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Introduction to Political Science > Task 3 - POLITICAL ECONOMY > Flashcards

Task 3 - POLITICAL ECONOMY Flashcards

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1
Q
  1. Political economy. Explain the concept
A

No distinction btw politics and economy
Political factors are essential in determining economic outcomes and viceversa

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2
Q
  1. Pol econ: What does the study entale?
A

Pol econ examines how different econ systems affect institutional and political arrangements

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3
Q
  1. APPROACHES TO POL ECONOMY. Name the 3
A
  1. State-centric political economy
  2. Classical/neoclassical political economy
  3. Marxist political economy
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4
Q

1.1 State-centric political economy

A

Developed out of mercantilism: Econ markets not natural, but exist within a social context shaped by exercise of state power

  • Build up state’s wealth, power and prestige
  • Development of a favorable trading balance (low imports- high exports)
  • Protectionism
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5
Q

1.2 Classical/neoclassical pol econ

A

Derived from Adam Smith’s writings

  • Key econ agents: Individuals
  • Unregulated econ tends to lead to long-run equilibrium
  • Invisible hand
  • Self-managing market
  • Policy of lasseiz-faire
  • No state intervention
  • Conditions for perfect competition
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6
Q

1.3 Marxist pol econ

A

Capitalism as class exploitation system: Capitalist quest for profit only satisfied through surplus value from its workers (paying them less)

  • Econ actors: Social classes
  • Standing in relation to ownership of productive wealth
  • Burgeoisie - proletariat
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7
Q
  1. VARIETIES OF CAPITALISM. Name the 3
A
  1. Enterprise capitalism
  2. Social capitalism
  3. State capitalism
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8
Q

2.1 Enterprise capitalism

A

Classical economists
- Faith in self-regulating markets
- Public ownership at minimum
- Welfare provision as more than a safety net
- Profit-driven business
- High productivity
- Labour flexibility
- Weak trade unions
- Wide material inequalitites
- Social fragmentation
- Vulnerable to market changes

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9
Q

2.2 Social capitalism

A

Much of central and western Europe
- Flexible and pragmatic ideas
- Econ importance of politics
- State intervention to protect infant industries
- Link btw financial and insutrial capital
Close relationship btw business corps and regional banks
Long-term investments (high and stable)
Social partnership
- Central theme: Social market
MARRYING DISCIPLINES OF MARKET COMPETITION AND NEED FOR SOCIAL COHESION AND SOLIDARITY

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10
Q

2.2 Social capitalism. Drawbacks

A
  • Encourages inflexibility
  • Difficult for businesses to adapt to market conditions
  • High levels of social expenditure
    Pushed-up taxes
    Burden employers and employees
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11
Q

2.3 State capitalism

A

–> Capitalist economies in which the state plays a crucial directive role. Often non-iberal
- Collective capitalism: Cooperation and long-term relationships
- Relational markets (btw industry and finance)
- Long-term investments
- Firms provide core of life
Male workers get benefits for being ‘members’
Stress placed on team-work
Narrow income differentials (worker - manager)
- Taxation and public spending low
- Gov plays vital role in ‘guiding’ investment

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12
Q

2.3 State capitalism. Drawbacks

A

JAPAN
- Unresponsiveness to changing global market conditions
- Tendency for individualism and entrepreneuralism
- Values: Duties and hierarchy

CHINA
- Burgeoning capitalism and Stalinistical pol control
- Success in econ growth
- Huge supply of cheap labour
- Massive investment on econ infrastructure

RUSSIA
- 90’s shock treatment
- Wrest power back from oligarchs
- Failure to diversify economy
- Authoritarianism may generate resentment for pol freedom

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13
Q
  1. MANAGED OR UNMANAGED CAPITALISM. Name the 2 opposing views
A
  1. Keynsianism
  2. Neoliberalism
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14
Q

3.1 Keynsianism

A

–> Rejection of self-regulating markets
- Results in instability and unemployment
- State intervension promotes stability and safety nets
- Neoclassical pol econ
- If unemployment rises, the gov reflates the economy by increasing public spending or cutting taxes

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15
Q

3.1 Keynsianism. Drawbacks

A

–> “Tax and spend” policies: Sapped enterprise and initiative
- Undermined growth
- Permanent high inflation

Stagflation in 70s

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16
Q

3.2 Neoliberalism

A

–> Econ priorities towards free market
- Natural dynamism of the market
- Form of market fundamentalism –> Self-regulating markets
- Monetarism
- Supply-side policies (encouragement to produce)
- Deregulation
- Tax cuts

17
Q
  1. GLOBALIZATION. Characteristics
A

–> Complex of processes sometimes overlapping
- ‘Borderless’ world: National borders become permeable
- Divisions btw people prev separated by time and space less significant
- Multidimensional interconnections
- Top-down processes -> Single global system (Homogenization)
- Localization, regionalization and multiculturalism
- Nation-state not able to organize econ and pol life correctly

Nationalism based on nation fades

18
Q
  1. Globalization. Varieties
A
  1. Economic globalization
  2. Cultural globalization
  3. Political globalization
19
Q

4.1 Economic globalization

A

–> all economies have been absorbed into an interlocking global economy
- Production is internationalized
- Financial flows freely and instantly
- Lower trade barriers
- End to exchange controls
- Freer movements of investment capital

Helped widen gap econ gap btw East and West

20
Q

4.2 Cultural globalization

A

–> Process whereby information, commodities and images enter a global flow that tends to ‘flatten’ out cultural differences

  • Driven by growth of transnational companies and the emergence of global commodities
  • Culture serves and constraints the forces of glob
  • ‘Information revolution’
21
Q

4.3 Political globalization

A

–> Evident in growing importance of international organizations
- Exercise of jurisdiction not within a single state (international area)
- Intergovernmentalism: Provide mechanism for states to take concerted action w/o sacrificing national sovereignty

UN, NATO, EEC, EU, EC, WB, IMF…

22
Q
  1. RISE OF NEOLIBERAL GLOBALIZATION. Main themes
A

–> Glob has developed w Neoliberalism, both are though of as a same larger phenomenon
Core of growth: Financial markets and process of ‘financialization’

  • Capitalism turned into turbo-capitalism
23
Q
  1. Rise of neoliberal globalization. Why are they so linked?
A
  • Intensified international competition
  • Deregulation and reducement of tax levels (attraction of FDIs, preventing TNC’s from relocation)
24
Q
  1. Rise of neoliberal globalization. Drawbacks (4)
A
  1. Downward pressure of public spending
    Association with inequality and social breakdown
  2. Considerable growth of public and private debt
  3. Rooted in major contradictions
    Democratic deficit through the internationalization of the state
    Growing pressure to protect environm from glob
    Surrender of state authority to corporate financial and econ interests
  4. Naomi klein - Implications with
    - Shocks
    - States of emergency
    - Crises
25
Q
  1. The 2007-09 financial crisis
A

–> Deeper level: Merely a symptom of the defects and vulnerabilities of the neoliberal capitalism

26
Q
  1. Chronic public/private debt
A
  • Failure of productivity growth to produce increases in ‘real’ wages
  • No demand = increased borrowing
  • Govs allowed debt to rise
  • ## Glob econ downturn by the crisis reduced tax revenues

Introduction to Political Science (11 decks)

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