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POL101 Lectures Semester 2.docx

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Department
Political Science
Course
POL101Y1
Professor
Jeffrey Kopstein
Semester
Winter

Description
February 4, 2013 Outliers or Models? Dependant Development What is development?  Progress (ones condition at time 2 is better than its condition at time 1) + Transformation (fundamentally different at time 2 than at time 1)  ^We are concerned with human development (rich countries can have disparities on the individual level)  Equitable development [individual GDP’s, per capita] [distribution income how is it distributed? Who gets what?] [Distribution of wealth, social mobility ie. Born into a poor family=lower chance of higher social standing]  Capacity [economic profile, etc] [can people become more educated?]  Sustainable development [development visa vie the environment] [can we sustain the supply of development, how is the economy diverse?]  Political development [democracy, human rights  modernization theory] Today: Focus on aggregate economic growth + how do we explain that some countries are developed while some countries remain undeveloped? (there are some rich countries, there are some very poor countries  rich are getting richer, poor are getting poorer)  to do this we will use theory Theory: helps us explain (why?), allows us to predict, helps us prescribe The Theoretical Conversation: 1) The cosmopolitical view  Smith  free market  “under a system of perfectly free commerce each country naturally devotes its capital and labor to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole” – David Ricardo  key is specialization (do what you are good at doing)  everyone will become prosperous in their own way  peace  works in positive sum ways (everybody gains, allow the market to reign) 2) The mercantilist view  ie. List and Hamilton  Smith could be correct, but you are ignoring power of the hegemony (you believe in the free market because you are a part of the English)  it is not just about the individual, nations and countries matter  “to maintain b/w the recent establishments of one country and the long matures… without the extraordinary aid and protection of government”–Hamilton  he is stressing it is about countries (ie. England versus Germany) and that Smiths view is unequally, it is not positive sum, but negative sum (one gains at someone else’s expense)  America cannot possibly compete with England without the extraordinary aid of government (visible hand of government  create comparative advantage  to disrupt nature) 3) The Leninist view  Lenin is shaking his head saying you’re all so naive  inspired by Marx (who predicts the end of capitalism)  theory of international relations  argues: imperialism is “the substitution of capitalist monopolies for capitalist free competition… Monopoly is exactly the opposite of free competition… monopoly, which grows out of free competition, does not abolish the latter, but exists over it and alongside of it, and thereby gives rise to a number of very acute, intense antagonisms, frictions and conflict”- Lenin  he is saying capital needs to expand World Systems Theory  Inspired by Marxist/Leninist tradition  Looks at the consequences of imperialism  3 characteristics: 1) 2) Global economy is actually global (not just about Europe anymore) 3) For world systems people  it is a structural theory (structure of global capital makes them need to expand)  Immanuel Wallerstein (dependency school of thought): 1) A systemic view of global capitalism 2) Liberal ideological hegemony 3) Capitalism produces monopolistic producers (MNCs) 4) Also about Monopsonistic purchasers (the north)  big buyers (ie. You can set the price  ie. Wal-Mart has ability to set the price) 5) Colonial Legacy  when colonial governments left, the countries were left with little capacity for transformation “Structure” of Global Capitalism  Dominant “core” versus dependant “periphery”  Structural dependency (countries in periphery are dependant on countries in the core)  Periphery: on mono, low-value exports, therefore, you are dependant on the global north The Implications of Global Capitalism  All 3 theorists agree we live in a global capitalism world BUT they respond differently  (I) Cosmopolitical view  not about dominance  as long as you work hard then you will prosper  (II) Mercantilist view  preventing dominance  (III) Marxist/Leninist view  has to be about dominance  World systems theory carries with it great appeal: helps us explain variation, why some countries are poor while some remain rich. The Appeal of World Systems