INR 3702

Base erosion and profit sharing (BEPS)

(BEPS)— their term for the process whereby TNCs artificially shift profits to low-tax locations where they have very little real economic activity. the OECD has been trying to

General agreement on tariffs and trade (GATT)

(GATT) in 1947 to lower trade barriers and promote the West's political objectives during the Cold war a 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions unprecedented increase in trade in the last 50 years has created high levels of interdependence between countries.

Global Value Chains (GVC's)

(also called "global production networks" (GPNs)) that encompass "the full range of activities that firms and workers perform to bring a product from its conception to end use and beyond." 19 GVCs link together many companies in a division of labor that spans different countries. exist when these activities cross geographic borders

Marx 3 laws that destroy capitalism

1. law of falling rate of profit asserts that over time capitalists replace workers with machines and other labor-saving devices, increasing unemployment. Because surplus value (profit) can only come from exploiting living labor, the lower proportion of living labor compared to machines causes the rate of profit to decline. 2. the law of disproportionality holds that capitalism, because of its anarchic, unplanned nature, is prone to instability. During a period of economic boom there will be overproduction such that capitalists cannot sell everything they produce at profit and workers cannot afford to buy everything that they make. 3. law of concentration holds that capitalism creates increasing inequality in the distribution of income and holds that capitalism creates increasing inequality in the distribution of income and

LuxLeaks

2014 major scandal the International Consortium of Investigative Journalists (ICIJ), using 28,000 pages of documents leaked by a PricewaterhouseCoopers whistleblower, revealed that in the 2000s the Luxembourg tax authorities had issued secret tax rulings to more than 340 TNCs which helped them save billions of dollars on their global tax bills. a

False Consciousness (Marx)

= the effect of bourgeois ideology on the masses, causing them to view reality in ways that support the interests of capitalists rather than those of their own class.

positive sum game

A situation in which all countries can benefit even if some benefit more than others

Neoliberalism

A strategy for economic development that calls for free markets, balanced budgets, privatization, free trade, and minimal government intervention in the economy.

Dependency Theory

A structuralist theory that offers a critique of the modernization model of development. Based on the idea that certain types of political and economic relations (especially colonialism) between countries and regions of the world have created arrangements that both control and limit the extent to which regions can develop.

Keynesian Compromise

An aspect of the Bretton Woods system. Nations retain the ability to intervene in their domestic economies but agree to limit interference in international economic markets. allowed individual nation-states to continue regulating domestic economic activities within their own geographic borders. ALLOWED THEM TO MAINTAIN CAPITAL CONTROLS WHICH ARE RULES LIMITING THE AMOUNT OF MONEY COMING INTO OR LEAVING A COUNTRY

Mercantilism

An economic policy under which nations sought to increase their wealth and power by obtaining large amounts of gold and silver and by selling more goods than they bought which explains the compulsion of nation-states to use power to protect themselves and generate wealth for their citizens. Although neoliberal ideas replaced mercantilist ideas in popularity after the 1970s, mercantilism has made a comeback in recent years.

keynesianism

An economic theory based on the thoughts of British economist John Maynard Keynes, holding that central banks should adjust interest rates and governments should use deficit spending and tax policies to increase purchasing power and hence prosperity.

transfer pricing

Another TNC practice that is gaining increased attention in recent years is

heterodox economic liberals orthodox economic liberals

By the mid-2000s, these critics, whom we label as "heterodox economic liberals" to distinguish them from neoliberalism-supporting "orthodox economic liberals," argued that globalization should be managed better. For example, Joseph Stiglitz, the former chief economist of the World Bank and Nobel Prize winner in Economics, criticizes IMF policies for making it difficult for many developing nations to get out of debt and benefit from globalization.

classical mercantilism

Classical mercantilism (from the sixteenth until the nineteenth centuries) focused on state efforts to generate trade surpluses by promoting exports and limiting imports.

