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PSCI283 Study Guide - Final Guide: Dont, Bretton Woods Conference, Economic Nationalism

Political Science
Course Code
Eric Helleiner
Study Guide

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PSCI 283
Introduction to Political Economy
-What is IPE and why has it grown so rapidly since 1990s?
oSomeone who can understand data flows between European countries, etc.
-Hat the course is NOT doing: economics vs. political economy
-Economists make two assumptions:
oHumans are driven by a desire to maximize wealth
-Economics is an increasingly mathematical concept by methods
Goal for the Test: Is the global economic governance at a turning point?
The Bretton Woods System
-1988 conference to design the postwar world economy
-Very aspirational hard to recreate a Bretton woods conference again
-44 governments: wartime context
-Great success! Histories fascinated by Bretton woods
-Famous personalities, Keynes’s (famous economist) and White (lead negotiator) were at the
-Three core features of the agreement:
oFormal multilateral corporation
oPromoting a more open world economy: liberal lesson from 1930s if there is free trade
between countries, you’re more likely to have peace and prosperity. Interesting because
they were arguing that the closure of countries who moved away from free trade, was the
cause of the war
oMarkets need to be managed and embedded in social priorities: Keynesian lesson from
-Theology of “embedded liberalism”. Liberalism is not left wing. They are lasseiz- faire
BW as a Western System: Postwar Order 1.0
-A big setback: the cold war
oBretton woods system vs, Comecon
oComecon does not exist today but it was a very central liberal system
-3 core features:
oMultinational cooperation
oBuilding a more open world economy
oManaged markets: domestically and internationally
-The Global Years: The GATT
Crisis in the 1970S
-Nixon shocks
oMost important signal that ended the version 1.0
osaid the US dollar would not be tied to gold
osaid Europe and japan (western allies) to do things that were in American interest, if not
then he would be tariffs against the products coming into America
-move to floating exchange rates
-oil shock
-North-South Conflict
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PSCI 283
-General sense in which no one is following the rules (Eroding unilateralism)
oGolden years and then suddenly rising unemployment and combined inflation
oFear of another great depression
Postwar Order 2.0 After 1980
-So single conference but three core features:
oStrengthened multilateralism
Towards worldwide membership
Strengthened IMF, WB, TO and others
oA more open world economy:
Globalization trends
oLess active management of markets
From embedded to neo-liberalism: internal and external reforms
Multilateral institutions new purpose
A turning Point?
-Weakening multilateralism?
oA lot of countries merging powers are now saying IMF and WB do not serve their
purpose anymore and therefore they create their own (China)
-Unstable open global economy?
-Challenges to neoliberalism?
Towards Postwar Order 3.0 and a new Bretton Woods?
-Chinas presidency of the G20: the Hangzhou summit in September 2016
-Xi Jinping’s legacy?
oHas a G20 summit
Competing Theoretical Perspectives
-Theory cannot be avoided
oPositivism vs. post- positivism
oThree Broad Categories:
Adam Smith: we are all a bunch of wealth seeking individuals and the
free markets will create harmonious world
Free market operates as a invisible hand
Postwar Order 1.0 and 2.0 reflected liberal learning: need multilateral
cooperation and markets need management
Economic nationalism
Radical theories
oNature of the disagreements:
What key units of analysis?
Political project
-Are we at a turning point?
oMaybe, but we need more reform in the system in order to keep it going (bolster
multilateral corporation) and fend of anti-liberals
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PSCI 283
Economic Nationalism or Mercantilism/Realism
-Liste was Adam Smith’s biggest critic
Radical Perspectives
-Marxism: exploitative class relations in global capitalist system
oBroader “hegemonic bloc” of social forces creates Postwar Order 1.0 and 2.0
oViews are similar to plutocrats
oThinks that the global capital system is unsustainable which is why we’re having
economic crises
-Feminism: gendered nature of global economy and neoliberalism
-Greens: neoliberal global capitalism unsustainable environmentally
Trade in the Bretton Woods Division
-Focus on money/finance but with goal of freer trade
-Liberal trade theory (Brawley)
oLiberals thought freer trade would bring prosperity and peace (economic and political
-Bretton Woods calls for agreement ASAP to “reduce obstacles to international trade”
Building Multilateralism Rules in Postwar 1.0
-The Failed ITO (International Trade Organization)
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