international political economy + marxism dependency theory

The Hobson-Leninist Theory of Imperialism continued

•The core problem or cause of imperialism as identified by both Hobson and Lenin is the concentration of wealth which capitalism produces • •A more egalitarian distribution of wealth would bring consumption and production into equilibrium • •A handful of capitalists have so much money they don't know how to dispose of it, so they are constantly looking for new investment opportunities • •The underdeveloped world presents such an opportunity: capitalists make direct investments in the periphery and call on their home governments to protect these investments, through force if necessary (i.e., gunboat diplomacy) • •The periphery is also seen as a vital source of raw materials (basic inputs for manufacturing industries, and later, energy resources)

Marxism

A theory of change and a critical analysis of capitalism • • •Class struggle is the central element of social change: "The history of all hitherto existing society is the history of class struggle (Communist Manifesto)" • • •In the present form of society, capitalism, the two main classes are the capitalists (or bourgeoisie), who own the means of producing the necessities of life; and the workers (or proletariat) who do not own those means of production

Marxism

Economics determines politics and political structure; its relevance declined after the end of the Cold War; yet it survives as an analytical tool and a critique of capitalism's flaws such as ups and downs cycle of capitalist evolution, widespread poverty side by side with great wealth, and the intense rivalries of capitalist economies over market share

intellectual perspectives

Liberalism (economic internationalism) Marxism Mercantilism (economic nationalism)

Liberalism

Regards politics and economics as relatively separable and autonomous spheres of activities; most profession economists; commitment to market or capitalist economy

Mercantilism

¨Economy is subject to the state and its interests such as security and wealth ¨Mercantilism was common in Europe from the 16th to the 18th century; promoted governmental regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers ¨It was the economic counterpart of political absolutism ¨Governments were led to impose price and wage controls, foster national industries, promote exports, and discourage imports; protectionism ¨Recognizes the anarchic nature of international affairs, the primacy of the state and its interests in international affairs, and the importance of power in international relations

A Compromise by Gilpin

¨Fundamental difference in emphasis between economics and politics-the distinction between absolute and relative gains ¨ ¨Nations contend in pursuit of wealth and power ¨ ¨The primary actors in the international system are nation-states in pursuit of national interests ¨ ¨Political economy is the reciprocal and dynamic interaction between economics and politics ¨ ¨In the short run, politics determines economics ¨ ¨In the long run, improvements in economics transforms political system

The Goal of Economic Activity

¨Liberalism ¤The optimum or efficient use of the world's scarce resources and the maximization of world welfare ¤ ¨Marxism ¤The distribution of wealth among social classes ¤ ¨Mercantilism ¤Distribution of employment, industry, and military power among nation-states

relation between economics and politics

¨Liberalism ¤The pursuit of wealth should determine the nature of the political order ¤Moving global political unification and world peace ¤ ¨Marxism ¤The mode of production (economic relations) determines the superstructure of political relations ¤ ¨Mercantilism ¤Politics determines economics

The Nature of Economic Relations

¨Liberalism: ¤Harmonious (positive-sum game) ¤The state should not interfere with economic transactions across national boundaries ¤The national interest is best served by free transactions between states ¤The pursuit of self-interest in a free, competitive economy achieves the greatest good for the greatest number in international no less than in the national society ¤ ¨Marxism ¤Conflictual (zero-sum game) ¤ ¨Mercaltilism ¤Conflictual (zero-sum game)

The State and Public Policy

¨Marxism ¤Economic classes ¤Interest of the dominant class determines the foreign policy of the state ¤The state as "executive committee of the ruling class" ¤ ¨Mercantilism ¤Nation-states; the state as an organic unit ¤National interest determines foreign policy ¤Recognizes only the interests of nation-states ¤ ¨Liberalism ¤Individual consumers, firms, or entrepreneur ¤The state as aggregation of private interests ¤The nation-state had no meaning as an economic entity

Class Struggle part 2

• •This strategy assumes that the additional toasters can be sold (i.e., that demand matches supply) • •However, this increased efficiency eventually leads to overcapacity: the level of production begins to exceed the level of consumption • •As the home market becomes saturated with the goods produced by capitalists, the need to expand into foreign markets becomes greater • •The owner may look for foreign markets to export his or her surplus of toasters • •Capitalists then begin placing pressure on their respective governments to engage in efforts to secure access to the markets of underdeveloped • • •This is where international relations finally enters the picture

Marxist Perspectives on the State part 2

•According to the structural perspective (sometimes referred to as neo-Marxism), the state is a relatively (but not completely) independent and autonomous actor • •The task of the state is to maintain the overall cohesion of the capitalist system • •Carrying out this task may at times require the state to take actions which certain segments of the bourgeoisie oppose • •Nevertheless, there are limits to what the state can do within the structure of the capitalist system • •In a democracy, for instance, where public officials must be re-elected to remain in office, re-election depends in part on the realization of favorable or prosperous economic conditions, which in turn depends on the willingness of capitalists to continue investing in the domestic economy

