Govt 1817 Lecture Contents
Global and International Relations: Convergence and Differentiation
"Internationalization" and "globalization" make different statements about the importance of processes... Convergence (Globalization) Corporation in global markets MNCs vs TNCs Multinational or transnational A theory of the rationality of global capitalism Convergence (Globalization) Analytical claim: a few business centers diffuse new practices Outcome: Global homogeneity of culture, economy, society, and politics. The rest of the world remade in the image of the west Differentiation (internationalization) States and civilizations in the international system Huntington (reading): His enduring contribution is not the argument he develops, but he intuition that after the ideological clashes of the COld War some other set of ideas will frame conflict between states Modernization without westernization = multiple modernities Analytical claim: culture as territorially clearly bounded Intellectual lineage: difference seinlanguage, religion, ethnicity, and caste offer no overlap Modern tradition: romantic nationalism, racial theories, civilizational theories, value relativism Outcome: civilizational clashes, ethnic cleansing and partition, ethno-developmentalism. A plural and irreconcilably conflictual world
Trade and Investment: MNC
$1.3 trillion in FDI flows in 2018 2018 internationalization Decline in investment in large corporations
Internationalization and the Politics of Oil and Gas: How Muammar Gaddafi Defeated the Seven Sisters and the rise of OPEC
1960s: market conditions continue to favor producing firms, not producing countries Early 1970s: enter Libya's Gadaffi who sees new political possibilities in market shifts. Seven sisters vs. Occidental With the risk of Libyan-Occidental deal spreading, the majors agree to multilateral negotiations October 1973 oil shock and war (Egypt-Israel) Price increases to $11.50/barrel 1979: $14 by 1979. Iranaian revolution and IDK
US Intervention: Structural Marxism (uphold capitalism more generallY)
3 logics of intervention" 1) local pro capitalist: establish major industries 2) regional pro capitalist 3) Global anti-communist/war on terror: move from economic to ideological strategic argument Structural Marxism is too elastic: 1) minimalist interests: calculate gains and losses; goal is to preserve capitalism; measure costs 2) non-minimalist/hegemonic interests: many options, goal is to eliminate evil
Trade and Investment: Liberalism Players/Trends
Actors: Firms, govts, IO Aims: Individual Utilities Causation: Interests Politics: Positive Sum Prescription: Interdependence *Market dynamics can have independent effects on power
Trade and Investment: Realism Players/Trends
Actors: States Aims: Power and Security Causation: Depend on relative power Politics: Zero Sum Prescription: Power and Conflict **Market relations reflect power relations
Islamatic State Context
Aims to build a unitary state in the Arab Middle East; simplistic ideology rooted in Salafism Serious engagement of technocrats as long as they go along with ISIS ideology War on minorities and women Military prowess, tactical flexibility, learning Influence goes beyond Saddam's officer corps and includes Baathist ideology The Iraqi army cannot fight without Shiite militia and support from Iran. Iraq and ISIS are both transnational "quasi-states" ISIS spreads to Syria after 2011; seizing of Mosul and declaration of caliphate (June 2014), Ramadi (May 2015); retrenchment and defeat 2016-18 Ultimately, ISIS benefited from power vacuum in Iraq and Syria Transnational state, religious and secular logics at work "Westphalia" fights back and wins decisively
ISIS vs. Al Qaeda
Al-Qaeda accommodates local populations and fights the enemy afar (the West). ISIS does not Because of its roots in Saddam's regime, ISIS moved from jihadism to statism quickly and effectively Civilizations operating above nation states. ISIS is a transnational organization; effective use of social media for foreign fighter recruitment
Internationalization and the Politics of Oil and Gas Takeaways
All paradigms and analytical perspectives are fair game: you can combine them in eclectic combinations Globalization and Oil Oil and rise of an energy intensive, oil-based industrialism; global rise of income OIl creates wealth Oil creates sharp distributional conflicts Oil revenues help fund terrorism Global warming A fossil fuel future? Really? Transitioning to a clean energy capitalism (geothermal, hydrogen, change in lifestyle) The politics of the transition: all hands on deck and all sources of energy in proper proportion, really, did you say all, coal
Eclecticism: Opposite Consequences
Ascribe opposite outcomes to same explanation Examples: Capitalism leads to peace (trade) and war (military industrial complex)
Eclecticism: Opposite Causes
Ascribe same outcome of contradictory explanations Important lesson: don't hold to inconsistent arguments. SPecify outcomes and explanations carefully and precisely Examples: Democratic liberalism leads to war; totalitarian communism leads to war
Trade and Investment: Political Foundation of today's world economy
Atlantic charter of 1941: equal access to trade and raw materials Lend Lease (UK) 1942: UK ends discriminatory trade Bretton Woods (1944): Internationalization of New Deal Marshall Plan (1947): Rebuild Europe for stability and profits End of gold standard (1971): Flex exchange rates Treaty of Versailles?
