INR3038 WEALTH AND POWER Midterm

Marx's Laws of Capitalism

- Falling rate of profit -concentration -disproportionality

Constructivist Elements of Analysis

- IPE reflects cooperation as it does conflict -relationship between state behavior and choices to society's norms, and cultural values -the deconstruction of individual and state choice.

Characteristics of fixed exchange rate system of the monetary and finance structure

- The price of gold fixed at $35 an ounce -formal and informal rules of system showed that US provided security to Western Europe in exchange for its acceptance of US hegemony -IMF used borrowing measures to regulate currency value adjustments

Post-colonialism

- a history that prolongs Neocolonialism- not needing to physically be there to take over -TNC'S -through conditionality's - maintain control in countries through dependency

Since 1944, the role of the IMF in the monetary and finance structure has been to

- help developing countries deal with a variety or monetary and financial crisis issues by promoting FDI in these nations -create an orderly international monetary system - help members balance payment problems on a short-term basis

Reasons states are sensitive to international currency and finance issues

- impact on national interest rates -affect FDI -both raise probs related to speculation

David Ricardo (1772-1823)

- open markets promotes efficiency - free trade binds nations together and promotes the universal good -open markets leas to greater wealth

3 processes of TCC success

1. Accumulation of disposition- transforming assets from public control to private 2. Responsibilization- individuals must cultivate their capital, compete with others, and self-invest wisely 3. Rise of Precariat- a large social class who work without secure work benefits

Labor Theory of Value

Adam Smith: The belief that human labor produces economic value. Adherents argued that the price of a product should be determined not by the market (supply and demand) but by the amount of work required to make it, and that most of the price should be paid to the person who produced it.

When it comes to production, _____ has seen a bigger inflow in recent years, partly due to _____ interest in commodities in the continent.

Africa, China's

Which of the following are the BRICs?

Brazil, Russia, India, and China

Orthodox Liberal

Competition regulates economy Self-interest serves societies interest Capitalism allows efficient allocation of resources

Which of the following was not a characteristic of the fixed exchange rate system of the monetary and finance structure?

Currency values were allowed to adjust up or down according to the supply and demand conditions in the market for the U.S. dollar

life cycle of norms

Emergence, Cascade, Internalization a concept created by Martha Finnemore and Kathryn Sikkink to distinguish the different stages of norm evolution - from emergency to cascade to internalization

The structuralist perspective agrees with liberalism that free and open trade leads to a positive sum scenario

FALSE

Mercantilist trade

For mercantilist, trade is an instrument states often use to enhance their wealth, power, and prestige in relation to other states

Which of the following statements about trade is false?

Free trade tends to be associated with democratic nations because domestic groups and industries are likely to receive help from representatives who champion their interests

Hegemony Stability Theory

Idea that international market works best when a single hegemon accepts the costs

Constructivism holds that that __________ are socially constructed and shape how political and economic actors interact with each other

Identities, Ideas, and Norms

Elements of Capitalism

Market coordinates economic activity Market exist for exchange of land, labor, commodities, and money Competition regulates economic activity Individuals can start up new business Individuals have property rights and entitled to income from it

Which is the best statement of the relationship between wealth and power according the mercantilist thought?

National wealth creates national power and national power secures national wealth

Norm Life Cycles

Norm Emergence: when norm entrepreneurs frame an issue and convince core states to back-up a norm Norm Cascade- when previously reluctant states in quick succession formally accept the norm Internalization- when all states internalize the norm an debate about it ends EX: Nuclear Taboo ( use of nuclear firearms is morally wrong)

Keynesian comprise

Owners of capital would share gains from growth and rising productivity with the workers through the wage and benefits

Norm antipreneurs

Prevent normative change

Which of the following does not represent part of life cycle of norms?

Rejection

How does neoimperialism differ from classical imperialism?

States no longer need to occupy other countries in order to exploit them

soft power

The reliance on diplomacy and negotiation to solve international problems.

Hard Power

The reliance on economic and military strength to solve international problems.

Which of the following is not usually given as a reason states are sensitive to international currency and finance issues? Currency and finance ......?

They make it hard for people to translate different languages

Which best describes how constructivists view trade?

Trade relations may be cooperative or conflicted depending on the expectations of the trading partners involved.

