POL 1025 Study Guide (Comprehensive Guide to the Course)

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University of Minnesota Twin Cities
Political Science
POL 1025
John Freeman

The Study of War Conceptual Distinctions  Low intensity  o doesn't employ large armies or WMD o civil war, small scale o under developed countries o guerrillas, terrorist, etc  High intensity  o developed countries o large scale o organized armies, large armies o WMD Ethics and Legality of War  Pacifism  o all killing is wrong  Bellicism  o it's good to fight war o jahid: holy war -- inner struggle o social darwinism  Just War Doctrine  o list of reasons why one can go to war o makes war justifiable Patterns of Human Conflict  Last 50 years  o now less war, but more powerful o Most wars in global south o less war about territory, more within states  Last 600 years  o armed lots of war o recent history is more of an anomaly  Democide: governments intentional killing  o famine, forced labor, massacres, etc o killing of civilians  Geneva Doctrine  o study of violence and war  Extrapolation: making predictions based on a small section of data Theoretical Perspectives Goldstein and Peevehouse 283-284 Realism (goes to Mercantilist) Liberalism Materialism (goes to "Radical") NeoRealism NeoLiberalism Quest for physical security Quest of material security Economic Liberalism (free markets) Mercantilist "Radical" "Embedded Liberalsim" (compensation for participation) Structuralist Differences between Economic Liberalism and Radical Political Economy  primary value being pursued  o Growth (EL) vs Distribution (RPE)  How much conflict?  o EL -- not much; RPE -- see much more conflict  Major obstacles  o Government (EL)  Results  o EL -- like WB and IMF; RPE see this as exploration  Resource distributor  o EL -- markets; RPE -- state administered change  Econ and PS  o EL -- none; RPE -- every thing is political, not separate subjects Trade Politics Trade Politics: Distributional Coalitions  coalitions of winners and losers  o winners form coalitions for free trade o loser form coalitions for protection Explanation: Specializing in trade increases the world consumption Creates distributional consequences (isn't fair); causes political conflict Spawns coalitional politics (both groups within countries (specialization) and across countries (distributional justice)) Struggles between these coalitions, within political institutions Essay Questions Top down question: Explain from the view of political science why international trade is inherently political?  the increase of consumption creates distributional consequences  distributional consequences and gaps in wealth  form coalitions  struggles between these coalitions Bottom up question: Explain a given statement  Tariffs in the world have decrease in the last 50 years.  Use the diagram to explain why this happened (free trade coalitions have won across the world, and coalitions that don't care about the distribution justice problems may have also won) The Politics of Tariffs  tension: if you allow goods to come in, more people can consume them, but it affects the profits within the industry (lowers profits, affects jobs)  o trade legislation to help these people  Tariffs: duty or charge on good from abroad that raised their price in the domestic market; makes domestic production more competitive in the short term  alters supply and demand; raises prices, reduces consumption  if you impose a tariff, help people in the short term (people buy domestic), but less people can consume  o gain protection, drop consumption  trade wars -- more and more tariffs, constantly lowering consumption, eventually we won't trade at all  tariffs invite retaliation, leads to elimination of trade Problems of "Delayed Development"  Population growth  o because south countries have much more rapid population growth, they have to spend much of their time feeding people and creating agriculture o don't have ability to industrialize o infant mortality, famines, etc o demography -- study of population and trends o growth rates are decreasing, but growth rate in the south is still much higher than in the north o Fertility Rate: number of children that a women has in her lifetime; indicator of population growth o Demographic Transition: when society goes from high death and high birthrates to low death and low birthrates o  death rates tend to go down first, followed by the birth rates  reduces pressures on agricultural needs  gives flexibility to industrialize o Population Momentum: lag effect of having lots of children, more young people than old people; reduced fertility rates create more old people than young people, becomes difficult to finance the federal state o  lots of young people presents health and food challenges  however, lots of young people creates lots of workers  Technological dependence  o a lot of technology is owned and patented in the north o southern countries have to buy the technology, which is extremely expensive o also absence of technology (pharmaceuticals)  Dualism  o idea that development only occurs