Origins of the Cold War General Context
Begins during WWII -> most wars start during other wars Nuclear weapons: can deter attacks but can't defend country Third world: end of decolonization US hegemony in the west US position on Germany: stalemate; no clarity for whether to redo economic/political structure or to use in anticommunist efforts Soviet position on Germany: no clear course but clear priorities of dismembering Germany after great casualties (structural realism fits better than US because of fear) SU: offensive/defensive? Defend territory, regime stability US: indecisive, containment because fall of UK, Too powerful internationally, too divided domestically UK: Mixture of US and US, Open door policy, self determination, Outside sphere of influence Cold War caused by Security Dilemma NOT anarchy Realism explains SU better than US, because of more intensity
Why realism doesn't really explain cold war
Cold War ended with a whimper not a bang Bipolarity wasn't stable compared to multipolarity (empire failed) (maybe nuclear weapons led to stability??) Big change in world but only minor change in distribution of capability Realism can defend themselves but does not fit well
Globalization and Politics of Finance: Asian Financial Crisis and its fallout
Collapse of Japanese real-estate bubble in 1990 as a primary cause of the crisis Central Bank lowers interest rate to zero Domestic banks export capital to SE Asia Governments and private corporations create a bubble. Leads to crisis IMF meeting in May 1997; Thailand, Indonesia, S. Korea; role of politics; regimes fall; IMF spends $150 bn IMF tries, unsuccessfully, to dismantle one of the most successful types of capitalism Crisis continues and envelopes Russia and Argentina (1998-2001). It wipes out most of the economic gains of the 1990s
Internationalization and the Politics of Oil and Gas: Constructivism and DP
Constructivism (terrorism) and DP matter greatly Story of saudi domestic politics Constructivism: fear - power of normal: people aren't scared of dying from flu even though it has a much higher probability of being killed in terrorist attack
Cuba Takeaways
Convention: optimism (crisis is the international politics of nuclear diplomacy) PK: Pessimism (overwhelmed by the intentionality of it all) Avoid escalatory crisis dynamics to avoid WWIII
Global and International Relations: Glocalization
Convergence and differentiation combined is a source of tension and adaptation which creates new objects and practice Hybridization across and within collectivities via information, migration Fusion food and LA = center of the food universe; Nietzshe on LA = armpit of humanity Both are right and wrong - loss of authenticity and the excitement of new possibilities Analytical claim: culture and institutions as transnational products and processes Intellectual lineage: mixing of languages, cultures, technologies: the Silk Road Modern tradition: Creolization, hybridization, syncretism, postmodernism Outcome: intercivilizational cross-fertilization, intercultural flows
Intervention: Crisis Diplomacy and Consensus Building
Crisis diplomacy pattern: overreact to threat Consensus building pattern: oversell remedy, raise expectations too much Overreaction and overselling - over commitment and erosion of domestic support Organization prone policy: allies and IOs; mostly insist on international support With the disappearance of anti-communism, invent new demons (terrosim, Saddam hussein, taliban?) or reinvent old one (china/russia)
The End of the Cold War: Domestic Politics
DP in west creates contagion effect in soviet bloc Doves and Hawks fight in SU: quiet rot of system, no one is willing to kill or die for communism Awareness of increasing tech backwardness Look towards domestic change Germany and Japan have been transformed to trading states, no longer aggressive authoritarian, do not want nuclear weapons US DP wants stability and caution in foreign policy SU DP seizes option of strategic withdrawal from empire
Globalization and Politics of Finance: Liberalism
Deviating from the most efficient path of unregulated markets is difficult since there is no clear alternative Policies of selective disengagement have ended in disaster IN Europe and Asia prudent mixtures of liberal and statist policies have world Dynamic markets bypassing states are in agreement with liberal story
Global and International Relations: Security
Different regional mixes of realism, liberalism, and constructivism Asian security affairs are stable and traditional; well-captured by realism with a small dash of liberalism and constructivism European security affairs in the 1990s experienced revolutionary upheaval. Constructivism and liberalism with a small dash of realism. Will the war in Ukraine and the migration crisis change this? What about the future role of the US - the uncertainties of a 2024 Trump Presidency for global and international politics
Soviet Intervention: Realism
Dual focus: 1) defend alliance adherence 2) preserve position of communist party Primary concern is communist party in DP, not good for realism Soviet expansion after 1945 was defensive not offensive
The End of the Cold War: Marxism
Due to civil society, not class struggle Due to dependent development: SU has contradiction between military and economic development Germany is recuperated well after WWII (Marshall Plan) while East Europe and Russia is undeveloped Plausible account, but some weakness for timing and peacefulness of the ending
Intervention: Cold War Democrats
During CW, democrats were party of war and intervention LIberali domestic programs need broad coalition in Congress, Pay off conservatives with tough anti-communism abroad Democrats seek to expand economy and help lower classes while maintaining business confidence, anti communism is useful tool for doing both Dem are vulnerable to being called soft on communism Core constituencies of democratic coalition are strongly anti communist Anti-communism is thus the glue for the dem coalition during the cold war
