POL101Y1 Lecture Notes - Italian Fascism, Collective Security, Isolationism

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Published on 13 Apr 2013
of 3
Feb 11 Lecture
Postwar Reconstruction
Asia’s Rise
- Government intervention (subsidies, credit, direct investments, etc)
- Infant industry protection
- Picking and making market winners (global demand)
- American patronage
- Developmental state
- Export oriented growth
Outlier or Model?
- Market regarding- Adam Smith
- Mercantilist- List and Hamilton
- Dependent development- Lenin and Wallerstein
Global Economic Growth- prewar, interwar and postwar
- 1870-1913: golden age of Europe, good economic growth (2.5%)
- 1913-1950: decrease in economic growth
- 1950-1970: huge economic growth: period when Asia plugged into the
The World Wars: a devastating turning point
- WWI: 15 million deaths; WWII: 50 million deaths
- Physical infrastructure of Europe/ Japan destroyed
World War I (1914-1918)
- Rise of Germany
- Alliance formation (England, France, Russia vs Germany)
- Isolationism/ expansionism
- Power transition moment
- 1919 Treaty of Versailles and Germany’s defeat
Collective Security
- Woodrow Wilson
- Collective security doctrine
o preservation of state sovereignty (realist)
o aggression illegal; outlaw offensive war (cannot invade another
o deter aggression through coalition
League of Nations- Paris Peace Conference 1919 (security a collective
responsibility, moral responsibility for prevention, could only work if this
threat of punishment was credible)
(I) Breakdown of Collective Security
- Japan’s East Asia Co-Prosperity Sphere
- Italian Fascism and Ethiopia
- No U.S. Participation in LON
- Isolated Germany
Neville Chamberlain’s Appeasement policy (British PM)
US does nothing
(II) Economic Warfare
- Great depression
- Mercantilist response
o Smoot Hawley tariffs
- Beggar Thy Neighbor
o Competitive exchange rate devaluations
- > Economic warfare
Political economic causes of WWII (1939-1945)
- decrease in international trade
- annual growth rate in world output and trade
- Rise of the National Socialists in Germany- the Nazi party in 1933
(III) Postwar Lessons
- Democracy- occupation strategies (democracy correlated with peace)
- Full employment
- Economic interdependence
- Preponderant American power
Contending Ideas
- How to organize the postwar order?
o US free trade
o UK mercantilist
o Keynesian counter-cyclical stimulus
Embedded Liberalism
- Keynesian compromise
o International stability (goals)
o Multilateralism (structure)
o State intervention (means)
- Free trade AND government intervention
(I) Bretton Woods
- Global reserves fund- IMF
- Fired exchange rate
- International Bank for Reconstruction and Development (World Bank)
- Backed by US dollar
(II) General Agreement on Trade and Tariffs
- Established 1948
- Framework for negotiations
- 3 principles
o Expansion of trade by reducing tariffs
o Multilateral
o Unconditioned reciprocity
- > 1950-1975: merchandise trade grew 8%/ year
(III) European Reconstruction
- Marshall Plan
- Regional institution building
o European Coal and Steel Community
o European Economic Community
o Common agricultural policy
(IV) Welfare State