Source Collection: Economics in the Global Age
Document 1
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Author |
Deng Xiaoping (1904–1997) |
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Date and location |
January 18 to February 21, 1992, China |
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Source type |
Primary source – speech |
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Description |
Deng was the leader of China from 1978 to 1989. During his rule, he changed the way China set up its economy to bring in market economy policies. The excerpt below comes from a set of talks he gave in various Chinese cities in 1992. Here, he explains how socialism and capitalism can have similar features yet still be different. |
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Citation |
Deng, Xiaoping. “Talks Given in Wuchang, Shenzhen, Zhuhai and Shanghai.” Speech, January 18–February 21, 1992. Mississippi State University. https://olemiss.edu/courses/pol324/dengxp92.htm |
The proportion of planning to market forces is not the essential difference between socialism and capitalism. A planned economy is not equivalent to socialism, because there is planning under capitalism too; a market economy is not capitalism, because there are markets under socialism too. Planning and market forces are both means of controlling economic activity. The essence of socialism is liberation and development of the productive forces, elimination of exploitation and polarization, and the ultimate achievement of prosperity for all. This concept must be made clear to the people....
Are securities and the stock market good or bad? Do they entail any dangers? Are they peculiar to capitalism? Can socialism make use of them? We allow people to reserve their judgement, but we must try these things out. If, after one or two years of experimentation, they prove feasible, we can expand them. Otherwise, we can put a stop to them and be done with it. We can stop them all at once or gradually, totally or partially....
What is there to be afraid of? So long as we keep this attitude, everything will be all right, and we shall not make any major mistakes. In short, if we want socialism to achieve superiority over capitalism, we should not hesitate to draw on the achievements of all cultures and to learn from other countries, including the developed capitalist countries, all advanced methods of operation and techniques of management that reflect the laws governing modern socialized production.
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Glossary Market forces: supply and demand conditions that influence prices |
Document 2
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Author |
Peter Dworkin (1952–present) |
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Date and location |
November 2, 1981, USA |
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Source type |
Primary source – magazine article |
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Description |
A military dictatorship led by Augusto Pinochet siezed control of the nation of Chile in 1973. After the coup, inflation in was very high. To combat this, a group of economists called the “Chicago Boys” started a series of neoliberal reforms that shared similarities with Ronald Reagan’s later economic policies in the United States, which many called “Reaganomics”. The excerpt of the article details what happened and describes some controversies. |
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Citation |
Dworkin, Peter. “Chile’s Brave New World of Reaganomics.” Fortune, November 2, 1981. |
Any country that knocks down its inflation rate from high triple digits to the low teens is bound to attract attention. And because Chile did it with a mix of budget cuts, tax changes, and free-market doctrine that looks... like Reaganomics, the Administration’s boosters are pointing to Chile as proof that the Reagan economic program is sound and will... work.
... Chile’s military junta has fashioned a relatively healthy economy. Inflation is down to about 12%, and the budget has a surplus... the government still controls big industries... nearly all of the 500 companies nationalized by Allende have been returned to private ownership....
The results are strikingly visible in Santiago. Glittering, luxury-filled shops rival... Houston or Los Angeles. With trade barriers down... Japanese cars have largely replaced... Chevrolet Novas and Ford Falcons.... Though the gap between rich and poor seems not to have narrowed, the junta has sharply reduced the country’s infant mortality rate, once a scandalous 65 per 1,000....
... Chileans are careful not to make extravagant claims about what their program might accomplish somewhere else. And Chile may not be the most suitable laboratory in which to test ideas for the huge and diverse U.S. economy. It has a budget about the size of New York City’s, and its population of 11 million is remarkably homogeneous....
The junta... rules... Freedom of speech is restricted, industry-wide strikes are outlawed, and police... keep order in Santiago. Unemployment hovers around 15%, which is surely an unacceptable level for any democracy.
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Glossary Neoliberal: having to do with economic policies favoring free markets, privatization, and reduced government spending |
Document 3
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Author |
Signed by twelve countries of the European Union |
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Date and location |
1992, the Netherlands |
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Source type |
Primary source – legal document |
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Description |
The Maastricht Treaty, named for the city in the Netherlands where it was finalized (also called the Treaty on European Union) is the foundation treaty of the modern European Union. It set the rules and policies that the twelve member countries, and future members states, agreed to follow. The treaty covered areas such as a shared European citizenship, established security policies, and set the path for a single European currency. The except below is from the treaty. |
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Citation |
“Treaty on European Union.” Official Journal C 191, 29/07/1992 P.0001 – 0110. EUR-Lex. Accessed 23 September 2021. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:11992M/TXT |
Article A
By this Treaty, the High Contracting Parties establish among themselves a European Union...
This Treaty marks a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as closely as possible to the citizen.
The Union shall be founded on the European Communities, supplemented by the policies and forms of cooperation established by this Treaty. Its task shall be to organize, in a manner demonstrating consistency and solidarity, relations between the Member States and between their peoples.
Article B
The Union shall set itself the following objectives:
- to promote economic and social progress which is balanced and sustainable, in particular through the creation of an area without internal frontiers, through the strengthening of economic and social cohesion and through the establishment of economic and monetary union... including a single currency...
Article 2
The Community shall have as its task... establishing a common market and an economic and monetary union and... implementing... common policies or activities... to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity...