Globalization and Politics of Finance: Constructivism
Efficiency is not only objective but also intersubjective. Laws of economics as ideology Risk analysis denies common sense and the importance of uncertainty Economics is denying the obvious in order to build elegant models and make money Asian developmental states vs. crony capitalism in the eyes of iMF in 1997 Like IR, economics is obama social science and an ideology that proceeds on faith and is driven by interest and conviction rather than evidence
End of the Cold War: Marxism
Elements of Marxism in US foreign policy: - US capitalism and global conquest, Cold war interventions in 3rd world, anti-soveit policy, very down the line pro capitalist sentiment which collides with Soviet Security interests - US becomes much more open door after learning its lessons, SU does not Conclusion: Marxism fails to convince because trends not backed by evidence and fails to specify clearly the links between economic interests, ideology and institutions (like structural marxism) not totally wrong for either
Globalization and Politics of Finance: High Tech Bubble and Subprime mortgage crisis (2008)
Enron and dot.com crisis. Market speculation, fraud, lack of oversight. Crash of 2000. High-tech stock speculation separated from the real economy. Does not stop deregulation movement in Congress Subprime crisis leads to bank collapse in Sept. 2008. Had been building for 5-7 years
Trade and Investment: High Power Concentration: economic openness
Ex 1: UK 1846-1873 Industrial Revolution Corn Laws? Cobden - Character Treaty Ex 2: US 1945-1973 US most powerful nation: 1945 income is 50% of world total Insists on liberalism: low tariffs, convertible currencies No discriminationL economic Wilsonianism; not shared by rest of world UK and USN: Brain and Brawn US ideas were persuasive/pervasive
The End of the Cold War: Constuctivism
Focus on change in identities, norms, and political practices (rather than discourse) New norms for human rights (helsinki accord), on domestic and international level Intl politics transform as spread of new norms bring new trends and change like breakup of SU and reconstitution of IR Very convincing
Internationalization and the Politics of Oil and Gas: Fracking
Fracking natural gas in the US as a new source of energy... Small Houston based oil firm invests for 25 years in developing new technology; decades without results but break through in the last 15 years Natural Gas Revolution: hydraulic fracking Explosion of domestic production starting in 2007 Huge estimated reserves (100+ years at current consumption) effect on global politics Policy controversies about environmental impact, distribution, etc
Internationalization and the Politics of Oil and Gas: US Policy Past and Future
Future prices shaped by demand and supply conditions in markets Drop in exploration, known reserves; future pressures on supply vs. sense of security The political instability of the Middle East, and the global effects of the natural gas revolutionRussia and pipeline politics to Europe Russia's pivot to China: Ukraine with ?
Globalization and Politics of Finance General Context
Gold Standard and the 1930s Bretton Woods and the system of fixed exchange rates in a gold-dollar system after 1945 Several devaluations and the revaluations by early 1960s Institutions created in the 1960s for crisis management to protect against the underlying instabilities of the financial system Exporting inflation and importing capital, US creates an unfettered transatlantic market for dollars and eventually blows up the system From fixed exchange rates to flexible exchange rates: the 1971/73 pivot August 1971: US closes the gold window unilaterally. THose holding dollars are losing a lot of money An indication o fUS direct power reflected in unilateral action An indication of the loss of US indirect power over the rules of the game in financial markets Financial power shifts from states to markets Global Markets and FInancial Crises Debt crises are neither abnormal nor unforeseen, Typical pattern in recent decades Cheap credit Irresponsible lending Governments and individuals consuming rather than investing High growth, consumption, and prosperity in the short term followed by excess trade and current account deficits Creditors get nervous and pull liquid funds out of stock, bond and money markets Debt crisis Deregulation of markets is a powerful facilitator of these global connections Markets are not natural. Re-regulation possible in response to a big financial crisis. US and UK opposed; other countries more favorable
End of Cold War: Domestic Politics
Growing mass demonstration Elections unification Skeptical Western Europe and Supportive US Mostly bystanders who are skeptical or fearful (Thatcher and Mitterrand) US (Bush) is a central actor; close consultation with Kohl and Gorbachev
Internationalization and the Politics of Oil and Gas: National Security Politics and Markets
Gulf War I and II and Saudi Arabia - oil is crucial Alliance between the house of Saud and the US but not much domestic legitimacy for this arrangement US gives protection and expects responsible OPEC price leadership and continued denomination of oil price for dollars What?? October 2022 price increase Iraq war and th war on terror Oil as a byproduct and/or prime objective US plan was to privatize the Iraqi oil industry after the war Caspian Sea and central Asia as a new center of geopolitical conflict Oil companies are determining which pipelines are being built in a period of weak demand (Chechnya vs. Afghanistan vs. Turkey) Rise of Russia as a leader exporter of oil Venezuela and Latin America populism. Africa in the future..