Security community

Constructivists have found that sometimes seemingly implacable rivals cooperate because they come to have a shared understanding that they are part of a "security community"— community"— a group with a sense of shared moral purpose and mutual trust. a situation in which low expectations of interstate violence permit a high degree of political cooperation-as for example, among NATO members

DIFFERENT PERSPECTIVES IPE

Economic liberalism (particularly neoliberalism— see Chapter 2) is most closely associated with the study of markets. Later we will explain why there is an increasing gap between orthodox economic liberals, who champion free markets and free trade, and heterodox economic liberals, who support more state regulation and trade protection to sustain markets. Heterodox liberals stress that markets work best when they are embedded in (connected to) society and when the state intervenes to resolve problems that markets alone cannot handle. In fact, many heterodox scholars acknowledge that markets are the source of many of these problems. Hard power refers to tangible military and economic assets employed to compel, coerce, influence, fend off, or defeat enemies and competitors. Soft power is comprised of selective tools that reflect and project a country's cultural values, beliefs, and ideals. Mercantilism (also called economic nationalism) is closely associated with the political philosophy of realism, which focuses on state efforts to accumulate power and wealth to protect society from physical harm Structuralism is rooted in Marxist analysis but not limited to it (see Chapter 4). Structuralist ideas continue to be extremely important, even though they are not as politically popular as they were before the end of the Cold War. Constructivism is a relatively new and increasingly influential IPE perspective (see Chapter 5). It contends that norms, ideas, and discourse play important roles in shaping outcomes in the global political economy. 4 LEVELS OF ANALYSIS: 1. GLOBAL LEVEL global level is the broadest, most comprehensive level of analysis. We 2. interstate level: level, we analyze how the relationships between states affect global outcomes. For example: ■ Alliances and the balance of power (distribution of power) between states profoundly shape what actions individual states can take and what threats they face. 3. sTATE-SOCIETAL LEVEL: we analyze how bureaucratic decision making and the type of government shape outcomes. 4. At the individual level, we look at what individual policymakers do to cause or influence events. We try to understand the 4 LEVELS OF ANALYSIS: GLOBAL LEVEL, INTERNATIONAL LEVEL, STATE-SOCIETAL LEVEL, INDIVIDUAL LEVEL 5 IPE STRUCTURES: KNOWLEDGE STRUCTURE, SECURITY STRUCTURE, FINANCE AND MONETARY STRUCTURE, TRADE STRUCTURE PRODUCTION STRUCTURE

outsourcing

Eventually they started to contract with other companies overseas for goods and services— a process called

Economic Nationalism

Finally, by the end of the century, economic nationalism (a people's sense of economic loyalty to their nation-state) nation-state) became even more entrenched in international relations, which in turn helped generate a second wave of imperialism when Germany, Japan, Italy, and the United States began acquiring their own colonies.

Nation:

For both mercantilists and realists, the nation-state is the primary unit of analysis. is a collection of people who, on the basis of ethnic background, language, and history, define themselves as members of an extended political community. 3

Offshoring

For example, a contentious issue in the developed countries is offshoring— when corporations move their manufacturing or certain business functions overseas. in the 1980s, many companies moved factories to Asia and Latin America to take advantage of cheap, plentiful labor.

Industrial policies

Government policies designed to support the growth of the industrial sector of an economy. It may include support for infant industries through tax cuts, grants, low interest loans, and etc, as well as investment in human capital, research and development, or infrastructure development. National innovation projects are central features of industrial policies.

Capital Mobility

IMF in particular spread the notion that capital mobility— i.e., unrestricted flows of private capital across borders— was a necessary policy for every state that wanted to develop rapidly. IPE scholar Jeffrey Chwieroth finds that IMF staff staff— made up mostly of economists— brought to the IMF neoclassical economics ideas that they had been trained to believe in during graduate school. 59 The organizational culture in the Fund privileged economic theory, which had turned against Keynesianism and capital controls by the 1970s. the ability of an investor to move his or her money across borders and invest where profits are highest and costs are lowest

Infant industries

In Alexander Hamilton's Financial Program, these newly developing businesses needed to be protected from foreign competition in the form of tariffs on imported goods Report on the Subject of Manufactures to the first U.S. Congress, Hamilton argued— in opposition to the ideas of Thomas Jefferson— that free-trade policies were not in the best interest of a young nation. Unless the U.S. government imposed taxes on imports, America's infant industries could never compete with Britain's mature industries in manufacturing all the goods and services that Americans demanded.

