IPE Midterm

What does mercantilism/realism focus on?

- Strengthening states and state power, not markets as capitalists do - Requires states to nurture industry (given that it's state v. state; a zero-sum game) - Nurtures domestic "infant industries" until they grow strong

What did the Bretton Woods system do in the 50s and early 60s?

-For the 1950s and into the early 60s, the Bretton Woods system works for the advanced industrialized countries & reconstructs Japan & Western Europe, hence mitigating the nightmare of depression. -American labor remained relatively strong; although the Taft-Hartley Act began to chip away at it

Different takes on liberalism

Because the "invisible hand" of the market performs so efficiently, society can regulate itself best with minimal interference from the state. Some liberals even reject the idea that the state is an autonomous actor and see public policy as resulting from a struggle among private interests. However, interventionist liberals favor some activism by the government because of the market's limitations in dealing with problems such as unemployment.

Three dimensional economics

Bowles' term for "political economy," which he defines as a way of understanding capitalism that has evolved and changed with capitalism itself.

Cafruny's criticism of "comparative advantage"

Cafruny says this is not true unless you make an assumption that there's full employment in both countries involved. Otherwise, it's not clear that international trade would be beneficial to both countries. • US & China example: ○ China's wages are cheaper so companies go out to business in US, they outsource to China, industry is reduced to 2/3rds over past 25 years. ○ Counterpoint: US has made up for that in other areas such as finance, so has not hurt GDP, but has hurt working people

Crisis of the 1970s

Crisis of "embedded liberal order" which was resolved by the neoliberal order. Characterized by the rise of financialization (or deregulation of finance) reflected the amount of consumer debt. Families going into debt to stay middle class became the norm.

Asian Financial Crisis

In 1993 the World Bank issued a report on The East Asian Miracle which examined the region's "remarkable record of high and sustained economic growth" from 1965 to 1990, and a number of analysts began to refer to the East Asian "miracle economies." In the late 1980s, however, East Asia's dependence on the United States and Japan began to have some major drawbacks. For example, the United States responded to its growing balance-of-payments deficits by becoming more protectionist, and South Korea and Taiwan offered concessions because of fears that the United States would retaliate against what they considered to be "unfair" trade practices. With the breakup of the Soviet bloc and the decline of the Cold War, the United States was also less willing to supply large amounts of aid to South Korea and Taiwan. East Asia had largely recovered from the financial crisis by 2000, and there was renewed confidence in economic growth in the region. Even if the East Asian Newly Industrialized Economies had not been miracle economies, they had developed rapidly for several decades, and their economic development has resumed.

What is Wade's argument about "The invisible hand of the American Empire?"

In a liberal capitalist global economy, hegemonic countries like the US use smoke and mirrors to maintain power domestically and abroad. The idea of a state like the US being altruistic toward poorer countries is also just smoke and mirrors for efforts to maintain power over them.

interdependence theory

Interdependence can be defined as "mutual dependence," in which "there are reciprocal (although not necessarily symmetrical) costly effects of transactions." Interdependence theorists question the realist assumptions that states are rational unitary actors, that states are the only important actors in IR, and that states can rely on military force to promote their national interest. Military force is of little use in dealing with interdependence issues such as environmental pollution, monetary and trade relations, and sustainable development. Interdependence theorists note that these issues are also more intermestic (domestic as well as international) than traditional security issues, and they criticize realists for overemphasizing the division between international and domestic politics.32 Despite these criticisms, interdependence theorists view their model as supplementing rather than replacing realism.

Cohn: External Development Factors

Internationally, orthodox liberals view North-South relations as a positive-sum game that benefits the South, and they often argue that "the late-comers to modern economic growth tend to catch up with the early-comers."68 The South requires foreign investment, the diffusion of advanced technologies, and export markets. Thus, LDCs that achieve development are integrated in the global economy through freer trade and capital flows, whereas the least developed LDCs have few trade and investment linkages with the North. Orthodox liberals believe that the East Asian NIEs developed rapidly in the 1960s-1980s because of their market orientation. Thus, Milton Friedman and Rose Friedman wrote in 1980 that "Malaysia, Singapore, Korea, Taiwan, Hong Kong, and Japan—all relying extensively on private markets, are thriving," while "India, Indonesia, and Communist China, all relying heavily on central planning, have experienced economic stagnation and political repression."

How does Hamilton describe the duty of manufacturers?

Promoting US independence of foreign nations "for military and other essential supplies."

What do Gamon & Wigan argue are behind the false belief that the deregulation of markets advances market completion, despite the increased prevalence of financial crises?

They argue that this is motivated by compulsive narcissistic neurosis, whereby the negative consequences of repetitive and aberrant behavior are expressive of elicit desire, comparable to compulsive gambling.

What is meant by "vertical integration?"

the degree to which a firm owns its upstream suppliers and its downstream buyers.

What limits do both liberalism and realism have?

- Both take existing system as a given; conservative in that sense & don't consider the possibilities of alternatives -Mercantilism: descriptive, takes state as a given, doesn't see future beyond the state -Liberalism: assumes that superseding capitalism would be negative, an assumption of political neutrality of markets (ignores that they are organized by power), assumes that market freedoms are inherently good

What is Friedman talking about when he says that 'the world is flat?'

