Economic imperialism is an important trend in development theory as well as social capital, both in general and as applied to development specifically.
It is important to understand economic imperialism if we are to understand how social capital is commonly conceptualized and how it is transformed through application to development programming.
What Is Economic Imperialism?
Economic imperialism is the extension of the main ideas of neoclassical economics to other disciplines of social sciences.
The World Bank’s use of social capital allowed them to bypass important social issues such as race; class, power and conflict, etc.
Economists of the World Bank appropriated the social, leaving their economy. Thus, the World Bank’s use of social capital was an example of economic imperialism.
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How Does Economic Imperialism Work?
This theory states that someone must become poorer in order for someone to become richer. Imperialism justifies forceful expansion with a belief in social Darwinism, or “survival of the fittest.”
This can be an economic justification for building an empire by controlling other nations. Imperialism has also contributed to climate change because nature is seen as nothing more than a resource to be exploited at the lowest possible cost.
Someone else has to suffer through resource depletion or pollution if business in the developed world is to thrive in a zero-sum economy.
Despite different moral evaluations, the term “economic imperialism” has a consistent meaning in the literature.
It is generally accepted that the term “economic imperialism” refers to the spread of economics, or, more precisely, the main ideas of neoclassical economics in areas that lie outside the traditional scope of the discipline.
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What Do States Engaging In Economic Imperialism Seek To Achieve?
The goal of economic imperialism is to create a flow of trade that benefits the economy of the United States or a European nation by providing cheap resources and markets for manufactured goods.
Economic imperialism also sought a positive balance of trade so that more money would flow to the United States and Europe than to non-industrialized economies.
The goal includes both involuntary and voluntary subordination of one economic entity to another, whether at the level of enterprises, national economies or regional groups of economies; there may or may not be controls or restrictions.
Such a concept is at the same time more comprehensive than imperialism as defined above. This is because it embraces all the interrelationships of strong and weak economic units, whether dominated or not.
At the same time less comprehensive because it does not include imperialism of a non-economic origin or character.
The point is to distinguish the relations, real or hidden in any market situation, from those characteristic of imperialism, that is, to single out from the range of phenomena covered by the concept of economic dominance those originating from the use or threat of superior force.
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Example Of Economic Imperialism
Imperialist takeovers have been taking place all over the world for hundreds of years, one of the most notable examples being the colonization of the Americas.
Although the colonization of the Americas between the 15th and 19th centuries was different in nature from the expansion of the United States, Japan, and European powers in the late 19th and early 20th centuries, both periods are examples of imperialism.
Imperialism evolved from prehistoric clan struggles over food and resource scarcity, but it retained its bloody roots. Throughout history, many cultures have suffered under the rule of their imperialist conquerors. Many indigenous societies have been either inadvertently or intentionally destroyed.
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What Is Economic Imperialism Theories?
Conservative Economic Theory
A more developed nation sees imperialism as a means of maintaining its already successful economy and stable social order.
By providing new unfree markets for its exported goods, the dominant nation can maintain employment levels and divert any social strife from its urban population to its colonial territories.
Historically, this rationale embodies an assumption of ideological and racial superiority within the dominant nation.
Liberal Economic Theory
The growth of wealth and capitalism in a dominant nation results in the production of more goods than its population can consume.
Its leaders see imperialist expansion as a way to cut costs while increasing profits by balancing production and consumption.
As an alternative to imperialism, a wealthier nation sometimes solves the problem of underconsumption domestically through liberal legislative means such as wage controls.
Marxist-Leninist Economic Theory
Socialist leaders such as Karl Marx and Vladimir Lenin rejected liberal legislative strategies that addressed underconsumption because they would inevitably take money from the middle class of the dominant state and lead to the division of the world into rich and poor countries.
Lenin cited capitalist-imperialist aspirations as the cause of World War I and called for a Marxist form of imperialism to be adopted instead.
Political Theory
Imperialism is nothing more than the inevitable result of the attempt of wealthy nations to maintain their position in the world balance of power.
This theory posits that the true purpose of imperialism is to minimize a nation’s military and political vulnerability.
The Warrior Class Theory
Imperialism actually serves no real economic or political purpose. Instead, it is a nonsensical manifestation of the ancient behavior of nations whose political processes are dominated by the “warrior” class.
Originally created to meet the actual need for national defense, the warrior class eventually creates crises that can only be dealt with by imperialism to perpetuate its existence.
Conclusion
Economic imperialism is when foreign countries, whether government or business, have significant power and influence over another country’s economy and economic decision-making.
In the 19th century, economic imperialism allowed the industrialized American and European economies to gain significant power and influence over the economies of non-industrialized countries.
As a result, trade between America and Europe and non-industrialized economies primarily benefited the American and European economies.
Economic Imperialism FAQs
Is Colonialism And Imperialism The Same?
Although colonialism and imperialism are often used interchangeably, there are some significant differences between the two that separate them. Some of these differences are: Colonialism occurs when one country physically establishes dominance over another country, usually through a combination of violence and diplomacy, in order to exploit its resources.
What Is The Benefit Of Economic Imperialism?
Imperialism led to the rapid development of technology. The whole world is now interconnected, which makes all global events more accessible. Through imperialism, countries benefited from machines and technology. Improved technology led to mass production of goods, efficient use of resources and maximization of profits.
What Is The Downside Of Economic Imperialism?
Creating conflict. While imperialism has brought peace and stability to the world, it has also led to conflict between nations. The interference of one nation in the private affairs of another nation leads to war and conflict.