Ukraine: Oil
Have some oil, but more importantly have control over gas pipeline that Russia relies on Russia's economic primacy in Eurasia is unquestioned, primarily through use of oil and gas prices and subsidies Gazprom and other RUssian corporations invested heavily in Eurasian energy, transportation and telecommunications Gazprom, everywhere Russian railways, everywhere Rosneft, state-owned oil company acquired Bishkek Oil Company RusHydro, state-owned electricity corporation building hydroelectric power plants in Kyrgyzstan Russian sphere of influence, but China is looming
Trade and Investment: Foreign Direct Investment
Home-Country investors Benefits from FDI Market seeking: growth potential Resource-seeking investors: Efficiency declining investors: Strategic asset-seeking investors: Host Country Governments Benefits of FDI: Resource transfer Costs: Crowding at local firms
Trade and Investment: Structural Marxism
Hymer US MNCs are large, efficient, high tech → typify capitalism World Economy is stratified (wallerstein) Universal law of uneven development Japanese MNCs started with law tech, small firms, and cutting edge internationalization. Later, other industries moved to US for political reasons (US protectionism) Textile companies US explanation is implausible as a general explanation Why do Japanese MNCs behave differently? Rise of global corporations in other parts of the world: well underway Sovereign wealth funds as another kind of MNC limited to states?
Eclecticism: Parsimony of Reasons Adduced
Independent variable - Why? Example: Pitcher theory of baseball (need one variable: player or bullpen) vs. battling/fielding theories of baseball (need eight variables) Big problem for analysis Parsimonious explanations not well-suited to specific outcomes Rich explanations not well-suited as a general guide Yet specific outcomes and complex analysis is where and how we (and government) make choices. Impossible combination?
Nuclear Weapons: Realism
Intense nuclear competition by rational adversaries Arms race, interaction dynamics create spiral of number and cost of warheads, interactions outweigh internal causes Supports Realism, but expenditures not accelerating or spiral cuts against realism No logic in nuclear/nonnuclear states fighting Rationality factor is not there with nuclear weapons... realism doesn't work
US Intervention: Instrumental Marxism (borgiousee individuals)
Intervention linked to protection of economic assets Protect direct economic interests of US But some of the biggest Cold War interventions are countries with small economies...
Intervention Takeaways
Interventions after the end of the Cold War, big debate and confusion in Washington on unilateralism vs. multilateralism Two types of unilateralism (Neo-isolationists, pharmacists????) Two types of multilateralism (Selective engagement to contain great power threats, cooperative security)
Global and International Relations: Japan and Iraw, why bush admin was so wrong
J: no acts of violence against US occupation, I: many acts J: WOrking government; I: collapse of Baathist regime J: civil society was vibrant and disagreeing; I religious and tribal factionalism J: no expatriate governing council by DoD; I: Chalabi government and lack of legitimacy J: little corruption and gangs; I: J: Taisho democracy-history of sexperience of democratic government in the 20s; I: none J: No outside economic interested or war profiteering corporations close to US administration; I: oil privatization and Bechtel and Halliburton J: economic model-pro-state, anti-foreigner; I: anti-state, pro-foreigner J: elections without prospect of violence; I: election with prospect of violence The power of wishful thinking Germany: same story of enormous difference with Iraq
Internationalization and the Politics of Oil and Gas: Consequences of Oil Price Increases
Japan and Europe are much more dependent on Mideast oil than US; less pro-Israel Encourages mercantilist tendencies and forces global structural economic readjustments with enormous political consequences: Rise of Japan and Germany US inflation and Reagan revolution Latin American debt crisis Collapse of Communism in Eastern Europe and the end of the Soviet Union Effects of 1970s price increase is a substantial net transfer of wealth from rich to poor countries New producers, conservation Alternative sources of energy Natural gas revolution
Old and New Wars: Ukraine and ISIS General Context
Links to finance and oil Within Westphalian system (Ukraine) or stretching beyond (ISIS and new caliphate)
Trade and Investment: Capabilities and Variable Openness
Low power concentration: economic closure Ex 1) Europe 1873-1914 German collection of iron/rye Ex 2) Interwar Years No full recovery after WWI: Black monday and great depression Competitive currency devaluation/ Taft's escalation Nazi Germany's new trade policy Vulnerability dependence Ex 3) Coming Years Downfall of American Order? PK and Kirshner II
Globalization and Politics of Finance: Marxism
Macroeconomic politics in NOrth drive the system (early 80s) and changes in financial capitalism (since early 90s) IMF and private banks cooperate to eliminate potential for partial disengagement from global capitalist markets. Export economics and privatization
