best explored through modern structuralist theories: the dependency theory, the modern world system theory, and neoimperialism. This paper is composed of two parts. The first part of the research will provide a structuralist outline to the global political economy and the constraints that are imposed by a capitalist world. The latter half of the paper applies structuralism specifically to food management, or mismanagement, poverty, and the struggle to develop.

2 2 Part I: The Globalization of Inequality Globalization and neoliberalism are often associated and interconnected within the global economy. Formally, globalization refers to the growing interdependence and interconnectedness of the world. However, market vulnerability is derived from increased flows of capital. In other words, globalization is subject to neo-liberal economic policies because there is an overlapping rhetoric of both theories. (Harriss, 2001). Structuralists view capitalism as more than the power to control beyond hard resources. Marx, a major contributor to IPE, crafted the idea of false consciousness capitalist ideology. The belief in the legitimacy and in the benefits of capitalism is the ultimate perpetuator of the popular support for neoliberalist policies in a globalized economy. With that said, the state is also an important unit of analysis. The state is particularly powerful within the domestic economy; and in turn, these domestic interests are representative within the global sphere. States have the power to choose the economic winners and the economic losers through taxation, spending, and regulations (Balaam, 2014). In this class struggle, capitalists and workers will seek to gain political representation in which their interests are reflective in policies. With greater financial resources, the capitalist class is often promoted through policies because of the state s dependency on capital. However, the state unit of analysis can only explain the internal factors of market inequality. A structuralist approach makes assumptions of the international political relations between the developed and the developing states based on theories of imperialism and global world orders. Lenin s theory of imperialism is essential because its analysis is based on the assumption that it is capitalism s nature for the finance and production structures among nations to be biased in favor of the owner s capital (Balaam, 2014). Whereas globalization is

3 3 formally defined as interdependence amongst capital-abundant nations and capital-scarce nations, structuralists see this relationship as exploitative, resulting in institutionalized dependence and uneven development. The dependency theory highlights the relationships between core states and peripheral states, and the constraints that follow. The North-South divide defines the capitalist core as the North and the developing nations as the South. The theory demonstrates the idea that the structure of the global political economy creates vulnerability for the South; and this vulnerability and dependency has been seen throughout modern history. The most recent structure of dependency is a result of multinational corporations in the postwar era. As dependency becomes institutionalized through international agencies and false consciousness, the idea of neoimperialism is prominent to the structuralist perspective. Neoimperialism differs from classical imperialism: states no longer need to occupy other countries in order to control them. GATT, IMF, and the World Bank are arguably the result of underlying capitalist expansive motives. Structuralists view these financial institutions as a mere disguise for developed states to expand their economic interests beyond their domestic territorial boundaries. Critics often contend that U.S. efforts to promote economic liberal theories were nothing more than their own foreign political security and economic interests. It is this false consciousness in which developed nations, promoted globalization as a beneficial package of policies that would help all developing countries grow. The Washington Consensus, an understanding that economic liberal trade and investment best served this purpose, became the rationale for policies for the IMF, the World Bank, and the WTO (Balaam, 2014). As previous selective military intervention highlights United States economic liberal policy objectives, international financial institutions are also representative of international class conflict. For example, the IMF and World Bank implemented conditional loans for developing countries. Structural adjustment policies,

4 4 which reflected developed nations push for neoliberal economic policies, were required if a developing nation borrowed money. States were advised to liberalize trade and allow foreign direct investment into the domestic economy. The idea that countries could grow their way out of debt became the foundation of the Washington Consensus. Developing nations were liberalized their economies because it would be more attractive to foreign investors if tariff barriers were eliminated. However, adopting IMF structural policies only opened the door to surveillance, the process of monitoring and consultation with each of its member countries (Lombardi, 2008). With institutional surveillance, powerful countries are more capable to exercise capitalist power and exploitative behavior. Dependency theorists contend that the international financial and foreign aid system is exploitative (Balaam, 2014). Indebted countries are subject to long-term financial dependence, and therefore, developed nations are only interested in the profit from interest rates, and not the development of a country. Theorists argue that political and economic motives are commonly behind most foreign aid (Hayter, 1971). Such economic assistance only reinforces dependency and dominate-subordinate relationships. Such relationships are a result of another structuralist idea: neocolonialism. Neocolonialism refers to the basic economic linkages that are still in tact, despite the removal of political dominance during decolonization. In other words, previous colonies are incapable of independent development and must rely on their former imperial power the establishment of the welfare state. (Rao, 2000). Underdevelopment originated in the colonial order and development in the post-colonial era was dependent on the developed countries for capital and technology (Balaam, 2014). Through financial institutions and foreign banks, neoimperialism is continuously exercised as developed nations exploit the export commodity market through unequal exchange relationships.

