Economic and Political Systems in 20th Century - Essay Example

Economic and Political Systems of South Korea, DRC Congo and the U.S.A in the 20th Century al Affiliation) Economic andPolitical Systems of South Korea South Korea or the Republic of Korea is one of the most developed nations in not only Asia but in the world as a whole. However, at the turn of the 20th Century, the country was not as prosperous as it is today and it is only after the adoption of some key economic and political systems and policies did it eventually emerge as a leading nation, with one of the highest GDP levels in the world. The current economic and political systems of South Korea can be traced back to the 20th Century. In 1945, after the end of the World War II, the former colony of Japan (North and South Korea) was divided into two parts, South Korea, which was influenced by the U.S and North Korea, which was influenced by the USSR. In essence, South Korea adopted capitalism and democracy while North Korea adopted a communistic economic system and authoritarian political system. According to Maria, South Koreans enjoy a better living standard than their counterparts in the North due to the different political and economic changes adopted by their respective governments in the mid-20th Century. The newly independent South Korean government heavily relied on political institutions managed by Syngman Rhee, who was supported by the U.S government. However, by 1948, when the first election was held in South Korea, the state was not democratic. In fact, both Syngman Rhee and his immediate successor, Gen. Chung-Hee, adopted authoritarian systems of government but implemented economic system based on the forces of demand and supply. The economic institutions recognized and protected private ownership of land, which is a core principle for any successful market economy (Maria, 2003). Acemoglu et al is of the opinion that the government of Gen. Chung-Hee is credited for the economic prosperity of South Korea, which was achieved by adopting an economic system based on aiding profitable sectors of the economy (firms) with credit and subsidies to facilitate rapid economic growth and development. In addition, the facilitation of private ownership of land ensured the development of the economy thorough innovation and technological advancements, which are key ingredients of a successful market economy. To foster even greater economic growth, the government encouraged trade, exports, foreign direct investments, transfer of technology and industrialisation, by setting up favorable economic conditions. Policies that promoted investment in education were also adopted, which led to the achievement of high literacy levels for the entire population, thus enhancing an inclusive economic system (Acemoglu, 2012). According to Problems of our economic and political systems of today, the final ingredient to the success of South Korea was its adoption of a pluralistic government, achieved by adopting a democratic system of government courtesy of Gen. Chung-Hee. By finally adopting a democratic system of government, the inclusive economic systems were supported appropriately, such as through the protection of private ownership of land and the development of systems of government where the population is included in the decision making framework, in order to cater for their needs through their representatives. Therefore, the adoption of an inclusive political and economic system is what is responsible for the economic prosperity and stability of South Korea today (Problems of our economic and political systems of today, 2011). Economic and Political Systems of DR Congo Up to 1960, the Democratic Republic of Congo (DRC) was under colonial rule, like numerous African countries. Colonial systems of government adopted extractive political and economic systems. Colonial political systems were developed to ensure that the indigenous population of native Africans did not have an input in the way that the government was run, evidenced by the lack of voting rights, forced labour, slavery and generally the lack of basic human rights. This means that Africans did not have the right to private ownership of land, which led to a situation where the people did not innovate or invent, a prerequisite for national economic development and growth. In terms of economic systems, the colonial government (Belgian) restricted the indigenous population from participating in trade by adopting laws that barred the Congolese from participating in lucrative economic ventures like mining. Instead, the colonial government used Africans for cheap labour through coercion. Additionally, the poor Africans were imposed high taxes by the Belgian colonial government in order to sustain the expenses of administration and trade (rubber). However, the newly formed independent government of Joseph Mobutu (1965 till 1997), continued with the vastly extractive economic institutions set up by their predecessors, which is responsible for the economic decline and high poverty levels in the DRC despite its high mineral and resource endowment coupled with its large population that is a ready source of labour. The newly formed government of Mobutu was not inclusive, in that it was designed to enrich Mobutu and a select class of elite politicians and friends at the expense of the entire country. An appropriate instance of the extractive economic institutions developed by Mobutu includes his decision to buy large tracts of land and castles in Europe, renting high-end jets for his personal pleasure and developing personal airports in his home town using the country’s finances. Mind you, all these personal expenditure had adverse effects on national development and institutional growth. The economic institutions enriched only a few minority while impoverishing the