The three factors that proved most prominent in Britain’s ascension were: colonial influence on arrests, numerous effective government market interventions, and the cultural advantages that Protestantism bestowed upon British society. These conditions are still relevant for developing economies to take into account. As modern colonialism is apparent, disguised as free trade, it acts as the detriment and the cause to the lack of development of an tartaric economy.
Effective state intervention, the beneficial condition to a developing economy, acts as a bulwark to the dependent relationships fostered under ‘free trade’. The culture effect is beneficial and relevant because it allows for state intervention to be effectively operated; countering the effects that the ‘free trade’ system imposes on peripheries. The beginning of this paper will devote itself to discussing the effects of these conditions in Britain. The latter will discuss how these conditions are capable of having an influence on contemporary developing economies.
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During the 18th and 19th centuries, colonialism was a reoccurring theme across the European continent. Compared to the French, the British effectively manipulated the goals of colonization. The British did so by focusing on economic gains rather than territorial accession and political popularization. This manipulated form of colonization emphasized the importance of economic success. Through this manipulation and operation of colonialism focusing on economic gains, the global market was created. The Nigerian colony between 1900-1930, gave rise to the growth of industry in Britain.
In Nigeria, the British exploited the land and established the territory with the purpose of exporting its raw materials back to Britain. (Citing Jay and Crowder) Kohl states that the British solely wanted to create industry within their borders by stimulating “the production and export of cash crops… To encourage the importation of European manufactured goods” 1. The British achieved this by creating a relationship that forced Nigeria to be dependent on Britain. This phenomenon, known as dependency theory in political science, initiated a unique industrial cycle in Britain.
The banking system, that allowed for the ‘profit motive’ to operate in Britain was a product of colonial tax policies. Capital that was accumulated from the tariffs imposed by the British government on trade with Nigeria, enabled the British government to reinvest their profits into infrastructure in Britain, specifically the banking system. Banks were created to provide loans, ND entrepreneurs were able to invest this now available capital in building factories that would mass-produce secondary goods, which were eventually sold back to British colonies.
Britain’s colonial practice in Nigeria provided for capital accumulation. This capital then became available to the public. The banking system offered profit-motivated entrepreneurs the chance to borrow capital, which provided the means to birthing a manufacturing base in Britain. Effective state intervention is crucial in explaining economic development in Britain. The Enclosure Act initiated the domino effect of ‘industry evolution’. The British government legitimated the prevarication of common land in 18012 with the Enclosure Act.
The effects of the enclosure act range widely, but the most beneficial effect of the act was the creation of the labor force. The labor force provides the means to production within the factories that will create secondary goods, further being traded between Britain and its colonies and other trading agents. Not only do these labor forces enable the mass production of secondary goods to operate, but also the wages accumulated by these employees are beneficial because they are reinvested into the British economy through consumer demands.
The cultural effect on the economy is seen by most theorists to give rise to more questions than answers, but in a social scientific sense, the cultural effect is highly influential because it does produce economic development;. The impact of culture in Britain during the industrial Revolution can be demonstrated and explained through Max Weeper’s composition “The Protestant Ethic and the Spirit of Capitalism”. The profit motive is supported by Weeper’s argument in that the ethics of Calvinist, a branch of Protestantism, helped develop economic conditions in Britain during the Industrial Revolution.
Weber states that is has done so because of the effects of predestination. The belief in predestination fostered ideals that in order to gain God’s favor one would need to be successful in the world of business, earning material success and profit through the capitalist systems. The cultural effect has had influence on economic development in Britain because it supports the ‘profit motive’, which pressured the Industrial Revolution in Britain. Colonial influence, effective state intervention and the cultural effect were the most crucial factors in making the Industrial Revolution possible.
These three conditions paved the way for the establishment of the modern economic system of capitalism and reinforced it as an economic ideology superior to agricultural based economy apparent before the Agricultural Revolution. What analysts strive to understand today is if the conditions described above can be reproduced in contemporary developing economies. The remainder Of this paper will provide insight into the relevance of each condition in contemporary terms. Traditional interpretation of colonialism sees political popularization through territorial accession as its ends.
The contemporary interpretation sees alongside disguised as the system of ‘free trade’, which does not benefit the periphery country in any means. This system operates on unequal terms of trade between the commercial dealers. Thus creating an exploitative relationship who’s stability is reassured through the military threat of the core country that supervises this inalienable economic structure. This system allows core countries to gathers the raw materials at low prices, produce valuable products, and finally sell the more valuable products to the market it controls. An example of this exploitative relationship can be seen between the US and
Bolivia. Angel Village, “a retired state road inspector”, said to William Finnegan that the free trade the Americans, under the Bush administration, implemented and supervised world wide trade that exploited Bolivia of its natural oils, gases and minerals and that the wealth was going back to the “foreigners”5 (the Americans). Parallel to the description of exploitation from Village, the Valuable brothers, authors of “Modernization and Dependency’, both establish that development of the core is the underdevelopment of the peripheries under these unequal terms Of trade.