Globalization, through outsourcing and technology, has leveled the global playing field for other countries to compete equally for global knowledge work like never before. Innovation has taken away the necessity of emigration, and barriers are being taken down allowing many other people to directly compete with Americans.

Marxism/Structuralism in IPE Academia

-Leading IPE school of thought in 60s and 70s; focusing on uneven development of countries, relationship of capitalism and imperialism, etc. -Since the 1980s it has had a setback, new generations of graduate students were not taught about this approach (representative of changing political tides in US) -Weaknesses: Although the analysis is arguably superior, the record of revolutions have tarnished all elements of Marxism -Sheds light on the limits of liberalism and mercantilism

Why does Hamilton support tariffs?

Hamilton believes tariffs (in moderation) are good for raising national revenue, subsidizing domestic manufacturers, protecting startup manufacturers for the short term so it could compete

What are the 2 different types of feminism in IPE?

-Liberal feminism: tends to assume that within the restraints of the given system it is possible to expand gender equality, especially in terms of decision making in government; focus of greater opportunity & eliminating the gendered division of labor (Lacsomana critiques liberal forms of feminism focusing on identity politics & how they ignore issues of class) -Marxist feminism: shines a light on the fact that sexism hurts men as well as women. (Ie; pay gap hurts men as well as women)

How do structuralists and liberals view North/South relations?

-Liberalism argues that integration & economic interdependence will have all countries develop -Structuralists disagree believing it is about power relations and the Global North dominating the Global South; the relationships are not neutral & mutually beneficial (points to colonialism & neocolonialism)

What is commercialized diversification and what does Streek argue it has done?

It is the movement of markets and commercial relations from the satisfaction of needs to the servicing of wants. Streek points to the expansion of post-Fordist luxury goods following a pattern of increased product differentiation and accelerated product turnover, promoted by ever-more highly targeted marketing

Historical materialist/dependency theorist perspective of development in the Global South

As historical materialists, dependency theorists reject the liberal view that LDC economic problems result from inefficient domestic policies. Instead, they see capitalist states in the core of the global economy as either "underdeveloping" LDCs in the periphery or preventing them from attaining genuine, autonomous development. Class linkages also play a role, with elites in the South (the "comprador" class) collaborating with capitalists in the North to reinforce the pattern of LDC dependency. Whereas some historical materialists call for a redistribution of resources from the core to the periphery, others believe that the core will never willingly transfer resources; thus, they call for a social revolution in the South and/or a severing of contacts with the North.

What type of theories is Wade?

A realist: he assumes that international relations are power struggles where states attempt to further their domestic interests that the expense of other countries.

What is "the spillover effect" (externalities)?

A situation where the activities of one person or firm imposes costs on others (ie; environmental pollution).

What makes liberalism different from both marxism/materialism and mercantalism/realism?

1. Liberalism is the most influential perspective in IPE 2. Unlike realists who focus on the rational unitary state, and Marxists who view the world in terms of class relations, liberals deal with a wider range of actors and levels of analysis.

What do Gamon and Wigan argue motivated the collapse of Fordist financial accumulation and advance of market civilization?

A complex series of libidinal investments, physical attachments that aim to strengthen our ego defenses and bring about stasis. They challenge the common idea that profit-motives were the main force for this change and argue that pecuniary motives were secondary to narcissistic fulfillment attained through disciplining the self in accordance with new behavior conventions.

Financing for balance-of-payment defecits

A country may also seek financing for its balance-of-payments deficit by borrowing from external sources or decreasing its foreign exchange reserves. Financing is often the preferred option when access to credit is available because it is easier to postpone difficult adjustment measures. However, financing may not be available over the long term; a country's reserves may be depleted, and foreigners are reluctant to invest in a country with chronic foreign debt problems.

What is psychological stasis?

A determinant of psychological agency. It is a state in which the psyche is effectively able to deflect external perturbations and maintain a sense of ego coherency.

What is the Stolper-Samuelson theorem?

A famous theorem in international economics that says when a rich capital-abundant country (such as the U.S.) trades with a poor labor-abundant country (such as China), wages in the rich country fall and profits go up.

Cohn on origin of the term "Mercantilist"

A pre-industrial doctrine Adam Smith, the eighteenth-century liberal economist and philosopher, used the term mercantilism to refer to economic thought and practice that prevailed in Europe from about 1500 to 1750. Mercantilists believed that a state could use its gold and silver to increase its power by building up its armed forces, hiring mercenaries, and influencing its enemies and allies. Because it is impossible for all states to have a balance-of-trade surplus, mercantilists viewed IR as a zero-sum game, in which relative gains were more important than absolute gains. In the late eighteenth century, critics argued that mercantilism encouraged states to encroach on individual freedom and engage in the continuous cycle of European wars. These criticisms were highly effective, and liberal views of free trade became dominant in England for much of the nineteenth century.

What is sociation by consumer choice?

A way for individuals to link up to others and thereby define their place in the world. The vast variety of alternative possibilities of consumption in affluent post-Fordist markets provdies a mechanism that allows people to conceive of an act of purchase as an act of self-identification and self-presentation, one that sets the individual apart from some social groups while uniting them with others.

Who was the first major mercantalist?

