Lecture 2

Question 1

Why are the institutions of the USA so much more conducive to economic success than those of México, or the rest of Latin America?

Answer 1

1. Colonial design: economic intervention was designed to force indigenous people’s living standards down to a subsistence level and thus extract all income in excess of this for Spaniards
   - Generated wealth for the Spanish crown, but in turn, made LA the most unequal continent

Question 2

While economic institutions are critical for determining whether a country is poor or prosperous, what determines what economic institutions a country has to have?

Answer 2

Politics and political institutions

Question 3

Economies cannot live without…

Answer 3

Political decisions

Question 4

Extractive institutions?

Answer 4

Growth based on existing technologies; it does not require technological change as such is not sustained. Example: Soviet Union.

Question 5

Inclusive institutions?

Answer 5

Based on innovation, requires technological change. Example: USA

Question 6

China, under the Chinese communist party, is determined to have extractive institutions, but

Answer 6

Chinese capitalism is a hybrid system

Question 7

According to Polanyi, what was the strategy to maintain peace? (100 years of peace stage)

Answer 7

Trade as a mean and equivalent of peace. Haute finance was also used as an instrument to keep the peace.

Question 8

Why was the gold standard stable?

Answer 8

Lest prone to inflation, because you could use it and it wasn’t possible to print more.

Question 9

The myth of the free market?

Answer 9

There never was a truly free, self-regulating market system. Governments of today’s industrialized countries took an active role. Western Europe maintained capital restrictions until quite recently, even today protectionism and government interventions are alive and well.

Question 10

According to Marx and Engels, every class struggle is a political struggle

Answer 10

True

Question 11

The unification of languages leads to…

Answer 11

Community

Question 12

The bourgeois has resolved personal worth into exchange value… and has set up a single, unconscionable frredom

Answer 12

Free Trade

Question 13

Why has the work of the proletarians has lost all individual character?

Answer 13

Because of the extensive use of machinery, he becomes an appendage of the machine.

Question 14

What did the bourgeoisie created through the exploitation of the world market?

Answer 14

A cosmopolitan character to production and consumption in every country

Question 15

Some of the communist proposals

Answer 15

• Abolition of private property
• Non segmentation along national lines
• A heavy progressive income tax
• Free education for all children in public schools

Question 16

Why did they fail?

Answer 16

They failed to create class consciousness within the workers and their prediction about capitalism ¿?

Question 17

The creed of the Industrial Revolution was materialistic because:

Answer 17

All human problems could be resolved given an unlimited amount of material commodities

Question 18

What does a market economy implies?

Answer 18

A self-regulating system of markets, an economy directed by market prices and nothing but market prices

Question 19

Why is it the myth of the free market?

Answer 19

Previously to our time, no economy has ever existed that, even in principle, was controlled by markets. We can’t assume the functioning of market laws unless a market like this is shown to exist.

Question 20

Most contemporary (white) feminist political economists view capitalism as…

Answer 20

An institutional order that shapes the culture, polity, economy, through its tendency to prioritize the accumulation of surplus

Question 21

According to Marx vision, what is surplus value?

Answer 21

When labor itself produces more value than is embodied in the value of labor power. Since the capitalist buys the right to consume labor power, they own the means of production, thus is the first owner of this surplus

Question 22

This generates…

Answer 22

Class exploitation

Question 23

Definition of global care chains

Answer 23

Personal links between people across the globe based on the paid or unpaid work of caring. A series of responsibilities passed on from one woman to another.

Question 24

19th century globalization

Answer 24

1. New technologies, steamship, railroads, canals, and the telegraph revolutionized international transport and communication: it reduced trade costs and redefined relations of power
2. Free market. The governments of the world relaxed the restrictions they placed on trade
3. Adoption of the gold standard enabled capital to move internationally without fear of changes in currency values.
4. Colonialism and imperialism

Question 25

3 constitutive elements of capitalism (según Nigel)

Answer 25

1. Free market - open economy - capital concentrated in individuals firms
2. Democracy - individual freedom
3. Globalization - the worldwide extension of capitalism

Question 26

Why is globalization the worldwide extension of capitalism?

Answer 26

So intertwined has capitalism become with globalization that is impossible to discuss the future of one without discussing the future of the other

Question 27

Was an amazing piece of institutional engineering. It supplied the world economy with a new economic philosophy

Answer 27

The Bretton Woods

Question 28

Which international organizations were created by the BW?

Answer 28

International Monetary Fund and the Wold Bank

Question 29

The implications of the BW institutions

Answer 29

1. Allowed nations to build costumized versions of capitalism to corporate governance, labor markets, tax regimes, etc.
   - Continental europe alone: 3 different types; German, French, and Scandinavian

Question 30

Which institution marks the pursuit of a new kind of globalization that reversed the BW priorities: hyperglobalization

Answer 30

WTO

Question 31

Capitalism 1.0

Answer 31

1. 20th century, first wave of globalization
2. A restricted role of the state in the economy

Question 32

Capitalism 2.0

Answer 32

1. WWII until 1970s
2. Labour unions, progressive policies, welfare state
3. A new balance of state + market

Question 33

Neoliberal capitalism

Answer 33

1. 1970s-1980s onwards
2. Neoliberal economy: hyperglobalizers - deep financial integration

Question 34

Key institutions for social policies

Answer 34

1. Labour policy
2. Social transfers
3. Social services
4. Taxes

Question 35

Welfare regimes

Answer 35

1. Liberal
2. Bismarckian (conservative)
3. Social democrative
4. Socialist regime