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POL208Y1 (500)


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Political Science
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Lilach Gilady

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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 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 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 govt as possiblelaissez faire; minimal govt 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 o Hence, the capitalist syst. Is unsustainable and irrational capitalism sows the seeds of its own destruction and replacement by a socialist system (dialectics) o Lenin: overseas imperialism and trade helped capitalism escape its inevitable demise this is but a delay and not a sustainable solution o Guns serve the needs of butter o Main Actors: social classes (Marx); Capitalist mercantilist states (Lenin) THE GOVERNMENT & THE MARKET o None intervention Full centralized ctrl o Liberalism: minimal intervention o Marxism: complete ctrl, ownership, planning o Keynesianism: The welfare state, come central planning (MITI) o Most governments adopt some hybrid of these approaches POLITICS IN HARD TIMES o Times of crisis: opportunity for political change o Social coalitions; political institutions o US; Europe; Canadawill there be a lasting impact? What aspects of the economy are unique to IR? o Trade Exchange rate o Foreign investment o International capital flows o Immigration o Multinational corporations o WTO, EU and other IGOs o Etc. January 17, 2012 ANCIENT TIMES o International trade has existed for a long, long TIME th th o The salt trade (8 -16 century A.D) o The Silk Roadexotic items from Asia to Europe when silk road was blocked, came the rise to the search for the north west passage to Asia EUROPEAN EXPLORATION OF THE MARITIMES o Relationship between politics and markets
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