Introduction to IPE Flashcards
Define GPE
- Interrelationship between public and private power in the allocation of scarce resourcES
what is the view on markets for economics
Allow efficient distribution and allocation
Individuals are informed and make mutually advantageous exchanges through markets
explain view on markets of IPE
Not natural mechanism Embedded in social relations,
Form and function shaped by political, social, cultural and religious practices and norms
E.g. market participants, e.g. property market not allowing woman
What two events resulted in the separation of politics and economics
Marginal revolution of 1870s
• Focus on individuals, marginal utility
Neoclassical economics from 1970s
• Politics=hinders in market of efficient outcomes // marginalised
what are the three core assumptions of IPE (Underhill)
a. Political and economic domains cannot be separated
b. Political interactions are central to structure of markets
c. Domestic and international spheres cannot be meaningfully separated
what are the 8 stages of the history of the global economy
- early 16th cent
- industrial revolution (classical liberalism)
- WWI + inter war period
- Great depression
- WWII to late 60s (embedded liberalism)
- post war growth
- nixon shock (neoliberalism)
- decline of welfare state
describe 16th century global economy
- Competition among European monarchs to amass wealth (and power) by extending their markets through building of empires
o = enmeshment of communities across glove in European economies (=Eurocentric economy)
mercantilism
what is mercantilism
power= wealth
what were the basic points of the global economy during the industrial revolution
- global integration increase through technology developments= enabled movement of goods, people (migration) and ideas
- little pattern of trade shift (bilateral, not dependant on institutions, tariffs remained to protect domestic producers)
explain the institutional arrangmements of the industrial revolution
- despite Expansion of economic integration but also lack of institutionalization
o Only the gold standard: price of currency converted to price of gold
o Fixed exchange rate= Provided certainty for traders
What era of liberalism was there during the industrial rev
classical
explain the global economy during WWI and inter war years
- Ended era of intensified trade (world trade declined 2/3 by ‘34
o Chaos reflection of inability of govs to agree on measures to restore stability + beggar thy neighbour policies - Fundamental problem: inability of states to construct viable international financial system
- Collapse of gold standard
o Saw limited certainty
-
why did international trade collapse during the great depression in 1929
- International trade collapsed as governments pursued protectionist measures in an attempt to strengthen domestic recoveries
what era of liberalism was during WWII to late 60s
embedded
when was the bretton woods conference
wwii after
what occurred and was established during BW
- Parties agreed to the dollar standard (foreign currencies fixed to US dollar, and US dollar fixed to its gold holdings)
- Establish IMF and International Bank for Reconstruction and Development (and World Bank) to facilitate global trade and finance
What was the agreements of BW structured around
compromises (multilateralism)
- governments opened economies to international trade and investment,
- but retained capacity to intervene domestically (manage domestic economic policy), especially to maintain full employment (safeguarding domestic objectives)
Explain post war growth
economic growth - but UNEQAUL
- production through TNCs
- intra-industry trade
- NGOs
what era of liberalisation was the nixon shock
neoliberalism
explain nixon shock
• Pressures on US dollar= US gov (Nixon) to leave gold-dollar standard
• Allowed countries to ‘float’ currency (determined by supply and demand of certain currency)
• Series of energy crises (1973-1979)
o OPEC impose embargo in response to US support for Israel in Yom Kippur War
o Price of crude oil rose from $3 barrel in 1973 to $12 barrel in 1974
• Raise in oil + Nixon shock = stock market crash and recession in 1970s
• Prolonged economic decline
o Characterised by stagflation (high unemployment AND inflation- these generally occur separately)
explain decline of welfare state
• Following recession- shift to conservative politics (Thatcher and Reagan) to target inflation through economic policy
• High income countries shift economic politics away from targeting welfare objectives of post-war period, and towards preparing citizens and corporations for international competition
o More flexible labour markets
o Private sector more flexible
o But reduced state support to welfare
explain differences of IE, IR and IPE
o IE- efficiency, resources allocated to most efficient outcome
o IR: power, how does an actor achieve its power (who gets what, when and how?)
o IPE: how are power and wealth related in the allocation of scarce resources
Consequences of conceptualising IR and IE as distinct social spheres
a. Political interactions are central to the structure of markets
b. Governments make economic and political comprimises domestically to ensure global economy remains intact and functioning
c. Power is often attributed to wealth
o If not studied as linked // unable to see past and current trends
o Economic interest often define political agendas
what are the preconditions for markets
- property= rights over things
- buyers and sellers
- money - (medium of exchange) fiat money
- information
explain embeddedness of markets
markets coexist with, shaped by, and depend on other social relations
2 ways markets are embedded
formal: government actions
informal: family ties
how was the 2008 financial crises different from the 30s
o Recovery= reflection of effectiveness of concerted responses at national and global levels
o Still implemented domestic focus, the beggar-thy-neighbor protectionist policies avoided
major consequences of globalisation of finance
- A national problem > global crisis (through global market and foreign investment)
- Complexity of financial instruments exacerbated problem of panic (bc uncertainty created in transaction among financial institutions)
