Theory of Wealth Accumulation

Why is there a wealth gap between the northern countries and the southern countries? Theories such as economic liberalism, world system theory, and dependency theory, have emerged to explain the North-South Gap. A clear understanding of these distinct theories is essential to drawing the similarities and differences between how Northern and Southern countries earn their wealth. MORE?

Reiterating the previous sentence, a comprehensive understanding of economic liberalism theory is crucial. Coming from the latin root, liber, meaning free, the notion of economic liberalism was developed by Adam Smith who contended that the power of free markets was unprecedented and would be the most ideal system. He advocated for the idea of free trade in conjunction with the reduction of government controls and regulations, as this efficiency of trade, coming from greater lending and investments, would stimulate the economy, thus growing it. This concept was laissez-faire (let it be), the precursor to economic liberalism theory. Now, economic liberalism holds that free trade makes everyone richer through positive sum gains. The most common example used is a pie. From a mercantilist perspective, states would merely compete amongst one another to gain a larger slice of the pie; in contrast, liberalists argue that free trade would allow the pie to enlarge, increasing everyone’ share. How exactly does this play in reality? Essentially, liberalized economies empower investors and corporations to make enormous sums of money, including countries in the “North”, as those states would gain revenue through taxation. Likewise, while this also reduces power of governments in the “South” to shape economic policies domestically and to respond to problems when they occur, neoliberalist policies, theoretically, also empower LDCs, as salaries can be taxed on by the government for those working in corporations, providing the government with another financial stream.

The global system of regional class divisions has been seen by some IR scholars as a world-system or a capital world economy. This view is Marxist in orientation ( focusing on economic classes) and relies on a global level of analysis. In the world system, class division are regionalized. Region in the global South mostly extract raw materials.- work that use much labor and little capital and pays low wages. Industrialized regions mostly manufacture goods- work that uses more capital, requires more skilled labor and pays worker higher wages. The manufacturing regions are called the core of the world system. This constantly reinforces the dominance of the core countries

Marxist IR scholars have developed this theory to explain the lack of accumulation in the third world. It is define as a situation in which accumulation of capital cannot sustain itself internally. A dependent country must borrow capital goods; its debt payments then reduce the accumulation of surplus. Dependency is a form of international interdependence- rich regions need to loan out their money just as poor ones need to borrow it. Foreign capital invested in a third world country to extract a particular raw material in a particular place, it only leaves the the country with some jobs for few local workers. Over time, the resource depleted. Another pattern is that national controlled production, a local capitalist control the cycle of accumulation based on production. The profit goes to the local capitalist mostly and that builds up a powerful class of rich owners within the countries.

"Wealthiest" Country in the World

Personally, I think that wealthiest country is not always the richest country. Country that makes tons of money does not mean the citizens living happily. I believe that to become a wealthiest countries need to have a best living condition.

Life Expectancy
One of the quality that a countries need to have in order to be the wealthiest is the country needs to have higher life expectancy. Because higher life expectancy represent a country has good medical system which people aren't dying of sickness at a young age. We can see that Japan has the highest life expectancy, and comparing to some "money making" countries, it is much higher.

Education
Another quality that countries need to have is high mean years of schooling, in the data organiser we can see, expected years of schooling and the mean years of schooling. The closer these two numbers matches means a better education a country has. Higher education leads to better job option and companies are likely to hire and pay higher wages to higher educated workers.

Food Intake
Nutrition is one of key factor, human depends on food and get energy from it. Food also keeps human alive. From the pictures we can see that the countries that is fed well is colour grey. We see the hungriest country such as African countries is in an alarming rate.

From these resources, we see that although countries like
US has high GNI but they do not have the best life expectancy. We can see that Japan has high life expectancy and good education. There starvation rate is in a safe colour. According the the World Life Expectancy Map, the reddish colour which has higher life expectancy are located on Japan Australia, and USA is coloured in orange which is colour in orange. Although Japan does not have the highest ecological footprint, but Japan is working on to lower the rate.
I think that Japan is wealthiest country in the World.

Global Hunger Index 2014

World Life Expectancy Map

Happiest Country Map

World Ecological Footprint

Rapa Nui People

The international society's management of natural resources is terrible, but it is not their fault. First of all we need to look at what kind of natural resources they are trying to manage and why it is so hard to manage. What we need to look at right now is that why does international society need to manage the natural resources. Why don't they do it before. Well, it all came down to the population of the world, because right now, people are living in a low budget world which they need to have more children, so they can use them as child labour to increase the family income. Then there is that tragedy of the commons, the commons were originally use by everyone in the town which they can graze their animal FREELY but the more animal they put on that commons, the more animals that is fed well, which will increase the income of an individual. Turns out that everyone in the town want to increase their own income and since the commons is free, they exploit the commons by putting so many animals to graze that the commons can support only a little. The solution was solved by enclosure of the commons, splitting it into privately owned pieces on each of which a single owner would have an incentive to manage resources responsibly.

Ocean is also part of an important natural resources that the world should be focus on right now. International society has trouble managing the forest is because they have trouble control the amount of fish that a fisherman can catch. Ocean is consider a global commons. People exploit the ocean by over fishing, dumping toxic and nuclear waste and other garbage, and long-distance oil shipments with their recurrent spills. There is no authority exist to enforce regulation and because of that, Ocean is FREE. What the world can do now is start by solve some of the problem that are manageable which is to stop the use of drift nets. Drift nets are huge fishing nets, miles long, that scoop up everything in their path. They are very profitable but destructive to the ocean ecosystem.

History shows that Easter Island was originally an island that was full with palm tree. The Natives that lives there has ignore that trees took a long time to grow back and start to exploit the forests. Today we do not know how a deforestation can kill 16 million palm trees. Were they using on building the Moai or as a source of drinkable plant sap? Some say that the reason why the palm trees were gone is because of climate change. More importantly, the population of the Rapa Nui people is big back in the time. Due to the effect of tragedy of commons, using all the palm tree to support one family has ruin the island.