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Although there is dispute about the particular meanings intended when discussions of colonialism and imperialism occur, in general, neocolonialism can be understood as the contemporary continuation of Western colonialism in new ways that differ from historically traditional forms of colonialism that expanded an empire's frontiers and its control of lands and people. Neocolonialism instead operates by controlling political, economic, and cultural elements of a society, people, or institutions. The colonial system is seen to endure and thrive even while assuming that nations and peoples are legitimately independent. In other words, a nation can colonize another, even though the second nation remains politically independent from the first.

In such a scenario, the indigenous peoples of (neo) colonized lands find that their lives are highly determined or acted upon by Western imperial forces. Although there is not necessarily a formal occupation of their lands, nor are they physically or militarily subverted, the ways in which they are identified, organized, entertained, and studied maintain relations of power that are tantamount to colonization between the dominating Westerners and others.

Scholars study neocolonialism across disciplines with emphases on the particular aspects of life in which such control is manifest. Scholars also look at the hierarchy of individuals that helps to maintain this control and the ways neocolonialist control is maintained. Much work in this area focuses on third world or developing nations, whose populations and economies allow for Western nations to take advantage of them for economic gain, as in the establishment of international call centers and foreign assembly plants. As another example, many Western countries have well-established patterns of dependence on immigrants, both legal and illegal, to support a particular political, economic, or cultural mode of existence. Service industries in many parts of the world, for instance, would not function without immigrant populations that nonetheless are rejected in discussions of immigration policy. Neocolonialism, then, is not geographically nor topographically bound, but operates through patterns of institutional and class discourse.

The theorizing of neocolonialism often focuses on how power relations are created through patterns of interaction at multiple levels. Such theoretical work can begin by exploring the most basic linguistic level of discourse—the very language that is used by those in neocolonialist power relations. For instance, some scholars explore the ways the colonial languages of English and Spanish continue to dominate the minds and cultural ways of knowing in Southeast Asia, Latin America, and Mexico. Howard Schiffman points out that even in instances when indigenous languages are considered the official languages of a people, the industries of cyberspace and management of transnational industry continue to push English as the dominant and preferred language for business, education, and international exchange.

Neocolonial scholars are not simply interested in the issues around language and language use; they are also interested in larger discursive practices that accompany language use. The work of French philosopher Michel Foucault is very influential in coming to understand how such practices evolve historically. He shows, for example, how the primary discourse of an age determines the forms of thinking and acting in that period of history. Therefore, neocolonialist scholars look for patterns in existing practices and institutions that are normally taken for granted, but may have a huge impact on the life of a people. The rise of the Internet is a good example of a form of communication that could shape peoples' lives and institutions worldwide.

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