PSIR Notes›II-A Comparative Political Analysis and International Politics›World capitalist economy and globalisation
Paper I · Comparative Political Analysis and International Politics
World capitalist economy and globalisation
Syllabus · Paper II-A · 6 — Key Concepts in International Relations : National interest, security and power; Balance of power and deterrence; Transational actors and collective security; World capitalist economy and globalisation.
The World Capitalist Economy — Phases
- Capitalism is expansionist by nature (profit is its engine) and has been globalising from the start of colonisation.
From colonial capitalism to deglobalisation — the arc of the world economy. 1 · Colonial (Inter-imperial rivalry → the two world wars) → 2 · Bretton Woods (Post-1945 Keynesian welfare model; new states dependent on Western finance) → 3 · 1970s crisis (Debt, oil shock, falling commodity values, a destabilised dollar) → 4 · Neoliberal turn (Communism collapses, Third World BoP crises → the Washington Consensus and the WTO) → 5 · Crisis again (1997–98 Asia, the dot-com bust, 2008–09 GFC, COVID-19 → deglobalisation). “Casino capitalism” → speculative finance and derivatives breed instability; uneven development and ethical and ecological costs follow.
- After 2008–09 → neoliberalism loses credibility; states tighten regulation and use stimulus — often to rescue corporates with public money. COVID-19 accelerated deglobalisation without producing a clear alternative.
Dependency, World-Systems, and the Global South
- Immanuel Wallerstein → a core–periphery world-system in which powerful states exploit weaker ones — “either socialism or barbarism.”
- Andre Gunder Frank → the “development of underdevelopment.” Gunnar Myrdal → the “backwash effect.” Samir Amin → the Global South is structurally disadvantaged in trade — cheap raw materials out, expensive goods in.
- Backdrop → market fundamentalism, privatisation and globalisation; Fukuyama’s “end of history” universalising neoliberalism; Noam Chomsky on wealth and power concentrated in the North.
| Challenge | Working content |
|---|---|
| Unequal trade | Inequality and exploitation through structurally unequal terms of trade. |
| Debt and SAPs | Structural Adjustment Programmes (IMF, World Bank) eroding the welfare state. |
| Climate injustice | The South suffers most despite lower historical emissions; Sunita Narain defends Common but Differentiated Responsibilities (CBDR). |
| Diluted sovereignty | WTO rules — TRIPS, the Agreement on Agriculture — favouring Western firms and undermining health and food sovereignty. |
India as a Leader of the Global South
- Reformed multilateralism → S. Jaishankar (The India Way) on reforming the WTO, the IMF, the World Bank and the UN to address the “democratic deficit” (Joseph Stiglitz).
- Climate justice → CBDR; the International Solar Alliance.
- South–South cooperation → the G20 presidency and the inclusion of the African Union.
- Alternative institutions → BRICS as an option beyond Western-led bodies.
- Global public goods → Digital Public Infrastructure — UPI shared with African states.
- The line to take → a neoliberal order marginalises the South; India consolidates leadership through equitable representation, climate justice and South–South cooperation.