in enclave, or part of a country; part of economy is underdeveloped, part is developed; no spillover between the two parts o split economy, island in the underdeveloped economy o Jamaica: cloth is shipped in, sewed into clothing, clothing is shipped out o  this trade doesn't affect the rest of the economy  Trade issues: terms of trade and lack of trade diversification  o Protectionism in the North o  want to manufacture goods and services and send them to the US, but there are trade barriers (i.e. quotas) o Poor terms of trade o  how much you get for exports versus how much you have to pay for imports  if good, get more for exports than you have to pay for imports  if bad, have to pay more for imports than you are making on your imports  southern countries export primary products, export for less than manufactured products   this has changed due to BRIC o Lack of trade diversification o  lots of countries that only export one or two products (80s and 90s)  ride the roller coaster of commodity prices/fluctuations  entire country is dependent on one export  need multiple exports to stabilize the economy  Mirror imaging: linkages to Northern business cycles  o southern countries are highly linked to northern country business cycles o often due to lack of trade diversification o southern countries don't have control over their economies  Country/political risk  o government is less stable in southern countries, because of this, investment in more risky o  civil wars, lack of stable laws, etc o northern countries don't want to invest in southern countries Problem solved?  BRIC (Brazil, Russia, India, China)  o southern countries that have possibly broken out of the south, could be closing the north south gap  Emerging markets  o linked to developed countries? o producing more of the GDP  Still a large north south gap Strategies for Southern Countries Direct foreign investment and relying on the MNC  relying on foreign companies to invest in your country  liberal idea (international cooperation)  all types of capital; private creditor flows, corporate bonds, stock market investment, official inflows  FDI: Foreign Direct Investment: foreigners setting up business or investing in business in a different country  o land purchases (farm land); Cambodia, China, Ethiopia o Egypt buys land in Sudan to grow wheat for Egypt o takes food away from these countries (such as Ethiopia) that need it because it is being shipped out o reason: weak local property rights  FDI: companies buying other companies in the other hemisphere  o mostly occurs in the US/in the north and in the developing world (i.e. China) o inflows: US, Britain, China o outflows: from US, Belgium, Britain, France, etc  MNC: Multinational Corporations: corporations that are owned and run across multiple countries  o example: Dell: creates computer parts in many different companies, assembles them and sells them in the US o ownership, employees, marketing is all cross-national o  marketing to everyone in the north  Legalization of International Politics: Bilateral Investment Treaties (BITS) to facilitate investment between multinationals/IGOs and countries  o if you sign a BIT, you get more direct foreign investment (because they have protection/mediation for disputes) o encourages FDI  Advantages: provide employment, mobilize savings through joint ventures with local business people, technology transfer (workers will learn how to use the technology), raise taxes (can tax the wages of the workers who work for the MNC, can't tax the MNC because they won't come to your country)  Drawbacks: resource depletion (very rapid, non-renewable resources), brain drain (software engineers etc. (the best and the brightest) moving to the north/the united states; transferring them out of the south), reinforce dualism (split economy), lose some of the control over economy and politics (if MNC isn't happy, they will change things, so the government wants to keep them happy), increased influence by the MNC home government  Coalitions for MNCs: local entrepreneurs, local militaries, skilled workers and managers  Coalitions against MNCs: inefficient local businesses (i.e. brazilian shoes) Depending on Foreign Aid  ask northern countries for grants and gifts  money or other resources (agricultural, medical, technological)  bilateral assistance: one country makes a gift to another country  multilateral assistance: an IGO makes a gift to the southern hemisphere/another country  50s and 60s: good way to get resources (from the USSR and the US; playing both sides)  East West conflict has died off, countries can't play both sides  foreign aid has decreased Borrowing for development  borrow from northern institutions, put into local investments and grow, and then pay back the loans and still end up ahead  rational because of the race between education and technology  o technological change requires more skill o until 1973, high skilled workers began to taper, but demand for them continued to rise  2 main sources to borrow money  o official sources of finance: IGOs o  World Bank -- long-term