Harold R. Kerbo (2006). WORLD POVERTY
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Note: My comments appear in dark red and are usually italicized.
Chapter 3: THE MODERN WORLD SYSTEM: EXPLANATIONS OF
GLOBALIZATION AND CONFLICT
Three structural positions in the modern world system
1.
Core: industrialized; exercises hegemony over world’s culture and economy.
2.
Semiperiphery: industrializing; holds resources valuable to the core.
3.
Periphery: not industrialized; not developing; weak state institutions; extreme
poverty.
Four forms of Core domination (p. 67)
1.
Productivity
2.
Trade
3.
Financial
4.
Military
Five
1.
2.
3.
4.
5.
benefits to Core nations from their domination of the Periphery (p. 65)
Cheap raw materials
Cheap labor
Huge profits from direct investments in periphery nations
Markets for exports
The “brain drain”: professionals leave poor countries to practice in the Core.
The Cold War: Soviet Union & the United States
1. The USSR tried to build military supremacy before it achieved the
economic base to sustain its military, in contradiction to all previous
empires in the modern world system. It had to do so! The Forgotten
War, 1919-1920….
2. The US spent a lot of money on its military to counter the Soviet
“threat.”
In the process, it failed to develop its industrial infrastructure.
3. “The cold war is over; Japan won.” (70)
So did Germany and most of the rest of Europe.
Note: none of those countries spent a lot on their military forces.
4. Critique this statement: “Again and again, it was the United States that
had [sic] to take the lead in protecting the capitalist nations’ oil supplies
[!] in places like the Middle East, reestablishing stability in the former
Yugoslavia [?], and now fighting terrorism directed against rich nations.”
(70)
The United States did not have to do any of that! It hasn’t made war to
“protect” oil supplies for capitalist nations. It has done so in order to
gain control over those oil supplies. The former Yugoslavia was made
(sort of) stable only so that it could be more systematically exploited by
northwestern Europe. The U.S. is only “fighting terrorism” because it
created terrorism in the first place in order to subjugate and exploit
peoples and nations who resisted being dominated by the U.S. and
Europe.
Harold R. Kerbo (2006). WORLD POVERTY
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Decline and Reemergence of the United States (72-74)
1. In the 1970s, the US lost a war and its economic progress slowed.
2. In the 1980s, the US trade deficit grew and it became the world’s largest
debtor nation.
“By the end of the decade … the United States had only one bank among
the world’s top 10, while the top 8 banks in the world were all
Japanese.” (73)
3. In the 1990s, the US regained its economic leadership of core nations, at
least by some indicators (tables 3.4. & 3.5 (pp. 74-75).
4. “One of the most important elements in the U.S. economic resurgence and
longest economic boom in American history was simply the ability of U.S. corporations to get more work from American workers at less cost compared to
earlier periods and compared to other industrial nations.” (76)
Average US wages are “substantially below the average of other industrial
nations.”
5. The comparison between U.S. and German workers is on pp. 79-82.
6. The countries missing from Table 3.7, page 81: Belgium, which has the
highest hourly wage in the world; Italy; Australia; others? It would be
interesting to compare with Taiwan, S. Korea, and others in the
semiperiphery.
It is also important to note that all of the other countries listed in the
table have social service programs that magnify earnings for wage
workers: universal health coverage, free education, subsidized
transportation, subsidized child care, paid parental leaves, paid
vacations, child allowances, etc.
7. See Table 3.8, page 82. How can we interpret these statistics?
Forms of Capitalism [in the Core]
See Table 3.9, page 83.
1. Corporate-dominated: U.S., Canada, UK
2. Cooperative: EU
3. State development: the Asian model
Note: Kerbo claims that “cooperative capitalism” features “high taxes.” But
for whom? European income taxes are sharply progressive. And who
benefits from these taxes? Are these (actually only marginally higher) taxes
offset by the benefits for middle- and working-class citizens? European
middle- and working-class households actually have more disposable income
than comparable Americans have.
Why Care about Wal-Mart?
See pp. 84-85.