Alexander Hamilton

Cohn: Paths to development

Although some modernization theorists suggested that LDCs might follow different routes to development, most modernization theorists were deterministic, advising the South to follow the same path to development that the North had taken.63 For example, one theorist wrote that the Western development model "reappears in virtually all modernizing societies of all continents of the world, regardless of variations of race, color, or creed."64 Walt Rostow's book The Stages of Economic Growth was highly deterministic, claiming that societies move through five stages on the path to modernity: traditional society, the preconditions for takeoff, the takeoff, the drive to maturity, and the age of high mass consumption.65 Despite the initial appeal of this model, Rostow's predictions regarding LDC growth were overly optimistic, and it was difficult to apply his stages to specific LDCs.

How has globalization changed how countries join the international economy? How has it affected the US?

Globalization has changed this by accelerating the process of international integration. It has also made capital, technology, and methods of production mobile, marking a watershed with the past. The new order is exemplified by China's recent experiences. In less than two decades, China has become a global manufacturing powerhouse through massive foreign direct investment and technology transfer. The impact of this transformation on the U.S. economy is seen in the trade deficit, the loss of manufacturing jobs, and downward pressure on wages.

What are Indian economist Professor Utsa Patnaik's findings on the impact of British colonialism in India? What does she say about how it relates to the neoliberal era?

Britain robbed India of $45 trillion between 1765 and 1938, however it is estimated that if India had remained free with 24% of world GDP as in 1700 then its cumulative GDP would have been $232 trillion greater (1700-2003) and $44 trillion greater (1700-1950). Takeaway: The capitalist perpetrator deception continues in a neoliberal One Percenter-dominated world that is existentially threatened by nuclear weapons (a nuclear winter from nuclear war would wipe out most of Humanity and the Biosphere), poverty (15 million people die avoidably from deprivation each year, 4 million in India) and man-made climate change (about 1 million people die from climate change each year but this set to increase to an average of 100 million deaths per year this century if urgent, requisite action is not taken).

What was the dollar/gold standard?

Central banks held their international reserves in gold and foreign exchange under the Bretton Woods monetary regime. However, the original attraction of gold—its scarcity—became a liability as increased trade and foreign investment led to growing demand for reserves. Most countries also preferred U.S. dollars to gold, because dollars earned interest and did not have to be shipped and stored. U.S. dollars were therefore vital for global liquidity purposes, but large U.S. balance-of-trade surpluses in the late 1940s contributed to a shortage of dollars in other countries. To remedy this problem, the United States distributed dollars around the world from 1947 to 1958 through economic aid and military expenditures. Other countries could devalue their currencies under IMF guidance, but the dollar's value was to remain fixed at $35 per ounce of gold to ensure that it would be "as good as gold." The United States agreed to exchange all dollars held by foreigners for gold at the official rate, and this seemed feasible because it had larger gold reserves than any other country.

Embedded Liberalism

Describes economics in the 30 year post WW2 "golden age," Karl Polanyi coined that phrase: § It means that before capitalism, the economy was embedded in the rest of society (not separate from it) § Then, as capitalism developed under classical liberalism, the economy became "disembedded". There was no sense of collectivity, it was entirely individualism. § By the 30s, it was clear that capitalism needed to be re-embedded into society. When this happened, the embedding came about in Europe with right-wing populism/nationalism □ In the US under Roosevelt, the partial embedding was done in a democratic way

The Global South's relationship with Keystone International Economic Organizations (KIEOs)

Despite these regional differences, the South in general lacks wealth and power vis-à-vis the North. Although LDCs look to the North for trade, foreign investment, development assistance, and technology transfers, they fear that these linkages prevent them from becoming more independent in policy making. The KIEOs (the IMF, World Bank, and WTO) have helped the South gain access to external finance and export markets, but LDCs believe that some KIEO policies inhibit their development efforts, and they resent the North's dominance in these organizations.

What does Kinzer tell us about John Foster Dulles?

Dulles was Eisenhower's Secretary of State who used the CIA to engage in multiple clandestine operations to overthrow foreign governments for the expressed purpose of fighting anticommunism, but also for the implicit purpose of "protecting the rights of multinational corporations." Kinzer details when Dulles managed to convince Eisenhower to agree to a CIA backed coup in Iran to overthrow Mohammad Mossadeq following his decision to nationalize Iranian oil in defiance of the British-controlled Anglo-Iranian Oil Company. Dulles was also able to mobilize these types of efforts because his younger brother happened to be the director of the CIA.

External Adjustment Measures for balance-of-payment defecits

External adjustment measures such as tariffs, import quotas, export subsidies, and currency devaluation are used to decrease imports and foreign investment outflows and increase exports and foreign investment inflows.

Cohn on Feminist Theory

Feminist scholars argue that the main IPE perspectives largely ignore the role of women. Liberalism measures production and participation in the labor force only in terms of the market, or working for pay or profit. However, women often work in the subsistence sector of LDC economies or provide basic needs in the household. Feminist scholars have examined the gendered effects of a number of IPE processes such as global restructuring and the changing international division of labor, the tourism industry, labor migration, and IMF and World Bank structural adjustment loans. These studies tend to be highly normative in their commitment to achieving gender equality, and often concerned with issues involving the entire society that have implications for men as well as women. In view of their commitment to activism, feminist scholars have an interest in transnational feminist networks (TFNs), which are "structures organized above the national level that unite women from three or more countries around a common agenda, such as women's rights, reproductive health and rights, violence against women, peace and antimilitarism, or feminist economics."

