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Planning for Development: Modernization theory
Editor: Róbinson Rojas Sandford
From Project Syndicate
Is Modern capitalism sustainable?
Kennet Rogoff - December 2011

CAMBRIDGE – I am often asked if the recent global financial crisis marks the beginning of the end of modern capitalism. It is a curious question, because it seems to presume that there is a viable replacement waiting in the wings. The truth of the matter is that, for now at least, the only serious alternatives to today’s dominant Anglo-American paradigm are other forms of capitalism.
Continental European capitalism, which combines generous health and social benefits with reasonable working hours, long vacation periods, early retirement, and relatively equal income distributions, would seem to have everything to recommend it – except sustainability. China’s Darwinian capitalism, with its fierce competition among export firms, a weak social-safety net, and widespread government intervention, is widely touted as the inevitable heir to Western capitalism, if only because of China’s huge size and consistent outsize growth rate. Yet China’s economic system is continually evolving.
Indeed, it is far from clear how far China’s political, economic, and financial structures will continue to transform themselves, and whether China will eventually morph into capitalism’s new exemplar. In any case, China is still encumbered by the usual social, economic, and financial vulnerabilities of a rapidly growing lower-income country.

Aug. 23, 2012
The Heirs of Inequality

ROME – It has long been known that spurts of rapid economic growth can increase inequality: China and India are the latest examples. But might slow growth and rising inequality – the two most salient characteristics of developed economies nowadays – also be connected? That is the intriguing hypothesis of a recent study by the French economist Thomas Piketty of the Paris School of Economics. Piketty has done some of the most important work on inequality in recent years.
Taking advantage of the French bureaucracy’s precision, Piketty was able to reconstruct the French national accounts over nearly two centuries. The economy from 1820 until World War I – a kind of second ancien regime – had two striking features: slow growth – about 1% a year – and an outsize share of inherited wealth, which accounted for roughly 20-25% of GDP....

Aug. 22, 2012
Economics in Denial

PARIS – In an exasperated outburst, just before he left the presidency of the European Central Bank, Jean-Claude Trichet complained that, “as a policymaker during the crisis, I found the available [economic and financial] models of limited help. In fact, I would go further: in the face of the crisis, we felt abandoned by conventional tools.”
Trichet went on to appeal for inspiration from other disciplines – physics, engineering, psychology, and biology – to help explain the phenomena he had experienced. It was a remarkable cry for help, and a serious indictment of the economics profession, not to mention all those extravagantly rewarded finance professors in business schools from Harvard to Hyderabad.
So far, relatively little help has been forthcoming from the engineers and physicists in whom Trichet placed his faith, though there has been some response. Robert May, an eminent climate change expert, has argued that techniques from his discipline may help explain financial-market developments. Epidemiologists have suggested that the study of how infectious diseases are propagated may illuminate the unusual patterns of financial contagion that we have seen in the last five years.

The Stages of Economic Growth: A Non-Communist Manifesto
By W.W. Rostow
(Cambridge: Cambridge University Press, 1960),
Chapter 2, "The Five Stages of Growth--A Summary," pp. 4-16
It is possible to identify all societies, in their economic dimensions, as lying within one of five categories: the traditional society, the preconditions for take-off, the take-off, the drive to maturity, and the age of high mass-consumption...

Róbinson Rojas - 1996
Modernization theory and the laws of social change

(Modernization theory and the pacific -or violent- transition to industrial capitalism)

Modernization theory is the historical product of three main events in the post-World War Two era:
1) the rise of the United States as a superpower to contain the growth of the international communist movement. For this, the United States financed the industrialization of Western Europe ( Marshall plan), the industrialization of South Korea and Taiwan, and the reconstruction of Japan.
2) the growth of a united worldwide communist movement led from Moscow and later on also from Beijing (with Soviet Union, People's Republic of China, Vietnam and Cuba as hot points).
3) the process of de-colonisation in Africa and Asia as an outcome of the disintegration of the former European colonial empires.

  Róbinson Rojas - 1998
The making of "regulated capitalism"

Since the late 1930s until the 1950s industrialised countries scholars built a set of disparate concepts which became the unscientific base of a group of ideas loosely grouped in what was known as "development economics" or "modernization theories". All of them conceptualized structures aiming at "pushing" economic development through imposing on third world societies the Western european (liberal) type of state.
By 1977, M. Todaro ("Economics for a Developing World", Longman, 1977) summarized "literature on economic development has been dominated by two major strands of thought:

Susan George - 1999
A Short History of Neoliberalism

Twenty Years of Elite Economics and Emerging Opportunities for Structural Change

Conference on Economic Sovereignty in a Globalising World Bangkok, 24-26 March 1999
The Conference organisers have asked me for a brief history of neo-liberalism which they title "Twenty Years of Elite Economics". I'm sorry to tell you that in order to make any sense, I have to start even further back, some 50 years ago, just after the end of World War II.

From Global Exchange
Global Rulemakers

The Undemocratic Institutions of
the Global Economy

The World Trade Organization
Established in 1995, the WTO is a powerful international body that develops and enforces rules for trade and investment. A global economy is being created where corporations have all the rights, governments have all the obligations, and democracy is left behind.

The World Bank & IMF
Through loans, often to unelected governments, and "structural adjustment" policies, these institutions have kept most nations of the global south in poverty. Their policies ensure open market access for corporations while cutting social spending on programs such as education, health care and production credits for poor farmers.

R.A.Pastor: U.S. foreign policy: the Caribbean Basin
The Central Intelligence Agency: its crimes.
ZNet's Global Economics
S. George: Breve historia del neoliberalismo
V. Shiva: La violencia de la globalización

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