World Economy & Capitalism

10/6/13

In class we discussed the world economy and how it attempts to categorize large zones into regions based on cultural, political, or geographic similarities. Many of the terms that divide our world today are arrogant and gave the sense that some countries are superior to those that do not have economic stability. Terms like first, second, and third world countries have a crude connotation attached to it. Based on Wallerstein's journal, the world economy tries to incorporate many cultures and groups into areas that believe to have a unifying component. That unifying component is the division of labor. The three categories we discussed were core, semi-periphery, and periphery. Countries are sorted and ranked into these categories based on economic and political strength. Who is to judge the framework of a country's political structure? Is monetary value enough to condemn semi-periphery and periphery countries that are not as industrialized and capitalistic as core countries? Capitalism blends into the world economy perfectly, because what the world economy lacks is what capitalism has to offer. The two components are designed to dominate the open market, offering a universal exchange of wealth through countries all over the world. The downfall of capitalism is that the structure of it's ideology allows for winners and losers. The core countries who have the wealth can manipulate those in the periphery for resources and the semi-periphery for their production. Consumerism in core countries encourages cheap labor costs in periphery and semi-periphery. The real "winner" is this scenario is core countries whose profits explode while others suffer the exploitation of their environment.

If you have the time, you should watch Life and Debt on YouTube. It's an hour long documentary of how organizations like the IMF have control over the economy of developing countries and how they can manipulate policy and growth through debt. The world economy has provided enormous opportunity for growth by integrating open markets and promoting interdependence among countries. However, fluctuating price swings and competition between local markets and the world markets show a darker side of globalization. Globalization constantly pressures developing countries to compete for profitability of their products. In the case of Jamaica, short term loans at full interest by the IMF hinder the ability to achieve economic stability. This documentary shows how countries are kept within the realm of semi-periphery and under the control of organizations in core countries.

If you haven't seen this before, watch it. This short clip gives a realistic perspective of how we take our circumstances for granted.