WHAT IS PERIPHERAL CAPITALISM? - ECONOMY - 2025

The peripheral capitalism is an economic system adopted by industrialized countries by way of tax countries or industrialized center. An example of peripheral capitalism is the one adopted by the majority of Latin American countries imposed by the United States. In East Asia you can also find many examples of countries governed by this economic system.

Peripheral capitalism derives from capitalism, an economic system present in some countries, generally industrialized, in which the importance of private property prevails over the individual. The basis of his system would be the prohibition of the State intervening in the economy or at least reducing its intervention to a minimum.

Some examples of industrialized and capitalist countries are the United States, the United Kingdom, Japan, Germany, France, Australia or Canada. These countries are fed by raw materials that come from other countries. The former would be the "center" while the latter would be the "peripheral" countries.

Even though the economic, social and cultural reality of the so-called “periphery” countries are so different from the center countries, the economic system in the peripheral countries tends to imitate the capitalism of the industrialized countries, leading to great internal contradictions.

There are thinkers who consider that the development systems of each country should not be imitated or imported from other countries, but rather create their own based on the particular characteristics of each region.

However, this idea often runs up against the intentions of the capitalist hegemonic countries, which need the natural resources of the peripheral countries to maintain their economy.

Characteristics of peripheral capitalism

- Peripheral capitalism is not a decision made by the "peripheral" nations, but rather an imposition of the more economically stronger "center" countries.

- It is an economic system that is fed mainly by the production of raw materials and agricultural products from less developed countries.

- It is usually run by a local bourgeoisie linked to foreign capital.

- Peripheral capitalism generates an economic dependence of the most underdeveloped countries with respect to the most developed. For example, in technology.

- It is the stage prior to "center" capitalism. In other words, before becoming an economic powerhouse, you must go through this stage.

- The development and increase of capitalism is a direct consequence of peripheral capitalism. In other words, the development of capitalist countries depends on the underdevelopment of other countries that are not.

- Peripheral capitalism creates a system of inequality.

Contradictions of peripheral capitalism

Below we list some of the contradictions that arise in peripheral capitalism, a product of this imitation of the capitalist system:

Technical / technological contradictions

By imitating the technique used in the centers from the periphery, there is a tendency to have the need for high capital requirements that are not available. This leads to the fact that it is necessary to buy it from the central countries.

Another negative consequence of this is that the imported technique from the center countries does not require as much workforce compared to that which exists in the peripheral countries, which is why social pressures begin to be generated that even lead to internal conflict.

Contradictions in consumption

In peripheral countries - and especially the upper strata of the social scale - they tend to imitate the consumption of industrialized countries, thus erasing - once again - the culture of their own countries.

This pattern of consumption that is imitated is not related to the level of productivity of their countries, thus creating new internal contradictions.

Economic imperialism

Another way of understanding what peripheral capitalism is is by taking into account the concept of economic imperialism, which is what dictates the economic pattern (developments, costs, raw materials to use, services to offer, etc.) based on their own needs.

In this way, economic imperialism dictates guidelines of what should be produced and how to do it, while peripheral capitalism obeys these guidelines.

Using physical concepts, we could say that a centripetal force is exerted between the center and the periphery. That is, unlike centrifugal force, which is what characterizes, for example, automatic clothes washers, where the elements are removed from the center (and that is why the clothes at the end of the washing process end up stuck to the wall of the washing machine), the centripetal force is the opposite, and the elements are pushed towards the center.

In this way, in peripheral capitalism the countries of the center exert a centripetal force where they impede the economic independence of the periphery.

The centers not only produce the technical and technological advances that they impose within their sphere of influence, but they also concentrate the fruits of growing productivity.

The influence of the center on the periphery

The centers exert influence in the development of certain aspects of the periphery when it is convenient for the former, contributing to their own interests. From the center, peripheral countries are given a passive role, basically limited to supplying raw materials at low cost.

In this sense, when the country of the center is interested in the extraction of a specific raw material, the development of that sector in that country on the periphery is in favor of its interests, so it will allow and support such development.

From the center countries, when there is an excess supply of a product or service, since domestic demand is satisfied, the next step is to allocate the surplus of that supply to developing countries.

The following consequence is that there is a relationship of strong dependence on the part of developing countries towards the centers of power that are so far away from them and that generally do so from developed countries that dominate - in principle from the economic point of view - to the countries of the region.

However, sometimes this dominance exercised by developed countries is not limited to the economic sphere, but rather - in alliance with the high social strata of the peripheral country that have economic power - sometimes they also hold the political power of those countries and even an entire region.

Representatives of peripheral capitalism

As mentioned above, the clearest example of peripheral capitalism occurs in most Latin American countries, which, having many natural resources, are exposed to foreign capital.

Among these countries we can find Mexico, Chile, Brazil, Colombia, Peru, Argentina or Venezuela.

In turn, in East Asia we can find other representatives of peripheral capitalism such as Vietnam, Thailand, Laos, Taiwan or Cambodia.

Conclusions

Given the above, we can conclude that peripheral capitalism is highly related to the underdevelopment of many countries in our region.

The high dependence on the part of the periphery on the development conditions of developed countries has made the effect of recessions in developed countries be felt directly.

Likewise, dependence led to the fact that when developed countries stopped needing raw materials from the periphery countries, the economic and social crisis of the latter increased even more.

One of the ways to break this harmful dependence on peripheral capitalism is industrialization with direct support from the State, even against the main premise of capitalism, which is non-intervention by the State in the country's economy.

References

1. Peripheral capitalism, neoliberalism and community defense institutions (January 2017) in Pacarina del Sur recovered July 9, 2017 from Pacarina del Sur: pacarinadelsur.com
2. Claudia Gutiérrez (August 2011) in Recovered Peripheral Capitalism, July 9, 2017 from grupo8020.com: grupo8020.com
3. Bernard, Jessie (1968). "Disorganization of the community", in "International Encyclopedia of Social Sciences", Mexico.
4. Vuskovic, Pedro (1987). "Raúl Prebisch and his theory of peripheral capitalism", in Foreign Trade, Mexico.
5. The uneven development (1974). Essay on the social formations of peripheral capitalism. Confrontation books, Economy Series, 2, Barcelona.