From the late 19th to the end of the 20th century, the African continent among other regions was colonised by nations such as Portugal, Britain, Germany and Italy among others. Colonial capitalism was persistent at the time, and the colonisers exploited minerals, slaves, cash crops, etc from the colonies to their nations (colonial drain). To date, the economic underdevelopment in Africa has been attributed to the effects of colonialism. In this age of globalisation, Africa still experiences the impacts of colonialism through neocolonialism. For the past 6 decades of independence, African dynasties and colonial giants continue to exploit Africans. Most African leaders continue to have trade ties with their colonisers, in exchange for power. This state of economic dualism is one of the largest barriers to development in most colonies (Asafa, 2015).
Compare and contrast Adam Smiths and Karl Marxs approaches to economic growth and development
Both economic philosophers purported that an increase in the number of middle-class citizens in a country would reduce tension and lead to the attainment of a stable economy and government. While Adam Smith believed that capitalism would eventually lead to economic growth, Marx negated the idea and instead believed in socialism and communism. Smith stated that people are naturally selfish, and hence only by their contributions to society would other people benefit. He argued that state efforts were ineffective compared to market forces that are unbridled. To him, the government needs to have limits in the control of its peoples rights and freedoms. On the other hand, Marx argued that people prefer to have their lives controlled by the state. This way they were guaranteed with free housing, education and healthcare. He was completely against capitalism and believed that it would only result in tensions and destruction of an economy. Additionally, while Smith classified workers into groups such as the educated and non-educated, religious and non-religious, Marx aimed at social equality by all means. He insisted on reducing the gap between capitalists and workers, so as to achieve a distribution of wealth (Sen, 1988).
In my opinion, the two philosophers complement each other in the sense that both believe in the benefits of capitalism in the growth of an economy. The sole reason why Marx was so against capitalism is that he believed in equity. That wealth should be distributed across the nation. He is fearful that even though capitalism helps a nation to grow, it would cause tension that would lead to destruction in the end.
What kind of policies can a developmental state implement in order to further economic growth and development? What are the limits to these policies?
Thanks to globalisation, developmental countries can easily boost the growth of their economy through policies such as entering into trade agreements with other countries. This will enable the country to export goods that it specialises in, and import those that it lacks. This will open doors to a lot of investors who will create jobs, cause industrial growth and hence economic growth. The countrys leaders should, however, be keen not to allow economic dualism, dumping of goods into the country through importation and increased national debts. Governments should also work towards fostering a favourable environment for its citizens to invest in. through allowing low-interest lending, ensuring political stability and providing incentives, citizens will be encouraged and steer the economy forward. Monopolies should, however, be prevented by all means, as these lead to a form of capitalism and neocolonialism (Bardhan, 1993).
Asafa, J. (2015). The triple causes of African underdevelopment: Colonial capitalism, state terrorism and racism. International Journal of Sociology and Anthropology, 7(3), 75.
Bardhan, P. (1993), Economics of Development and the Development of Economics, Journal of Economic Perspectives, Vol. 7
Sen, Amartya K. (1988). The Concept of Development in H. Chenery and T. N. Srinivasan (eds.),Handbook of Development Economics, Vol. 1, Amsterdam: North-Holland, pp. 9-26.
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