What does Wade argue international economic organizations are truly for?

He argues that they are just instruments of the hegemonic power to monopolize the world order. For example, he points to how the US pushed intellectual property rights were pushed into agreement with the World Trade Organization to heavily benefit parochial interests.

Marx on the emergence of capitalism in the West vs. the East

He believed that capitalism emerged in the West (in Europe) when private feudal landholdings were converted into private bourgeois property. India and China, by contrast, had an "Asiatic" mode of production that Marx viewed as outside the mainstream of Western development. The state's presence was much greater in the Asiatic mode, with the central governments in China and India developing large public work projects to provide water over extensive land areas. At the local level India and China had small, self-sufficient village communities with communal rather than individual ownership. Marx harshly criticized England for destroying India's textile industry by preventing it from exporting cotton to Europe and by inundating it with British textiles; but he also criticized India for lacking capitalism's capacity for development.14 In contrast to stagnating Asiatic societies, Marx viewed capitalism as a dynamic, expansive system with a historic mission to spread development throughout the world. Thus, Marx believed that England performed a dual function in India: destroying the old society and providing the foundation for Western society, which would in turn provide the conditions for a Communist revolution in Asia: "Can mankind fulfill its destiny without a fundamental revolution in the social state of Asia? If not, whatever may have been the crimes of England, she was the unconscious tool of history in bringing about that revolution."

What does Marx believe about capitalism's affect on a society's productive potential?

He believed that it is an obstacle to full development because the conflictual capitalist owner-worker dynamic blocks the adoption of many advances in technology and knowledge.

What did Marx believe about the nature of economic systems?

He believed that they change over time in response to their own operations and that capitalism fuels this change, leads to the growth of cities, propels increases in material abundance, induces global migrations, fosters changes in family life, and will ultimately bring about its own destruction.

What are Hamilton's thoughts on trade?

He believes trade is necessary and doesn't want to be completely independent of it because it's good for raising revenue through tariffs which can subsidize domestic industries,

What does Hamilton critique in his "Report On Manufacturers"?

He is critiquing capitalism and the idea that private interests naturally lead to public prosperity (the invisible hand)

What does Kristof say about China's economic growth in relation to sweatshops?

He partially attributes the sweatshops to China's rapid economic growth, being the fastest growing world economy since the 80s. In China, per capita output has been doubling every 10 years.

What was the Bretton Woods Conference, according to Cohn?

In July 1944, delegates from 44 countries convened the Bretton Woods Conference, and within 22 days they endorsed a framework for international economic cooperation after World War II. Under U.S. leadership, the North established institutions to develop a liberal economic order and prevent a recurrence of the interwar problems. The DCs at the Bretton Woods Conference had faith in the ability of international institutions to promote economic stability and growth, and the three Keystone International Economic Organizations have contributed to postwar prosperity. However, there is a hierarchy of states in the IMF, World Bank, and WTO, with the North having the most votes in the IMF and World Bank and the most influence over multilateral trade negotiations in the General Agreement on Tariffs and Trade/WTO. The South has had less power and wealth in the global political economy, and has tried to alter the KIEOs and establish alternative organizations such as United Nations Conference on Trade and Development.

What are the key elements of Keynesian economics?

In sum, Keynes called for the state to help combat unemployment, and his support for national and international economic management had a major impact on liberal economic thought. Despite Keynes's divergence from liberal orthodoxy, as an economic liberal he believed in the importance of individual initiative and the efficiency of the market. In Keynes's view, greater management would facilitate the efficient functioning of market forces. Thus, he favored government intervention not to replace capitalism but to rescue and revitalize, it; this perspective gave rise to interventionist liberalism.14

What does Cohn say about the decline of the Bretton Woods System

In the 1970s, however, several changes began to pose serious problems for the Keystone International Economic Organizations (KIEOs) First, the United States became less supportive of economic liberalism as its economic dominance declined; for example, U.S. protectionism increased after its balance of trade shifted to a deficit position in 1971. Europe and Japan also began to question U.S. leadership, and frictions among DCs increased with the decline of the Cold War

Which American leader best personifies all aspects of the Open Door Policy & why?

John Foster Dulles, who served as a major adviser in the Truman administration and Secretary of State for Eisenhower. During the 20s, he supported the Hughes-Hoover Policy of expansion based on "community ideals, interests, and purposes with Germany and Japan, and specifically pushed American penetration of underdeveloped areas in line with his emphasis on the necessity of markets for surplus goods and capital. His definition of compromise did not include a fundamental rapprochement and accommodation with the Soviet Union, or the acceptance of fundamental changes in the underdeveloped regions.

What does Polanyi mean by the "disembedded economy?"

Karl Polanyi expressed the integration of the economy in the whole social order by saying that the precapitalist economy was "embedded" in society. For "economics" to be recognized, work would have to become specialized, buying and selling would have to become market functions, and the pursuit of economic gain would have to become the guiding principle of economic life. This is what capitalism accomplished, thus society became "disembedded" from economy.

