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PSCI 1100 (40)
Lecture

Lec 5-INTERNATIONAL POLITICAL ECONOMY.docx

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Department
Political Science
Course
PSCI 1100
Professor
Hans Martin Jaeger
Semester
Winter

Description
4/6/2013 8:22:00 AM INTERNATIONAL POLITICAL ECONOMY  US: reflects debate in international relations, liberalism and realism  CANADA: has a more Marxist approach INTRO: IPE AND ‘YOUR STUFF’ Basic concern of IPE: relationship of…  Political and economy (pursuit of power vs. wealth). Utility, justice, value,  States and markets  States and firms (esp. MNCs) Chinese investments, how/if they affect Canada  Interplay of economic, political, and social structures and practices (class, gender, race)  International and domestic-level (comparative) questions  Though some corporations stem from the US, manufacturing is done in cheaper areas (china, vietnam)  Shows us an example of power relations  Who and under what conditions are these sneakers made? Female low wage labour  Affecting foreign economic policies:  Relations between capital and labour the gvnt has – how it is interconnected  Extent to which central bank is independent or dependent on gvnts and fiscal policy THEORETICAL APPROACHES/HISTORICAL BACKGROUND: Mercantilism (economic realism):  Predominant economic policy of European states (esp. Spain, Portug., Engl./Brit. th th Empire, Netherl.ds) from 16 to 18 cent. (colonialism, early capitalism); also: interwar period  Any kind of realist approach to economic relations  International economic relations = competition of states; states must encourage exports and protect domestic producers  There’s a relationship between economic and security relations  A powerful economic base = strong military and ability to expand it  Connected to colonialism  Meant that colonial powers can prevent its colonies to trade with certain countries  Means that, ex. Britain alone can benefit from the trade  Colony was used for extraction of raw materials then reselling them abroad Liberalism:  Prevalent since mid 19 cent after British opening of markets; also post WW2  Dominance of liberalism as an approach to international econ relations,  As opposed to realist approach dominating IR  International economic relations result of:  “Natural propensity to truck, barter, and exchange” (A. Smith, Wealth of Nations, 1776)  It’s human nature to be traders; shifts focus away from states and focuses on individuals as entrepreneurs and owners of private property  Benefits of specialization/division of labor.  Interactions (esp. Trade relations) of individuals and firms with limited role of states  Free trade among countries can work because 19 cent and immediate post WW2 period were a time of hegemony  Benign connotation: one state that ensures that all states enjoy free trade through military protection, side payments and support of states  Marshall Plan post WW2 allowed countries to rebuild and be capable of participating in economic relations  These periods of hegemony = international order and free trade  Saudi Arabia exports oil because that’s its competitive advantage  LIB: if everyone does what they’re good at, we get better products, higher efficient and therefore public good  Absolute gains: only interested in what your country gains  Relative gains: interested in what other countries gain too Qualifications of Orthodox Liberalism: • “Double movement” of market liberalization and social-welfare “buffers” in 19 th cent. (K. Polanyi). 19 cent wasn’t all about liberalization of private markets, but also about the negative consequences about liberalization and introducing laws that will help poor people to survive and participate in market relations • Due to temp market inefficiencies need for gvnt to stimulate demand and invest in public projects (J.M. Keynes). Believed in markets, but in times of recession and inefficiency, there was a role for gvnt to help and invest in projects to save the economy. Revolved around how much state we want in the economy. • “Embedded liberalism” in post-WWII period (J. Ruggie). More to international econ relations than previous 2 points. Refers to international eco order combining free trade system with possibility of states to maintain welfare state and capital controls. Compromise after WW2 to combine liberal international trading system with welfare state strategy. THE POST-WW2 INTERNATIONAL ECONOMIC ORDER: • Lessons from the Great Depression (1930s): need for monetary stability and open trade • No free trade, colonial trading but not much attention paid to international economic relations →The Bretton Woods system (1944-71): US and EU don’t want to trade with developing countries, but developing don’t want to go along with US and EU requirements for trade • International Monetary Fund (IMF) (guarantee fixed exch. rates (set ration vis a vis USD) through short-term loans to deficit states). Tasked with achieving monetary stability. If state is in danger of devaluing its
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