PSCI 152 Lecture Notes - Lecture 1: Mercantilism, Wage Labour, Steam Engine
31 May 2018
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PSCI 152- Lecture Notes
Lecture 1
Waves of Globalization
Good Period: 1814-1915
Bad Period: 1914-1945 (because countries became more insular during and between the world
wars
Good Period: 1945- present (sort of)
Wave 1(19th C)
Before this time, trade would only be profitable if the good had a high profit margin and was light.
Shipping costs were a prohibitive expense
Technology- Lowers shipping expenses
Steam engine (railroad and steam ships)
Telegraph
Politics- countries start loosening limitations on trade. Need more food to feed the urbanizing
population and have fewer farmers
Britain leads opening of system
Opens market to grain (1840
Gravity theory of trade- more likely to trade with countries close to you
Collapse of the Global System
Great Depression
Protectionism dominates
Us Imposes Smoot-Hawley Tariffs
Lessons Learned (by the US)
WWII partly caused by a broken global economy
US alone can establish global economy
US isolationism focuses on protecting its domestic industries where as the rest of the
world wants to establish rule to improve international trade
Wave 2
Rebuilding the global economic system
Bretton Woods- negotiations in New Hampshire to basically determine the "new World
Order"
IMF(International Monetary Fund) and World Bank
Similar to 19th c global economy
US proposes the ITO
Prolonged Negotiations
Tariff reductions (taxes on foreign goods)
23 countries sign the GATT General Agreement on Tariffs and Trade
US Congress refuses to support ITO
Because of this No other countries ratify the GATT
Fear of loss of sovereignty by an overarching organization
GATT becomes framework for trade
GATT is legally binding
Subjects of IPE
International Trade System
World Trade Organization
General Agreements on Tariffs and Trade (GATT)
Regional Trade Agreements
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