IPE

Question 1

what’s IPE

Answer 1

International political economy

Question 2

what is the study of the interaction of international relations and economics, primarily inter-state trade and investment, and its impact on economic growth and peace.

Answer 2

IPE

Question 3

who classifies approaches to international political economy in to three perspectives

Answer 3

Robert Gilpin

Question 4

what are the three perspectives of IPE

Answer 4

mercantilism, liberalism, and Marxism.

Question 5

what does Liberalism say about IPE

Answer 5

the effect of states trading between each other tended to lead to peace.

Question 6

who was Liberalism

Answer 6

Adam Smith (Wealth of Nations, 1776), Montesquieu (1750), and the Manchester Liberals

Question 7

what are the two arguments for liberalism

Answer 7

(1) trade obtains wealth more easily than war, and (2) trade converts states from systems run by militarists to systems run by middle classes by making the masses wealthy and diverting attention from activities abroad

Question 8

what is liberalism

Answer 8

Liberalism is a doctrine for organizing and managing a market economy in order to achieve maximum efficiency, economic growth, and individual welfare.

Question 9

the three main assumptions of liberalism

Answer 9

(1) . Separate the pursuit of territory from the pursuit of wealth: if wealth is based on trade, there is also no point to conquering territory.
(2) . Market forces are both more efficient, and by replacing governments, de-politicize the pursuit of wealth.
(3) . Free trade creates interdependence which is a disincentive to use force: wars destroy trade, business, wealth, factories, and the delicate system of commerce; increases debt, taxes and government spending; kills skilled people.

Question 10

Logic of the Market; for liberals..

Answer 10

the essential focus is on the benefits of the market to the state and the consumer.
-Liberals are committed to the price mechanism of the market (the law of supply and demand) as the most efficient way of organizing domestic and international relations
-self-correcting equilibrium of cost
-Markets are more efficient than other forms of organization.
_Liberals believe in progress.

Question 11

Logic of Politics in Liberalism

Answer 11

Liberalism is committed to a free market and minimal state intervention.
_Committed to individual equality and liberty
_For liberals, market exchanges are free.

Question 12

Logic of Trade and Peace. Liberalism argue..

Answer 12

that trade leads to peace because long-term harmony will supercede any temporary or local conflict.

Question 13

who talked about harmony of interests

Answer 13

Richard Cobden and John Stuart Mill

Question 14

what did Richard Cobden and John Stuart Mill argued for Logic of Trade and Peace.

Answer 14

that free trade brings harmony of interests because it separates the pursuit of wealth from territory, thereby making it unnecessary to conquer foreign sources of raw materials or finished goods.
- Trade is cheaper because it is cheaper than war or the occupation of an unwilling society.
-trade permitted states to specialize in a trade, pushed product prices down.
-

Question 15

what is Theory of comparative advantage

Answer 15

inter-state trade brings benefits because it permits states to specialize in activities for which they are predisposed, and this increases their overall efficiency. Example: Ricardo’s example: Portuguese wine for English wool.
_Therefore, wealth is more easily obtained than war. When war is cheaper or easier, it is pursued instead.

Question 16

what does trade create ( liberalism )

Answer 16

Trade creates a middle class that resists involvement in war more strongly than other domestic socio-economic distributions.

Question 17

what does free trade and capitalism increase ( liberalism )

Answer 17

Capitalism and free trade increase individual liberty and help promote democracy, which in turn promote the rule of law and international cooperation further facilitating international trade.

Question 18

what are the critics of liberalism

Answer 18

(1). Liberals separate economics from its institutional and political bases.
(2). International free trade has never existed without a naval hegemon paying the costs of the system, and defending the high seas: Portuguese, Dutch, English, or US.
_International liberalism depends on a hegemon.
3). Economic interdependence is never symmetrical.
_Liberalism promises absolute returns for all participants in the market, but does not pay any attention to the importance of relative gains between states.
4) For liberals, the state is supposed to be noninterventionist, except where public goods are involved
(5). However, state nonintervention is at the cost of social equality.
_Liberalism tends to disregard the impact of social inequity.
_Not everyone gains equally
(6). Liberals assume complete information, but in fact there are great transaction costs at work in the marketplace. Individuals are not rational actors and there is no complete information. Economists tend to defend these assumptions by arguing that inefficient consumers are selected out.
(7). Liberals assume technological growth. Economic growth is a recent phenomena, and we have some minimal control over it.

Question 19

For liberals, the state is supposed to be noninterventionist, except where public goods are involved. However, states are needed to offset the two dysfunctions, or ‘market failures’ that exist potentially in markets:

Answer 19

(1) . Market failure can come in the form of collapse – depression occurs.
(2) . Market failure can come in the form of monopolization: companies use their superior size to undersell competitors, put them out of business, and once all competition has been rendered bankrupt, raise prices to maximize profits. (Economies of scale).

Question 20

what is the origin of Mercantilism.

Answer 20

Origins in trade in Western Europe

Question 21

what does economic nationalism argues ( Mercantilism )

Answer 21

argues that in the process of state-building, economics is subordinated to the imperatives of power

Question 22

what is the position of mercantilism on IPE

Answer 22

Economic activities are and should be subordinated to state interests.
_Mercantilists are also preoccupied with autarky, or economic self-sufficiency

Question 23

Logic of Mercantilism:

Answer 23

-The state is the most important organization in the international system, and national security, and by extension the accumulation of power, is its principal activity
-The current market system tends to concentrate wealth in some states, and this can lead to dependency relations and even an international hierarchy.
-Mercantilism can be defensive and offensive.
_Mercantilists prefer a positive balance of trade.
_Mercantilists focus on industry as the basis for power.
Nationalists believe that industry has spillover effects to the rest of the economy, such as social mobilization and education, that increases the power of the state.

