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Chapter 17 — The Struggle for Economic Well-Being Study Chapter Summary Many people consider economic well-being
to be a basic human right--the right to fulfill vital needs for food, shelter,
health care, and education. Economic well-being is also linked to the issue of
peace. War can harm or destroy economic well-being, and arms races consume
valuable resources that could be better used to fight poverty. Similarly, economic well-being and ecological health are also closely
related. For example, economic well-being calls for a sensible balance between
population and resources, and both pollution and the imprudent use of resources
affect the quality of economic life. This chapter focuses on the following problem:
What creative breakthroughs can promote greater economic well-being? While pockets of poverty are found in the
developed world, the preponderance of poor people live in the approximately 135
countries designated as developing. Of those, 49 are designated as least developed countries (LDCs) where poverty is rampant. While significant progress
has been made in challenging poverty over the past fifty years, the
distribution of gains has been uneven, and the gap between the richest
countries and poorest countries of the world is widening. The largest
concentrations of poverty are in South Asia and sub-Saharan Africa. Some observers believe that the
explanation for the persistence of poverty is to be found in the vagaries of
geography and demography. For others, the cause lies in adverse trade and
financial conditions that are merely carryovers from European colonialism, in
what is known as neoimperialism. Regardless of the cause, chronic poverty has serious
political consequences beyond human suffering, not the least of which are of
civil wars, coups, revolutions and territorial wars. Chapter 17 examines four broad strategies
for confronting poverty: liberal capitalism and liberal democracy, egalitarian communism,
illiberal capitalism and
right-wing authoritarianism, and democratic socialism. In general, supporters of liberal capitalism
and liberal democracy maintain that a threefold strategy is required.
First, poor people and nations must help themselves through the building of
stable and reasonably efficient political and administrative structures.
Second, richer nations must help developing nations in a variety of ways.
Third, private enterprise must assist through investment. This strategy
emphasizes peaceful, evolutionary development as well as political, economic,
and social freedom. It taps people’s interest in their own improvement and
connects the self-interest in reasonable profits to the satisfaction of human
needs. Critics argue that capitalists are motivated by profits, not by social
justice, and that liberal democratic capitalists are financially too tied into
the dominant system of exploitation to respond to the claims of the least
developed. Egalitarian communism is characterized by virtually no (or very little)
private property. The major means of production are owned by the state, and the
regulation and management of virtually the entire economy is by the state. The
underlying premise is that society is a collective, and maintaining the welfare
of the collective is the fairest, most equitable, most just means of running
the economy. In some cases, like China’s, life has improved for the vast
majority, and the worst ravages of starvation and abject poverty have been
overcome. But this assessment must be tempered with the knowledge that the most
successful communist systems are those, like China’s, that have been rapidly
shifting towards free market reforms. While some egalitarian economic progress
has been made in more purely communist systems, the overall record in places
such as North Korea, Cuba, and certainly the now-collapsed Soviet Union, is not
very good. Critics also contend that there is a high price to be paid for
opting for such a system, not the least of which are the destruction of the
regime’s opponents and the authoritarian control of speech, press, and culture.
Above all, communist systems do not rely on individual incentives as a prime
motivator, and there are few if any other incentives to work harder, produce
more, or innovate. Illiberal capitalism and right-wing
authoritarianism systems
are a form of capitalism that emphasizes capital growth at the expense of, or
in disregard of, economic and social justice. Wealth must be created before it
can be equitably distributed. Right-wing authoritarianism provides necessary
stability while wealth is generated. Critics charge that the cost of such a
strategy--political repression, illegal arrests, imprisonment, and torture--is
excessive. The democratic socialism option
assumes the possibility of public ownership of key economic and social
services. Agriculture may or may not be publicly owned. Small businesses and
service industries remain in private hands. This option also assumes a
two-party or multiparty system, political competition, and civil liberties. The
strengths of this option lie in its commitment to meeting basic human needs
within a framework of freedom, and supporters argue that this model makes
particular sense for developing countries. On the other hand, democratic
socialism may be vulnerable to attacks from the left or the right. Critics on
the right are frightened by socialism and democracy. The left is uncomfortable
with the government ownership of the large economic and social service
industries. Chapter 17 concludes with observations
about the valuable roles played by international organizations, nongovernmental
organizations, and state-based foreign aid programs. Chapter Objectives After reading this chapter you should...
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