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.

International Economic System

Speaking of US and Western power in the international economic system, their goals and methods of so call helping the LEDCs is a lie. What we see today is that poor countries stay poor and the rich countries stays rich. Let’s talk about why these poor countries are poor originally. Internally, the lack of natural resources is one part of the reason, with the lack of natural resources, the countries itself cannot produce it’s own power sources and they are not able to use the natural resources to benefit themselves. Probably the other reasons is poor governance, with poor governance, the citizens will not be able to cooperate with the government. Sometimes the governments focus on benefit him or her instead of the citizens of countries. Talking about natural resources, the geographic disadvantage is one part of important fact, the disadvantage, they may not be able to produce it’s own food and it leads to starvation within the countries. The lack of infrastructures leads to inconvenient within the countries. Sometimes it includes school and other important infrastructures.

        The MEDCs believes that free trade can help the LEDCs to develop. They MEDCs will import in higher tariff, so they would sell clothes in higher prices. The LEDCs citizens will then buy the products that are made in there countries. Speaking of advantages on products, MEDCs has technology and infrastructures that will decrease the cost for making their products and they can produce in large amount. They can sell their product cheaply in the LEDCs. LEDCs citizens will buy the products that are cheap to them, but LEDCs manufacture factory do not have technology to produce in a cheap price. If they lower their prices, the workers will not get enough amount of money to live.

        This leads to loans, if a LEDCs want to borrow money for building infrastructures and build technology in their factories. They will have to borrow the money from World Bank, but the World Bank was control by the MEDCs, if they borrow it, they are force to follow certain rules such as lowering the tariffs. This will make the MEDCs product even cheaper and the LEDCs have the money but it is not able to sell more products. Then the World Bank will ask them to pay their debts or start paying the interest. The LEDCs might took the money that is originally use for building infrastructures to pay those debt but if that is not enough, they will have to borrow more money from other countries. It turns into a cycle and the LEDCs will be more and more in debt.

        Another real example is that in America, some states are able to produce large amount of corns that the Americans cannot even finish, which is why food in America is so cheap. The rest of the food will be sold in other countries in cheaper prices. This will hurt the farmers in those countries. The reason why American famers are able to profit from growing food is because the America pays more money to the famers to continue their business. The US famers will profit even more than what it is suppose to get. That is why the LEDCs are continuing being poor and as they aren’t developed, their population will start increasing.

Maximize the Positive, Minimize the Negative

Now days, the LEDCs countries has trouble developing through trade with MEDCs, but some times trade is the only way they could develop. Why are they still poor? Now we are trying to maximize the positive effects of trade while minimize the negative effects of trade.
There are two types of trade, Free Trade and Fair Trade. By looking at positive effects of each, it seems like a great deal. The benefits of Free Trade, due to the efficiency benefits from comparative advantage, competition, and avoiding trade barriers, producers are able to lower costs of Goods and still make profits. Through trade, the capital and technology will be influence, it became more available in developing states. Overall free trade has been shown to contribute economic growth.
Fair Trade, organized social movement that aims to create more equitable trading conditions to help disadvantaged producers in LEDCs receives great profit for the goods they produce, but the MEDCs will have to pay slightly more for goods. Benefit of Fair Trade, the producers will receive fairer prices and higher returns to pay workers. The promote of sustainable development can promote less energy intensive production and use of renewable resources. Through Fair Trade, the workers working conditions are much better due to the NGOs, NGOs manage to committed to fair labour practices to stop forced labour, and child labour. They also committed to gender equity which men and women can be paid fairly and work at the same job.

I think that in order to keep the positive effects going, is to give more power to the NGOs and on that, assign a representative of the LEDCs workers to make sure that where the money goes and make sure that people are getting the fair amount of income that they suppose to get. Have LEDCs and MEDCs each send a "middle man" to sort out the unfair and make sure each other are not absorbing all the income that suppose to be paid to the workers. Another advice is to promote environment protection, in case one farmer increases it's supply which he or she can lower the price, and that hurts other farmer that does not have much technology and resources to develop enough supply. They can also set a buying range which means each MEDCs can only buy a amount of supply, so that all LEDCs has chance to trade with the MEDCs.