Liberal perspective of development in the Global South

LDC economic problems in the liberal view stem more from inefficient domestic policies than from their dependent position in the global economy. Indeed, liberals often see North-South interdependent linkages as providing even more benefits for the South than for the North. LDCs that follow open economic policies and increase linkages with the North are therefore more likely to achieve successful development. Although all liberals encourage LDCs to follow open, market-oriented policies, interventionist liberals (also called reformist liberals) recognize that North-South inequalities can put LDCs at a disadvantage. Whereas orthodox liberals emphasize equal treatment and reciprocity, interventionist liberals call on the North to consider the special needs of the South.

Liberal view of multilateral trade

Liberal economists see multilateralism as the best possible route to freer trade because it breaks down regional as well as national barriers. Liberals often support open Regional Trade Areas as a "second-best" route to trade liberalization when global trade negotiations fail, but they consider closed RTAs as a threat to global free trade. Liberals are also concerned that the recent trend toward forming numerous bilateral Free Trade Areas is producing overlapping FTAs that undermine "transparency and predictability in international trade relations."1 Although liberals acknowledge that open regionalism may harm some groups such as displaced workers, they believe that the efficiency gains outweigh the costs incurred.

Liberalism & the role of the individual vs. the state/collective groups

Liberals see politics in "bottom-up" or pluralist terms, in which individuals and groups seek to achieve their goals through political means. In IPE, liberals therefore give primacy of place to the individual consumer, firm, or entrepreneur. They place more emphasis than realists on domestic-international interactions, and view individuals as having inalienable rights that must be protected from collectivities such as labor unions, churches, and the state. Whereas realists emphasize the role of the state, liberals attribute globalization to technological change, market forces, and international institutions.

Cohn: Orthodox Liberalism & North/South Relations

Liberals see the key factors in development as the efficient use of scarce resources and economic growth, which they often define as an increase in a state's per capita income. Orthodox liberals devote little attention to North-South distributional issues because they assume that international economic relations are a positive-sum game and that interdependence has a mutually beneficial effect on states. Indeed, orthodox liberals often argue that North-South linkages provide more benefits to LDCs than to DCs.

Instrumental Marxism

Like liberal pluralism—sees government (i.e., politics) as responding in a rather passive manner to economic pressures.7Liberals, however, see any societal group as having political influence, whereas instrumental Marxists believe that a state's policies reflect the interests of the capitalist class. To support their position, instrumental Marxists point to personal ties between capitalists and public officials and to the movement of individuals between business and government

How do historical materialists, liberals, and realists view the basis of war?

Marxists believe that capital accumulation and the need to expand markets is the basis of wars and that war cannot be mitigated if this is pursued. Liberals believe that the interdependence of markets, or globalization today, would mitigate rivalry. Mercantilists believe that balancing powers and diplomacy would mitigate rivalry.

Marxism/historical materialism

Marxists see "class" as the main factor affecting the economic and political order. Each mode of production (e.g., feudalism and capitalism) is associated with an exploiting nonproducing class and an exploited class of producers. It is well known that the views of historical materialists evolved along with changes in the international system. In the Marxist view, the bourgeoisie promote globalization because it increases their profits and gives them dominance over the proletariat. Historical materialists agree with liberals that globalization is a pervasive force, but unlike liberals they see it as a negative process that prevents states from safeguarding domestic welfare and employment.

Why did the New Deal move forward?

New Deal in 1930s came about in the context of global & American depression, massive social unrest, & a militant labor movement (essentially a new social contract between working class & ruling class as well as Keynesian economic intervention) & paved the way for what would come after WW2

What type of economy did all developed nations originally start out with?

No country has ever developed with free market policies (they only benefit the powerful countries that have already developed). All developed countries got where they are by starting out with a mercantilist strategy.

Realists on energy security

Oil is central to energy security concerns because it is a finite resource that has a vital role in national economies. Conflicting views about the extent of global petroleum reserves and the economic and environmental consequences of exploiting them have made oil an important source of power and influence. Realists first began to view energy security as a major issue when oil prices quadrupled after the October 1973 Mideast war because Arab OPEC countries limited oil supplies. Although there was a reduction in oil prices in the late 1980s and 1990s, in recent years energy prices and "resource nationalism" have re-emerged as major issues.

What is the General Agreement on Tariffs & Trade?

One of the three Keystone International Economic Organizations developed after the Bretton Woods Conference (along with the IMF & WTO). It was originally the main global trade organization, but In 1995 the WTO replaced that role. The GATT lowered tariffs in multilateral trade negotiations, established rules for conducting international trade, and developed procedures for settling trade disputes. These functions were designed to avoid the protectionist barriers of the interwar period.

Critiques of liberalism

Orthodox liberals believe that all states benefit from free trade and foreign investment in a competitive market. They are not concerned about the fact that all states do not benefit equally, because the economic linkages produce mutual benefits. Interventionist liberals note that unemployment can occur under market conditions and that LDCs may require special treatment, but they believe that these problems can be remedied by supplementing rather than replacing the liberal economic system. Both realists and historical materialists criticize liberals for their inattention to power and distributional issues. Realists argue that relative gains are more important than absolute gains, because the most powerful states capture the largest share of the benefits. Economic exchanges are rarely free and equal, and bargaining power based on monopoly and coercion can have important political effects

Different economic theories on responding to balance-of-payments defecit

Orthodox liberals believe that governments should adopt internal adjustment measures as a necessary form of discipline because they see payments deficits as resulting from domestic inefficiencies. They oppose external adjustment measures that raise trade barriers and distort economic interactions, and they oppose external financing because it permits states to delay instituting internal reforms. Realists by contrast see internal adjustment methods as posing a threat to a state's policy-making autonomy, and historical materialists believe that LDCs should not have to bear internal adjustment costs in an international system that serves DC interests. External adjustment is much more acceptable to realists and historical materialists.