FIVE IPE STRUCTURES

In the textbook we will often refer to five structures that were first outlined by Susan Strange: production, trade, finance, security, and knowledge. For Strange, these structures are complex arrangements that function as the underlying foundations of the international political economy. Each contains a number of state and nonstate institutions, organizations, and other actors that determine the rules and processes that govern access to production, trade, finance, security, and knowledge. In Chapters 6 through 10, we examine the rules and norms in each structure, how they were created, who benefits from them, and who is contesting them. The "rules of the game" in each structure take the form of treaties, informal and formal agreements, and "bargains." They act as girders and trusses that hold together each of these five major structures.

Responsibilization

Instead of being protected from the depredations of the market through unions or other organizations that engage in collective action, individuals have become isolated units. As "responsibilized" people they have to cultivate their "human capital," compete with others, "self-invest wisely," and become self-reliant. Undoing the Demos: Neoliberalism's Stealth Revolution, political scientist Wendy Brown argues that the neoliberal form of capitalism undermines traditional economic solidarity, replacing it with

trade structure:

International trade agreements and national regulations shape the flows of goods and services across borders. While the rise of globally freer trade since the 1980s has helped many countries grow more quickly, many unions and manufacturers in Western countries have lobbied their governments for protectionist barriers against cheap imports

Foreign Direct Investment

Investment made by a foreign company in the economy of another country. grew, TNCs expanded outside their own home countries to build manufacturing facilities and set up offices.

Knowledge structure:

Knowledge and technology are sources of wealth and power for those who use them effectively. The spread of information and communications technologies has fueled industrialization in emerging countries and empowered citizens living under authoritarian regimes, as see

Norm antipreneurs

Like Carpenter, Australian international relations scholar Alan Bloomfield urges us to pay greater attention to cases where there is a failed attempt to change status quo norms. He argues that "norm antipreneurs" sometimes successfully prevent normative change. He sees antipreneurs as often having a strategic advantage when emerging alternative norms have little credibility or socio-institutional support. state antipreneurs have an advantage when they can exercise vetoes in existing institutions or defund institutions that are receptive to new norms. 36

Malevolent and benign mercantilism

MALEVOLENT: a more hostile version of economic warfare that nations employ to expand their territorial base or political influence at the expense of other nations. BENIGN: benign mercantilism is more defensive in nature, as "it attempts to protect the economy against untoward economic and political forces." 19