Harold R. Kerbo (2006). WORLD POVERTY
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The Global Corporate Class
1. Carlyle Group’s board of directors:
a. Frank Carlucci—former Sec of Defense under Reagan, former deputy
director of CIA.
b. George H.W. Bush
c. John Major—former British prime minister
d. Thomas Foley—former speaker of the House
e. James Baker III—former Sec of State under Reagan
f. Anand Panyarachum—former Thai prime minister
g. Executives from Boeing, BMW, and Toshiba
2. There probably is a global corporate class.
3. C. Wright Mills and G. William Domhoff have provided guidelines for
identifying the existence of a corporate [capitalist or ruling] class.
4. William I. Robinson [UCSB] and Jerry Harris (2000), in the journal
Science & Society, argue that there is a global corporate class.
a. It controls international economic institutions such as the IMF, World
Bank, WTO, European Union, Asia Pacific Economic Cooperation
(APEC), World Economic Forum (WEF), and more.
b. They claim that this global corporate class “represents the transition
from the nation-state phase to a new transnational phase of
capitalism.” (87)
c. But while no one doubts that this group is powerful, there is still the
question of how much unity [solidarity, class consciousness] exists
among its members.
5. Kerbo mentions Samuel Huntington (Clash of Civilizations) to make his
point that cultural differences are still divisive—although he does not
agree with Huntington’s analysis, which he implies is too extreme.
6. The Daimler-Benz took over Chrysler and forced out Chrysler executives.
“There are extensive corporate cultural clashes….”
7. The WEF is not as influential as often assumed.
8. On the WTO: “There are more than 150 member nations of the WTO
who are able to vote on trade issues, with no country able to veto any
decision of the membership body…. But the WTO is not the ruler of
global capitalism and exploiter of poor nations to the extent many would
suggest.” The head of the WTO is currently a Thai.
a. There are no votes in the WTO. It operates by consensus. The
major criticism of the WTO is that decisions are made by tribunals
made up of “experts” from Europe and North America, all of whom
favor neoliberal policies. Administrative decisions are made without
any input from poor countries, but by a staff drawn from the EU,
Canada, the US, and those from poor countries trained in Europe and
North America. Poor countries complain that WTO decisions are “not
transparent.”
b. The head of the WTO is of almost no significance, since even if it is
someone from a country in the semiperiphery or periphery, it will be
someone with credentials and ideological views acceptable to the
core, as in the current case.
Harold R. Kerbo (2006). WORLD POVERTY
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9. The IMF and World Bank are both controlled by the US corporate class.
The IMF director has to be a European, but it has to be someone
acceptable to the US Department of Treasury.
10. So what is the conclusion?
a. There is a global corporate class.
b. But it is dominated by the US corporate class.
c. There is less unity and common socialization in the global corporate
class than is the case in any country’s corporate class.
d. The venues for “socialization, discussion, and possible consensus
building” (89) of the global corporate class are increasing.
The first of these was the Trilateral Commission, founded by David
Rockefeller in 1973. It is still around, although it has been
superceded in importance by other organizations, such as the
Business Roundtable. Also of great importance is the World
Economic Forum, which meets yearly at Davos, Switzerland.
11. Does the corporate class have loyalties to any nation?
a. No, it doesn’t.
b. The US corporate class is simply determined to maintain its class
privilege and the system of international capital accumulation that
maintains that privilege.
c. The rest of the global corporate class is becoming increasingly
international (i.e., less loyal to any nation) as its corporations
become increasingly transnational.
d. The exception might be the East and SE Asian corporate class.
If they are the exception, it is doubtful that they will remain so in the
long run.
Harold R. Kerbo (2006). WORLD POVERTY
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Chapter 4: THE GLOBAL ECONOMY AND WORLD POVERTY:
ATTEMPTED EXPLANATIONS
The Resurgence of Cultural Explanations
1. Kerbo says, “Comfortable people in rich nations know they have worked
hard for what they have achieved.” (92) Do they know that, or do they
simply believe it?
