Modern World Economy

and the book of

Revelation

Global Capitalist Economy

and Christian Criticisms
Introduction
The World is wide-known to be unequal
Economically
There are two types of explanations:
 The poorer States are less developed
 There are active exploitation by the Richer
States on the Poorer States
Modernization Theories
Theorists like S.Huntington suggest that
there is a Modernization process
The process is Revolutionary, Complex,
Systemic and Global
Modernization is Phased, Progressive and
Irreversible
It also predict on the Homogenizing effect
of Modernization
Modernization Thesis
Modernizing Institutions and
EducationModern ValueModern
BehaviorModern SocietyEconomic
Development
Poverty of 3rd World State as a result of
being in Early phase of Modernization
They predicted that Poor State will become
richer upon Modernization
Widening Gap
However, These Predictions never come true:
 The GDP of 48 Poorest States have fewer wealth than
the 3 Richest persons combined
 In 1960, the 20% of the world's people in the richest
countries had 30 times the income of the poorest 20%.
It had rise to 74 times in 1997
 Growth rate in Economy, Literacy rate and Life
Expectancy, as well as Reduction rate of Infant and
Child Mortality, become slower and slower
Dependency Theory
Some Leftists argue that the World have become a
two tier system, composed of Developed and Less
Developed Countries
Activity of World Capitalism made LDCs
dependent on Industrialized Developed States
True source of Underdevelopment lies in
Development of World Capitalism
 i.e. Development of Underdevelopment
Dependency Theory
Some theorists propose for preferential treatment
on LDCs to aid their industrialization i.e. The New
International Economic Order
However these proposal are ignored by the West
Some more radical theorist suggest LDCs to quit
World Economy, which is hardly practical
Neo-Liberalism
Liberalists believe that Free Trade and Free
Market would eventually benefit everyone
 Based on Classical theories by Smith and Ricardo
LDCs are poor because they don’t have a free
Market
Liberalist suggest LDCs to Open their Market and
develop more linkage to World Economy
Neo-liberalism
Practical Suggestions include reduction of
State subsidies, Privatization and removal
of Quota and Tariffs
World Economy as a Varied-sum Game that
gain by everybody is possible
Liberalist often use the Experience of Post-
War East Asia as an Example
Flaws of Neo-Liberalism
Despite Free Trade and Market opening
could stimulate Economic growth, the
relation is not Straight forward
Most State achieved successful growth open
their Market GRADUALLY with State
interventions
Those States who open their Market rapidly
with deregulation have poorest Growth
Flaws in Neo-Liberalism
Successful cases in East Asia
 Government in East Asia Countries usually
Open their Market gradually
 When receiving Foreign investment,
Government would step-in and require them to
follow some terms, e.g. Technology transfer
 These enable Local Enterprises to grow and
prepare for competition in Global Market
Flaws in Neo-Liberalism
Unsuccessful cases in Latin America
 Latin American States have fewer regulations on
Economic Activities
 However most Foreign investment are used to set up
low-tech Industries
 R&D Department in Latin American Enterprises often
closed down after combined with Transnational
Corporations
 Income from Taxation markly reduced
 Cheap Imports ruined Local Industries
Flaws in Neo-Liberalism
From the mentioned Example, we should
reject the notion of “Freer is Better”
Regulation of market and State
Interventions are needed to strengthen
Local Enterprises, making them competitive
in Global Economy
Flaws in Neo-Liberalism
International Political Economy shows
characteristics of a Zero-sum game
When the Economy in East Asia developed, the
situation in Sub-Saharan Africa become worse
Even within East Asia, most Economic gains
flows into the pocket of the Upper class
In some degree, the Growth in East Asia is in the
expense of Africa and East Asian Lower Classes
Unfair Trade
The terms of International Trade are also unfair
When the LDCs are requested to Open their
Market, the West remain their Protectionism
 Tariffs and Quotas are imposed on imports from LDCs
 Subsidizes are given to Western Farms and Enterprises
 Some “Subsidizes” are given in an invisible manner
e.g. Construction and Maintenance of Infrastructures
and Transportations
Unfair Trade
In World Bank and IMF, Those who pay more
membership fee have more vote, leaving LDCs in
disadvantage
The State seeking help from World Bank and IMF
have to Open their Market unilaterally
In WTO, every state have one vote and often lead
to Multilateral change
 However, many LDCs have fewer resources in joining
WTO conferences.
 This reduce the bargaining power of many LDCs
Unfair Trade
In the Developed World, Most Capital flow occur
between the more advanced State
They are less reliable on other States, and could
often strengthen their bargaining Power by
Regionalism e.g. European union
The Poor States are more depended on the
Advanced States
Regionalism in Poor States are less likely to be
successful
Unfair Trade
Local Enterprises and Farms in LDCs do have the
channel to reach the Global Market, nor do they
have market information
As a result LDCs products are sold cheap, while
being sold in a highly rate in the West
 1 Pound of Coffee sold $ 0.28 in 2000
 It is only 9% of the price of a can of Coffee Powder
 Only 1% of the money given for your coffee could go
to the farmers
Unfair Trade
Transnational Corporation benefits most when it
buy service and raw material in a low price
TNCs threat to withdrawn investment so as to
reduce resistance
Many framers have to suffer the low prize, and
cope it it by reduce education or health expenses
Some local Factories try to maintain low prize by
exploitation of the workers, result in creation of
“sweat factories”
Unfair Trade
Western Countries occasion use Military action to
remove those do not follow the rules-of-the-game
 In 1954, an Elected Leftist in Guatemala starting a
Land Reform
 Most of these Land are left Idle for a long time, and
some of them belong to the US United Fruit Company
