This paper attempts to discuss the issue of capitalism while at the same time exploring the concepts of US dominance. The paper provides an analysis of the issue of capitalism while looking into details the concept of interdependence, dependency as well as the mercantilist theories. The issue of capitalism is as old as mankind and the paper equally attempts to explore how it is impacting in the developing nations. The paper also explores the single dominant status of America which she has been enjoying for many years. This paper in line with this idea attempts to explore the emerging trends of the in the global fronts.
At the sane time the paper attempts to explore the countries which are emerging as the challenges to the dominance being enjoyed by the US. Finally the paper examines the realists vision of national interest and how it related to the other national interest. 1. Dependency and independency Capitalism started spreading since the end of the second world. A consensus was held in Washington to open up market and free trade this has led to current global crisis in financial markets that is making poor countries more poorer (Cohen ,1998,p.1).
Capitalism of free markets is so volatile as alluded by Robert Hormats of Goldman Sachs International that uncertainties and disquiet exist in the heart of increasing pressure to realize pain of globalization. ( Cohen,1998,p. 2). Anthony Giddens of London school of economics comments about need for urgent governance of the world economy (Cohen,1998,p. 3). Capitalism played key role in opening up hinterlands , agricultural and industrial revolution.
In contrast, is the same capitalism revolution that is sending hundreds of millions of people who hold stock either through mutual or direct funds. Elsewhere capitalism has had drastic effects by raising rates of poverty to alarming levels (Cohen, 1998, p. 4) Post-colonization left most of colony countries still heavily self-reliable. Although postcolonial theory claims to have led to modernization, however the level of dependency and imbalance of trade left the colony countries and new leaders with no choice but rely on mother countries for economic growth.
Dependency is based on structural and social-economic perception, on the other hand development and imperialism has tied capitalism to postcolonial theory (ISSN, 2002, p. 2). The reality is that the postcolonial theory advocates for post-structural and cultural perception that is embedded to imperialism. The reality is that development of economies and underdevelopment are actually opposite sides of the same coin (ISSN, 2002, p. 3). Leaders in third world countries have found themselves quietly championing imperialism at the expense of its people and economy.
This has roots from the complex outcome of dependency as a result of global capitalism (ISSN, 2002, p. 5). We can sum up that dependency and interdependency theories are phenomenal and are a complete manifestation and consequences of Capitalism (ISSN, 2002, p. 9). Mercantilists Mercantilism is an idealism that impresses power and likens politics and economics to power. History of mercantilism reports that they did not believe in theorism but were practitioners who cared less of to Salvation or Justice like scholastics do.
One can argue that they were oriented in real world; for example they had writings that leaned towards policy application with no analytical or theoretical layout, a behaviour that led some to refer to them as rent seeking behaviour (Cohen, 1998, p. 19). In contrast they exhibited theories and school of thought that was implicit in economics. Mercantilism is a big theory that was practiced in Europe between 16th to 18th century. It advocated for government management and control over the economy of a nation thus amalgamated state power and compromised national powers.
It is Adam Smith a Scottish economist in his article on wealth, who first described some 17th century publicists to as mercantilist. (Cohen, 1998, p. 19) The main principles behind mercantilism is the economic maximization by extensive farming, conversion raw materials into profitable products, promotion of increased population, batter trade of Gold and Silver to domestic goods, importation of unfinished products, find ready market for excess manufactured goods to foreigners, and finally allow no importation of goods that are locally available.
This is what opened up the struggle and the 18th and 19th century scramble to colonize third world countries(Cohen, 1998, p. 19). Colony countries were denied change to industrialize, which resulted to monopolization by mother country. Mercantilism principles spelled out measures mend to drain out foreign exchange but instead encouraged investment through savings, thrift, and parsimony. This in essence laid foundation for emergence of Capitalism that aimed at huge profits. ( Cohen, 1998, p. 19).
Mercantilism had a specie Flow mechanism which encouraged gold inflow then raise prices domestically, second the higher cost of Gold will fetch attractive imports, make goods that are domestic unattractive and hence next to impossible to export. This means buying cheap and selling dearly and thus discouraging exports in turn that again twist balance of trade against a nation. Thomas Mun is early pointer that this specie-flow mechanism has no account of the long term repercussions.
What mercantilist observed is to increase trade as a way of enriching a nation by equating wealth and money (Cohen, 1998, p. 19). We can sum up that mercantilist operated on enhancing prosperity of a nation through a surplus balance of trade by accumulating Gold. Second by controlling foreign trade to encourage inflow specie, promote industries, colonialism, increase cost of importing finished goods by high tariffs, and finally encouraging exports of finished goods (Cohen, 1998, p. 19).