DOMINANT FEATURES OF CAPITALISM

Markets coordinate society's economic activities. ■ Extensive markets exist for the exchange of land, labor, commodities, and money . ■ Consumer self-interests motivate economic activity, while competition regulates economic activity. ■ Individuals have the freedom to start up new business enterprises without state permission ■ Individuals have the right to private property and are entitled to the income that flows from their property. According to Smith, the pursuit of individual self-interest does not lead to civil disorder or even anarchy; rather, self-interest serves society's interests. Smith famously said, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages." 5 In a capitalist economy, self-interest drives individuals to make rational choices that best serve their own needs and desires. However, it is competition that constrains and disciplines self-interest and prevents it from becoming destructive to the interests of others. Capitalism assumes that price competition also results in the efficient allocation of resources among competing uses. When economists say that markets coordinate society's economic activity, they generally mean that no one (especially the state) should be in charge of how resources are allocated. Market coordination entails a decentralized (spread out) resource allocation process guided by the tastes and preferences of individual consumers. The last two tenets of capitalism deal with the role of the state in establishing freedom of enterprise and private property. Freedom of enterprise means that businesses can easily channel resources to the production of goods and services that are in high demand while simultaneously intensifying competitive pressures in these industries. When individuals are free to make their own career choices, they naturally prepare for and seek out careers or lines of employment in which they are likely to be most productive. Likewise, as economic circumstances change, labor resources will be rapidly redeployed to growing sectors of the economy as individuals take advantage of new opportunities. properly. Today we would say that in capitalist economies Smith opposed rent-seeking (the manipulation of the market to reward powerful business interests). For Smith, the market's invisible hand cannot work for the benefit of all society if there isn't competition. He viewed the state (the visible hand?) as necessary to prevent capitalists themselves from destroying the market, and he also recognized that powerful political interests could use the state to create an unfair market. In his often-overlooked book The Theory of Moral Sentiments, properly structured market, commercial activity would produce righteous and prudent people. Even as people pursue their self-interests, their passions are restrained by competition that induces them to best serve the interests of others, to behave honestly, and to gain a reputation for fairness. In IPE jargon, economic liberals view the outcomes of state, market, and society relations as a positive-sum game, in which everyone can potentially get more by making bargains with others as opposed to not trading with them. Mercantilists, on the other hand, tend to view economic transactions as a zero-sum game, in which gains by one person or group necessarily come at the expense of others (see Chapter 3).

new constitutionalism

More broadly, orthodox liberals support what IPE scholars call the "new constitutionalism," which entails removing some sensitive economic issues from the realm of politics and placing their governance in the hands of independent bodies and the private sector.

tax inversion

One of the most controversial ways to lower taxes is through a tax inversion, by which a large corporation in one country sells itself to (or buys) a smaller corporation in another country and then reincorporates there. where a US based MNC buys a firm in a low tax country in order to shield foreign earnings from US taxes

dsdd

One of the most influential political economists of the twentieth century was John Maynard Keynes (1883- 1946)— pronounced "canes"— who developed a subtle and compelling strain of liberalism called Keynesianism. Like Mill, Keynes was concerned with the negative impact of markets on society. His ideas were especially popular from the 1930s through the early 1970s. The 2007- 2008 financial crisis caused many experts to become more critical laissez-faire ideas and look back to Keynes for an explanation of why crises occur and how to resolve them. A civil servant, writer, farmer, lecturer, and Director of the Bank of England, Keynes refuted some of the principles of classical economic liberalism. He believed that the Great Depression was evidence that the invisible hand of the market sometimes errs in catastrophic ways. As early as 1926, he wrote:

IPE 3 DIMENSIONS Political dimension: Economic Societal dimension

POLITICAL DIMENSION: accounts for the use of power by individuals domestic groups, states, international organizations, NGOS and transnational corporations ECONOMIC DIMENSION: IPE involves an economic dimension that deals with how scarce resources are distributed in markets among individuals, groups, and nation-states. SOCIETAL DIMENSION: the works of such notables as Lindblom along with economists Robert Heilbroner and Lester Thurow help us realize that IPE needs to reflect on the societal dimension of different international problems. 3

Expansionary fiscal contractions

Political scientist Sebastian Dellepiane-Avellaneda points to the dominance of the idea of "expansionary fiscal contractions" as a key driver of Eurozone governments' behavior. 72 In the 1990s, an influential group of Italian economists— many of whom graduated from Milan's Bocconi University— developed the argument that during a recession it is not wise for a government to increase spending and borrowing; rather, cuts in government spending and increased taxes (also called "fiscal consolidation" or austerity) are most likely to produce economic growth.

law of comparative advantage

Ricardo demonstrated that free trade increased efficiency and had the potential to make every country better off. the idea that a nation is better off when it produces goods and services for which it has a comparative advantage

Investor-state dispute settlement

TNCs can take their disputes directly to independent international arbitration bodies that issue binding rulings that can sometimes compel states to award damages to foreign investors. a growing number of investment agreements today have a controversial mechanism for adjudicating disputes called

