GeographicLuckandDependencyTheory

ZihengLiu

摘要：Economic disparity is a huge global issue nowadays which threatens the economic justice and thus in some sense decides the fate of human being， especially those from developing countries. This essay analyzes economic disparity by using Geographic Luck and Dependency Theory. None of the two theories could explain the economic disparity individually. China， Britain and Iran are used as three examples to support the thesis.

關鍵詞：economic disparity； Geographic Luck； Dependency Theory

I. Introduction

Economic disparity is a huge global problem. As we know， countries are divided into developed countries and developing countries according to economic development level， and this unbalanced situation is closely related to history， politics and some other factors. For example， China， Britain and Iran are three countries which have complicated histories， and the processes of their economic developments are different. China was a traditionally agricultural country before the Economic Reform and Open Door Policy in the 1980s. Britain， the once so called “sun- never- set- down- empire，” was the strongest power during the 18th and 19th centuries， and its colonies were all over the world. Iran was strong in ancient times， but it sells oil to keep its economic balance now. The ups and downs of these countries in terms of economy can never be explained fully by one factor. Instead it is a complicated system that decides the development of some countrys economy and causes the economic disparity between different countries. Economic disparity is different to explain due to the above mentions factors but it is not to say it is unexplainable. There are two theories that can explain economic disparity， Geographic Luck and Dependency Theory. But it is advisable to point out that each of them has its own limitation. So this essay attempts to combine these two theories in order to fully and objectively explain the economic disparity， and above all tries to find a way to solve this global problem. Geographic Luck is just one of the reasons why rich countries are rich and poor countries are poor， but it cant explain all the situations. Dependency Theory reflects a trade relationship between rich and poor countries， but it cant explain all the trades between them.

II. The Definitions of Two Theories

As mentioned above， Geographic Luck and Dependency Theory are two important theories to explain economic disparity. Geographic Luck argues that economy is influenced by geography a lot. In other words， geographical elements are in some sense the decisive forces which influence the economic disparity between countries， regions and continents. The countries with rich soil and plenty of resources can take their advantages and develop their economies well. For example， the development of the United States depends on geographic luck to some extent. Firstly， the resources of the United States are protected well because the continent was found late. Secondly， the United States has only two neighbors so that it can concentrate on development rather than on territorial issues. Thirdly， the types of crops and animals are multiple enough to supply the whole countrys demand. However， not all countries are as luck as the U.S. For example， people in New Guinea can only plow taro roots which are hard to store. “And there is only one kind of animal， pigs， in New Guinea， and they cant be used with farming， and they cant provide meat and milk. So， farmers in New Guinea just can use humans as muscle power.” （Guns Germs and Steel Episode 1 of 3 Out of Eden） This means that New Guinea doesnt have geographic luck so that its people are always lack of food and cannot shake off the yoke of poverty.

Dependency Theory focuses on the description of the trade relationship between rich countries and poor countries. Poor countries export primary commodities to rich countries at a low price， and then rich countries manufacture products based on those commodities and sell them back to poor countries at a high price. The rich countries become richer and the poor countries poorer due to the unequal trades. For example， Ethiopia is a poor country in Africa. It exports its resources to Britain such as gold and iron at a very low price and imports equipments and machines from Britain at a high price. Britain benefits a lot from the trade， while Ethiopia becomes weaker.

III. China

China is a country which has geographic luck. In Tang Dynasty， geographic luck made China become rich and developed. China had rich soil so that the agriculture of China was advanced at that time. Agriculture was the most important standard to measure whether a country was rich or not in ancient times. In Ming Dynasty and Qing Dynasty， the emperors of China enacted a policy called “Cut off China from the Outside World.” They wanted to ensure the safety of the empire， and they believed that the resources of China itself were enough to Chinese people. They didnt expect any trades with any other countries. The main reason of the faulty decision is geographic luck. China had huge territory and small population at that time so it was not necessary to trade with others. However， this faulty decision made China develop slowly and backward. Japan， Britain， America， France， Germany， Russia， Italy and Austro-Hungary conquered China and took a lot of treasure and resources from China due to Chinas weakness in 1900.

Dependency Theory can also explain the economy of China. During the conquest， China had to provide resources to the conquerors at a low price and bought products from them at a high price which made Chinas economy weaker till the victory of the War of Resistance Against Japan （the World War II in China）. After the Peoples Republic of China was established， especially the policy of Reform and Opening was adopted， the economy of China developed fast and miraculously. According to Stephen C. Thomas research， “Chinas economy averaged a growth rate of close to 10% a year for over thirty years， and China has become the second biggest economy since 2010” （Thomas， China's Economic Development from 1860 to the Present）. The growth of Chinas economy is a good example of the Dependency Theory. As we all know， China is the factory of the world， and the factories of China manufacture products and sell them to western countries at a low price because of western countries possession of intellectual property. Then， China imports these products from western countries at a high price. Although China can also earn money from the trade， western countries can earn much more money from it. For example， iPhone is designed by Apple which is a company in the Unites States， but most iPhones are assembled in China. Each iPhone can bring interest of more than $300 to Apple， but FOXCONN （A Chinese company） can only get $3 from each iPhone. Therefore， Dependency Theory is superior to Geographic Luck to explain Chinas economy because it is more suitable to modern China and more ideal to explain the disparity between the economy of China and western countries.

