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JSIS 330Prof Adrian Sinkler Lei QiFinal EssayJune. 10From Power Asymmetries to Poverty & InequalityAs two main persistent problems in the contemporary international economy, poverty and inequality have raised intense discussions about their essential cause. Neo-liberals, such as Douglas Irwin, insist it is the state failure that should bear the blame. Whereas neo-structuralist often argues that it is the increased economic power of Multi-national Corporations that led to current uneven global level playing field, and therefore causes these problems. While neo-mercantilists, such as Ha-Joon Chang, assert that the asymmetries of power between developed and less-developed states is the essential cause of contemporary problems of poverty and inequality. In this paper, I will argue that Neo-mercantilists explanation is more convincing as they have provided comparative evidenceconsisting failure examples of countries that had followed the rules set by powerful countries, as well as successful examples of those that did not follow such rules. Poverty and inequality always come as two interlinked concepts, as poverty-reduction cannot be achieved until people have equal access to basic services. They are also two obstinate problems in Less-Developed Countries (LDCs). People in those countries usually suffer from problems such as hunger, limited access to medical services,and lack of education. Unfortunately, there are still a lot of people who live under one dollar every day. As an orthodox economic liberal, Irwin firmly supports complete free trade with no external frictions and insists it is state intervention that contributes most to the problems of poverty and inequality.1He argues that state regulations are usually designed 1 Douglas Irwin, Free Trade Under Fire(Princeton University Press, 2009), 204.
Lei 2to protect some certain interest group, especially the elite group, through unequal distribution of resources. On the contrary, if those Less-Developed Countries adopt free