2. In The Protestant Ethic & the Spirit of Capitalism, Weber argues that
cultural values and attitudes enabled Western Europe to develop
capitalism.
a. Functionalist theorists (e.g., Parsons, Wilbert Moore) misinterpreted
Weber’s thesis and developed a “modernization” theory that held
that poor countries would have to develop modern values if they
were to become developed.
b. Their “traditional” values that were holding them back.
c. These theorists also explain the development of Asian economies in
terms of Asian cultural values and beliefs.
3. The World Bank has reissued its 1985 book, Underdevelopment Is a
State of Mind.
Samuel Huntington and others have taken up the theme.
4. This is just the “culture of poverty” thesis redirected from domestic
conditions in the U.S. and applied the poor countries.
Overcoming the culture of poverty did not reduce poverty in the U.S.
It won’t work in poor countries either.
5. Those who argue that Asian culture is responsible for Asian economic
development overlook the fact that “not all East and SE Asian nations
with these values have gotten themselves out of poverty.” (93)
Dependency, Uneven Development, and Economic Stagnation
1. Poor countries today face different circumstances than Europe and the U.S. did
when they were developing.
a. They have fewer natural resources, larger populations, and poorer climates
(Myrdal, 1970).
b. They also have to contend with already developed nations, which earlier
developing economies did not have to contend with.
c. Rich nations exercise enormous influence over international markets,
subsidize their agriculture and industry, [and steal from poor countries].
2. When copper (for example) is mined in poor countries, the add-on benefits do
not stay in those countries.
a. The ore is shipped abroad for conversion into finished products.
b. “Leaders of poor nations … should demand that multinational corporations
pay fair taxes and decent wages, and reinvest profits within the poor
nations so the chain of economic activities creating development can occur
within the poor nations.” (95)
3. The modern world system has also changed agriculture in poor countries.
a. Instead of producing for local consumption with labor-intensive methods,
food is grown for export using capital-intensive methods.
b. This forces small farmers off their land and reduces employment
opportunities in rural areas, fueling urbanization and sweatshops.
Harold R. Kerbo (2006). WORLD POVERTY
4. The rich in poor countries have economic incentives not to stop this pattern of
dependency.
They benefit from the exploitative practices of the multinationals.
The rich in poor countries got rich as plantation owners, exploiting the rural
poor.
Global Corporations Can Do Harm
1. Early research indicated that poor countries were harmed by high levels of
foreign corporate investment.
2. But the impact is complex.
It makes a difference what is being invested in, how many corporations are
involved, and controls on investment. (98)
3. Poor countries with more “human capital” (e.g., education) are better able to
turn foreign investment into positive results.
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The Western Bias: Why We Often Fail to Understand
1. Andre Gunder Frank’s critique of Marx and Weber: both failed to
understand Asian culture and its possible consequences for capitalist
development.
2. James Fallows’ summary of contrasts between Asian and Western
values:
a. The purpose of economic life: collective national strength, not
consumption.
b. The view of power: concentrated power can be used in the national
interest.
c. A distrust of unpredictability: hence, free markets are not trusted.
d. Protection of the in-group; attention to national borders. (100)
3. Hence, “getting the price right” is not as important to poor countries as
gaining access to capital.
Actually, this is also more important than free markets to Western
businesses and governments. Free market theory is basically just
ideology. It is divorced from practice.
4. Chalmers Johnson called the West’s attention to the “Asian development
model” in the 1982 book MITI and the Japanese Miracle.
That model still dominates Asian development policy.
5. Frank’s critique of the Western bias in world system theory: it “forgot”
that Asia had its own world system long before the West had one.
6. Kerbo’s “important points” (101):
a. What looks like less democracy does not necessarily lead “to elite
exploitation for elite self-interests.” This is an error of individualism.
b. Long-standing cultural traditions of nationalism help Asian countries
curtail their own elites and regulate foreign investors.
c. Individualism leads Western economists [and sociologists] to underestimate the value of state intervention in economic development.
A Rich Nation Bias
1. Popular opinion in rich countries blame people in poor countries for their
condition.
2. There is an unrealistic presumption that “a magical jump from poverty to
affluence [can occur] almost over night.” (106)
3. We need to fight injustice, but we need to understand why poor people in poor
countries put up with it.