Eurasianism: Ukraine
Maidan popular revolution 2/12/14 came as a total surprise for PUtin; leads to a coup d'etat Putin's decision to intervene rushing back from Sochi Olympics Eurasianism as Russian ideology Legacy on Mongolian Empire - largest empire (landlocked) Tradition started after 1917 as a reaction to Western theories of Socialism; after 1991, a reaction against Western theories of neoliberalism Insistence on Russian honor; multipolarity Old Communists: drew on 19th century German theories of geo-politics, race, spheres of influence, and bilateral-axis-thinking Centered on Russia, it offers a plausible alternative vision to Atlanticism and US hegemony Politics after dissolution of the Soviet Union returns to Eurasian worldview Eurasian ideology generates a sphere of influence thinking. Former Soviet Union is Russia's natural sphere of influence The US is opposed to all spheres of influence except its own in the Americas (Cuba as the only exception?) Russia domestic politic as reason for intervention The Maidan revolution raised the specter of the loss of Ukraine. Crimea boosted Putin's popularity among his political base Fighting never stopped after 2014 In sum: Russia wants to play the role of mediator in conflicts by deploying limited military force under conditions of political uncertainty Compromising territorial integrity of other states furthers Russia's geopolitical goals and civilizational claims
Global and International Relations: Asia and Europe
Market capitalism in Asia vs. Legal institutions in Europe Asia: Formally mcu less integrated markets; ethnic capitalism Europe: integration creates customs union early; role in the Euro PICTURE on 48 Explanatory sketches for outcome of Asia and Europe Differences in regional institutions Similarities in openness Analytical eclecticism
Trade and Investment: Variable power concentration: oscillation between economic closure and openness
Mid 1970s-1990s Decline of US power/relative closure of trade Japan ??, US protectionism rises: old-new industries Sectoral sequences Early 1990s Rise in US power, increase in relative openness Better economic performance than EU and Japan WTD, liberalization or trade Siner 2008 ?? Democrats much more protectionist Outsourcing of Walmart to China
Trade and Investment: Liberalism
Morah MNCs spread through because of markets Product Cycle Theory: Changes in firm competitiveness over time Strong support 1910-20s, Now less clear since globalization has equalized cold structure More than 50% of total world trade occurs within MNCs Moran: liberalism? Marxism? Hybrid? Defensive because defeat of politics Not past, but future which drives system Expectation of future investment and growth MNCs are often defensive and try to defend monopolistic rents Firms shadow each other and cross invest to protect each other against unknown future
Cuba General Context
Most serious crisis after the Cold War leads to Cuba Bay of Pigs (loss of US innocence, Cuban exiles overturn Castro) JFK assassinated with sus ties USSR: Khrushchev (reformer, wants detente), loses his job over this crisis
Globalization and Politics of Finance: OPEC Recycling and Latin American Debt Crisis
OPEC and petrodollar recycling, Bankers make money and do not think about systemic risk. Cheap credit to poor countries... crisis Poor countries need to borrow after 1973 to pay for more expensive oil 1982: crisis starts in Mexico then moves throughout Latin America. Now totally forgotten Early 1990s: growth resumes stimulated by an influx of capital from global markets attracted by trade liberalization and NAFTA
Internationalization and Politics of Oil and Gas General Context
Oil Cartels in the Oil Industry: Oil is a vitally important center of the international economy and a site of unending politics Standard Oil broken up in 1911 1998 Exxon-Mobil merger ($80 billion) recreates part of Standard Oil Oil industry is vertically integrated; high barriers to entry; take profits upstream and downstream since exploration is very risky Traditional major actors were the seven sisters Oligopoly facing ruinous competition with each other, hence created a cartel arrangement Other firms US independent producers European state-owned firms State-owned firms of OPEC countries Before WWII: industry is shaped by cooperation between Western governments and large firms Prime Minister Mohammed Mossadeq of Iran overthrown in 1953 with the help of the CIA 1950s: oil price falls (substitution led to excess supply) 1958: US adopts an import quota 1959: Seven sisters impose price cuts on oil exporting countries
Islamic State: Oil
Oil is the central part of the Iraqi insurgency after the victory of the US over Saddam. Put down by US surge in 2007; re-emerges after 2009 and develops a regional authority structure ISIS becomes richest terrorist organization. Captures infrastructure and sells oil below market prices. Tens of millions of dollars, monthly, 50-60% spent on human services Quickly builds a state bureaucracy
Trade and Investment General Context
