"Just 8 men own same wealth as half the world" - With this title Oxfam published its annual study on global inequality in January this year. Even if the exact calculation of their numbers is controversial, the report itself is shocking.
In answer to this news the scientific debate about global inequalities as well as economic convergences, which emerge within the structures and processes of our global capitalism, break out again. The Nobel laureate Joseph Stiglitz, for example, blames
global capitalism for this development and sends an appeal for strengthened corporate social responsibility.
In this essay I therefore want to examine to which extent global capitalism can be seen as the producer of uneven development rather than of economic convergence.
Since the early 1980s the winds of global capitalism became stronger. It was a period where developing countries with their mostly inward-looking and nationalistic policies suffered deep crisis like the Latin American depth crisis as of the early 1980s or the collapse of the Soviet Bloc in 1991. During this era neoliberal economies of the more developed world built the hegemonic power [...]
Table of Contents
1. INTRODUCTION
2. HISTORY OF GLOBAL ECONOMIC POLICIES SINCE THE EARLY 1980s
3. THE IDEA OF CAPITALISM AND ITS THEORETICAL CONTRIBUTION TO OVERCOME GLOBAL INEQUALITY
4. EMPIRICAL ANALYSIS: HOW DID ECONOMIES REACT TO THESE POLICY CHANGES IN TERMS OF INEQUALITY?
5. SCHUMPETER´S CREATIVE DESTRUCTION AND INEQUALITY
6. CONCLUSION: DID CAPITALISM FAIL?
Objectives and Topics
This essay examines the extent to which global capitalism, particularly since the 1980s, acts as a driver of uneven development rather than fostering economic convergence between nations. It critically evaluates neoliberal policy frameworks, such as the Washington Consensus, against empirical evidence of income inequality and theoretical models of growth.
- The historical impact of neoliberal economic policies on developing nations.
- Theoretical explanations for global inequality, including the Kuznets curve.
- Empirical analysis of income-inequality trends both between and within countries.
- Application of Schumpeter’s model of "Creative Destruction" to global economic structures.
- The role of China as a counter-example to traditional neoliberal development paths.
Excerpt from the Book
SCHUMPETER´S CREATIVE DESTRUCTION AND INEQUALITY
The increase of the global level of inequality lets assume that, even if the levels of industrialisation converged, the reforms of the 1980s and the 1990s were not successful. In terms of between-countries inequality it keeps striking that those developing countries, which strongly engaged with neoliberal policies, did not achieve to catch up with the more developed countries even if the former industrialised and the latter de-industrialised. The theory of lower productivity of service activities than the productivity of manufacturing activities, therefore, does not convince.
The rise of within-countries inequality indicates a failure of Kuznets theory since inequality in, inter alia, the USA and UK rose again.
Inspired from Karl Marx, Joseph Schumpeter formulated the model of Creative Destruction. By means of this theory and some further thoughts of distinguished economists an extended theory arised, which seems to better explain the empirical observations made before.
Summary of Chapters
1. INTRODUCTION: The chapter introduces the context of rising global inequality and sets the research objective to investigate if global capitalism causes uneven development.
2. HISTORY OF GLOBAL ECONOMIC POLICIES SINCE THE EARLY 1980s: This section details the emergence of the Washington Consensus and the varying adoption of neoliberal policies across different global regions.
3. THE IDEA OF CAPITALISM AND ITS THEORETICAL CONTRIBUTION TO OVERCOME GLOBAL INEQUALITY: This chapter explores the theoretical expectation that free-market structures and industrialization would naturally lead to a convergence of wealth between nations.
4. EMPIRICAL ANALYSIS: HOW DID ECONOMIES REACT TO THESE POLICY CHANGES IN TERMS OF INEQUALITY?: The chapter presents empirical data showing that despite industrialization in some areas, global income inequality has increased, with a specific focus on the divide between and within countries.
5. SCHUMPETER´S CREATIVE DESTRUCTION AND INEQUALITY: This section applies Schumpeter’s theory to a global scale, suggesting that innovation-driven competition reinforces inequalities between wealthy first-mover nations and less-wealthy reproducers.
6. CONCLUSION: DID CAPITALISM FAIL?: The final chapter summarizes that neoliberal instruments have largely failed to reduce global inequality, highlighting China’s unique developmental path as a significant deviation from the norm.
Keywords
Global Capitalism, Uneven Development, Economic Convergence, Washington Consensus, Neoliberalism, Income Inequality, Kuznets Curve, Creative Destruction, Industrialization, Global South, Wealth Distribution, Globalization, Transnational Corporations, Economic Policy, Schumpeter.
Frequently Asked Questions
What is the primary focus of this paper?
The paper examines whether global capitalism and neoliberal policies have successfully fostered economic convergence or if they have primarily produced uneven development across the globe.
What are the central themes discussed?
The central themes include the impact of the Washington Consensus, the evolution of global inequality since the 1980s, the failure of traditional theories like the Kuznets curve to explain current trends, and the application of Schumpeterian economic models to global space.
What is the main research question?
The core research question is to determine to what extent global capitalism acts as a producer of uneven development rather than as a mechanism for economic convergence.
Which scientific methodology is employed?
The paper utilizes an analytical review of economic literature and empirical data to compare theoretical neoliberal growth expectations with historical outcomes in both developed and developing economies.
What topics are covered in the main body?
The main body covers the history of economic policies, the theoretical foundations of neoliberal growth, an empirical analysis of inequality trends, and an in-depth discussion on Schumpeter’s "Creative Destruction" applied to global economic geography.
Which keywords best characterize this work?
Key terms include Global Capitalism, Uneven Development, Washington Consensus, Neoliberalism, Income Inequality, and Creative Destruction.
Why is China considered a special case in this study?
China is highlighted because it experienced significant growth and poverty reduction while simultaneously rejecting major aspects of the neoliberal Washington Consensus, effectively challenging the paper's main theoretical framework.
How does the paper explain the rise in within-country inequality?
The author notes that within-country inequality has increased despite industrialization, suggesting that the initial benefits of economic transition are often captured by a small group of innovators or "first movers" rather than being broadly distributed.
What does the author conclude about the success of capitalism in reducing inequality?
The author concludes that stringent global capitalism does not appear to be an effective tool for narrowing the gap in national average incomes, noting that the theory of Creative Destruction provides a more compelling explanation for the observed empirical inequalities.
- Arbeit zitieren
- Anonym (Autor:in), 2017, Critical reflection upon the extent to which global capitalism produces uneven development rather than economic convergence, München, GRIN Verlag, https://www.grin.com/document/369413