Socialism

•Calls for public rather than private ownership or control of property and natural resources • •Individuals do not live or work in isolation but live in cooperation with one another • •Everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it • •Society as a whole, therefore, should own or at least control property for the benefit of all its members

Marxism and International Relations

•Marxism, as it was originally conceived by Karl Marx, had very little to say about international relations • •Marx's primary purpose was to provide a critique of capitalism • •However, subsequent to the emergence of Marxism as a general body of theory, Marxist concepts have been applied to the study of International Politics • •Marxist theories provide alternative explanations for international political outcomes such as war • •They also give greater attention to phenomena such as imperialism, global inequality, and underdevelopment which tend to be neglected by more mainstream theories such as realism and institutionalism which tend to focus their attention on relations among major states

Phases of Territorial Expansion

•Scholars have identified two distinct phases of territorial expansion (i.e., imperialism) by European states: • •Mercantilist / dynastic imperialism (1492-1763), during which the entire Western hemisphere and much of Asia came under European control • •"New" colonialism (1870-1914), during which most of Africa and part of the Far East were subjugated by Europe • •It is the second phase which has attracted the most attention from theorists seeking to explain imperialism

major issues in IPE

Trade International investment Multinational corporations Monetary relations

socialism part 2

•Capitalism, which is based on private ownership of the means of production and allows individual choices in a free market to determine how goods and services are distributed • •Socialists complain that capitalism necessarily leads to unfair and exploitative concentrations of wealth and power in the hands of the relative few who emerge victorious from free-market competition—people who then use their wealth and power to reinforce their dominance in society • •Because such people are rich, they may choose where and how to live, and their choices in turn limit the options of the poor • •Terms such as individual freedom and equality of opportunity may be meaningful for capitalists but can only ring hollow for working people, who must do the capitalists' bidding if they are to survive. As socialists see it, true freedom and true equality require social control of the resources that provide the basis for prosperity in any society

The Mode of Production

•Class conflicts have caused society to pass through a series of distinct stages. In general Marx and Engels identified five (and one transitional) successive stages of development in Western Europe • •Primitive Communism: as seen in cooperative tribal societies •Slave Society: which develops when the tribe becomes a city-state Aristocracy is born. •Feudalism: aristocracy is the ruling class. Merchants develop into capitalists •Capitalism: capitalists are the ruling class, who create and employ the true working class •Dictatorship of the proletariat (Socialism): workers gain class consciousness, overthrow the capitalists, and take control over the state •Communism: a classless and stateless society.

Dependency Theory 3

•Dependency theorists perceive the countries of the world as being divided into classes in much the same way that Marxism sees domestic society as being divided into classes • •The Core—the advanced industrialized nations of the North (e.g., Western Europe, North America, Japan) • •The Periphery—the developing nations of the South (e.g., Latin America, Africa, and parts of Asia) • •The Semi-periphery—those nations that inhabit a position somewhere in between that of core and periphery (e.g., China, South Korea, Mexico, Brazil, Turkey) • •According to dependency theory, those countries that occupy peripheral positions are unable to accumulate the capital necessary for development because the economic surplus generated by these countries' economic activities are continually being transferred to the core

Dependency Theory

•Dependency theory emerged in the 1970s as an explanation for underdevelopment in Latin America • •It was later applied to other underdeveloped regions such as Africa • •Dependency is defined as a situation in which the development of some countries' economies are conditioned by the development and expansion of other (more dominant) countries' economies • •In short, dependency means that the fate of your country is determined by decisions and outcomes occurring elsewhere

Dependency Theory 2

•Dependency theory views underdevelopment as being the product of both internal class structures and external relations with developed states • •The theory suggests that these internal structures and external relations must be fundamentally changed in order for development to take place • •Dependency theory's focus on social and economic relationships (both between classes within countries and between countries themselves) and inequalities is largely inspired by Marxism

Karl Marx (1818-1883)

•German philosopher, political economist, and socialist revolutionary • •Along with his long-time collaborator Friedrich Engels, wrote The Communist Manifesto (1848) • •Also wrote Das Kapital (1867) • •Perhaps no other thinker from the 19th or 20th centuries has had as profound and lasting an impact on world history as Marx

The Hobson-Leninist Theory of Imperialism

•Hobson and Lenin both argued that imperialism was ultimately a product of the maturation of capitalism: • •Industrialization leads to improvements in technology which, when applied to the needs of the manufacturing sector, greatly increases the efficiency of industry • •However, this increased efficiency eventually leads to overcapacity: the level of production begins to exceed the level of consumption • •As the home market becomes saturated with the goods produced by capitalists, the need to expand into foreign markets becomes greater • •Capitalists then begin placing pressure on their respective governments to engage in efforts to secure access to the markets of underdeveloped countries • •The end result: Imperialism

Explaining the Gap Between North and South

•How do we explain the enormous gap between income levels in the world's industrialized regions and those in the global South? • •A country's economic development is based on its ability to accumulate capital • •Capital accumulation refers to the creation of standing wealth in the form of buildings, roads, factories, etc. •Capital accumulation depends upon the creation of an economic surplus which depends on investing money in productive capital rather than spending it on consumption • •Capital accumulation is measured by a country's economic growth rate