5 5 The modern world system theory captures the exploitation of developing economies through unequal exchange relationships. Essentially, a structuralist perspective on capitalism is a perspective that considers capitalism as a world system, which determines political and social relations. Moreover, the world system provides the sole means of organization in the international system (Balaam, 2014). The political economic relationship between the core states and the peripheral states is determined and influenced by the world order. For example, The world-system theory sees the world as an instrument for institutionalizing the core-periphery structure of domination. The role of the world-economy-agencies- the IMF and the World Bank is to force peripheral economies to stay open to worldeconomy forces, and to maintain their outward economic orientation as against any locally-inspired tendencies toward auto-centric development (Ardalan, 2009). In conclusion, the structuralist perspective of inequality in globalization is a result of capitalism and world order. The world system theory places emphasis on core countries and their abilities for intervention and surveillance for a newer source of political economic control over peripheral states: neoimperialism. Furthermore, the dependency theory highlights these economic linkages as a source for exploitation and a long-term debt cycle with structural policy consequences enforced by the IMF. The structuralist theories, therefore, are not separate ideas or units of analyses: they are interconnected and seek to explain the structure of the institutions that continue to aggravate inequality and foster uneven development within the international political economy.

6 6 Part II: Structuralism Applied Many structuralists trace hunger in developing nations back to the colonial policies of the developed nations (Balaam, 2014). Dependency theorists and the modern world system theory describe this structuralist approach as the classic political economic relationship between the core and peripheral states. As states who were once resource and land rich, many of these developing nations adopted structural adjustment policies, which placed a strong emphasis on core interests: neoliberalism. In the 1950s and 1960s, these nations focused on the rural-industrial sector and accumulated large commodity surpluses. But, with the wave of neoliberalism in the 1970s, these nations were encouraged to borrow from foreign banks and focus on developing their industries. The major condition of the IMF, the structural adjustment program, meant that these states were to finance their debt from export revenue. As developing states transformed their economies in support of their industries, investment in agriculture dropped resulting in dependency on food imports. In addition, a large influx of cheaper imports had also undercut the prices of domestic commodities (Balaam, 2014). De-peasantisation is the process of urbanization, in which large populations of people abandon the rural, agricultural regions for urban-city slums. This is a result of the pressure to industrialize, which ultimately led to increase in starvation and food insecurity in developing nations. States, who were once rich in food resources, are now finding themselves to be increasingly dependent on imported food products. When economic liberal trade policies are implemented, imports provide cheaper food products, which ultimately drive local markets out of business and increase dependency. Structuralists argue that there needs to be a stronger focus on the consequences of food aid and poverty. Aid should only be used for short-term efforts, as long-term aid can deter local production and make a state even more dependent on imports and foreign aid.

7 7 In addition, structuralists promote food sovereignty, rather than food security, while food security emphasizes economic access to food and macro-level policies that either produce or import enough food to meet basic nutritional standards, food sovereignty emphasizes access to and control over the means to produce one s own food (Balaam, 2014). To have control over the decision-making in the food system, structuralists argue that land resources and technology are integral for benefiting local farmers, and ultimately, feeding their communities. The structuralist approach is not just a foundation for analysis, but it also questions the morals and interests of actors in order to understand inequality. Genetically Modified Organisms, GMOs, have become the center of debate for food production and food management in the international political economy. GMOs have ultimately restructured the food production system, as it is an industrial, capital-intensive method not labor-intensive. For example, in many cases, GMOs also played a role in cases of fiscal mismanagement, corruption, income disparities, a collapsed currency, and the loss of personal savings (Llana, 2008). GMOs have raised questions regarding harm and safety, but this new food production system widens the poverty gap even further as poorer nations struggle to obtain modern technology and revenue for cheaper, faster food production. Nonetheless, Structuralists continue to question whether these market-oriented food policies are actually beneficial for those who are hungry.

