Dependency theory came forth in the 1940’s in opposition to the dependency theory of modernization. It is highly influenced by the Marxist perspective which states that globalization is the basis for market capitalism, cheap labor and advancement of technology in developed nations. Raul Prebisch found that the growth of wealth in developed nations appeared to be at the expense of the underdeveloped nations. According to the modernist paradigm, the periphery countries are at an early stage of development and need to look to the core countries to follow the path of development. On the contrary, dependency theory looks at the historical trends to explain the current state of the underdeveloped countries.
He described his purpose as to lay bare “the economic law of motion of modern society.” The second and third volumes were published posthumously, edited by his collaborator Friedrich Engels (1820–95) (The Editors of Encyclopædia Britannica , 2015). Much of Das Kapital spells out Marx’s concept of the “surplus value” of labour and its consequences for capitalism Marx’s concept of the “surplus value” of labor and its consequences for capitalism on das kapital. The nature of commodities, wages and the worker-capitalist relationship, among other things. Surplus value is the incipient capitalist starts by buying in order to sell, and to sell at a higher price, in order to get back by an increment in money surplus-value cannot come either from the buyer buying the commodities under their value, or from the seller selling them above their value. The increase in the value of money that is to be converted into capital cannot take place in the money itself, nor can it originate in the purchase, is not different from its value.
The poor countries usually are been help in term of technology and science from developed countries and this lead to the increasing of capitalist in the backward country. Eventually, these capitalist system are become main reason in the form of exploitation towards the society. Based on this, I would explain further about the exploitation through modernization and dependency theories. Modernization theorist is aimed to explain the reason about the poorer countries failed to evolve into modern societies. Modernization theory believes that capitalist or investments from developed countries are the solution towards the poverty.
Dependency theory came forth in the 1940’s in opposition to the dependency theory of modernization. It is highly influenced by the Marxist perspective which states that globalization is the basis for market capitalism, cheap labor and advancement of technology in developed nations. Raul Prebisch found that the growth of wealth in developed nations appeared to be at the expense of the underdeveloped nations. According to the modernist paradigm, the periphery countries are at an early stage of development and need to look to the core countries to follow the path of development. On the contrary, dependency theory looks at the historical trends to explain the current state of the underdeveloped countries.
This form of knowledge does not distinguishlimitations based on nationhood, religion and ethnicity that is why is it said to have encouraged globalization. The second factor is capitalism, which is a methodused to organizeeconomic activities that will result in making a profit and this phase of capitalism is regarded as the main force behind globalization. The constant concern to build up a surplus or fail constrains capital to look for out cheaper production sites and new markets for their products, which in realistic terms means the world. The third factor is technology which is the application of knowledge, in general scientific knowledge, to solve practical problems. Technological innovations in production and transportation were important during the early modern phase of globalization, whereas technological innovations in information and communication were important during the late modern phase of globalization.
Hayek’s explanation of an economy’s business cycle “The Austrian Business Cycle”: In his book “Prices and Production”, Hayek’s argued that any business cycle commence as a result of a monetary policy or approach that is adopted by governments. Hayek agreed with Adam’s Smith theory of free markets. He argued that despite the fact that markets evolved over time as a result of human actions, at a certain stage markets fail resulting in unemployment and inefficient allocation of resources. On analyzing the factors behind markets failure, Hayek suggested that the reason behind fluctuations in the stability of markets was the intervention of governments in the monetary equilibrium of economies. There he argued for a monetary approach to the origins of the cycle.
Anxiety can be assumed one of the institutive mechanisms of neoliberalism. In the lights of that, Jean and John Comaroff evaluate production and accumulation processes in terms of how symbols and meanings are interpreted. The changes in the process of production affected people so that they manage their social and economic life in terms of their interpretation of neoliberal forces. They used millennial capitalism so that they tried to show the results of it. “To the degree that millennial capitalism fuses the modern and the postmodern, hope and hopelessness, utility and futility, the world created in its image presents itself as a mass of contradictions: as a world, simultaneously, of possibility and impossibility (Jean Comaroff and John Comaroff,
One of the most cited articles in economic integration literature is that of Abdel Jaber (1971). According to this study, welfare impacts of economic integration arrangements among developing countries should incorporate employment, productivity, and income effects in addition to the production and consumption effects. Furthermore, a number of studies have argued that economic integration among developing countries should not be treated as a tariff issue but as an approach to economic development. For instance, Roberson (1970) argued that the theories of economic integration have merely focused on gains of better resource allocation, whereas economic development is concerned with the employment of idle resources and better deployment of under-utilized resources to stimulate faster long-run growth. Another worth mentioning study is that of Mikesell (1965).
While the laborers make ever more riches through progressing production, they additionally make their own suffering, getting to be themselves a commodity to be exchanged on the labor market. Capital, however, increases with continuous production and aggregation, inclining towards monopoly structures. The engine of this political economy is greed and competition, i.e., the war amongst the greedy. Pro-capitalist economists like to illustrate the rise economic systems by individualizing the primordial by presenting the lone caveman acting for nobody but himself, but Karl Marx objects in this illustration as it doesn’t present the immediate world as it actually is. Human beings are not isolated as they constantly
The key divergence of this school from previous views is that fluctuations are the outcomes of shocks under a perfectly competitive market setting with flexible prices and wages. An important strand from the new classical theorist emerged from the real business cycle models ala Kydland and Prescott (1982), Long and Plosser (1983), and Prescott (1986) among others. The underlying hypothesis is that output is at its natural level which, is subject to contemporaneous distortion from its steady state path. This changes are ascribed to changes in decisions at the micro level (the Ramsey-Cass-Koopman models). The model relaxes the assumption of market imperfection raised by household heterogeneity and intergenerational linkages (Romer, 2006, p. 48).