GROWING INFLUENCE OF FACTORS INSIDE THE STATE

The Rise of Populism and Nationalism Today we are witnessing the re-emergence of nationalism and a loss of faith in globalization. In the past decade there has been growing mass support for "populist-nationalist" parties and rulers in Russia, France, Hungary, Turkey, Egypt, Brazil, the Philippines, Venezuela, and most recently in the United States with the election of Donald Trump. By the early 2000s both globalization and globalism (its supporting ideology) had come under attack for benefitting rich elites much more so than the working class and poor nearly everywhere.

paradox of thrift

The idea that when many households simultaneously try to increase their saving, actual saving may fail to increase because the reduction in consumption and aggregate demand will reduce income and employment.

Production Structure

The issue of who produces what and on what terms lies at the heart of the international political economy.

Global Governance

The regulation and coordination of transnational issue areas by nation-states, international and regional organizations, and private agencies through the establishment of international regimes. These regimes may focus on problem solving or the simple enforcement of rules and regulations. more threats to world peace. Because of the interconnectedness of states and markets, international institutions must play some role in solving global problems. Paradoxically, precisely at a time when more collaboration between states is necessary, states seem less willing to cooperate in providing global governance. Changes in ideas at the social level have created tensions between many groups, including those who reject globalization and those who embrace social justice.

Zero-sum

These harsh conditions imposed on states a potentially destabilizing zero-sum outlook whereby absolute gains by one state were interpreted as absolute losses for other states.

Corn Laws

These laws forbade the importation of foreign grain without the prices in England rising substantially

Spiral Model

Thomas Risse, Stephen Ropp, and Kathryn Sikkink add a "spiral model" to the study of norms. 17 In the area of human rights, they observe that an authoritarian state will often deny that it is violating human rights or claim that the norm of human rights is superseded by some other norm, before eventually making tactical concessions in the face of international pressure.

Finance and monetary structure

With perhaps the most abstract set of linkages between nations, this structure determines who has access to money and on what terms, and thus how capital is distributed between nations. .

Hegemonic Stability Theory

a body of theory that maintains that the establishment of hegemony for global dominance by a single great power is a necessary condition for global order in commercial transactions and international military security

public goods

a commodity or service that is provided without profit to all members of a society, either by the government or a private individual or organization.

Dialectical Process

a discourse between two or more people holding different points of view about a subject but wishing to establish the truth through reasoned arguments

Structuralism

a focus on economic power and class conflict, structuralism has its roots in the ideas of Karl Marx. While most structuralists do not share the commitment to a socialist system as envisioned by some Marxists, they do believe that the current global capitalist system is exploitative and can be changed into something that distributes economic output in a more just manner.

Insourcing

a practice in which a company contracts with a specialist firm to handle all or part of its supply chain operations Mercantilists may find some solace in an incipient countertrend that business journalist Charles Fishman examined in 2012: insourcing. 13

zero-sum game

a situation in which an economic gain by one country results in an economic loss by another

Precariat

addition to dispossession and responsibilization, a third trend in today's capitalism is what Guy Standing describes as the rise of the precariat, a large social class that has insecure work without benefits. the growing number of part-time workers, temporary workers, and others living precariously without stable jobs, occupational identities, or social protections

Regional Trade Agreements (RTAs)

agreement allowed exceptions from its general trade rules for regional trade agreements (RTAs) and products such as textiles and agricultural goods. agreements among three or more countries in a region to reduce barriers to trade among themselves

Boomerang pattern

also describe a "boomerang pattern": if domestic groups in a country cannot convince their government to accept a norm, they work with international groups in their network to domestic NGOs in one state activate transnational linkages to bring pressure from other states to bear on their own government

Securitization

also known as the Copenhagen School— which emerged in the late 1980s and was popularized by Barry Buzan and Ole Wæver. occurs when elites, through discourse, construct an issue as a security threat; if the public agrees with the discourse, leaders can undertake exceptional measures against the security problem— such as suspending civil liberties— that the public wouldnt normally sanction the process of transforming loans or other financial assets into securities

DARPA (Defense Advanced Research Projects Agency)

an agency of the U.S. Department of Defense responsible for the development of emerging technologies for use by the military. played an important role after 1957 in funding and promoting new technologies integral to computers, airplanes, civilian nuclear energy, lasers, and biotechnology. 24 DARPA has helped coordinate academic researchers, venture capitalists, and government officials to develop new technologies, many of which have military uses.

