POL208Y1 Lecture Notes - Northwest Passage, Submarine Warfare, Economic Warfare

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18 Apr 2012
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January 10, 2012
GILADY SEMESTER 2: POL208Y1 INTRODUCTION TO IR
o IPEINTERNATIONAL POLITICAL ECONOMY
o ISLANDS OF CO-OP: INSTITUTIONS
o SUMMARY AND LOOKING FORWARD
The Economy MattersBUT WHY?
Political Economy; The interaction between economics and
politics
What is the Role of the Economy in IR?
o It depends on who you ask:
o A source of power (we need butter to buy
guns)
o A source of welfare (we like butter)
PROSPERITY AS MEANS vs. PROSPERITY AS A GOAL
o The role of economy in IR
Guns vs. Butter
What is the relationship between Guns vs. prosperity?
o A common metaphor for the national production
possibility frontier
o ―Guns will make us powerful, butter will only make us
fat.‖ –Goering
GUNS vs. BUTTER PPF (PRODUCTION POSSIBILITY FRONTIER)
G
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B
WAR ECONOMY
o The trade off b/t ‗guns‘ and ‗butter‘ is most
noticeable in times of war
o Total warsustainable over time?
o Effects on morale
o Effects on gender relations
o Positive effects of wartime economy?
Economic Warfare
o An intense, coercive disturbance of the economy
of an adversary aimed at diminishing its power
o Economic warfare can be waged separately from
military warfare (sanctions) or in conjunction
with an ongoing war (strategic bombing, siege,
blockade etc.)
o Submarine warfare in WWI and WWII; oil embargo on
Japan
o International Law: Separates between goods that
are part of the war effort and those that are for
civilian use. Dual use?
o Mixed record; Smart sanctionsspecific sanctions
that aid the economy
o Economic measures can be used as bargain for
other countries incentives to persuade other
countries into political action
HOW TO CALCULATE the COST OF WAR?
o Direct cots: tanks. Plans, bombs, personnel,
damaged infrastructure
o Indirect costs, higher oil prices, borrowing
money, healthcare for veterans etc.
OPPCOpportunity Costs
o For the US: Total economic impact for the war
2002-2008 $1.3 Trillion (compared with 804
billion in direct war costs)
o A 1$ in indirect costs for every $1 in direct
costs
o PER family of four: $20,900 ($57/week)
How to understand the role of the economy in IR?
o Our view of the role o the economy depends on how we
answer the following questions
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o What is power?
o What is the main purpose of power?
o Is the economy then an instrument for gaining
power or is power an instrument for an improved
economy? (Human nature)
o Who are the main actors in international
relations?
o Is cooperation sustainable? (Relative vs.
absolute gains)
o What is therefore the desired balance between
guns and butter?
LIBERALISM, ECONOMIC NATIONALISM (REALISM), MARXISM
ECONOMIC LIBERALISM
o Increased efficiency increased growth maximize
welfare
o Smallest gov‘t as possible—laissez faire; minimal
gov‘t intervention MARKET FORCES WILL REACH
EFFICIENT EQUILIBRIUM AND STABILITY
o TRADE PEACE (LIBERAL PEACE)
o ABSOLUTE GAINS
o LIBERALS Believe IN GUNS VS. BUTTER
ECONOMIC NATIONALISM
o Mercantilism; realism; protectionism
o Wealth is a source of power; economic competition
for primacy; imperialism
o Guns and Butter
o Industrialisation; government intervention and
ownership; strategic trade (protectionism)
o Trade interdependence vulnerability potential
conflict (autarkyproduce all that is necessary)
o Strategic trade: only with non threatening
partners and only if trade benefits us more that
it benefits out trading partners
o Relative gains
o Main actors: states
MARXISM
o The world economy is dominated by capitalists who
seek to maximize profit
o This leads to overproductionmore supply than
demandinstability and crisis
o Capitalism creates a concentration of wealth (and
power) in the hands of a smaller capitalist
elitegrowing impoverishment of the rest
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