Economic Issues Chapter 11

Chapter 11
(questions 2, 3, 6, 8, and 11)
Pg 184 #2) Imagine that a developed Western nation is facing a period of
economic decline. What might this government tend to do if it believes in
a) Keynesian economics?
b) neo-liberal economics?
 Answered on blackboard
Pg 184 #3) Using Rostow’s work as an example define what is meant by a
“model”. What are the advantages disadvantages of using a model to describe
a complex reality?
 A simplified version of reality, based on extensive
observations, which uses average or typical results.
Demographic Transition Model, Atomic Model
(Dalton, Bohr, Rutherford), Linnaeus’ 5 kingdoms.
Allows us to understand
complex situations.
Cannot accurately forecast or
predict all situations.
Allows us to make
predictions about those
complex situations.
Can only be used as a rough
guide since refinements are
often required
Pre-Colonial Africa
Africa and Independence
Pg 184 #6) Suggest how colonialism and concession companies aided in the
economic takeoff of imperial nations and hindered that of colonies.
Colonialism: acquisition and settlement of a territory or a
Country by another nation.
Concession company: a company created by an imperialist
country to develop trade in its colonies, often behaved as the
government by proxy (Hudson Bay Co., East India Co.)
 Agriculture moves from subsistence to commercial.
 Growth of cities, growth of paid workers, growth of service
 Expansion of public education.
Pg 184 #6) Suggest how colonialism and concession companies aided in the
economic takeoff of imperial nations and hindered that of colonies.
Imperial Nations
 concession companies extract resources from the
colonies (furs and timber from Canada, cotton from
India, ivory from Africa).
resources manufactured in the imperial country and
sold on the domestic and international markets.
fuelled the development of industry
provided jobs needed in the growth of cities
assisted in the accumulation of wealth in imperial
Pg 184 #6) Suggest how colonialism and concession companies aided in the
economic takeoff of imperial nations and hindered that of colonies.
 borders imposed with little relation to existing
political structures
favouring select groups created ruling classes
introduction of non-native agricultural products for
export (reduced local food supply)
local religions and cultures suppressed
introduction of disease
Pg 184 #8) …Identify three countries in each category that have:
a) limited free markets
b) a balance between free markets and an involved government
c) a limited role for government
 a) USSR , North Korea, China (pre-1990s), Cuba
 b) Sweden, Canada, France
 c) USA, England, New Zealand
HDI* Scores in Former Colonies
The Human Development Index (HDI) is defined by Investopedia as “a tool developed by the United Nations to measure and rank
countries’ levels of social and economic development based on four criteria: Life expectancy at birth, mean years of schooling, expected
years of schooling and gross national income per capita. The HDI makes it possible to track changes in development levels over time and
to compare development levels in different countries.”
Thank you Anne!!!
What pattern do you see?
The former colonies with low HDI values are, for the most part, concentrated in Africa. There are
also the nations that were part of the British India which also have low values.
South American former colonies all range in the mid-upper HDI values with the highest values
found in North America and Oceania.
What explanation can you offer?
There are a range of reasons which can explain the pattern observed;
There is a link between the highest HDI values and the early settlement dates of some colonies.
Canada, the USA, Australia, and in a number of South American countries. Where settlement was
an important part of the colonization process, western forms of government followed as well as
investment in the economies of the settlers. The goal was to create economic and political entities
which could be self-governing.
In Africa , colonization (partition) occurred much later and the ultimate goal was not settlement
but instead was access to resources and riches. As a result there was much less focus on investing
in these economic, or societal systems. When independence was reached there less social and
economic infrastructure in place in order for these nations to succeed.
India saw a greater level of investment on the part of the east-India company (a concession
company). Independence and partition brought population pressure and conflict with
neighbouring nations which prevented development.
Finally, in some instances corruption has grown out of the artificial grouping of varying cultural
and tribal groups (in Kenya there is an expression “Our turn to eat”).

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