LINDA WEISS AND ELIZABETH THURBON

and others use procurement policies to create "national champions"— big, globally competitive companies like Boeing, Lockheed, Motorola, IBM, and Microsoft— that rely on the government to purchase their products.

Norm Entrepreneurs

are individuals and groups who seek to advance principled standards of behavior. example, scholars Martha Finnemore and Kathryn Sikkink developed an influential explanation of how "norm entrepreneurs" influence states to adopt and internalize new norms and values. 3

Bourgeoisie

are wealthy elites who own the means of production— or what today are big industries and financial institutions. In British society, the bourgeoisie also made up the Members of Parliament and thus controlled the government— or state, as Marx would refer to it.

TCC transnational capitalist class

as one of the most important developments in contemporary capitalism. This class primarily consists of the owners and managers of transnational corporations and financial institutions.

Corporate social responsibility

codes whereby they try to address key social and environmental issues in their business practices.

epistemic communities

defined as "professionals with recognized expertise and competence in a particular domain and an authoritative claim to policy-relevant knowledge within that domain or issue-area." networks of experts who bring their knowledge and expertise to the political arena to help policymakers understand problems, generate possible solutions, and evaluate policy success or failure

Nuclear Taboo

despite these weapons' obvious military utility. International relations scholar Nina Tannenwald analyzes the "nuclear taboo"— the strongly held norm among the permanent members of the Security Council that first use of nuclear weapons is unthinkable. Balaam, David N.; Dillman, Bradford. the idea that a specific international norm has gradually become accepted by the international community that the use of nuclear weapons is unacceptable in warfare

embedded liberalism

dominant economic approach during the Bretton Woods system, which combined open international markets with domestic state intervention to attain such goals as full employment and social welfare

National Treatment

equal treatment for imported and local goods in a domestic market. requires that a country treat imported goods the same as equivalent domestically produced goods.

Strategic Resources

firms' capabilities that are valuable, rare, costly to imitate, and costly to substitute. Access to and control over strategic resources has been a top concern of industrialized nations for many decades. They fear that being "cut off" from energy, minerals, and metals will cripple their economies and weaken their war-fighting ability.

Intermediate goods

goods— inputs, parts, and components used in the production of finished goods. For example, steel is an intermediate good used in the production of cars.

food sovereignty

grassroots peasant movement led by La Vía Campesina has created and diffused a norm of the right to produce food for oneself in the territory where one lives. right of peoples, communities, and countries to define their own agricultural, labor, fishing, food, and land policies that are ecologically, socially, economically, and culturally appropriate to their unique circumstances

discourse analysis

helps us understand where important concepts come from and how they shape state policies, sometimes in very undesirable ways. Some constructivists trace changes in language and rhetoric in the speeches of important officials to understand the role of ideas in foreign policy.

State:

is a collection of people who, on the basis of ethnic background, language, and history, define themselves as members of an extended political community. 3

problematization

is a process by which states and advocacy groups construct a problem that requires some kind of coordinated, international response.

Odious Debt

is in the making as a result of changes in political values and notions of fairness. As a result, there is a possibility that elimination of debt inherited from corrupt, authoritarian regimes will become more widely accepted.

Framing:

is the process of defining what the essence of a global issue is: what is causing it, who is involved, what its consequences are, and what the best approach to addressing it is.