Theory  On one level, it is appealing b/c of the post colonial moment (explanation of)  Underdevelopment as empirical reality  Soviet alternative and self reliance (Marxist alternative during 50s and 60s)  Key point: Development became a global “project”  Brandt Commission  we begin to see things like development assistance, foreign aid, subsidies and credits, etc  However, fact of the matter is poor countries stayed poor BUT then something curious happens…  While the rest of the developing world stays poor, you have a group of economies experiencing extreme rapid economic growth  Average GDP growth rates:  Taiwan (9.8%), South Korea (9.6%), Singapore (10.1%), Malaysia (7.3%), Thailand (7.2%)  While places like Africa experience 0%  Getting Richer (GNP per capita):  Japan, Singapore, Taiwan, South Korea The East Asian Miracle  Rapid economic growth  Growth with relative equity  Industrial upgrading and diversification (global value chain)  Export-led economic development  How do we explain this? Getting the prices RIGHT  Cheap skilled labor  Infrastructure  Stable foreign exchange rates (no crazy banking)  Low tax rates extremely low income tax rates  Open to foreign direct investment  Up the export value chain Getting the process WRONG  Infant industry protection – growing globally competitive firms o Government subsidies, interest free loans, credit (created incentives) o Government investment  in other words, government deliberately invested o Disciplined labor o Import substitution tariffs (taxed in areas they wanted to develop) o Main point: manipulate the market  visible hand of the government  they got it wrong  CASE: Taiwan Semiconductor Manufacturing Corporation (TSMC) o Leverage existing strengths (knew it could make electronics, toys, stereos) o Industrial Technology Research Institute o Government purchase foreign technology o Government investment in R&D o Government investment in firm o This would not have happened without state leadership  CASE: Hyundai “Pony” o Spun out of Hyundai construction o International partnerships o Innovate engine design o Protect domestic market (1970s) o Eventually what we see: “Pony” selling in Korea o International standards to export (1980s) Picking and Making Winners  Logic  pick market winners  State leadership  make market winners  Create comparative advantage Why East Asia? (I) The international context o Global economic growth o War o American hegemonic interests (II) The developmental state o Bureaucratic hierarchy o Bureaucratic meritocracy o State autonomy (yet embedded) o Extraordinary leverage for power over industry (business)  with this money they were able to reward/punish firms  state capacity (III) People o Benevolent dictatorships o Confucian ethic o Economic nationalism The developmental state as… (I) Market regarding (II) Mercantilist (III) Dependant developer Question he leaves us with: Is the developmental state an outlier? Or a model? February 11, 2013 Postwar Reconstruction (Growing the Global Economy)  Era after WW2 (rise of the current global economy) Asia’s Rise  Government intervention (investment, birth of new industries)  Infantry industry protection  Picking and making market winners (making things for which there was global market demand  created comparative advantage)  Benefited from American patronage (they got enormous amounts of economic aid, military support + America provided consumer markets [bought the stuff being made in East Asia])  Key characteristics of East Asia’s rise: Developmental state (very strong coordination, very little corruption, very bureaucratic)  Export oriented growth (sold more than they bought) Outlier or Model?  Market regarding – Smith (liberals) (looked to these East Asian countries  these economies were the prototype for what Smith talked about for global peace and prosperity)  Mercantilist – List and Hamilton (argue that it was the visible hand of government)  Dependant development – Lenin and Wallerstein (as much as we want to see these economies as miracle economies, there were dependent development  structured around core economies [ie. US] and were in the periphery dependent on foreign aid]  no way this could have happened without American patronage)  Asia’s rise came at the time of global economic growth, growth in average GDP  World Wars = minor turning point in economic growth  After the world wars that we see a rise in global economic growth which intern facilitated Asia’s economic growth  Today we will focus on POST-war reconstruction (to see why these periods are so important for economic growth) The World Wars: A Devastating Turning Point  WW1- 15 million