International Political Economy

1. International Political Economy Structuralism in Perspective: Lenin and Imperialism, Modern World Systems Theory, Dependency Theory. (Ch. 4 contd)

2. Lenin and Imperialism • Lenin: founder of the Soviet Union, role in the Russian Revolution of 1917. • Took Marx’s ideas forward – Russia had gone through the capitalist stage in history and was ready for a socialist revolution • Lenin’s ideas are the basis of Dependency and MWS theory

3. Marx Vs Lenin Marx: Capitalism contains the seeds of its own destruction – inherently unstable – three laws – class conflict – revolutionary crisis – transition to socialism. Lenin expanded Marx’s theory: Capitalism had escaped its three laws of motion through overseas imperialism – acquisition of foreign colonies had enabled the capitalists to dispose off unconsumed goods and acquire cheap resources. Marx focus: internal exploitation of capitalism Lenin Focus: international exploitation of capitalism – how inequality between classes was similar to inequality in development among industrialized and developing countries.

4. Fourth Law: Law of capitalist imperialism As capitalist economies mature, capital accumulates, profits fall, capitalist economies acquire colonies to serve as markets, investment outlets and sources of cheap raw material. Lenin: imperialism is the highest stage of capitalism –concentration of wealth in capitalism fuels imperialism

5. Imperial capitalism spreads through two structures of IPE: the production and finance structure. Under capitalism both theses structures are constituted to create dependency and facilitate exploitation. Rich capitalist countries are able to delay their financial crisis by keeping poor nations underdeveloped and deep in debt, and dependent on the rich nations for manufactured goods, jobs and financial resources.

6. Modern World System’s theory (MWS) Immanuel Wallerstein - the founder of the intellectual school of world-systems theory – - characterizes the world system as a set of mechanisms which redistributes resources from the periphery to the core.

7. Modern World System’s theory (MWS) Core: developed industrialized nations Semi- Periphery: NICs Periphery: LDCs Core nations dominate the peripheral states through unequal exchange- extraction of cheap raw materials etc. The Core interacts with the periphery and the semiperiphery through the global structure of capitalism. Core exploits and transforms Semi periphery acts as an intermediary – diffusing opposition of the periphery to the core.

8. The core nations primarily own and control the major means of production in the world and perform the higher-level production tasks. The periphery nations own very little of the world’s means of production and provide less-skilled labor. Like a Marx’s class system with a nation,:The core nations receive the greatest share of surplus production, and periphery nations receive the least. Furthermore, core nations are usually able to purchase raw materials and other goods from noncore nations at low prices, while demanding higher prices for their exports to noncore nations

9. Core, Periphery and Semi-periphery Today?

10. Criticism of MWS? MWS approach to structuralism sees exploitation as an inherent element of the capitalist economic structure both within and among the core, periphery and semiperiphery. Simplistic and deterministic?

11. Dependency Theory Main theme: the structure of the global political economy enslaves the less developed countries of the “South” by making them dependent on the capitalist core nations of the “North” “Development of underdevelopment” thesis: Imperialism produced underdevelopment

12. Then how can the periphery develop if it is exploited by the industrialized nations in the global political economy? • Withdraw from the global political economy? • Efforts to redistribute power and income between North and South (eg. Organizations like UNCTAD) • Calls for a NIEO