Order derives from shared interest Markets provide basic order for life Two outcomes: 1) material gain: economic benefit derived from an efficient allocation of resources (fair distribution? only if markets are fair and superior 2) Loss of state control: international flows affect national politics
Eclecticism: Alternative Causes
Over-determination of events after the fact (a posteriori) (20/20 hindsight) Empirical solution is imperfect Different paradigms and analytical perspectives lead us to somewhat different types of evidence Evidence helps sort out some claims, but is often inconclusive Total truth or partial truths No total truth is possible, Use theories, does not seek to prove The problem of alternative causes: after the fact, a posteriori overdetermination Firing Squad The problem is real. Each explanation is sufficient, none is necessary Football team The problem is false. Each explanation is necessary, none is sufficient Combination lock: eclectic solution to problem of over-determination Pick and choose among explanations depending on the problem
Globalization and Politics of Finance: Conclusion
Paradigm and AP or eclecticism All of the explanations help Disadvantage of not knowing how to pick one that is always the best Advantages of eclecticism are greatest if you have questions that you wish to answer rather than relying on one toll that you have mastered
Paradigms and Perspectives
Paradigms and analytical perspectives are more or less useful for Giving answers and/or posing questions Two worlds Balck or white world: all or nothing Truth is total: prove and disprove theories Grey World: More or less TruthS are partial: use theories
Trade and Investment: Realism
Pax Americana creates freedom for investment MNCs spread for 2 reasons: Govt. policy: don't have to pay taxes if profits are reinvested abroad
Eclecticism takeaways
People who like analytical eclecticism call the cast of mind that relies on it "ecumenical" People who do not, call it "wishy-washy" or "undisciplined" Self doubt and self criticism are for PK ann admirable trait of a mind that is self aware
Globalization and Politics of Finance: Sovereign Debt Crisis in Europe: Iceland, Greece, Portugal, Spain, Italy, France...
Perceived inability of a country to pay debt leads to restricted access to international capital markets Bankers tell government it has to cut spending; domestic resistance or rebellion European banks owned bad Greek bonds; in 2010-2012 they had to take a "haircut" ie. register a loss on their balance sheet for those bonds Connection to US banks is opaque. American bank exposure is much lower than European exposure By 2015 virtually all of Greek debt was held by states. German taxpayers own about $100 billion of bad Greek assets that they are unlikely to ever recoup, Very tough political bargaining and deep resistance to further bailouts
Trade and Investment Takeaways
Political Economy typically relies on a variety of paradigms and perspectives
Nuclear Weapons General Context
Purpose of the military is no longer to win wars but to prevent them Mutually Assured Destruction (MAD) Evolution into far more destructive nuclear weapons US was initially superior with SU playing catchup, period of parity, and then change in what they looked for Defensive Speak, attempts to stabilize instead of eliminate, many treaties like SALT Since 2012, Putin rise to power, things changed. new start in 2021, new powers, UN action
Ukraine: Pipeline Politics
Putin's 1997 dissertation Use resources to increase Russian leverage in IR and Urgent need to diversify Russia's economy Russia leveraged oil influence but did not diversify Europe chooses to increase its dependence on Russian gas (1950s-1980s) Germany's Nord-stream 1,2 (NJET) Saga Is Europe now dependent? Yes and No Boycott of Russian coal/Y; oil/Y; gas/? Gazprom plays major role in Russia's international relations
Ukraine: Trade
Putin's goal: Eurasian Economic Union Economic imbalance of Eurasian Union creates political opposition and suspicion in Central Asia Member states nervous about trade diversion effects while Russia sees it as a barrier against China's influence; Ukraine war means China will expand in Central Asia - Russia as a "new vassal state?"Strong political appeal as an antidote to Europe and the West; affirms Russia's great power status - really?War with Ukraine has been politically costly. Russia has lost Ukraine for good and is in the process of trading one set of economic dependence (Europe) for another one (China)
Humanitarian Intervention: Realism
Realism does not work at all for humanitarian intervention *finnemore
Nuclear Weapons Takeaways
Realism only gets part of the story Marxism and DP help us understand part, quantity and quality of weapons Eclecticism might be the answer
ISIS/Ukraine Takeaways
Realism: Yes, much Liberalism: No, little Marxism: Maybe, little Constructivism: Yes (PK not Huntington) Domestic Politics: Yes, much
Global and International Relations: A world of regions and the US