majority, thorough the adoption of extractive economic systems that deprived the majority of economic opportunities. According to Acemoglu et al., not only did Mobutu adopt extractive economic systems, but he adopted equally extractive political systems of government, evidenced by the adoption of an authoritarian system of government. Any opposition to Mobutu’s government was dealt using political assassinations, illegal detention and other violations of basic human rights. In addition, Congo’s political system was not centralized, meaning that as head of state he was unable to control the entire nation, resulting in numerous civil strife that impacted adversely on any potential economic development projects. Due to civil wars and unrest, there was no protection of privately owned land, no investments and no incentives for the citizens to participate in economic activities aimed at fostering economic growth and development (Acemoglu, 2012). Barma argues that the absence of a centralized government, supported by democratic agencies and departments run by competent bureaucrats and technocrats, is responsible for the decline of DRC. The concentration of power on only a select elite class continues to hinder economic and political growth in DRC. Today, the country is plagued by extractive political and economic systems, evidenced by the high poverty levels, civil strife and war, despite its high resource endowment in minerals such as diamonds, gold and copper (Barma, 2011). Economic and Political Systems of the U.S Currently, the U.S is the most developed country in the globe, with a national G.D.P that is close to 18% of the world’s G.D.P. The economic and political power of the U.S has been due to centuries of adopting inclusive political and economic institutions facilitated by democracy and capitalism respectively. The 20th century has been a big contributor to the current position of the U.S as a global powerhouse, thus necessitating the need to analyze the economic and political systems present in the U.S during that period. The period after World War II marks the emergence of the U.S as the world’s leading superpower, since after 1945, the world was divided into two spheres of political and economic influence, the western sphere which was supported by the U.S and emphasized on democracy and capitalism, while the eastern sphere was supported by the U.S.S.R, which advocated for communism as a comprehensive political and economic system. Barma states that the U.S’ financial power has been singled out as the primary reason for its dominance in the 20th Century. Unlike other powerhouses at the time like Britain, France and Germany, the U.S did not initially actively engage in both world wars, which enabled it to harness enough revenue to build its infrastructure. In addition, the adoption of laissez faire capitalism that is capital intensive, ensured that all firms and industries were solely driven by profits at the expense of other factors like social responsibility. This enabled firms to use automated machines and other cost effective techniques to reduce manufacturing costs and increase productivity and revenue (Barma, 2011). The democratic system of government, alternating between the Democratic Party and Republican party and overseen by a functional Congress, also ensured that the government was held accountable for its actions and that the laws of equality and fairness were upheld despite the social, ethnic, race and sexual affiliation of a person, leading to the coinage of the term ‘land of opportunity’ in reference to the U.S. For instance, it’s somewhat lax immigration policies allowed people from all parts of the world to immigrate to the U.S and in so doing, there was transfer of scientific knowledge, which was responsible for some of the greatest U.S inventions and fetes, like space exploration and the development of nuclear energy. This inclusive form of government enacted the bill of rights in its constitution, allowing people to own private property and express themselves freely, incentives for innovation and technological advancement. According to Acemoglu et al., the inclusive economic systems ensured that the population was motivated to participate in income generating projects. The government provided tax write offs and subsidies to profitable companies and other foreign investors to foster economic growth. The adoption of a free economy with very little government supervision was essential in creating an environment that favored investments and savings, factors that are key to economic growth and development. A good example of the impact of the inclusive political and economic systems adopted by the U.S is the Nogales region, shared by Mexico (Sonora) and the U.S. (Arizona). Despite their contrasting fortunes, the two regions share the same culture, region and people, but the difference is the country where they are situated. This situation highlights how the U.S adoption of inclusive political and economic systems has contributed immensely to its prosperity and especially during the 20th Century (Acemoglu, 2012). Reference List Acemoglu, D., & Robinson, J. (2012). Why nations fail: The origins of power, prosperity, and poverty. New York: Crown. Barma, N. (2011). Rents to riches? The political economy of natural resource-led development. Washington, D.C.: World Bank Publications. Problems of our economic and political systems of today (2011). Retrieved April 27, 2015, from https://kimgraaemunch.wordpress.com/2014/04/28/problems-of-our-economic-and-political-systems-of-today/ Maria, W. (2003). Reforming Economic Systems in Asia: A Comparative Analysis of China, Japan, South Korea, Malaysia and Thailand (Cheltenham: Edward Elgar in association with ISPI, 2001, 216 pp., 55.00, hbk.). Millennium - Journal of International Studies, 195-197. Read More