Theory of Hegemonic Stability

Popular realist theory that argues that a single great power can provide the basis for establishing & policing an open liberal order of free trade. Hegemonic systems: when one power is clearly the dominant power Multilateral/balance-of-power systems: not conducive to free trade; generally unstable and conducive to war

How do realists/mercantalists view international institutions?

Realists are more skeptical than liberals that international institutions have an important role in moving states to a Pareto-optimal (CC) outcome for several reasons. First, realists see international institutions as existing more often in "low politics" socioeconomic areas than in the "high politics" areas of national security and defense. Second, realists often view institutions as having no independent standing, because they serve the interests of the most powerful states. Third, realists see state concerns with relative gains as posing a major obstacle to cooperation. Even if two states have common interests, they may not cooperate because of each state's concern that the other will receive greater gains. Institutions can promote cooperation, according to realists, only if they can ensure that members' gains are balanced and equitable; but this is difficult to achieve because gains are rarely equal.37

What does Lacsamana say about 'intersectionality'?

She criticizes the premise of intersectionality that treats "race", class, gender, sexuality, etc. as isolated, independent categories that intersect at particular times to create localized, specific experiences. Instead, she argues that we do not experience our lives intersectionally, but "all together", which means this deliberate fragmentation of identity markers only serves to position "race" as a "cultural phenomenon and gender and class as social and economic." She also makes the distinction that "class" in the historical materialist sense is fundamentally different from race and gender because of its explanatory potential and its function as the "only structural determinant."

Adam Smith's criticisms of capitalism.

Smith warned that businessmen almost never have the same interests as the public and may even intend to deceive and oppress the public and that the pursuit of self-interest does not always benefit society as a whole.

Open Door Policy

Statement of U.S. foreign policy toward China. Issued by U.S. secretary of state John Hay (1899), the statement reaffirmed the principle that all countries should have equal access to any Chinese port open to trade.

How does Streek argue that commercialization and consumer preferences affect eachother?

Streek believes that marketing discovers, but typically also develops consumer preferences: it asks consumers what they would like, but it also proposes to them things they mught be prepared to like, including things they never imagined could have existed. Good marketing, he argues, co-opts consumers as co-designers, in an effort to haul more of their as-yet commercially idle wants, or potential wants, into market relations.

How does Streek connect the rise of commercialization to the neoliberal trend of privatization?

Streek identifies how it became received as political wisdom during the 80s and 90s that the difference between public and private provision was that the state dictates to people what they are supposed to need, which will always in effect be the same for everybody, whereas private markets cater to what people really want as individuals. Governments began to acknowledge the supposedly inherent superiority of the private over the public sector by encouraging citizens to perceive themselves, in their relations with state bureaucracies, as customers. Gradually, this paradigm extended into the very core of citizenship, where the traditional relationship between citizens and the state became increasingly subject to unfavorable comparison with the relationship between customers and producers in the refurbished post-Fordist markets for consumer goods.

How does Streek argue the post-Fordist turn toward commercialization changed the world of sports?

Streek points to how the Olympic Games used to be a domain of 'amateurs,' who were not supposed to make money at all on what was officially considered to be no more than their personal obsession or their patriotic duty. However, following the end of Fordism, the Olympic movement turned into a giant money-making machine, both for the athletes and numerous corporate sponsors, the advertising industry, the media and a vast complex of other firms producing a range of consumer goods related to physical exercise or the body in general. Fashion has come to play an essential part in this for athletes as well as fans.

Which industry does Streek identify as having changed the most due to post-Fordist commercialization?

Telecommunications and television

What does Lacsamana critique about post-modern feminism?

That it has broken with its relationship with historical materialism in examining how class and capitalism affect feminist issues. She argues that this Marxist perspective has been replaced by fixations on identity politics. As a result, abstract market decisions and rationalizations are "naturalized" as objective and rational mechanisms of capitalist accumulation rather than socially constructed, deliberate policies pursued by those most privileged in the GPE (white, Western, heterosexual men). Above all, she argues that contemporary feminist theory cannot situate feminist studies within the international division of labour to better illustrate how ideologies concerning gender, race, sexuality, and nationality are deeply intertwined with neoliberal capitalist expansion and exploitation.

What does Bowles say about the emergence of the study of "economics?"

That it is relatively new and came along with the arrival of capitalism 300 years ago,

The Deepening of European Integration

The EC began its operations with considerable enthusiasm in 1957. However, the integration process slowed in the 1960s and 1970s because of actions of France's president Charles de Gaulle, and international events such as the collapse of the Bretton Woods monetary regime, the OPEC oil crisis, and the onset of recession. Although Britain joined the EC in 1973, it opposed the development of strong EC supranational institutions; thus, the 1970s were marked by "Eurosclerosis" (i.e., stagnation) and a loss of faith in the EC's vitality.