The Valuable brothers furthermore agglomerated the importance of the LACE doctrine that was promoted to “diversify the export base of Latin American countries and to accelerate industrialization efforts through import substitution industrialization”7. The fact that countries today are reaching out to broaden their own industrial base through SIS or more recent policy mechanisms such as export led industrialization, specifically in East Asia, demonstrates that colonialism, even though in a more modern sense (less forceful and more strategic), exists, is threatening and is impinging.
Modern alongside disguised as ‘free trade’ promotes unequal terms of trade, which births an unstable and exhausted economy in periphery countries. An example of the detrimental effects that are inherent to a dependent relationship with the core is no better demonstrated than the peripheral instability caused by the 2008 economic slowdown in the United States. Within days of the market crash, the closure of hundreds of factories and the loss of tens of thousands of jobs were reported in countries throughout Asia, specifically China and Taiwan. Effective government intervention is critical in anthropometry developing economies.
It is critical because efficient state intervention will counter the effects of the unequal terms of trade observed within the dependency theory. By implementing policy mechanisms such as SIS, the development of a self-sufficient economy is more easily obtained by limiting competition and enabling the growth of infant industries. Crossroads, with her accounts in “Import Substitution Industrialization”, offers an explanation of establishing SIS and believes that economic self-sufficiency will arise with the installation of this particular policy mechanism-8 The gains SIS remises are achieved mainly through the expansion of the domestic market.
Along with the development of domestic industry within countries under SIS, recruited workers that fill these industries earn an income, which serves “to expand the market for consumer goods”9 within that countries economy. This is due to the available capital achieved through an income. Effective government intervention is extremely relevant when dealing with contemporary economic development because effective government intervention will lead countries away from unstable markets under dependency and into ‘lesser’ unstable markets found within policy semantics such as SIS.
In retrospect, effective state intervention, specifically implementing policy mechanisms such as SIS, are beneficial for developing economies to bulwark the effects of the dependent relationship between the core and the periphery. Culture, as experienced in the Industrial Revolution, has a major impact on the economy. Berger, in “An East Asian Development Model” discusses the salient economic features of this ‘second case’ of capital modernity observed specifically in Taiwan 10.
Both Berger and Hoist co authors to “An East Asian Development Model” demonstrate which aspects of ultra give rise to features of the economic success seen in Taiwan. This approach to economic influence, although attractive, heavily glamorousness the effects of culture with no statistical evidence and concomitantly disregards policy mechanisms put in place in Taiwan that were installed during Japanese colonization, as posited by Amassed in, “Twain’s Economic History”. Berger wants to determine if culture, specifically Confucianism in Taiwan, has lead to the development of this ‘second case’ of resilient capital modernity.
Berger presses forward saying that the social and cultural features of Twain’s population heavily influence the features of what he calls a ‘second case’ of capital modernity. Berger is correct in saying this and it is true that strong achievement orientated work ethic, a highly developed sense of collective solidarity, the prestige of education and the meritocracy norms and institutions that seek out elites at an early eagle 1 do deliver the platform to developing an economy. On top of this platform of cultural influences, policy mechanisms that Amassed would argue for are the key to fulfilling and continuing economic development.
Weber, whose theory on the protestant thick shaped how culture was seen to influence the economy, shed light on East Asian culture and how it shaped economic development. Weber believed that Asian culture and religious traditions were not congenial to the sorts of development seen in Taiwan. Berger critiques Webber platform on East Asian development and concludes that both East Asian Buddhism and Confucianism promote both positive attitudes towards work in the world and the proper goals of life.
Hoist, co author of “An East Asian Development Model”, also concluded that capitalist development is due to cultural elements such as “work ethics, diligence, respect for educational achievement and the stress on order and harmony’. The features Of culture that Hoist lists have significant influence on the dynamics of economic activities that is practiced amongst “workers, farmers, entrepreneurs, public servants and even policy makers”12.
The weakness of cultural effect on the economy is apparent due the lack of statistical evidence found which leads political scientists to believe that the cultural effect does not influence economic development. Though there is no statistical evidence, we can propose that he cultural effect rather indirectly shapes the dynamics and structure to political development that allows policy mechanisms, such as SIS, to be promptly implemented and operated.
The relevance of the cultural effect in contemporary developing economies is promoted on the basis that a popularized culture within society allows policy mechanisms to be carried out more efficiently, promptly and effectively as per say a society with fragmentation in culture. In retrospect, the Industrial Revolution was fueled by three conditions that are both relevant and beneficial to contemporary evolving economies. This paper has established the effects that traditional colonialism had on British industry and market growth.
In contemporary times, where a new ‘modern’ colonialism has been established, its effects of this have compelled political scientists to formulate the dependency theory. Furthermore, this paper has discussed how effective state intervention in contemporary developing economies is utilized to escape the core- periphery relationship, deemed ‘dependent’. Finally, the process of introducing policy mechanisms such as SIS glamour the benefits of the ‘culture effect’, and owe this cultural influence determines how well policy mechanisms operate at a micro level.