Question 24

when does mercantilism most occur

Answer 24

in declining economies, and is manifested by protectionism, and it may occur in developing states in which attention is paid to protecting nascent industries.

Question 25

Contemporary Mercantilism

Answer 25

Protectionism is often advocated by mercantilists, and this puts it in opposition to free trade liberals.
_Welfare mercantilism by the welfare state protecting citizens from external competition.

Question 26

exemple of mercantilism

Answer 26

Weimar Germany, the strategic use of trade to obtain greater relative gains

Question 27

what is the principal implication of free trade ( Weimar Germany, )

Answer 27

that free trade is not free trade: rather, it is a method of obtaining monopolization and thereafter affecting the structure of trade so that the state obtains favourable terms of exchange. Mercantilists are preoccupied with accumulating the resources necessary for war.

Question 28

Mercantilism explains why states do not rely on…

Answer 28

the free market, but engage in industrial policies to ensure a base of manufacturing strength, seek to corner oil, uranium and phosphate producing regions.

Question 29

en exemple of mercantilism

Answer 29

Friedrich List, was the U.S. ambassador to the German principalities, but he was actually a German nationalist exile. His strongly mercantilist views shaped German foreign policy in the First and Second World Wars. He sought free-trade within Germany (the Zollverein) but resisted free trade believing that Germany would be dominated economically by its neighbors.

Question 30

Critique of Mercantilism

Answer 30

(1). Little analysis of foregone gains – the most powerful states today are those that cooperated through free trade. Autarky is therefore a short-sighted strateg y.
- undervalues the importance of alliances and of positive-sum economic relations.
- assume that economic relations are zero-sum but stronger together so that they can oppose a third-party threat
In fact, almost all the powerful successful states were dependent on international trade: Holland, UK, US. The autarky of the mercantilists is therefore empirically unfounded.
(2). Protectionism may actually decrease power if it encourages inefficiency, as may an interventionist state: the transaction costs may be greater for a state than for a market.

Question 31

what the definition of Marxism ( Focus on the Marxist elaboration of the capitalist mode of production and its underlying logic.)

Answer 31

Capitalism is the private ownership of the means of production and the existence of wage labor. Capitalists strive for profit and capital accumulation in a competitive market. Labor has been dispossessed of its land and is a commodity that is subject to price mechanisms.

Question 32

for Marxist is the market rational

Answer 32

no, Marxists argue that although individuals in the market are rational, the market itself is irrational and prone to failure.

Question 33

There are four underlying dysfunctional mechanisms in capitalism ( Marxism ):

Answer 33

(1) . The law of disproportionality
(2) . The law of concentration (accumulation) of capital
(3) . The law of the falling rate of profit
(4) . The law of uneven growth

Question 34

what is The law of disproportionality

Answer 34

this rejects Say’s Law, Marx argued that this mechanism against overproduction does not exist, and so there are periods where supply and demand do not match. There is thus a cyclically recurring period of depression and crisis that would eventually lead the proletariat into revolution against the owners of the means of production.

Question 35

what’s Say’s Law?

Answer 35

supply creates its own demand so that supply and demand will always be, except for brief moments, in balance: this equilibriating mechanism in the market makes overproduction impossible.

Question 36

what is The law of concentration (accumulation ) of capital

Answer 36

competition in the capitalist market forces investors to increase their efficiency in order to survive, and so they strive to accumulate capital. This leads to an ever-increasing concentration of capital in the hands of a few as the weaker capitalists are selected out of the system. The impoverished capitalists then join the ranks of the proletariat, and this makes revolution more likely.

Question 37

what is The law of the falling rate of profit

Answer 37

As the pressure of competition forces capitalists to increase efficiency and productivity through investment in new labor-saving and more productive technology, the level of unemployment will increase and the rate of profit will decrease. causes; slowing in the economic growth rate, and increases unemployment, both of which make revolution more likely.

Question 38

what is The law of uneven growth

Answer 38

as capitalist economies mature, they seek colonies, and the share of colonies depends on their power (UK obtained the most colonies). However, as other great powers caught up, such as Germany, they demand a redivision of the colonies, and this leads to armed conflicts among the great powers. Lenin believes this was the cause of the First World War.
Lenin basically argued that capitalism created a system that inevitably led to war, and it even generates its own competitors because the export of capital and goods leads to the diffusion of technology, industry, capital and military power that weakens the core capitalist states. It creates competitors with lower wage costs that are able to compete with the great powers in the international market.

Question 39

what is the criticism of Marxism

Answer 39

Economic interdependence is not the most important factor in international relations: strategic and nationalist issues typically matter more. . The problem with Lenin’s argument is that the major capitalist powers cooperated in their exploitation of colonies Nor can he explain that the three most competitive imperial rivals, UK, France, and Russia, were allies in the war . Also, in the period prior to the First World War, investment was directed by foreign policy, not vice versa.

Question 40

what is Nash equilibrium

Answer 40

stability achieved when both players no longer have intention to change their choice

Question 41

prisoners dilemma

Answer 41

exemple of cooperation game and it is intended to demonstrate just how difficult cooperation can be

Question 42

cuban missile crisis

chicken game

Answer 42

usa; blockade or Air strike Urss: maintains or withdraw

Question 43

what is chicken game

Answer 43

simulate situations were mutual defection is catastrophic but exploitation pays high