The Importance Of Capitalism

Although no countries have ever deindustrialised, the loss of economic superiority is the key reason for stagnation. The emergence of new regions of growth and the decline of previously developed areas leads to a periodical restructuring of the spatial distribution of uneven development, creating a cyclic process (Smith, 1984). The free movement of capital across the globe means investment is channelled into countries which will deliver the highest amount of profit and withdrawn from countries which are no longer profitable (Harvey, 2011). The aforementioned world-system theory takes into account the profit extraction and exploitation of resources and labour needed to allow less developed countries to rapidly grow (Chirot et al. 1982). The theory stipulates the existence of an economic hierarchy based on the relative importance of countries – the core, periphery and the semi-periphery. Shifts in this hierarchy ultimately determine the dynamics of the global economic system (Knox et al. 2014).

The displacement of countries in the global economic hierarchy due to rapid economic growth in other countries is not confined to the example of Asia, there is a historical past regarding unevenness. The rise and stagnation of countries is key to the continued success of Capitalism, as the key is to maintain the production of space. Britain was the initial industrial nation, yet it was displaced by France in the 18th and 19th centuries and was propelled into further decline in the late nineteenth century with the advancement of industrial technologies in Japan and the USA (Tipton, 1998). The rise of Asia is just another example of the intrusion of capitalism to find new outlets for profit.

With the rise of other economies such as MIST (Mexic...

... middle of paper ...

...e Global North faces competition from emerging economies in the Global South, who have recognised the failings of Western economies meaning these economies have stable currencies, low debt and improved regulation. However, for many periphery and semi periphery countries, the dominance of capital and surplus value by the core economies means economic growth may be slow. As the rise and fall of economies is inherent to the ‘geography of capitalism’, the global goal should not be to create even development but to ensure patterns of differentiation and equalisation are socially determined rather than driven by capitalism. As competiveness is the principal ideology of Capitalism, the need to gain competitive advantage and increase productivity will continually be sourced through exploitation or at the expense of nature and humanity and will persist in future generations.