Week 3 ( 09-15-98): <bold>Varieties of Capitalism, Growth and
Adjustment
</bold>Here, The review of the following readings:
Clement, Henry. (Aug 30 - Sept 2,1998). <italic>The Financial Arms of
industrial and political Activity</italic>. Tunis. Stallings, Barbara.
(1995). <italic>Global Change, Regional Response</italic>. Cambridge
University Press.
Chapter 1: Stallings, B. <italic>Introduction: global
change, regional response.
</italic> Chapter 2: Halliday, F. <italic>The Third
World and the end of the cold war
</italic> Chapter 3: Stallings, B. and Streeck,
W.<italic> Capitalism in conflict? The United
Sates, Europe, and Japan in the post-cold war world.
</italic>It is also attached in a word/98 document.
RIKA MUHL/ ELVA ALARCON
<bold><fontfamily><param>Times</param><smaller>RIKA MUHL / ELVA
ALARCON. 09-15-98
</smaller></fontfamily></bold><fontfamily><param>Times</param><smaller>The
first three chapters of Barbara Stalling's book, <underline>Global
Change, Regional Response,</underline> and Clement Moore Henry's
article "The Financial Arms of Industrial and Political Activity" are
broadly concerned with the economic development of newly industrialized
countries (NICs) and developing countries under the governance of one
of the four capitalist models. Each of these countries is affected by
a set of criteria that contributes to the economic policies and
behavior of these developing countries. Some elements of this set are
more significant or relevant to a particular country or region than
others. The first chapter of Stallings' book lists these key elements
as the end of the cold war; new relations among advanced capitalist
powers; increased globalization of trade and production; shifting
patterns of international finance; and new ideological currents. Only
the first three elements will be dealt with in this article.
Stallings seems to assert that a country is as developed as allows the
particular capitalist model under which it operates by exploring "the
proposition that changes in the developing country hierarchy in the
1980's were closely associated with these international and regional
trends", these trends being the adoption of one of the capitalist
models largely because of a country's geographic proximity to one of
the four major capitalist blocs. Applying Stallings' elements to
Henry's article, we see that competition among capitalist powers has
not helped those countries in the MENA because they are not near a
region that has a strong trend of one type of capitalism, as Latin
America has with the United States, and as SE Asia and many East Asian
countries have with Japan. Also, the end of the cold war hurt the MENA
and other countries for two reasons: those who had aligned themselves
with the USSR found their aid from the USA and international financial
institutions (IFIs) reduced; and the IFIs rewarded more money and more
often to those who began rapid and liberal economic reforms that were
agreeable to the IFIs, and less to those who did not.
The financial underpinnings of many of the MENA countries and others
is IFI and public-sector oriented which limits production and trade
capability since many of these countries do not have strong private
capital operations. Also harmful is the inability of the MENA and
other countries to form their own regional trade bloc. Henry says that
in order to "assess the underlying structural power of capital, it is
necessary to analyze the systems which finance them". The structural
power of private capital lies in its ability to control investments and
not in the dollar amount of the investment. But foreign capital is not
easily available to the MENA countries because their general lack of
accountability in investments is unattractive to many investors, and
IFI's such as the World Bank and the IMF "punish" them by not giving
them loans since they either cannot or will not abide by the attached
conditions to liberalize their economies. MENA countries must rely on
commercial banks for capital which tend to be public-owned and less
efficient and responsive to investment needs.
In chapter two, Halliday highlights "the triumph of a political and
economic model of liberal capitalism" as the last postulate involved at
the end of the cold war in regard to the future of the third world. He
says that the collapse of USSR has had significant implications for its
trade and flows such as the dissolution of the Council of Mutual
Economic Assistance (COMECON). Most trade has been reduced, and the
countries that had significant trade with USSR have had to find other
outlets for their manufactured goods. Soviet aid was extremely
important in the development of some third world countries such as
Mongolia, Vietnam, and Afghanistan. After the cold war, however, the
post-communist states joined the IMF and the World Bank seeking a place
in the international world, which has stimulated competition for
markets and funds among those countries and the third world. A major
concern is "whether the evident universalizing trends in the world
political and economic system will be able to diffuse prosperity and
reduce the gap between richer and poorer states."
The emerging types of capitalism after the collapse of communism are
the main concerns of Stallings and Streeck in chapter three. The focus
is on how quantitative (trade and investment flows) and qualitative
(the behavior within international organizations -GATT and World Bank-)
data shaped the three versions of capitalism in the global context:
Anglo-American (free markets), Japanese (civil society), and European
(citizenship). According to the authors, the quantitative structure
economic and emerging political patterns have caused higher densities
of economic transaction across and greater flows within the regions,
the East Asian region showing the fastest growth. In the qualitative
tests, the authors affirm that the dynamic of non-hegemonic
interdependence entails conflict and cooperation among the "triad" as a
consequence of their heterogeneous socioeconomic features.
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