 It was known that the American Foreign Policy staff
have close link of UFC.
 Eventually the US started a coup in Guatemala, making
it suffer for 30 years of Military dictatorship
Unfair Trade
These Example showed that Western State
have the Military strength to maintain
International Economic Order, and try to
maintain the Capitalist mode of production
Latin American States like Chile have
become the later victims
World System Theory
Wallerstein describe the Modern World as a
unified World Economy System
A World System is a unified Economic
body with Division of Labor of it various
The Current World System originated in
Modern Europe
In 19th Century the whole World was
incorporated into the whole system
World System Theory
Within a World System, there exist a Core which
exploit the Peripheral
Ancient World Systems are usually Empires, and
the Core exploit Peripheral by demanding tributes
The Modern World System do not have a Political
unified Core, despite there are usually a
Hegemonic Power
Exploitation usually by the means of Trade
between different regions
Core
The Core States dominant the System and
they set the rule-of-game
In General they have Greater Military
Capacity and would use their Power to
uphold their Domination
There are also high-profit Industries with
more advanced Economy
Periphery
The Peripheral States usually involved in
low-profit and low-tech Industries and
Production of Raw material
The Ruling Elites are often bribed by the
Core States or TNCs, working for the
interest of the Core
They lack of bargaining Power and have to
follow the rules set by the Core
Semi-Periphery
The Character of Wallerstein’s theory is
that there is an intermediate Semi-Periphery
The existence of Semi-Periphery stabilized
the World Economy System
 The Middle layer prevented the polarization of
the System
 The Middle layer reduce the possibility for
unified Resistance towards the Core
Semi-Periphery
The Semi-Periphery have lower labor cost
while compared with the Core
They also have better Infrastructure while
compared with the Periphery
Semi-skilled Industry would likely to take
place in Semi-Periphery
This relieved the pressure demanding the
rise of Labor cost in the Core States
International Competition
States in different Categories are actually
competing
Peripheral States compete with each and
other, as well as with Semi-periphery, so as
to become Semi-Periphery
Semi-Peripheral States compete with Core
states, trying to get into the Core
International Competition
It is possible for State to change its Category, and
it is often
 e.g. Spain Change from Core to Semi-periphery in 16th
Century, England rise from Semi-periphery to Core at
the same time
However, the Global Power is a Zero-sum game in
the World System
When some States raised their status, the price
would be pay by others
And it is more difficult to rise status, and drop in
status are relatively more easy
International Competition
For example, Japan entered the World System in
1850’s as a Periphery, it have become a Semi-
Periphery after Meiji Modernization, and keep
trying to become a Core
However, many others pay the price:
 Peripheral States: China losing Sino-Japanese War and
result in Political unrest, Taiwan ceded, Korea lost its
Sovereignty
 Semi-Peripheral States: Russia lost Russo-Japanese
War and triggered a serious of Revolution
 Core States: Britain and the United State suffer from
the disturbed Pacific Balance
Ideological Domination
For Weber, Power by bare fist is unstable,
and Legitimacy are always needed
For Wallerstein, the Geo-culture provided
means of Legitimating the World Economic
System
Geo-Cultural is the Cultural framework
include values and Thought
Ideological Domination
The main Ideology of Geo-culture:
 Liberalism: Long-term reinforcement of Global
Capitalist System
 Scientism: Instrumental Manipulation of the Material
World
They aimed to determine “Universal” benefit and
“Universal” organizational rule
Racism and Sexism also provide justification on
Unequal outcome of the World System
The Roman World System
At the time when John write the Revelation,
the Roman Empire occupy most of the
known and accessible World
There form a World Empire System, with
division of labor held in a manner of tribute
and some degree of trade
Rome as Naval Hegemony
In Chapter 13 of Revelation, a Sea-borne
monster where no one could fight again was
described
This the image of the Powerful Roman
Navy
It hinted that the Exploitation of the World
System is a result of Force
Rome as Economic Center
In Chapter 17, a prostitute was described in
the image of the State Goddess of Rome
This prostitute request their customer to pay
for a large amount of money
 The Periphery are requested to pay tribute to
Rome, in return for Pax Romana
Rome as Economic Center
In Chapter 18, the fall of Rome was
described
Merchants from various place Mourn for it
Their mourn reflect that Rome have bought
in a large amount of luxuries
While gained from tributes, the Roman also
continue their Exploitation by Trade
Criticism on Rome
The Roman Empire was criticized by the
Revelation because:
 Roman Empire pound of their force and abused the use
 The Roman rule adversely affect the life of the poor
and ordinary
 The Roman rule prosecute many Martyrs
Conservative Christian often concentrate on point
3. It is not enough, and the point could still be
elaborated further…
Criticism on Rome
The “Roman Religion” is not simply a
Religion
It is a Political Ideology: Roma is actually a
God representing Roman Empire
The criticism of Revelation is not only on
alien religion, but also on a Hegemonic
Ideology favoring the Establishment of the
World System
What to do?
In Chapter 18, John suggest Christians to
escape form the City
The meaning would mean that Christians
should not take part in the crime of the
Roman World System
To Witness the real truth which is alien to
the system, Martyring would be the
outcome for those with conscience
Question for discussion
What is the similarity of the Roman World
System and the Modern one?
What should Christians do in our current
World Economy?
Would it be possible for a alternative of
New International Economic Order? How
can Christianity contribute?