Week 2 MT - Week 2 Associative American Development,...

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Week 2 Associative American Development, 1776-1860: Economic Growth and Political Disintegration (Keohane) For Less Developed Countries (LDCs) adopting policies of; - ASSOCIATION (export oriented): enable them to link to major capitalist centers through trade, capital flows and the operations of multinational corporations. - DISSOCIATION (import substituting): enables them to “delink” and achieve development and growth on their own, and focus on their own public. Pro-Associative: With no barriers to trade , more opportunities to specialize in areas where each country has more comparative advantage. Factors of production directed to more efficient uses through undistorted price signals. Against Associative: Gains of pursuing comparative advantage outweighed by economic, political and social costs. (Enclave economies: only specializing in or two products and failing to grow or have diversified agriculture) Possibility of social inequality and political authoritarianism because of the previous clause. Keohane: “Almost no one would advocate association with the world political economy regardless of the terms; but neither is total self-sufficiency, or autarky, widely regarded as a viable option.” - Association and Dissociation are two poles and they are rarely chosen ideally . HISTORICAL SUMMARY ? How did the US deal with association vs. dissociation between 1776 and 1860; when it was a weak agriculture country highly affected by Britain and France ? 1776 – 1815 : Focus of US activity was on gaining and keeping national control over policy, and opposing attempts of Britain and France to restrict and dominate American commerce. Self-sufficient agricultural economy prevented economic collapse. 1815 – 1860: US economy grew but civil war erupted because there was uneven development within regions. (Homestead agriculture in the W, plantation economy and slave labor to produce cotton for export in the S) - Northern and west ern US focused on s elf-sust aining growth, foreign trad e bec a m e les The South grew as a n export econo my, without d evelop m e nt .
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SUMMARY: Federal government usually permitted forces of comparative advantage (associative) to operate, this contributed to economic growth but also led to social inequality. But the dissociative measures such as the embargo on shipping damaged sectors and protective tariffs were insignificant to growth or industrialization. Short run – associative worked better. The American experience implies “that countries with comparative advantages in the export of raw materials may be doomed to association.” Damages of “association” to the US in the long run: - The harmful econo mic impact of south ern growth w/out diversification or industrialization. - Due to this, slavery was well-e st ablished and creat ed the b asis for civil war.
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This note was uploaded on 04/16/2009 for the course POL 173A taught by Professor Chase during the Spring '09 term at Brandeis.

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Week 2 MT - Week 2 Associative American Development,...

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