What were the key functions of the IMF in the Bretton Woods System?

The IMF was created to monitor a system of pegged or fixed exchange rates, in which each currency had an official exchange rate in relation to gold and the U.S. The IMF lost one of its main functions when the fixed-exchange-rate system for currencies collapsed in the 1970s and was replaced by floating exchange rates. However, the IMF's role increased again in the 1980s and 1990s when it became the lead international agency for the foreign debt and financial crises Keynes wanted a global currency to be administered by the IMF (thus taking it out of America's hands) but Harry Dexter White made sure that the international system would be reliant on the dollar backed by gold, keeping the US at the helm of the international monetary order fixing all currencies to the dollar

The International Monetary Fund

The IMF was created to stabilize exchange rates and provide member states with short-term loans for temporary balance-of-payments problems. The countries with the largest subscriptions and most votes in the IMF are the G5—the United States, Japan, Germany, France, and Britain The DCs also have the most influence in the IMF operating staff. By tacit agreement, the IMF managing director has always been European, and the World Bank president has always been American. Furthermore, in 2007, DC nationals accounted for 56 percent of the IMF professional staff and 71.2 percent of the managerial staff. Gender disparities are also evident. All the IMF managing directors have been men, and in 2007, men accounted for 64.1 percent of the IMF professional staff and 84.4 percent of the managerial staff.

What changed the European Commission into the European Union?

The Maastricht Treaty changed the name of the EC to the EU because the first pillar—the EC—was joined by two new pillars: one for a common foreign and security policy, and another for a common social policy. Whereas supranational decision making is sometimes used for the first pillar (the EC), intergovernmental decision making is the norm for the second and third pillars (foreign/security and social policy). The most important element of the EC pillar was the Maastricht Treaty's plans for the EMU. The treaty outlined a timetable for setting up the EMU, criteria for joining the EMU (e.g., a budget deficit of less than 3 percent of GDP, and public debt of no more than 60 percent of GDP), and functions the EMU would perform (e.g., the European Central Bank's role in the process).

What nation had the first system of free trade?

The Netherlands, which was a colony of Spain until the end of the 16th century. After the Dutch defeat the Spanish they become a dominant economic power in the world. ○ Dutch lawyer Grotius coined the Latin term: "mare liberum"

Cohn on the rise of Pax Americana

The United States emerged from World War I as the world's largest industrial power and the only major net creditor. Although it lent about $10 billion to cash-short countries during the 1920s, some U.S. policies did not facilitate a return to an open, liberal economy. The United States emerged as a more mature power after World War II, both willing and able to lead.

World Bank

The World Bank ("the Bank") has a major effect on LDC development strategies because of its dominant role "as a non-private lender, as a research and idea-generating unit, and as a provider of advice to the Third World The Bank, like the IMF, is a weighted voting institution. Each member has a capital subscription (or quota) based on its economic strength, which determines its financial contribution to the Bank and its number of votes.

What does Hamilton ascribe as the nation's duty?

To intervene in commerce to protect domestic industries through mechanisms such as tariffs, subsidies, or quality regulation.

The balance of payments

The balance of payments records the debit and credit transactions that residents, firms, and governments of one state have with the rest of the world over a one-year period; it has two main components: the current account, which includes all transactions related to a state's current expenditures and national income, and the capital account, which includes all movements of financial capital into and out of a state. A balance-of-trade surplus is certainly not the only measure of economic health, as Japan's economic problems demonstrate . However, arguments that the U.S. trade deficit is of little concern are not convincing. Regarding the first argument, serious questions are being raised about the sustainability of the U.S. external debt, especially since the 2008 global financial crisis . A state's competitiveness is not synonymous with the competitiveness of its MNCs. In assessing U.S. trade competitiveness and employment prospects for U.S. workers, it is not sufficient to focus only on the sales of U.S. foreign affiliates.

What did the Rise of Bretton Woods conference accomplish?

The conference was meant to anchor the 'embedded liberal order in US, Japan, etc. -Represented an extraordinarily creative & innovative system -1944 & Bretton Woods was the antithesis of the Versailles Treaty -Entrenched the US as core hegemonic power -Created International Economic Institutions; a duopoly with NATO & Marshall Plan -Established the foundation of a an international monetary system that works that kept the 'free world's' economy from going back to protectionism -Guaranteed that the US has veto power

According to Streek, how did capitalist economies move on from the stagnation of the 1970s?

The customization of product ranges increased the value added to industrial production: the closer products came to the specific preferences of consumers, the more they turned out to be willing to pay, and the harder they were prepared to work and the more they were prepared to borrow for the purchasing power needed to participate in the new paradigm of economic growth, with the transition it involved from saturated to affluent markets. Eg; the micro-electronic revolution multiplied the range of available car models to such an extent that customers could be invited to design their new car themselves, by specifying their individual preferences.

Dependency Theory

The dominant approach to development among Latin American intellectuals during the 1960s, rejects the optimism of liberal modernization theory and argues that advanced capitalist states either underdevelop LDCs or prevent them from achieving autonomous development. Like Marxists, dependency theorists focus on capitalist development; use terms such as class, mode of production, and imperialism; and support the replacement of capitalism with socialism. Dependency theorists argue that the North benefits from global capitalist linkages and dynamic development based on internal needs, while the South's development is severely constrained because of its interaction with the North.

