Does capitalism hurt underdeveloped countries?

In answer to Quora question "Does capitalism hurt underdeveloped countries?"

It depends on your values system and how you define "help" and "hurt." For some, increasing overall wealth is the only metric they care about, and both anticipated externalities and unintended consequences become fairly irrelevant. These folks tend to see the history of global capitalism as lifting many underdeveloped countries out of poverty. For others whose evaluation is more holistic, and who view quality of life as involving many more factors than just wealth, then that same history is viewed through a more refined, nuanced and multifaceted filter. For them, capitalism has created just as many problems as it has solved - and sometimes more serious problems than previously existed. And I think there is a cultural blindness in play as well - one that tends to project Western commercialistic and materialistic values and expectations onto other cultures who don't operate the same way.

So where we end up is that a pro-capitalist belief matrix will tend to make a very basic assessment of change after global capitalism has impacted a given culture: Are people now making money? Do they have running water? Sufficient food production? Electricity? Technology? Expanding infrastructure? Are they buying Western stuff? Are they fully engaged in trade? Are there jobs? Well then capitalism has worked and any "hurt" that occurs is their fault. And that's pretty much it. But the more holistic and nuanced evaluation will include other factors. Is the wealth production highly distributed or concentrated? Is the running water safe? Is the food causing a Type II Diabetes epidemic? Is a majority of the population benefiting from technological improvements, or just a few people? Is increased trade having an enduring positive impact on economic opportunity, education, health outcomes, etc.? Is the development sustainable? Are there increases in negative externalities (pollution, environmental destruction, health risks, resource depletion, etc.) that are offsetting positive benefits? What is the quality of work available - are people being exploited or enslaved? And so on.

I think the desire to simplify, to see things in black-and-white, is a normal human response to what can seem like frightening, ever-increasing complexity. But ignoring all but a handful of self-affirming (and often also self-aggrandizing) variables is a disastrous way to energize or organize an economy. It's like running through a forest with a blindfold. But our current form of State capitalism is driven by growth - and the pressure to keep growing is tremendous. Which is why, on an international scale, corporations are always searching for the next underdeveloped sweet spot for cheap resources, cheap labor, lower taxes, and just the right level of blindness, ignorance or greed to keep people running frantically through the woods in hopes of a brighter tomorrow.

(Along these lines I also like John Bailey's answer.)


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