In 1995, the 200 most powerful multi-national corporations of the world controlled approximately one third of its GNP The turnover of these companies sometimes exceeds the GNP of some countries. An example is General Motors, which, with a turnover of 132 billion dollars surpasses the GNP of Indonesia. Confronted with the power of these companies, one must acknowledge their importance in international relations, in the context of a capitalist world economy. Capitalism is "an economic system in which all or most of the means of production and distribution are privately owned, and are operated in a relatively competitive environment through the investment of capital to produce profits". Since the collapse of communism following the fall of the Berlin wall in 1989, capitalism has become the hegemonic ideal and the dominant economic trend. However, criticism of this ideology has not ceased, in the light of the fact that nearly half the world's population (2.8 billion people) lives on less than US$2 per day. This leads us to question whether capitalism may be considered a positive force in international relations and what its consequences are for both developed and third world countries.
[...] Is capitalism a positive or negative force in International Relations ? Is capitalism a positive or negative force in IR? In 1995, the 200 most powerful multi-national corporations controlled approximately one third of the world GNP The turnover of these companies sometimes exceeds the GNP of some countries: one example is General Motors which with a turnover of 132 billion dollars surpasses the GNP of Indonesia. Confronted with the power of these companies, one must acknowledge their importance in international relations, in the context of a capitalist world economy. [...]
[...] is, let me say, at the very least by no means self evident that there is more liberty, equality, and fraternity in the world today than there was one thousand years ago.” Wallerstein here uses the French emblem to denounce the contrast between the values proclaimed and the economic and social reality. With historical capitalism, small community structures were destroyed, to be replaced by the oppressive forms of control such as plantations. There has consequently been no progress made in the liberation of the peoples. Capitalism thus did not meliorate the under developed countries' economy but placed them in an exploitative scheme, where their condition worsened. [...]
[...] By entering the global economic system, third world countries are forced into the production of raw materials, as they have not known an industrial revolution as in Western developed countries. However, the price of manufactured goods increases more rapidly than that of raw materials. Consequently the countries in the periphery are each year poorer than those in the core but cannot escape the system. Although some countries manage to create economic growth, such as Brazil, which in the late 1960s and early 1970s presented high growth rates, this is still achieve within a relation of dependency. [...]
[...] This co-operation would also extend to other fields of international relations. Indeed after establishing common economic interests, countries would then realize they benefit from peace. With the development of free trade, divisions between states would fade, and the artificial barriers responsible for international tensions would be lifted. According to Ricardo, free trade “binds together, by one common tie of interest and intercourse, the universal society of nations throughout the civilised world” (Ricardo 1911:114) . This notion of peace through economic cooperation has confirmed itself through the development of the European Union for example. [...]
[...] will benefit the industrialized nations . First, it is in the interest of the industrialized western powers to promote free trade, as they are the most efficient producers. With their technological advances and high productivity, western companies will be able to put the cheapest goods on the market, as they can produce them on low costs. Third world countries entering free trade will thus see their market invaded with cheaper foreign goods. Whereas western companies will have found new customers, the national economies of the less developed countries will be unable to compete. [...]
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