Cohn on the decline of Pax Britannica

The growth of trade became slower in the late nineteenth century because of depressed economic conditions, industrial protectionism on the European continent, and a decline of British hegemony. A decrease in Britain's productivity relative to the United States and Germany made it less competitive in trade and less able to serve as a market for other countries' exports

Who were the founder of 'orthodox liberalism' and what did he argue?

The liberal tradition dates back at least to John Locke (1632-1704), who argued that the state's primary role was to ensure the "Preservation of ... [peoples'] Lives, Liberties and Estates, which I call by the general Name, Property."6 Locke predated Adam Smith by almost a century, but Smith is more associated with the orthodox liberal approach to political economy, because he opposed mercantilism and favored laissez-faire economics Thus, Smith opposed mercantilist state barriers against the free exchange of goods. Although he realized that merchants might favor protectionism to preserve their advantages, he differentiated such specific groups from the general populace who would benefit from free trade. Smith's free-trade arguments were based on the principles of division of labor and interdependence. Each state in an unregulated international economy would find a productive niche based on absolute advantage; that is, it would benefit by specializing in those goods it produced most efficiently and by trading with other states.

The main source of trade creation in Regional Trade Agreements

The main source of trade creation in RTAs is the increased trade among members, which shifts demand from less efficient domestic suppliers to more efficient regional suppliers. When firms within the region become more competitive as a result of the RTA, they are also more likely to support freer trade at the global as well as regional levels. Furthermore, RTAs often achieve a deeper level of integration than multilateral trade agreements because negotiations occur among a smaller number of like-minded partners. RTAs may therefore have a positive demonstration effect on multilateral trade negotiations. For example, the inclusion of agriculture, services, and intellectual property in the NAFTA provided a stimulus for negotiating these issues in the GATT Uruguay Round.

When did the first free trade order end?

There was a free trading order until the 17th century, when Britain challenges the Dutch in Anglo-Dutch wars. The British inaugurated the "navigation laws," closing back down the free trade system.

What makes historical materialism/marxism different from liberalism and realism?

Unlike liberalism & mercantilism, it acknowledges that there are inherent internal contradictions, above all the imperative of capital accumulation which in turn leads to the need of driving down wages & automazation & need to expand markets.

North American Free Trade Agreement (NAFTA)

Unlike the EU, NAFTA has remained a free trade agreement. NAFTA has succeeded in increasing North American trade and investment flows and improving profitability for large MNCs.

David Ricardo's contributions to liberalism

Was a stockholder in a company doing business w/Portugal. He carried Smith into the international system. Whearas Smith sought to demonstrate national mutual-self interests of capitalism, Ricardo wanted to demonstrate "comparative advantage" at a global scale. He directly confronted the mercantilists (who argued that trade-surpluses were beneficial). Ricardo argues that if two countries (eg; Portugal producing wine & Britain producing cloth) if they trade with each other, both will benefit and increase their wealth. He's saying that no matter what, all countries will have something they can produce relatively better, and that trade will advantage them. This became the gospel truth of international trade theory.

What is the difference between globalization and classical free trade?

Whereas classical free trade connected goods markets across countries, globalization creates a global labor market and moves jobs. Previously trade arbitraged goods prices, now it also arbitrages wages through job shifting. With the emergence of China, India and Eastern Europe, the dam of Socialism that held back two billion workers has been removed. If two swimming pools are joined, the water level will eventually equalize. That is what is happening with globalization. Manufacturing has already been placed in competition across countries, with dire consequences for manufacturing workers.

John Locke's contribution to liberalism

focused on the Social Contract; the essence that would bind society together through private property.

Adam Smith's contributions to liberalism

wrote Wealth Of Nations in 1776; provides 3 key insights: § How can a society coordinate production: The need for division of labor. § Individual self-interest becomes coordination for division of labor § Associated self-interest with public interest ○ Adam Smith saw how capitalism could be exploitative, concerned about poverty & monopoly.

What happened during the period between Pax Britannica and Pax Americana?

• By the 20th century, a multipolar system emerges and some more protectionism comes back. Germany places tariffs to protect their developing industries "Iron & Rye Coalition" ○ This culminates in WWI ○ The reason the beginning of the 20th century is a time of conflict is because of the multipolarity of the system ○ This doesn't end until the US rises in 1945 as the most powerful & hegemonic country (Pax Americana) § 2/3rds of the world's gold was in Fort Knox § Half of the world's manufacturing was in the US § Established the key institutions that exist today in Brettonwood NH, 1944

What policies does Hamilton Advocate for in "Report On Manufacturers"

○ Tariffs ○ Prohibitions on certain imports (ie; what the US is doing to Huawei) ○ Export Restrictions (on technology you don't want other countries to aquire) ○ Encouragement of new inventions (Research &Development) ○ Rules on intellectual property ○ Judicial regulation for inspection (ie; restrictions on GMOs & chlorinated chickens) ○ Facilitate pecuniary remittances (having a national bank with the ability to have debt) ○ Facilitate transport (building infrastructure) ○ Subsidize (bounties) for domestic industries Immigration