India: Economic Development and Social Opportunity, Essay Example

What are the key ideas in the three theories of development – Structuralism?

Structuralism emphasizes value on the totality of a system and the way it interrelates with all of its elements. The example Blnkenburg, Palma and Tregenna gives is to say it’s like “understanding the world economy as a system within which the centre and periphery are intrinsically linked, with many economic problems of the periphery deriving from that interaction” (Blankenburg, Palma, and Tregenna, 1). The structuralist views the economy fundamentally with a focus on structural features with a key theme being the dependent relationship that has evolved out of the interactions between developed regions and under-developed regions.

neo-Marxism

Neo-Marxist theory adopts the core tenants of Marxism but believes it must be modified in order to be effective for developing countries.  Neo-Marxists attribute this idea to the fact that Marx was not equipped with the necessary information to create a theory that could account for the needs of undeveloped regions. Neo-Marxism was able to account for the unique difference between advanced capitalist countries and developing countries. The main finding and argument of Neo-Marxists is that developed countries take advantage of underdeveloped capitalist countries by purchasing their core raw exports for significantly low prices and then manufacturing products with those exports to sell back to the under-developed region for an extremely high value. Neo-Marxists believe this cripples the economy of under-developed regions of the world. Neo-Marxists also take issue with the Marxist belief that before a country can become socialist, it must first transition to being a flourishing capitalist society.  Neo-Marxists argue this is an impossible objective for under-developed countries to accomplish.

Neoliberalism

Neoliberalism provides a method of awareness for defining how international institutions can enable international interactions and collective agreements. In political economy, neoliberalism is the school of thought that emphasizes value on privileging market forces over state intervention in most areas of economic activity. Neoliberals follow that the economy can fend for itself without regulation, and that the forces of supply and demand can adapt to all economic conditions.

According to Sen and Dreze, and also to the Millennial Development Goals, development should focus on the overall increase in human well-being, both social and economic. Explain. 

The main reason Sen and Dreze emphasize an importance on the increase of overall well-being for the sake of sustainable development can be seen with the substantial failure factors like market phobia and market mania imposes on real stable development. The authors note that, “market mania played a role in Russia’s rush towards a market economy in the nineties. The catastrophic results of this rush are one indication that something may be deeply wrong in this enthusiastic unreason” (Sen & Dreze, 53). The main point the authors make is that a biased and unreasonable faith in the market resulted in less than ideal outcomes and economic goals failed to be achieved. The authors use points like this to justify why in order for development to be effective it must be done through an overall improvement of the human-well being, specifically all of the factors that equate to the quality of life shared by a community. Local economic expansion, driven by advancements in education and authentic supply and demand from a grass roots level, are what fund real sustainable development. This idea adopts some of the core tenants of structuralism as is places a focus on the the central core aspects of an affluent economy while keeping the whole in mind. Professors Dreze and Sen state, “that an assessment of India’s failure to eliminate basic deprivations has to go beyond this limited focus, and to take note of the role played in that failure by inadequate public involvement in the provision of basic education, health care, social security, and related fields. Even the fostering of fast and participatory economic growth requires some basic social change, which is not addressed by liberalization and economic incentives (Sen & Dreze,34).  One key argument the authors make is that economic growth can not simply be achieved through liberalization or deregulation . They argue that substantial attention needs to paid to the public services designed to supplement and uplift the common good of the public.

What are some of the major controversies in international trade policies?

The bulk of all controversies related to international trade stem from the expansion of globalization and its impact on international markets and governmental policy. As local economies expand into overseas markets, less skilled workers in developed countries suffer by losing available jobs and having to accept lower wages for production of labor-intensive manufactured goods. Likewise, corporations take advantage of cheap labor accessible in other parts of the world and they move the manufacturing of their products to region of the world where wages are lower. Following the North American Free Trade Agreement, the US government promised it would fund the retraining of US workers, as many had their jobs transported to Mexico. This has been a major controversial issue for all those opposed to globalization and free trade.  Some free-trade advocates argue that the issue which stem from free trade can be resolved if portions of the profit are invested in the training of lower skilled workers and education expansion. The problem is, in past years in the United States, this tactic has failed.

A counter argument to many who oppose the negative impacts of international trade is that it has had a positive effect on the development of markets in regions like China and India, as wage increases and GDP improves for those regions in response to expansion in trade agreements. A critique counterbalances this argument is the view that free trade is less about transferring goods and more about the transfer of capital throughout the world without checks or balances. The negative result of the this can be seen in how many free trade agreements allow for foreign ownership of corporations and take advantage of worker’s rights in favor of owners.

Another issue regarding international trade policy can be seen in the decision over whether or not a particular government is going to have floating exchange rates or fixed exchange rate. Governments that choose to have fixed exchange rates may find it more difficult to acquire trade agreements, but companies with floating exchange rates also risk exposure to volatility and the value of their currency can decline.

Work Cited

Blankenburg, Stephanie, José Gabriel Palma and Fiona Tregenna. “structuralism.” The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 21 September 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_S000312> doi:10.1057/9780230226203.1643

Dreze, Jean, and Amartya Sen. “India: Economic development and social opportunity.” OUP Catalogue (1999).

Jessop, Bob. “Liberalism, neoliberalism, and urban governance: A state–theoretical perspective.” Antipode 34.3 (2002): 452-472.

Piaget, Jean. “Structuralism.” (1970).