deaths  WW2- 50 million deaths  World wars = devastating physical infrastructure of Europe and Japan  How then did the world wars set up the new global order? How did they shape the post-war reconstruction? What lessons did we learn as a community? World War I (1914-1918)  To get a sense of WWII, we need to get a sense of WWI  Rise of industrial Germany (early 20 century  Germanys economy growing two times faster than the UK  late 19 century emerging arms race [begin to militarize, manufacture steel])  Alliance formation (UK feelings very isolated, allies itself with France and Russia in fear of rising Germany)  Isolationism/expansionism (English response = isolate Germany, Germany allies with Austria, etc)  Rising hegemony/challenger, declining hegemony  Power transition moment (Germany loses WWI)  1919 Treaty of Versailles and Germanys defeat  Problem with treaty = War Guilt Clause (war was Germany’s fault) Collective Security  Idea of American president Woodrow Wilson  Collective Security doctrine o Preservation of state sovereignty (we have to respect one another’s borders) o BUT- in this new system, we need to find ways that WE (nations of the world) can cooperate o Aggression illegal; outlaw offensive war o How? - Deter aggression through coalition (if a country invaded another country, there would be an alliance of non aggressors who would ally together to threaten to punish that aggressor) o Failed deterrence lead to collective punishment  League of Nations – Paris Peace Conference (1919) o Security was to be a collective responsibility (not just the hegemony) o Could only work if this threat of punishment was credible (otherwise you will not care what anybody says) (I) Breakdown of Collective Security o Japan’s East Asia Co-Prosperity Sphere (Japan’s colonial efforts, invades China, captures Taiwan, becomes an expanding power)  Japan faced no punishment (league of nations did nothing) o Italian Fascism and Ethiopia (under reign of Mussolini Italy takes Ethiopia and LON does nothing) o No U.S. Participation in LON (“this is not America’s problem”) o Isolated Germany (Treaty of Versailles, France does not trust Germany, France turns to England and Poland [surrounds Germany]) o ^“The Versailles Treaty was both too harsh b/c it stirred up German nationalism and too lenient b/c it left the Germans the capability to do something about it.” –Joseph Nye, Harvard Professor o Needless to say, Germany was on the rise again o What is happening in England at this time? (II) Economic Welfare o Great Depression = global economic depression o Mercantilist response (increase tariffs, Smoot Hawley tariffs = decrease in imports) o Beggar Thy Neighbour (became a zero-sum game, began to devalue their exchange rates [make exports cheaper]  try to “out export” each other) o Basically, the economies were at war with each other – ECONOMIC WARFARE o Decrease in international trade (political economic causes of WWII) o Rise of the National Socialists in Germany (Nazy part 1933 preyed on people fears) Political Causes of WW2  Isolated Germany  Breakdown of collective security  Economic depression  ^All feed national socialists in Germany + feeds its neighbours (III) Postwar Lessons o Democracy – occupation strategies (human rights, leave behind peace constitution, etc) o Full employment o Economic interdependence (comes out of trade, we NEED to trade, our economies will grow, when national economies trade and grow, we become interdependent = will not go to war) o American power is preponderant (only power that was relatively unharmed [only Pearl Harbor]) Contending Ideas  “We need to rebuild world order”  How do we organize post-war order?  US  Free Trade (world built on Adam Smith’s Cosmo political view)  UK  Mercantilist (visible hand of government would help)  EMERGES  Keynesian counter-cyclical stimulus (kind of middle ground)  Keynes saw markets as running in a cyclical manner (boom and bust cycles)  Therefore: You occasionally need government intervention  Government intervention is needed to smooth out the curve  Keynes just wants stability Embedded Liberalism  Keynesian compromise (logic of this compromise in the international system) o Main goal: international stability (goals)  need this to prevent war) o Multilateralism (structure)  all economies must be involved o There has to be some room for state intervention (means)  act as a moderator o Hybrid philosophy  free trade and government intervention Free Trade and Government Intervention? (I) Bretton Woods o Free trade system where the great powers sat together and said “we are going to have a free trade system” just like Adam Smith