r5

• Embolusion is the quantitative development but qualitative development.
• Prone to corruption and inefficiencies
• Underdevelopment is a popularized term by Clifford Garetts and Bang Chao.
• Neo-Marxist theories of development focus on the collective conscience decreasing due to the division of labor.
• Marx's theory of history emphasizes the primacy of the mode of production and the material conditions and relations of production shape ideological systems such as religion and ethics.
• Neo-Marxist theories do not follow the main Marxist argument but the logic is the same as Marx has said.
• Neo-classical Development Theories are based on Modernization Theory, which suggests that lack of development is due to the absence of socio-cultural, political, and psychological characteristics.
• Marx’s Political Economy is the starting point of dependency theory, which is based on classical political economy and Marxian political economy.
• The mode of production, as per Marx, consists of the forces of production (land, labor, capital, technology) and the social relations of production.
• The superstructure, which serves to regulate and maintain the social order for the preservation of the mode of production, includes the state, religion, culture, law, politics.
• Economic determinism is a criticism of Marx, stating that the amount of labor that the laborers have is not equal to their wage.
• Gunder Frank’s Theory of Underdevelopment and Capitalist Accumulation suggests that capitalism is a progressive force because of its ability to massively and rapidly transform the productive forces (technology).
• The value of a good is determined not just by the raw materials but also the effort in the way it is to produce a product, as per the labor theory of value, as stated by David Ricardo.
• The problem of Marx is the amount of labor that the laborers have is not equal to their wage.
• From Marx, the modern history of capital dates back to the creation in the 16th century of a world-embracing commerce and a world-embracing market.
• Colonial capitalism has continued to extract capital to core countries, exploitation imposed by colonialism.
• Orthodox Marxists believe that underdevelopment is just a production level.
• Neo-Marxists have a worldwide view of the capitalism.
• Neo-classical theorists on trade include Keynesian, Modernization, and Comparative Advantage.
• Comparative Advantage is the basis of trade, and in a macro level, countries don’t have it all so they need to exchange to other countries.
• Comparative Advantage is not natural, as poverty is not natural, it is facilitated because of exploitation and colonialization.
• Frank argues that poverty exists because it is systematic, those inequalities promote poverty which in turn promotes underdevelopment.
• Variants of Neo-Marxist/Hetero-dox Marx include World Systems, Dependency Theory, and Unequal Exchange.
• World Systems theory discusses semi periphery countries such as Korea, Taiwan, Singapore.
• Dependency Theory is the first variant of Neo-Marxist theory to be forwarded by Raul Prevish and Andre Gunder-Frank.
• Dependency Theory argues that poor countries are poor not because they are traditional or backward in thinking, but because there has been a long term extraction of the big countries.
• Neo-classical development theories include Modernization Theory and Keynesian Economics.
• Neo-classical development theories argue that poor countries’ failure to develop is due to lack of effective demand.
• Effective demand refers to the aggregate level of demand in an economy that is sufficient to stimulate production and employment at a high level.
• Demand is the willingness of the buyer to consume products or services.
• Elasticity of demand is how much a buyer can buy, how flexible we are to buy something based on the willingness and price of the product/services.
• Effective Demand happens when the total amount of demand is enough to stimulate growth and employment (high demand =/= effective demand).
• High demand happens when the demand heightens but didn’t create or stimulate employment nor growth.
• Effective Demand happens when consumption creates employment hence stimulate growth.
• Frank is critical of theorists associated with ECLA who posited a theory of declining terms of trade (Raul Prebisch) and chronic unequal exchange (Arrighi Emmanuel) which disadvantage raw material producers.
• The terms of trade aren’t really equal because they are declining.
• Chronic unequal exchange - labor; labor that is not compensated so well (in the peripheries) while in the west they have very high salaries compared to the workers on the peripheries.
• The producers of raw materials are the one being exploited.
• The entire premise of the Neo-Marxist theory is how the entire system of capitalism facilitated by longer colonialization, disadvantage the raw material producers in many ways.
• They recommended import substitution industrialization (ISI) to develop the internal market.