8 8 Conclusion: In conclusion, structuralism provides an open debate for many of the international political economic problems that are relevant and prominent in the globalized economy. Unlike other IPE perspectives, structuralism provides a bottom-up approach, making this foundation for analysis particularly relevant for a structural study of the institutionalization of inequality in globalization. Moreover, the structuralist approach identifies the key actors and components of a capitalist international system. Drawing from the theories of Marx and Lenin, these major contributions to structuralism provide the best framework for understanding why states continue to struggle for development. Most importantly, the dependency theory, neocolonialism, the modern world system, and neoimperialism describe this as an economic pursuit and a class struggle. Most importantly, the theories presented argue that capitalist class competition is not just a domestic phenomenon, but it is highly evident on the world stage. As powerful states pursue their domestic interests on the world stage, it is inevitable that with economic winners, come economic losers. The key aspect to this structuralist framework is the idea of modern imperialism through the hidden agendas of global financial institutions. As neocolonialism continues its lasting legacies, these developing nations will continue the harsh cycle of debt turning towards the IMF and World Bank for help. SAPs and global pressure will continue to exert political power and influence, increasing the long-term debt payment for these struggling economies. In the food production and management realm, the push for industrialization has domestically supported development programs. However, this effort has only increased the financial burden because nations must continue to borrow money and purchase finished products from abroad. Not only is this accumulating large quantities of debt, but these nations are failing to support their once-abundant agricultural industries. When farmers feel the need to abandon rural areas, in search of urban-sector jobs, the agricultural sector is left

9 9 unattended. In addition, when there is free trade, foreign imports are cheaper and more attractive than domestically produced goods. Modern technology and a change in the means of production are also seemingly difficult for developing nations. GMOs are the center of debate for morals and safety issues, but they also pose a huge economic threat to developing nations who struggle to adopt newer means of production. Because they are capital-intensive, GMOs further perpetuate corruption and class struggle. Structuralists offer some answers for these modern economic problems. Firstly, structuralists do not support neoliberalist policies. Whereas scholars recognize the benefit of participation in international relations, structuralists suggest that developing nations should draw away from the global economy. Although recently, efforts by the UN and GATT have pushed for more economic development, structuralists contend that these nations should continue to push to reshape the global political economic regime and policies. Organizations such as BRICS, are prime examples of developing nations continuous pursuit towards economic development. While food management and distribution remain problematic, structuralists offer that food sovereignty is highly essential for stabilizing nations. Continuous emphasis on local food production is ideally the direction these developed nations should take.

10 10 Bibliography Ardalan, Kavous. "Globalization and Culture: Four Paradigmatic Views." International Journal of Social Economics Int J of Social Economics 36.5 (2009): Web. Balaam, David N., and Michael Veseth. Introduction to International Political Economy. Upper Saddle River, NJ: Prentice Hall, Print. Harriss, John. Globalisation and World's Poor: Institutions, Inequality and Justice. Economic and Political Weekly (2001): Web... Hayter, Teresa. Aid as Imperialism. Harmondsworth: Penguin, Print. Lombardi, Domenico, and Ngaire Woods. The Politics of Influence: An Analysis of IMF Surveillance. Review of International Political Economy 15.5 (2008): Web... Pouncy, Charles R. P.. Food, Globalism and Theory: Marxian and Institutionalist Insights into the Global Food System. The University of Miami Inter-American Law Review 43.1 (2011): Web... Rao, Nagesh. "neocolonialism" or "globalization"?: Postcolonial Theory and the Demands of Political Economy. Interdisciplinary Literary Studies 1.2 (2000): Web...