IV. Britain

Britain was conquered and controlled by Roman from 43AD to 410AD because of Britains geographic luck. Britains gold mines had never been found until the Roman army found them. Stanley Ireland， a professor at the University of Warwick， recorded， “one of the gold mines， called Dolaucothi gold mine， was first exploited by Roman army， and Roman empire was stronger because of the conquest” （Roman Britain， 15）. In 1700s， the Industrial Revolution broke out in Britain and a lot of machines were needed to be manufactured. But Britain is small and isolated， and there werent enough resources in this country. Since it didnt possess geographic luck anymore， British people had to conquer others in order to satisfy the British market. They conquered Asia， Africa， North America， and Australia and snatched resources from those countries， and British colonies were all over the world during the 18th and 19th centuries. Britain got geographic luck from its colonies. Its conquests made it richer and stronger， but the colonies under its rule were poorer and weaker.

Britain had conquered India since 1600. British colonists snatched the resources and transported some of them to Britain. Also， they established a lot of industrial companies and manufactured products by using the rest of the resources. Then， they sold these products to Indians at a high price. They forced Indians to plant wheat and hoarded it in order to reap fabulous profits which made a lot of Indians have no food to eat and starved to death. Indians who were not poor had to buy wheat at a high price in order survive. Britain became richer and richer through the conquest， but India became poorer and poorer. Dependency Theory is suitable to explain this situation. Britain became the most powerful country because of the conquest during the eighteenth and nineteenth centuries， but the people in the colonies had to spend a lot of money to trade with British unfairly. Dependency Theory can explain why Britain became rich better than Geographic Luck. The conquest based on Dependency Theory makes Britain become rich till today though it is not as strong as the Britain in the 18th and 19th centuries.

V. Iran

We can find some evidence of Dependency Theory in Iranian history. For example， the shah of Iran sold the Iranian tobacco industry to Britain in 1891. So “every farmer who grew tobacco had to sell it to the British Imperial Tobacco Company with a low price， and every smoker had to buy it at a shop that was part of British Imperials retail network with a high price.” （All the Shahs Men 32） The British company can benefit a lot from the unfair trade， and the shahs stupid action made the eruption of Tobacco Revolution.

As we know， Iran is a country with rich oil， and Irans economy depends heavily on oil. This geographic luck was first found by British colonists when they conquered Iran. “The newly formed Anglo-Persian Oil Company， which grew out of the DArcy concession， had begun extracting huge quantities of it from beneath Iranian soil since 1917.” （Stephen， All the Shahs Men 39） After the independence of Iran， Iranians sold oil to Europe， the United States， China and Russia， and the country became rich due to the geographic luck. Geographic Luck is better to explain the economy of Iran. Actually， Iran is a rich country now because of geographic luck though it cant compare with western countries， and the tobaccos unfair trade just lasted for a few years and didnt affect Irans economy a lot.

VI. Conclusion

The research above helps us understand the worlds existing economic disparities well. The evidence mentioned above shows that Geographic Luck or Dependency Theory cant explain the worlds economic disparity in history individually because each of them has its own limitation. Different theories are suitable to different countries， and one countrys economy might be explained by both of the two theories. Both of Geographic Luck and Dependency Theory have their own limitations. Therefore， simple and single theory cant explain the complicated worlds existing economic disparities well. Geographic Luck can explain why the countries in the Middle East such as Iran are rich well. These countries develop their economy by selling resources. And it can explain why European countries can develop their economy early. They conquered others and converted other countries geographic luck into theirs. It can also explain why some of the countries which on the small island or in Africa are poor： they dont have enough resources to develop their economy， and their citizens can only live in a primitive way. But it cant explain why some of the countries with rich resources are still poor， and Dependency Theory is suitable to these countries. These countries have to export their resources to western countries at a low price and import products from western countries at a high price， and this kind of unequal trade causes the situation that poor countries are poorer and rich countries are richer. Also， there is a kind of specific countries called BRICS countries including China， Russia， India， Brazil and South Africa. These countries are emerging nations which are between rich countries and poor countries. The most important part of these countries economy is products manufacture. Actually， this is a great way to develop economy in a high speed， but western countries can benefit more because they have intellectual property.

Poor countries should continue to export some of their resources in order to develop their economy， but they should develop their agriculture and industry as well so that they can gain economic independence rather than depend on the western countries totally. The BRICS countries should try to improve technological element of their products so that they can benefit more from manufacture. They should focus on the technology and try to establish their own brands so that they dont have to depend on the western countries， either. From this way， they can develop overall and healthy economy. The western countries are rich and powerful， so they should be responsible for the worlds existing economic disparity and try to change it. The western countries are supposed to provide technological support to poor countries and BRICS countries in order to improve their developing ways.

參考文獻：

[1]Dutt， Romesh Chunder. Economic History of India under Early British Rule. London： Ballanttne Hanson， 1906.

[2]Ferraro， Vincent. Dependency Theory： An Introduction. Mount Holyoke College， MA， 1996

[3]Guns Germs And Steel Episode 1 of 3 Out of Eden. You Tube. FreelyGiveTruthh， 24 Aug. 2012. Web. 23 Jan. 2013..

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