Week 11: Interrogating the Global Economy Through North-South Relations Notes

Week 11: Interrogating the Global Economy Through North-South Relations

Aims of the Lecture

  • Examine the implications of Western dominance in Economics and explore potential challenges.
  • Familiarize with the contributions of Samir Amin, particularly his work on Eurocentrism.
  • Introduce perspectives on North-South relations to the analysis of the global economy.

Regional Bias in Publications (1985-2012)

  • Data shows the total publications by geographical areas:
    • United States
    • Europe
    • Rest of the World (RoW)
  • Changes in publication distribution:
    • 1985-1999 (15 years)
    • 2000-2012 (13 years)

Gender Bias

  • Only three cis-women have won the Sveriges Riksbank Prize in Economic Sciences since its introduction in 1969:
    • Elinor Ostrom (2008): for her analysis of economic governance, especially the commons.
    • Esther Duflo (2019): jointly awarded for their experimental approach to alleviating global poverty.
    • Claudia Goldin (2023): for advancing our understanding of women’s labor market outcomes.
  • A 2019 study examined a cross-section of disciplines and observed significant progress in increasing cis women Nobel Prize recipients.
  • It took 15 years (2004-2019) to equal the first 100 years' total for women laureates.
  • Study identifies a gender bias in Nobel Prizes with >96% probability.
  • Even full-time permanent positions don't guarantee equal chances for women Nobel Prize recognition. (source: Lunnemann, P., Jensen, M.H., and Jauffred, L., 2019)
  • Nobel Laureates in Economics by Gender:
    • Male: 97%
    • Female: 3%

Global North Bias

  • Only two nationalities of the Global South have received the Nobel Prize in Economics: India and St. Lucia.
  • Sir Arthur Lewis (1979): jointly awarded “for their pioneering research into economic development research with particular consideration of the problems of developing countries.”
  • Amartya Sen (1998): “for his contributions to welfare economics.”

IMF Data Mapper

  • GDP based on PPP (Purchasing Power Parity), share of world (Percent of World).
  • Source: World Economic Outlook (October 2023).
  • Categories:
    • World
    • Major advanced economies (G7)
    • China, People's Republic of
    • Emerging market and developing economies

Global GDP Shift (2018)

  • The G7 countries' share of world GDP (PPP) in 2018 decreased to just under 30%.
  • Emerging markets and developing economies accounted for 60% of the global GDP, a trend expected to continue.
  • China's share alone reached almost 20%, with the USA at 15% and the EU at 16%.

Shifting Global Power

  • By 2030, Asia is projected to surpass North America and Europe combined in global power.
  • Factors contributing to this shift include higher economic growth, a larger population, increased military spending, and growing technological investment.
  • China is expected to have the largest economy, surpassing the United States a few years before 2030.

E7 vs. G7 Economic Power

  • In 2015, the economic power of E7 (China, India, Indonesia, Brazil, Russia, Mexico, and Turkey) equaled that of G7.
  • By 2040, the E7's economic power could be double the size of the G7.
  • This marks a substantial shift from the E7 being half the size of the G7 in 1995, illustrating the evolving landscape of global economic influence.

Global Economy vs. Economics

  • Economics makes claims only to describe the global economy, allowing it to claim universality and neutrality.
  • Alternatively, economics is a socio-technical process that contributes to the making of the global economy (Mitchell, 2005).

Equilibrium

  • Equilibrium: the price at which the quantity supplied equals the quantity demanded.
  • At the point of equilibrium, resources have been allocated optimally.
  • The market is efficient.

Equilibrium Model

  • Neoclassical economics is considered an “equilibrium model” (Reinert & Kvangraven, 2023).
  • Key characteristics:
    • Rational individualism
    • Self-interest
    • Market efficiency
    • Utility maximization (demand)
    • Profit maximization (supply)
    • Price mechanism
  • Consider some of the blindspots which this model does not account for.

