GeoFinal Review-- Country Studies

GeoFinal Review-- Country Studies - Final examination...

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Final examination review notes A.   Country studies 1. Why was it possible for Japan to industrialize through internal capital formation but  impossible for India to do so? Internal capital formation depends on suppressing consumption to boost savings.  In India, or in any  poor country undergoing rapid population growth, you can’t really shrink C much because with more mouths to  feed every year consumption is probably rising rather than falling.  In addition, it’s politically difficult to  suppress consumption, and the countries that choose this route are usually strong authoritarian regimes.  But  India’s government was neither strong nor authoritarian.  Social scientists sometimes distinguish between strong  states, in which the government gives an order and it’s carried out, and soft states, in which the government gives  an order and it sort of dribbles away in a fog of bureaucratic inertia and unaccountability.  On the strong-soft  spectrum, India was very far over to the soft side, so the suppress consumption route was not open to it. Japan possessed both a strong authoritarian government able to dictate the course of industrialization,  as  well as a deep history and culture rooted in loyalty, individual obedience and group cooperation for the  betterment of the community. Because of this, the Japanese people were willing to put up with the low wages  and high prices characteristic of the internal capital formation strategy of development. 2. In which respects does Japan’s current economic development resemble its development in  the nineteenth century?   What characterized Japan’s rapid 19 th  century industrialization?     First, industrialization did not come about through the free market but through government  management of the economy, and in all likelihood could not have come about nearly as quickly as it did without  government control; of course, the price was paid by the Japanese consumer, who put up with a much lower  standard of living.     Second, the very high savings rate and suppressed consumption that fueled the high growth rate were  accomplished by cartelizing industry—that is, by organizing cooperation rather than competition among the big  producers, enabling them to divide the market through mutual agreement on prices and production, which let  them charge higher prices than they could have under conditions of competition.     Third, the necessary adjunct to the control of domestic production is control over imports.  There would  be no point in having internal cartels maintaining high prices if foreign imports could undercut those prices.  The 
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This note was uploaded on 01/06/2009 for the course GEOG 21 taught by Professor Acker during the Fall '08 term at Berkeley.

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GeoFinal Review-- Country Studies - Final examination...

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