Regions: real behavioral, institutional imagined A concrete instance of convergence and differentiation Four aspects Real Regions Behavioral Regions Institutional Regions Regions are always acts of political creation Regional organizations: EU, ASEAN, MERCOSUR, NAFTA Imagined regions As white brands Regions are organized around core countries and link to the US in different ways US involvement in a region varies Core interests at stake: Europe, Asia, and Middle East No core interests at stake: South Asia, Africa Special case: the Americas
Internationalization and the Politics of Oil and Gas: Liberalism plus Realism plus Marxism
Remember Moran Oligopolistic markets of US and UK MNCs gets replaced by cartel of state-owned corporations MNCs end up as tax collectors of states States fight Inside the producer cartel (OPEC- Saudis-Iran-Iraq) Outside the producer cartel Consumers have an interest in stable and increasingly in high prices (environmental concerns) Saudi export of terrorism financed by oil to support he domestic regime; a new ruler (crown prince mohammed bin Salman, MBS) will jihadism knock at Suaid doors? Terrrorism, American national security, and energy policy wrapped into one
End of the Cold War: Domestic Politics
SU: Cold war caused by SU DP, defensive bc see UK and US as threat, or offensive to spread communism US: liberal institutions, fragmentation of power, inconsistency in foreign policy, democratic enlargement to prevent war, oversell threat and remedy (truman doctrine) Conclusion: Cold War so intense because of DP of antagonists, drives foreign policy, works better for US than SU
Nuclear Weapons: Domestic Politics
Sagan reading Oct 1962: Strategic Air Command secretly deployed nuclear warheads on 9 of 10 ICBMs at Vandenberg Air Force base and test-fired the 10th one over the Pacific. If Soviets had learned of this, they might have misinterpreted the test as an attack Many other scary episodes No learning after failures; no routines altered; cover-up of mistakes Cover-ups are part US DP: Election Cycle, regional concentral of defense economy, different leadership
Eclecticism: Generality of Outcomes
Scope of outcomes explained (Dependent variable: how?) Example: Explaining incidence of war vs. incidence of big wars, small wars, interstate wars, intra-state conventional wars, nuclear wars, guerilla wars... Theories have different tendencies and strengths: Realism, Marxism: Broad scope: many countries, many years Liberalism: fewer countries, fewer years Domestic Politics: one country, many years Constructivism: does not fit this schema very well. All countries, all years?
Intervention: Rep/Dems after CW
Since 1990s, differences between parties are less clear, both intervene due to unchecked power Republicans in 1980s: regional anti-communism Democrats in 1990s: global power humanitarianism Post 9/11: Republicalns: global anti-terrorist interventiosn BIg underlying division in both parties Dems are divided on human rights globalism vs. non-intervention Reps are divided on national-interest isolationists (realists) vs. core value interventionists (neo-conservatives)
Marxism: Nuclear Weapons
Structure of capitalism causes foreign policy Imperialism and militarism are two sides to the same coin, capitalism logic leads to war military keynesianism (govt increase military spending leads to economic growth) Globalization of military industrial complex
Islamic State General Context
Sunni/Shia Divide Sykes-Picot agreement and sphere of influence (1916) Fast forward to 9/11, al-Qaeda, 2003 US-led invasion of Iraq, and the crumbling of Saddam's Sunni regime 2011 Arab spring and Syrian Civil War creating power vacuum and opportunity for ISIS to expand 2013: counterrevolution in Egypt eliminating the Muslim Brotherhood as non-radical alternative 2014 ISIS declares caliphate state straddling Iraq and Syria
End of the Cold War: Realism
Systemic Realism: polarity Internal balancing (resource mobilization) instead of external balancing (alliances) End of cold war due to adverse shifts in balance of power? Away from stable bipolarity? SU: Imperial overstretch, strategic withdrawal, last territorial empire Third World Intervention Cost of empire in Eastern Europe Soviet Union is no longer a real world player, that high tech societies, economic player
Global and International Relations: Conclusion
Telephone pad and # sign (Cold War bloc system); the US as one of two superpowers Telephone pad and * sign (Post cold war regional system) the us as hegemonic center Is the US strong enough to pacify and democratize the Middle East, Central and Southeast Asia, Canada, Europe, Florida... Only with regional allies. How do we connect to those allies? First among equals Equal partners Bully Not at all Some other way Us in a global-international-regional world A case for eclectic analysis?
Globalization and Politics of Finance: Domestic Politics
The Causes of cruises are similar. Consequence of how they are resolved differ because of domestic politics Very different ways of dealing with 1980s and 1997-2008 crisis DP marks sense as an explanation of how a crisis occurs and how countries cope with it
US intervention: Marxism
Two big lies about US intervention: Official: US is uniquely non-interventionist Radical: US is uniquely imperialist *chomsky neither instrumental or structural marxism is compelling
Globalization and Politics of Finance: Is the US Next?
