Unit 7.

Dependency Theory and Global System of Interdependence

• Core Idea: All countries—core, semi-periphery, or periphery—are interdependent.
    - Wallerstein's Argument: No country can maintain its current level of modernization, economic wealth, or standard of living without the participation of other countries.
    - Global Interdependence: Every nation relies on others for resources, labor, and economic stability.

Isolation and Economic Viability

• False Independence: It is impossible for any country to isolate itself completely and function independently while maintaining development.
    - Example of North Korea:
      - North Korea presents as an isolated regime.
      - It struggles with high living standards and economic well-being.

Wallerstein's World-Systems Theory

• Single Global Economic System: Wallerstein posits that there exists one interconnected world economy.

• Legacy of Colonialism:
    - Historical context affects a country's current economic status.
    - Core countries grew to dominance largely due to colonial exploitation of peripheral nations.
    - Core countries benefitted from low-cost agricultural products and raw materials from less developed nations.

Structure of Countries in the World System

• Core Countries:
    - Characteristics: Economic and political dominance, strong military presence.
    - Established industrialization allows them to process resources and sell finished goods.

• Peripheral Countries:
    - Characteristics: Limited political influence, often struggling for stability.
    - Contributes natural resources and cheap labor to core countries.
    - Receives consumer goods in return for raw materials.

Modernization Model (Rostow's Stages of Economic Growth)

• Introduction to Economic Stages:
    - Overview of Rostow's stages; includes a visual representation (X-Y axis).
    - Uses a 45-degree line representing economic growth over time in economic development.

• Stage 1: Traditional Society:
    - Characteristics: Pre-industrial, extremely low development; no countries currently exist in this stage in modern times.
    - Historical Context: Time before agriculture, industrialization, and modern medicine—approximately 500 years ago.

• Stage 2: Preconditions for Take-off:
    - Economic activities remain primary (e.g., agriculture, extraction).
    - Example Countries: Afghanistan and parts of Nigeria show minimal industrialization at this stage.

• Stage 3: Take-off:
    - Transition from primary to secondary economic activities begins, indicating industrialization.
    - Newly industrialized countries start to engage in manufacturing.
    - Example Countries: Vietnam, parts of Mexico; identifies developing industrial capacity.

Conclusion

• Course Summary: The study of these theories reveals crucial interactions between countries and depicts the continued relevance of colonial histories in modern economic status. Understanding Rostow's model alongside Wallerstein's theories provides comprehensive insights into global economic dynamics and developmental inequalities.