wanted, but we will have an IMF (international monetary fund  will lend to countries in distress) o Free trade system, but exchange rates have to be fixed o Create International Bank for Reconstruction and Development (World Bank  provide loans to spark investment) o Backed by US dollar (II) General Agreement on Trade and Tariffs o Established in 1948 o Framework for negotiations o 3 principles: o Expansion of trade by reducing tariffs o Multilateral (applied to all countries) o Unconditional reciprocity o 1950-1975  merchandise trade grew by 8%/year (III) European Reconstruction o Marshall Plan (official name = economic recovery bill) o Intended to rebuild European infrastructure o Also a way of allowing European countries to cover their import (“Here’s some money, gets your economy growing”) o Regional institution building o European Coal and Steel Community (agreement b/w these 6 countries that there would be a common market for coal and steel  agreed to a common market  prevented war making capability) o European Economic Community (EEC)  reduction of tariffs, “let’s cooperate economically” o Common agricultural policy (famers forming agreement for the market of agriculture) (IV) Welfare State o Government interventions and investments (ie. Health, skills and education, income security [pensions]) Global Economic Growth  Economic reduction and growth in the post and pre war periods February 25, 2013 Cold War Realism Cold War: Origins  End of WWII  Division of Europe (Western Alliance, Communist block, neutral)  Hungary 1956  Division of Germany Cold War: From Confrontation to Stalemate  Nuclear Weapons. Weapons of a new kind?  Difference between deterrence and defense. What are nuclear weapons good for?  US Monopoly 1945-1949  US Superiority 1949-1968. Mutually Assured Destruction (MAD)  Parity 1968-1991 Nuclear Capacity  US massive nuclear capacity  Soviet Union is comparable  …This is a nuclear parity Cold War  Proxy War: Korea, Vietnam, African, Latin America What is Realism?  States act according to their interests  Ideas and ideals and the handmaidens of interest  Security Dilemma: The world is anarchic, no overarching authority  Each state must rely on itself- it is a Hobbesian world  Hobbes, Leviathan: “…this war of every man against every man, this also is consequent; that nothing can be unjust. The notions of right and wrong, justice and injustice, have there no place. Where there is no common power, there is no law; where no law, no injustice. Force and fraud are in war the two cardinal virtues”  States have no friends (they have interest, when they no longer have these interests, they change friends) Realism in International Relations: The Systemic Level  You pay attention to states, their capabilities, and their interests  Ignore: personalities, ideals, institutions, leaders, domestic processes  Stability of the system  Cold war was an era of bi-polarity  Bipolarity + nuclear weapons make for stability Cuban Missile Crisis: Cold War Instability  October 1962 – US discovers medium and intermediate range nuclear weapons Cuban Missile Crisis: Levels of Analysis  1. Prisoner’s dilemma (Payoff matrix)  2. Nation-state level: democracy versus communism  Bureaucratic politics: where you stand depends upon where you sit: Civilian versus military views  3. Personality: 3 leaders drawn from central casting: Kennedy, Khrushchev, Castro  And yet the crisis was resolved. Why?  Think of 3 levels of analysis  1. System 2. Nation-state 3. Personality How do you get out of the Prisoner’s Dilemma?  Let the prisoners communicate with each other (communication of “hotline”)  Change payoff structure (make nuclear war unsurvivable and therefore unthinkable)  Deep implications for the kinds of weapons that are “destabilizing” (anything that could destroy a nation’s “second strike” capability) What has Changed After the Cold War?  1. States monopoly of weaponry has diminished  2. Will cold war “deterrence” work against non-state actors? Is “prisoner’s dilemma” even applicable?  Democratization of technology  Neo-conservative analysis after 9/11  Source of security dilemma is no longer states but societies? Asymmetric warfare.  Is Iran the new Soviet Union? March 4, 2013 Seeing Inequality  Today  begin to look at distributive consequences of economic growth  Who gets what? And why?  This idea of “seeing inequality” is an important part of how you might want to go forward with your papers Seeing inequality  Bear witness (see human indignity with your own eyes)  Counting inequality (data)  in politics, counting is never objective  the
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