US banks are closely tied to global instabilities. US now a potential source of risk itself Are budget and trade deficits sustainable - funded by foreign central banks, now holding $27 trillion T bills and assets Excess savings in world markets, the US is a good investment in terms of security and risk. But trust is weakening US politics and crisis management are poisonous tend that will affect the dynamics of any future crisis should it come
Interventions General Context
US has much longer list of military and proxy intervention, SU is mainly in its own sphere of influence humanitarian, cultural (secular, religious) Secular: cultural imperialism, holywood, coca-colonization, two way street of cultural exchange, social media Religious Proselytizing: conservatism and faith-based politics and diplomacy Old theory: democracy = moderation, authoritarianism = aggression; new theory is opposite Transition and Elections: first, last year of presidential cycle are unproductive, too much focus on elections
Globalization and Politics of Finance: Realism
US hegemony = print money and thus reduce the wealth of our creditors fo the last 50 years When US power declines its influence when IMF and WB wanes. NOt yet. When??US decline creates a permissive international context that can lead to far-ranging financial instabilities and crises, perhaps induced by US deficits Realism looks plausible
Global and International Relations: Middle East, Iraq, Learning from history
US occupation of Germany and Japan as a model for Afghanistan and Iraq? Really?? Learning from history through analogies: identify structural similarities in situations and argue that similarity in structure will lead to similar outcomes Two psychological processes: Availability heuristic: why one analogy and not another Representative heuristic: how to go from one analogy to lots of analogies
Arguments about Origins of the Cold War
US: Realism (somewhat) DP (Very) Marxism (not totally wrong) SU: Realism (Very) DP (somewhat) Marxism (not toally wrong)
Eclecticism: Alternative Consequences
Under-determination of events before the fact (a priori) ("professors - people with more than two hands") Under precision Move from the general and trite to the specific and interesting Move from general propositions that can be tested to particular descriptions that cannot Over prediction The Cornell soccer team will win the next ten games with Syracuse, etc... US interventions that did not occur Structural, parsimonious big fish explanation and analytical... they are simple, and also flawed` The problem of alternative consequences: before the fact, a priori under-determination Existential solutions: paradigms vs. analytical perspectives Critical thinking will only get you so far. You cannot avoid asking about what is right and what is wrong and what you are or are not prepared to do about it
Trade and Investment: Instrumental Marxism
Underconsumption Spread of MNCS due to underconsumption, surplus capital, declining profit rate MNCs invest in developed North Profits are higher in North Raw materials: substitution is often possible ex) copper used to be very popular
End of the Cold War Context
Was a surprise Period of stagnation in SU (relevant to China?) Gorbachev elected to bring economic and political change, just got political Detente, arms control, radicalization splinters SU From Divided to United Germany: Berlin airlift, two german states, wall, Gorbachev knew he could not reform SU domestically if he suppressed East Germany protests with violence
Trade and Investment: A world of complete openness?
Yes: Perennial US complaints about other countries' closure (China) Agriculture (EU and Japan) Services (Japan and Third World) Manufacturing (sometimes in US) Invisible barriers No: Growth of trade MNCS: scale and scope TEchnology: diffusion/reverse engineering US plagiarizing GBR/everybody steals ideas and complains Labor mobility, forced migration, tourism Popular Culture Migration crisis: US, EU (Syria and Ukraine), Middle East, Asia, Africa, environmental refugees Migration driven by borders (California/Central Americas) Foreign exchange markets: $6.6 trillion/day (2019) Global bond and stock market ($60 trillion) After WWII, US relinquishes specific liberal economic objectives for general political ones EC Corp, export subsidies (VAT)Japanese protectionism, China trade imbalances Western bias of system Sectoral exceptions: agriculture and primary products (EC) low tech → high tech (US)
Ukraine General Context
historically contested and divided by various states and empires Consolidated into Soviet Republic after Russian Revolution Independent after 1991 Internal Divide in ideologies: east/west Ruled by oligarchs and kleptocrats (very corrupt) 2.24.22: Zelensky becomes Churchill overnight No more oligarchs and kleptocrats??? Russia's invasion changes Ukraine overnight (or is it Western news coverage of Ukraine??) 3-4 million refugees show a different kind of Ukraine that has emerged under the rule of oligarchs and kleptocrats in the crucible of war
US Intervention: Realism
implausible for US territory only threatened by nuclear attack? Why is US list so much longer? Conditions favoring US intervention in 3rd world bc political decay in weak states... restructuring will be possible at low cost
Global and International Relations General Context
nternationalization = Globalization More cross-border exchanges (quantity) Close to or above relative levels of exchange before 1914 except for UK foreign investment. Old MNCs were bigger than today's More of the same old stuff? Globalization = Globalization.2 Qualitatively new: space and time have shrunk in a previously unimaginable way This affects more than economic or social exchanges between national economies and corporations RE-stratification according to technical knowledge Backlash of locals Transform identity of actors Two Concepts of Globalization: Internationalization (the internet) vs. Globalization (World Wide Web) The two processes are hopelessly intermingled
