Week 3: International political economy – theoretical foundations Flashcards
What is Economic nationalism? What are its origins?
In IR it can be equated to realism. Focuses on the role of the state and the importance of power in shaping outcomes in the international political economy. Stresses the importance of the interest of the state in understanding IR. Protection of the national unit is at the center
Its origin is Mercantilism (15th century) and it replaced feudalism. Popularized with the rise of the nation-state in Europe and the need for each state to secure its interests (zero-sum game) as well as colonies
What is mercantilism?
It is an economic theory and is designed to maximize the exports and minimize the imports for an economy. In other words, it seeks to maximize the accumulation of resources within the country and use those resources for one-sided trade.
Which are the Key actors in Economic Nationalism?
The key actor is the STATE: main actor in GPE and central instrument for people to fulfill their goals
- assumes the political is above the social life
- anarchical; there are no systems or rules in the inter-state conduct so it’s every state for themselves
- state and political power comes first than than market and market relations, firms and TNCs
Two famous scholars in mercantilist/Economic nationalist theory?
Alexander Hamilton
Fredrick List
Which are the key dynamics of Economic Nationalism?
International political economy is constituted through the actions of rational states – a struggle for power and wealth!
- market is governed by the activities of states
- economic actors are subject to political authority
- the global economy is subordinate to the international political system
Conflict and cooperation inside Economic nationalism
- Realism in IR = Economic nationalism in IPE:
- International economic relations are seen as a zero-sum game - Argue for State control over key economic sectors:
- Security concerns- for certain products the state should not rely on imports
- Preservation of cultural values- arguments against “cultural imperialism”
- Protection of domestic industries
- Restricting foreign investments
Economic Nationalism in today’s world?
- Not a dominant approach
- Protectionism is reduced or eliminated; countries commit to free trade and foreign competition
- Gains strength in times of economic crisis or deterioration
- China is the only major power that still uses some aspects of it
Origins of Liberalism?
- Emerged alongside the Industrial Revolution in the 18th and 19th centuries
- It is against protectionism
- Adam Smith and David Ricardo are important figures
Main features of Liberalism?
- Main thought: Protectionism and restriction of economic activity impoverish states
- Focus on the individual or a wide range of actors
- The state is influenced by numerous factors (not a unitary actor)
- Individuals can choose between courses of action
- Free trade and cooperation
- The role of force and coercion in human affairs is minimized (instead, free will and individual choice are promoted)
Key actors in Liberalism?
- Individuals: Their wants and preferences; their behaviors; They are considered to be in pursuit of self-interest - max benefit of economic exchange for society; Interactions between diverse individuals are perceived as economic progress
- Firms: Source of economic wealth
- State: Brings politics into economics; State control is bad and expensive for the market, leads to a suboptimal outcome or economic failure
- TNCs: Positive influence/force; Brings technical and managerial skills to the countries it works in
Representatives of liberalism?
- Maynard Keynes
- Hayek
Liberalism today?
- Dominant perspective
- TNCs encourage market opening in all countries
- Importance of rational decision-makers
Challenges in Liberalism?
- 2008 economic crisis - reopened the debate on the role of government: regulation versus liberalism
- Does self-regulation of financial firms lead to economic efficiency or corruption and financial collapse?
- How should governments respond to financial and economic crises?
What is critical/radical perspective?
They question the way the world is organized and seek to change the world. They also challenge established forms of organization
Main features of the Critical/radical perspective?
- Critical attitude towards predominant social order
- Stressing the nature of oppression
- The struggle for justice on behalf of workers
What are some variants of the critical/radical perspective?
- Marxism: Class and the interests of the workers; Marx, Engels – class struggle will be resolved when the workers take over the power
- Feminism: a world of exploitation; Uncovering how our ideas of men and women shape society
3.Environmentalist: How people shape and are shaped by the environment
Key actors in critical/radical perspective?
- The main actor is class: defined by one’s position in the structure of production – owners of Means of production (bourgeoisie), laborer who sell their labor
- Firms are a key feature of exploitation
- The State is seen as the representative of class interests
Key dynamics in critical/radical perspective?
- Market relations are inherently exploitative
- Workers are denied a fair wage
- International economic relations are unstable and conflictual
What are the three tendencies / characteristics of capitalism?
- Tendency for the rate of profit to fall sees capitalists engaged in fierce competition with each other
- Capitalism leads to uneven development as some centers increase their wealth and growth at the expense of others.
- Capitalism leads to overproduction and underconsumption
What are Neo-Gramscian theories and what are their origins?
- 1980s and 1990s, a revised form of Marxism. Evolved out of Italian Marxism
- Stresses the role of transnational classes and ideology in their effort to understand the global economy
- Explores the connection between ideas, institutions and material capabilities.
What is the dependency theory? when did it appear?
- late 1960s, revival of Marxism
- Poor countries have faced immense obstacles to development and continue to be vulnerable to economic exploitation from developed states
- underdevelopment of some parts of the world was caused by development in other parts of the world
Conflict and Cooperation in critical/ radical perspective?
- International economic relations are a zero-sum game
- Forms of conflict: intra-state (domestic class relations) and inter-state (dominant
states oppress weaker ones) - International conflict is inevitable
Critical/radical perspectives today?
- With the end of the soviet union, Marxist states stopped existing.
- Areas where critical theory persists: ▪Analysis critical of capitalism’s inequalities and recurring economic crises
▪ Financial crisis and subsequent austerity measures
▪ Political power of finance capital
▪ Global power imbalances and inequalities
▪ Environmental concerns