The process by which inherently unstable opposing economic forces and counterforces lead to crisis, revolution, and to the next stage of history is called

a dialectical process

Dependency Theory

a model of economic and social development that explains global inequality in terms of the historical exploitation of poor nations by rich ones -relationship btw core and peripheral countries

Constructivism: Problematization

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

John Stuart Mill is most noted for changing liberalism to reflect...

advocating selective state action in cases where individual initiative might be inadequate in promoting social welfare

U.S. officials have accused Chinese officials of "artificially devaluing the Chinese yuan (or renminbi)" in order to sustain China's large number of exports to other countries. How did the Chinese do it?

by using large amounts of yuan to buy up U.S. dollars in their treasury, thereby flooding the market with more yuan, which led to a ("manipulated") decrease in its value

Which of the following is NOT one of Marx's Laws of Capitalism? The law of...

capitalist imperialism

A system in which a government gives banks preferential treatment in return for bribes from the banks is called

crony capitalism

Odious debt

debt that is contracted by a country with an unrepresentative government and that is used in ways that do not benefit the people of the nation

Lenin believed that capitalism was able to postpone its crisis by...

exploiting less developed countries through imperialism

Adam Smith favored "laissez-faire" policies, where individuals would achieve social benefit guided by the "invisible hand." The invisible hand stands for...

individual self interest and choices

levels of analysis

individual, state-societal, international,global

The "state" is to collective interest as...

market is to individual interest

The depersonalized actions of _____ often act as an unseen coordinator of social behavior in today's global political economy

markets

epistemic communities

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

Measures that restrict the quantity of an item a nation can export, with the effect of limiting the number of goods imported by another country, is called

non-tariff barriers

The basic principles of the GATT are

nondiscrimination and reciprocity

An important example of neomercantilism in the 1970s was the United States-led campaign with many industrialized states to decrease their foreign dependence on _____

oil

David Ricardo favored free open international markets. Which of the following ideas about free, open markets is not associated with Ricardo?

open markets results in zero-sum benefits to all

When a firm transfers part or all of the production process for a good or service to another country, this is...?

outsourcing

Economic liberals trade

positive-sum gains for all those involved in the transaction

The policy of the U.S. Fed and Bank of England to increase the money supply by purchasing hundreds of billions of dollars and pounds in bonds and other assets of financial institutions is called?

quantitative easing

IPE is created by the parallel existence and dynamic interaction of...

states and markets

Which kinds of trade policies are most associated with mercantilism?

strategic trade practices

In 1999 the U.S. congress repealed this Great Depression era measure, thereby allowing for mergers between commercial and investment banks. Many now also say that repealing this contributed to the Great Recession of 2008.

the Glass-Steagall Act

comparative advantage

the ability to produce a good at a lower opportunity cost than another producer

The Modern World System theory looks at capitalism as...

the capitalistic and exploitative interactions between core, semi-periphery, and periphery

All of the following are central elements of constructivist analysis EXCEPT:

the distribution of wealth and power between the major powers

The term "embedded liberalism" refers to...

the idea that markets need to be encapsulated in political and social institutions in order for them to be viewed as legitimate

Which period of history is often called the "mercantilist period"?

the period of nation-building in Europe and elsewhere—roughly 1600-1850

According to the theory of comparative advantage, mutually advantageous international trade is based on differences in

the relative cost of producing a good in different countries

The basic idea behind structuralism is that...

the structure of the international political economy—namely capitalism—conditions its outcome.

Constructivism: Framing

the way an issue is posed; how an issue is framed can significantly affect decisions and judgments.

This idea accounts for situations where many U.S. banks feel that no matter what they do, the government will always stand behind them because

they are too big to fail

The work of development expert and professor, Dani Rodrik, demonstrates that increased economic growth has paradoxically led to an increase in inequality within and between states.

true

discourse analysis

understand where important concepts come from and how they shape policy

Constructivist: Secularization

when elites, through discourse, construct an issue as a security threat; if the public agrees leaders can take extensive measures against the security problems-such as suspending civil liberties. Ex: immigration, drug trade, climate change

More than anything else, this event signaled the beginning of the Asian Financial crisis in July of 1997.

when the Thai government could no longer support the 25 to 1 value of the Thai baht to the U.S. dollar

Ideological manipulation (false consciousness) occurs when...

workers accept the system that exploits them and believe in the legitimacy of the capitalist system