Norm Emergence

occurs when norm entrepreneurs frame an issue and convince a core set of states to champion a norm. .Growing advocacy of the norm by important countries and NGOs, and some multilateral declarations

INTERLOCKING DIRECTORATES

of TNCs, meaning that corporate directors simultaneously serve on the boards of multiple corporations. They own shares in some of the same large companies and own bonds issued by many of the same countries.

Norm Cascade

once a critical mass of states brings the norm to a tipping point, a "norm cascade" kicks in, whereby previously reluctant states in quick succession formally accept the norm, often because they want other states to see them as legitimate members of the international community. The stage at which a previously emergent norm reaches a tipping point of broad acceptance and consensus among a critical mass of states.

Proletariat

proletariat were the exploited workers (including their fam-ilies) in Britain's mills and factories, who received very low wages and sometimes died on the job.

two basic principles of the GATT

reciprocity and nondiscrimination.

Neomercantilism

run an export surplus to achieve social or political objectives Beginning in the 1970s, scholars used the term "neomercantilism" to describe many defensive economic policies that states use to safeguard their societies in an interdependent and intensely competitive international challenge the assumption that specialization in comparative advantage unconditionally benefits all of the parties engaged in trade.

Scaling

scaling— which means turning new ideas into mass produced products— occurs less in the United States, the result is this: "As happened with batteries, abandoning today's 'commodity' manufacturing can lock you out of tomorrow's emerging industry." 10

Define IPE

study of those international and global problems and issues that cannot adequately be addressed by recourse to economic political or sociological analysis alone The term "international political economy" refers to what is studied. By combining different elements of these disciplines we are able to better explain many of the facets of complex interdependence that define some of our most pressing problems today. The need to study IPE arises because many important contemporary questions cannot adequately be addressed from the standpoint of a social single discipline—economics, politics, or sociology—or by the analysis of actors and actions that take place on a particular level of analysis—individual, state, or international system. IPE breaks down the barriers that separate and isolate the traditional methods of analysis, seeking a comprehensive understanding of issues and events.

non-tariff barriers

that many believed were stifling world trade. Rules were established to limit a range of discriminatory trade practices involving export subsidies, countervailing duties, dumping, government purchasing, government-imposed product standards, and licensing requirements on importers. The GATT's Tokyo Round non tax methods of increasing the cost or reducing the volume of imported goods

Ordoliberalism

the German variant of social liberalism that emphasizes the need for the state to ensure that the free market produces results close to its theoretical potential. In response to this perception and to Hitler's consequent rise to power, a small group of academics at Freiburg University developed a new conception of liberalism they called ordoliberalism. Walter Eucken (1891- 1950), Franz Böhm (1895- 1977), and Hans Grossman-Doerth (1894- 1944) founded this school of thought. Ordoliberals believe that the failings of liberalism resulted from the failure of nineteenth- and twentieth-century laissez-faire policy makers to appreciate Adam Smith's insight that the market is embedded in legal and political systems.

Historical Materialism

the assumption that material forces are the prime movers of history and politics; a key philosophical tenet of Marxism

procurement

the buying and reselling of goods that have already been produced

Dan Dimocco

the former CEO of U.S. steelmaker Nucor, served as a trade advisor to the Trump campaign in 2016 and was considered for the position of U.S. Trade Representative in the Trump administration. His 2015 book American Made: Why Making Things Will Return Us to Greatness presaged many of the neomercantilist arguments that Trump would espouse on the campaign trail. Echoing the productivist philosophy of Alexander Hamilton and Friedrich List, DiMicco states, "A country that doesn't create or make or build things is a country doomed to mediocrity.

Nondiscrimination

the idea that countries would extend preferential trade status to all their trade partners two components: most favored nation (MFN) treatment and national treatment.