Economic Power vs. Power of Economics

  • Leading economics journals are populated predominantly by authors based in a handful of rich countries.
  • Leading economics are dominated by a singular approach: neoclassical “equilibrium model”.
  • Problems with this:
    • Narrow agenda setting
    • Disregards history, context
    • Parochial theories and policy options
  • What accounts for this concentration of power?
    • Lack of resources?
    • Access to network?
    • Blindspots?
    • Eurocentrism?

Samir Amin

  • Born in Egypt in 1931.
  • Defended his PhD thesis at Sciences Po in Paris in 1957.
  • Pan-Africanist; worked primarily in Dakar, Senegal as Director of the African Office of the Third World Forum.
  • Central research agenda: “Why does capitalism in the third world not resemble capitalism in the first world?”

Eurocentrism

  • Originally published in French in 1988.
  • Eurocentrism is not a concept nor a conscious choice but rather a paradigm that functions spontaneously in the areas of "common sense" and of what seems obvious and unquestionable.

Eurocentrism II

  • Assumptions:
    1. Western civilizational foundation
    2. Historiography
    3. Teleological progress of development
    4. Racialized Binaries (West/Rest)
    5. Universalism

Eurocentrism IV: Seeing Economics Differently

  • Amin’s key economic arguments:
    • Marxist labor theory of value
    • Colonization and Imperialism as structural impediments to the Global South
    • Unequal exchange: value flows from the periphery to the core reproducing an international division of labor and geographically uneven distribution of wealth, stems from colonization and its structures.
    • Imperialist rent, for Amin, derived from extra surplus value

Eurocentrism V: Seeing Economics Differently

  • From the vantage point of the periphery, Amin provided a framework to uncover unequal structures of the global economy – which Eurocentric theories cannot provide.
  • The global structures that underpin an international system of exploitation.
  • Contributions to dependency theory - a South-centered tradition.
  • Amin explored how unequal exchange – the inequalities embedded in international trade – was a crucial feature of the global capitalist economy.
  • School of global historical materialism, in which the historical spread of global capitalism is the key to understanding the polarization between the core and the periphery.
  • Amin extended these concepts to analyze imperialism, unequal exchange, and polarizing tendencies between core and periphery.

Eurocentrism VI: Criticism

  • Western agency is reified at the expense of non-Western agency.
  • The West is treated as distinct from the non-West such that a fully relational conception of the West—one in which the non-West shapes, tracks, and inflects the West as much as vice versa—is either downplayed or dismissed altogether.
  • The colonial binaries of non-Western “silence vs. defiance” and an “all-powerful West vs. powerless non-West.”
  • Critiques call for a relational approach that brings non-Western agency back in while simultaneously recognizing that such agency is usually subjected to structural constraints (Hobson and Sajed, 2017).

Conclusion

  • Since its rise as a discipline in the 1950s, economics remains wedded to intellectual and institutional Western bias that remains unable to attend to the growing diversity in global economic actors.
  • The work of global South scholars like Samir Amin provides a basis on which to consider alternative approaches to our study of the global economy.
  • Introduce perspectives on North-South relations to the analysis of the global economy.

References

  • Amin, S. 1974. Accumulation on a world scale: a critique of the theory of underdevelopment. Monthly Review Press.
  • Anievas, A. and Nişancıoğlu, K., 2015. How the west came to rule: the geopolitical origins of capitalism. Pluto Press.
  • Greenspon, J. and Rodrik, D., 2021. A Note on the Global Distribution of Authorship in Economics Journals (No. w29435). National Bureau of Economic Research.
  • Hobson, J. M. and Sajed, A., 2017. Navigating Beyond the Eurofetishist Frontier of Critical IR Theory: Exploring the Complex Landscapes of Non-Western Agency, International Studies Review, Volume 19, Issue 4, Pages 547–572,
  • Lunnemann, P., Jensen, M.H., and Jauffred, L., 2019. Gender bias in Nobel prizes. Palgrave Communications, 5(1).
  • Mitchell, T., 2005. The work of economics: how a discipline makes its world. European Journal of Sociology/Archives Européennes de Sociologie, 46(2), pp.297-320.
  • Reinert, E.S. and Kvangraven, I.H. eds., 2023. A Modern Guide to Uneven Economic Development. Edward Elgar Publishing.
  • World Economic Outlook database 2023