The Source of Profits part 2

•In determining the source of profits, Marxists look to the dynamics of employer-worker relations (i.e., the relationship between the bourgeoisie and the proletariat) • •In the Marxist view, profit is ultimately determined by economic and political struggles between capital and labor • •This conception is not entirely at odds with the liberal economic interpretation which does take labor costs into account • •However, Marxism places significantly more weight on labor costs as the determinate variable with regard to profit levels

Theorists of Imperialism

•John A. Hobson (1858-1940) was perhaps the first person to draw a direct connection between capitalism and imperialism • •Hobson wrote Imperialism: A Study (1902) • •Hobson's thesis was later revived by Vladimir I. Lenin (1870-1924) • •Lenin wrote Imperialism: The Highest Stage of Capitalism (1916)

continued 3

•Lenin himself sees imperialism as a product of what he dubs the monopoly stage of capitalism • •As capitalism develops and matures, it evolves from its initial competitive form into an increasingly oligopolistic and/or monopolistic form • •The struggle among major capitalist countries for ever larger pieces of the world (i.e., colonies), according to Lenin, is the root cause of conflict and war among these countries (e.g., World War I) • •Lenin's argument would subsequently form the basis for the Marxist view of international relations in which capitalism is seen as being inherently expansionary and the root cause of international conflict

Two Debates of Socialism

•The first concerns the extent and the kind of property that society should own or control. Some socialists have thought that almost everything except personal items such as clothing should be public property; this is true, for example, of the society envisioned by the English humanist Sir Thomas More in his Utopia (1516). Other socialists, however, have been willing to accept or even welcome private ownership of farms, shops, and other small or medium-sized businesses • •The second disagreement concerns the way in which society is to exercise its control of property and other resources; centralists and decentralists • •On the centralist side are socialists who want to invest public control of property in some central authority, such as the state—or the state under the guidance of a political party; those in the decentralist camp believe that decisions about the use of public property and resources should be made at the local, or lowest-possible, level by the people who will be most directly affected by those decisions. This conflict has persisted throughout the history of socialism as a political movement

Problems with the Hobson-Leninist Theory of Imperialism

•The simple equation "capitalism = imperialism = war" has had (and continues to have) an enormous influence, but its explanatory power is rather limited • •Imperial conquests and wars occurred long before the emergence of modern capitalism • •Not all advanced capitalist societies engaged in imperialism (e.g., Switzerland, Sweden) • •The Soviet Union was a leading practitioner of imperialism in Eastern Europe and Central Asia

Imperialism

•The term imperialism is generally used to denote any policy or action aimed at extending a nation's authority over other nations either through outright territorial acquisition or through the establishment of economic and political hegemony • •Imperialism is the deliberate projection of a state's power beyond the area of its original jurisdiction • •Imperialism is often associated with, but can be distinguished from, colonialism • •Colonialism is gone, but imperialism remains

Marxist Perspectives on the State

•Two divergent perspectives on the state have developed among Marxists • •According to the instrumental perspective the state represents the "executive committee of the bourgeoisie" • •The capitalist class is cohesive and controls the state • •The state is essentially the "instrument" of those who wield economic power and government policies are crafted to serve the interests of the dominant economic class (i.e., the bourgeoisie)

Surplus Value

•What happens during the other 7 hours of the workers' shift? • •Each worker is producing $700 worth of toasters (7 hours x 10 toasters = 70 toasters x $10 = $700) but is not getting paid for it • •This is what Marxists refer to as surplus labor time or simply surplus value • •It is this surplus labor time which allows the factory owner to accumulate capital in the form of profit according to the Marxist labor theory of value

The Source of Profits

•Where do the profits of capitalists come from? • •According to neoclassical (i.e., liberal) economic theory, profit is a function of the relationship between the price of a good or service and the costs of producing that good/service •More specifically: Profit = Price - Production Costs • •Price is determined by market forces (i.e., the intersection of supply and demand) • •Production costs are a function of the price of inputs, including raw materials and labor

Marxist Perspectives on the State

•Whether the state is seen as the instrument of the capitalist class or an autonomous actor whose mission is to help sustain capitalism as a system, Marxism sees the foreign policy of states as being determined by the needs and interests of capitalism • •The central thesis of Marxism with respect to IR is that foreign economic expansion is a necessity; without it, capitalism would collapse

Classes of Capitalism

•Who are the classes to which Marxism refers? • •The Bourgeoisie—those individuals who own and control the means of production (i.e., capital) and who make money from their investments rather than from their labor • •The Proletariat—industrial workers who sell their labor for wages • •The Petite Bourgeoisie—the upper-middle class (e.g., small business owners, doctors, lawyers, and other professionals) • •The Lumpenproletariat—the class of economically unproductive people at the bottom of society (e.g., criminals, prisoners, drug addicts, pimps and prostitutes, the homeless, etc.)