GLOBALIZAITON SHIT

to Russia and taking the world closer to the edge of nuclear war than it has been in more than a generation by threatening to attack North Korea. Traditionally strong U.S. relationships with NATO, Mexico, and South Korea are fraying, leaving a leadership vacuum for China, Russia, and the European Union to fill. Many see another cold war looming between China, Russia, the United States, and their allies. We also see signs of the end of the postwar order in the European Union, which used to be a model of an integrated community of states but is now threatened by Greek economic troubles and the British vote to leave the union. Authoritarian-nationalist parties and populist leaders in Europe and the United States are promoting anti-immigration and anti-globalization policies. Clearly, the global financial crisis of 2008- 2009 increased skepticism towards free markets and imposed major costs on different social groups, many of whom are demanding a democratic role in shaping globalization's rules and rewards. To the dismay of traditional U.S. allies, Trump has raised the specter of a return to malevolent trade protectionism and has sought to roll back regulations on the banking industry put in place after the financial crisis. More broadly, many realists and economic liberals are critical of Trump's rejection of the

Transnational advocacy networks

to describe "those actors working internationally on an issue, who are bound together by shared values, a common discourse, and dense exchanges of information and services." a set of individuals and nongovernmental organizations acting in pursuit of a normative objective

most favored nation

treatment means not giving preferential treatment to the imports of one country over those of another. trading status describes a condition in which a country grants other countries favorable trading treatment such as the reduction of import duties

vertically integrated

was common decades ago for large companies to be vertically integrated, meaning they owned most of their supply chain, from the production of materials to manufacturing to wholesale distribution. circumstance in which an organization has control over a media product from production through distribution to exhibition

sovereign wealth funds (SWFs)

which are quasi-independent bodies that manage pools of capital on behalf of governments, have become important shapers of global production. managed by financial experts who ultimately answer to political elites but who act autonomously within a set of state directives. investment funds controlled by governments holding large stakes in foreign companies

Accumulation by Dispossession

which involves transferring assets from public or communal control to private ownership. 28 A process wherein wealth and power are centralized in the hands of the few by dispossessing individuals of their wealth or land

Transnational Corporation

■ A growing proportion of global production is organized in complex global value chains (GVCs) dominated by A company that conducts research, operates factories, and sells products in many countries, not just where its headquarters or shareholders are located.

CHAPTER 2 FOUR MAIN THESES:

■ First, economic liberal ideas continue to evolve as a reflection of changes in the global economy and the power of different actors and institutions. ■ Second, economic liberalism gained renewed popularity due to its association with the policies of the Reagan and Thatcher administrations, culminating in the globalization campaign of the 1990s. ■ Third, orthodox liberalism has increasingly come under attack for its failure to predict or sufficiently deal with such things as the financial crisis and the effects of globalization. ■ Fourth, we argue that, although weakened, laissez-faire ideas and policies are likely to remain popular in the United States and Essentially, the broad term "liberalism" means "liberty under the law." 2 Liberalism focuses on the side of human nature that is competitive in a constructive way and is guided by reason, not emotions. Although liberals believe that people are fundamentally self-interested, they do not see this as a disadvantage because competing interests in society can engage one another constructively. This contrasts with the mercantilist view, which, as we will see in Chapter 3, dwells on the side of human nature that is more aggressive, combative, and suspicious. Classical economic liberalism is rooted in reactions to important trends in Europe in the seventeenth and eighteenth centuries. François Quesnay (1694- 1774), who led a group of French philosophers called the Physiocrats or les Économistes, condemned government interference in the market, holding that, with few exceptions, it brought harm to society. The Physiocrats' motto was laissez-faire, laissez-passer, meaning "let be, let pass," but said in the spirit of telling the state, "Hands off! Leave us alone!" This became the theme of

Four assumptions of constructivism applied to IPE

■ Ideas, norms, and identities of groups and states are socially constructed. ■ Ideas and values are social forces that are as important as military or economic factors. ■ Conflict and cooperation are products of values and beliefs. ■ Some international political changes are driven by changes in the beliefs and identities of actors over time.

Orthodox economic liberals

■ Limit government support for banks, infrastructure projects, and social welfare programs; ■ Decrease regulation of the economy; ■ Cut taxes of the wealthy and middle class to stimulate economic growth; and ■ Foster more globalization, which is good for the United States and the worl