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Glossary Monetary union: an agreement among countries to share a common currency and financial policy |
Document 4
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Author |
IMF and OECD |
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Date and location |
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Source type |
Primary Source – economic data |
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Description |
Various economic data from the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) |
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Citation |
Chart 1 |
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Glossary Gross Domestic Product (GDP): a measure of the total value of all goods and services produced in a country |
Document 5
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Author |
David Bacon (1948–present) |
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Date and location |
2002, Mexico |
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Source type |
Primary source – article |
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Description |
David Bacon is an American journalist and political activist. In this article, he writes about the impact of NAFTA (North American Free Trade Agreement, 1993) on Mexican workers and their rights. His specific focus in this article is on maquiladoras, which are factories in Mexico run by foreign companies—usually American—and the problems their employees have. |
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Citation |
Bacon, David, “The Fruits of NAFTA.” Z Magazine, February 2002. |
All along the border, the rule of law has become hollow... [there are incentives] by authorities to avoid doing anything to discourage US investors, including enforcing Mexican law....
... what appears to be a legal problem is really about money.
... Torreon’s streets filled with women chanting and shouting demands for a return to a standard of living capable of providing something better than cardboard houses and communities without sewers, electricity and running water.
[The organization] SEDEPAC found it takes 1500 pesos a week to provide food, housing and transportation for a family of four. A normal maquiladora worker... makes just 320-350 pesos. Many explained that two and three families share... rooms, pooling income to cover rent and basic needs.
That income gap was documented by the Center for Reflection, Education and Action [CREA]... [finding] that at the minimum wage, it took a maquiladora worker in Juarez almost an hour to earn enough money to buy a kilo (2.2 pounds) of rice, and a worker in Tijuana an hour and a half.... [a] dockworker driving a container crane in the San Pedro harbor can buy the rice after 3 minutes at work... an undocumented worker at minimum wage only has to labor 12 minutes for it in LA.
Whose priorities will prevail in Mexico—those of workers or those of free-trade investors? “The changes proposed by [the banks, government, and business interests] would be a gigantic step backwards...” Campos Linas emphasized. “The bankers don’t understand that... a revolution... [got] our constitution and labor law. Our problem... [is] to enforce the [law] we have.”
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Glossary Maquiladora: a term for a factory in Mexico run by a foreign company that exports products to that company's country |
Document 6
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Author |
ASEAN Founding Members (1967–present) |
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Date and location |
1967, Bangkok, Thailand |
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Source type |
Primary source – legal document |
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Description |
The ASEAN Declaration, also called the Bangkok Declaration, is the foundation treaty of the Association of Southeast Asian Nations. It set the rules and policies that the five member countries agreed to follow. These countries wanted to encourage economic growth, social progress, and cultural development within member states, and creating this treaty was a step toward that goal. |
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Citation |
“The ASEAN Declaration (Bangkok Declaration).” Association of Southeast Asian Nations, August 8, 1967. Accessed 23 September 2021. https://agreement.asean.org/media/download/20140117154159.pdf |
The aims and purposes of the Association shall be:
- To accelerate the economic growth, social progress and cultural development in the region through joint [endeavors] in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of South-East Asian Nations;
- To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter;
- To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields;
- To provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres;
- To collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communication facilities and the raising of the living standards of their peoples;
- To promote South-East Asian studies;
To maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves.
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Glossary Collaboration: working together for a common goal |
Document 7
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Author |
Jeff Ballinger (1953–present) |
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Date and location |
1998, Indonesia |
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Source type |
Primary source – article |
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Description |
Jeff Ballinger is a writer and an American labor organizer who opposes sweatshop factories. “Sweatshop” is a term used to describe a workplace, usually clothing manufacturing, where manual laborers are subject to long hours, poor conditions, and very low wages. The majority of Ballinger’s writing has focused on the suffering of workers in Asia for American companies such as Nike and others. In the text below, from an article published in Dissent magazine in 1998, he describes these conditions and resistance to them. |
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Citation |
Ballinger, Jeff. “Nike In Indonesia.” Dissent, Fall 1998. https://www.dissentmagazine.org/article/nike-in-indonesia |
In 1913, when a member of the U.S. Commission on Industrial Relations asked him how Pullman porters were supposed to live on $27.50 per month, L.S. Hungerford, Pullman’s general manager, replied: “All I can say is that you can get all the men you require to do the work.” Eighty-five years later, Nike CEO Phil Knight trotted out the same line to a crowd... He cited a report from the field by Jill Ker Conway... Conway... had reported that she’d observed over three hundred job applicants lined up outside an Indonesian factory that produced Nike sneakers.... She deemed the working conditions exemplary.
Early this summer, in the depths of Indonesia’s economic crisis, I visited shoe factories in... industrial boom towns about an hour’s drive west of Jakarta... The workers had many complaints... low pay, abusive treatment..., inadequate breaks, punishing production quotas....
... I also spent time with a group of two dozen workers who had been fired by a Nike contractor in 1992. They had just won a decision from the Indonesian Supreme Court ordering the contractor to put them back to work, with lost wages....
Indonesia has maintained a “security approach” to labor relations, keeping the military on strike-breaking duty in defiance of a 1994 agreement with [the United States].
... But since 1994 Indonesia has made a mockery of its promises, pushing striking workers back into factories at bayonet point and jailing independent union activists....
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Glossary Quota: a fixed number of something that a person or group is required to achieve |