Trade Regimes

Are world trade regimes based more on dominance or reciprocity? I think that both of them has equal status to the world. Although both of them has disadvantage, the dominance trade showed in the documentary "Black Gold". The citizens in Ethiopia produce coffee beans, and it is their major income. The amount they earn on coffee beans decide on the way they live their life. In the video all of them live poorly and children do not go to school. From that we can know that the deal on coffee beans are not good to them. The problem is that their coffee beans was sold in a cheap prize and the "middleman" sells them in a high prize in other countries. The citizens have to agree to the deal because they need to compete with other coffee beans farms. I found that dominance trade apply most on agriculture product. Most agriculture export countries are LEDCs, they can never live a better life because what they earn is so little. At the end of the documentary, some of the coffee farmers change their product into some types of herb that is consider drugs. They said that they are force to change their product because that is what they can earn the most from. Reciprocity trade is one of the better kinds, but it only works when two countries has positive relationships. The European countries, they all work together and they all share the same tariffs on import. The Reciprocity trade is more of a better kind which will help the developing countries develop. Like Taiwan and the USA, USA lower tariffs on imports, so that Taiwan are allow to develop well. All the main reason is to keep Taiwan from going to communism during the Cold War. Overall I think that dominance trade is the most common but not necessarily more than reciprocity. Both trade regimes plays important rules to the society and both has disadvantage that needs to be change.

UN Effectiveness

After World War 2, US and the 50 other countries form the United Nation. The purpose is to prevent from war like World War 2 happen again. The two great power during that time, USA and the Soviet Union, and Soviet Union always try to spread communism and take over Europe and the Cold War between USA and the Soviet Union formed. For example, In 1962, UN secretary general provided valuable assistance as the primary negotiator between Nikita Khrushchev and John F. Kennedy during the Cuban Missile Crisis. Also in 2005, the Human Security Report shows that the decline in the number of wars, genocides and human rights abuses since the end of Cold War. We could say that UN is doing it's job at the start of peacekeeping and peacemaking.

Security Council is one of the meeting in United Nation and in the meeting countries talk about preventing countries going to war and solutions to violent actions in some countries. There are five permanent members of the United Nations Security Council, China, France, Russia, the United Kingdom and the United States. They are all nuclear powers. Five of the permanent members of the United Nations Security Council has Veto Power. Some people criticise the existent of the Veto Power. A Veto from any of the permanent members can stop any action that the Council may take. Although if the majority of nations agrees to one resolution, the veto power can stop it.  For example, US has vetoed 32 Security Council resolutions critical of Israel, despite that Israel has never been elected to the Security Council. The five permanent members of the United Nations can veto any resolution that affect it's self-interest.

Gallup released a study on the American perspective of the UN and 66% of American believe that they UN is still necessary, but only 35% of Americans feels that UN was doing a good job of solving the problems they have faced. The reason to the decline in faith in the UN because there are various incidents since 2002 that UN has not really accomplish as much as it could have. The genocide in Darfur and Syria is one of the example. In the end the UNv is a good idea, it still make contribution to the world we live in.

• Website Title: UN News Center
• Article Title: histoire, ONU, Nations Unies, Charte, chronologie
• Publisher: UN
• Date Accessed: November 02, 2014
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  • Website Title: Wikipedia
  • Publisher: Wikimedia Foundation
  • Date Accessed: November 03, 2014

  • Website Title: Wilson Perkins Allen Opinion Research
  • Article Title: Wilson Perkins Allen Opinion Research
  • Date Accessed: November 03, 2014

  • Website Title: : Is the United Nations effective?
  • Article Title: Barely Politics
  • Date Accessed: November 03, 2014