Comparing Neoclassical Theory, Disequilibrium Theory And Marxist Theory
Uneven development has been one of the most striking characteristics of the general process of capitalist, it is defined as persistent difference in stages and rates of economic development between altered areas of the economy. Nevertheless, the economic theory expects that most of the observed features of disparities would tend to be driven out because of the competitive market forces in the modern era due to the booming of technology causing the uneven development. This paper will underline the theory and evidence of uneven development. It will outline the three theories and its evidence that contributes of unevenness. They are Neoclassical Theory, Disequilibrium Theory and Marxist Theory.
Uneven Development refers to the unequal distribution of people, resources, wealth which are the fundamental characteristics of Human and
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People have rational preferences among outcomes, 2. Individuals maximize utility and firms maximize profits, 3. People act independently on the basis of full relevant information” (Weintraub, 1993).
Neoclassical Growth Theory has very important policy implication that has been considered in the economic growth. Neoclassical Theory provides the intellectual basis for neoliberal regional policy. As it was mentioned before, overtime the unevenness that neoclassical theory will eventually disappear, therefore the government will not do anything about the spatial inequality. If the government has to intervene, the measure that is needed for the market to do is to improve the functioning of factor markets, for example, by improving workers knowledge of employment opportunities in other regions.
The second theory of Uneven Development is The Disequilibrium Theory. This theory is associated with the Swedish Economist, Gunnar Myrdal who argued that economic change is most likely to be characterised by positive feedback effects rather than negative feedback. In the Swedish Journal of Economics Myrdal’s own definition of Disequilibrium Theory
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