loans for development   project finance: borrow money for specific project (i.e. plants, irrigation systems, etc)  20, 30, 40 year loans with lower interest rates  IDA: international development authority  IBRD: International Bank for Recovery and Development (another name for WB)  head of IMF from Europe, head of WB from United States  Multiple other economic development banks around the world o unofficial sources of finance: private lenders o  Private banks   Bank of America, Citigroup, Wells Fargo, etc.  northern banks  all individually larger than the world bank  also starting to be able to borrow money from countries The East-West Conflict Historical Overview  waves in US-USSR relations  Soviets spying on US after WWII  o high conflict after WWII (immediately after), crisis period o Berlin split/Berlin blockade o NATO/Warsaw Pact  Geneva Summit  o Eisenhouser and Russian leader o cooperation  Sputnik (down), Camp David Summit (up), U-2 shot down (down)  End in 1950s in the same position as after WWII  Cuban Missile Crisis  o ICBM base in Cuba o  identical to bases in Siberia o US put missiles in Turkey  Each downturn fuels arms race  Highpoint: Nixon and Kissinger  o Strategic Triangle/"China Card" o  friended Chinese to scare Russians o Anti-Ballistic Missile (ABM) Treaty o  wouldn't defend ourselves  no build ABM system (star wars)  second strike capability: can still annihilate attackers w/ second strike after attack  enables first strike  would never attack first, balance of terror  Russinas attack Afghanistan, downturn  Upturn with Reagan  o SDI (star wars) doesn't adhere to ABM treaty o USSR starts to fall apart o increase Russian and US cooperation The History of Global Monetary Affairs The History of Global Monetary Affairs (3 phases) Terms: Dollar convertibility The international monetary fund -- IMF conditionality The convertibility crisis and the Triffin dilemma "The closing of the gold window" Petrodollar recycling 1945-1960 -- Bretten Wood System  1945: Western powers that won WWII decided that we couldn't have a free for all trade  o created IMF o  Fund of currencies from which countries could borrow if they had cash flow problems  created stability in international financial system o Dollar convertibility o  conversion between dollars and gold  worked because a payment in dollars was a good as gold  US had enough gold that it could transfer all of our paper money into gold  reassured people in international trade  facilitated world trade (in the West, didn't include Russia and China) o IMF controversy o  IMF is based on weighted voting (percentage)   the more money you put in, the more votes you get  IMF conditionality   can borrow money under certain conditions   interest rates  less deficit  follow IMF orthodox  forces countries to adopt certain policies  technocratic system/view   rule by experts  IMF p.o.v.  Voting -- based on contributions  Economic recovery after WWII 1961-1971  Transition period from Bretten Wood system  o US was spending/printing more dollars than gold that it had to back it up o US was fighting the Vietnam War (2 billion dollars per month) o Countries began demanding gold  Convertibility Crisis (The Triiffin Dilemma)  o Triffin -- finance economist o if the US kept printing dollars, eventually there would be so many dollars in the world that all of the other countries in the world could take all of our gold, and we wouldn't have any left o but if we changed the exchange rate to keep our gold, we would bring down the international trading system (potentially) o Nixon decided to not give any gold for dollars  Closing of the Gold Window  o solution to Triffin Dilemma o US refusing to exchange gold for dollars o currency begins to float o US money is only good because US says it is good  Other events in international system at the same time  o Rise of offshore banking o  loaning money that is in savings  Example: loans in Swiss Francs in the US 1971ff  Third World Debt Crisis (170s-1990s)  o Southern countries in debt to Northern countries/banks o debt-to-export ratio o debt in percentage of GDP o What happens when these countries can't pay? o Also Mexican and South/East Asian debt crises (1990s)  Petrodollar recycling PETRODOLLAR RECYCLING "Offshore" Financial Markets ↙ $ ↖$ Oil Importers and Southern Developmental $ → OPEC Regimes ← Oil Offshore Financial Markets send money to Oil Importers etc. Oil Importers etc sent money to OPEC OPEC sends oil to Oil Importers etc. OPEC sends money to Offshore Financial Markets  (Re)Globalization of Finance  o end of 1990s o Mutual funds, pension funds, and insurance assets become important  Economic Rise of China  o goods to US o buy commodities o  sending resources south The Politics of International Finance The Nature of International Currency Dealings  Making trades requires some means of exchange  o bartering or money o bartering is cumbersome; world trade would be affected o money is a medium of exchange o  has value because the government says it does o no international institution that creates currency o  only national currency o Gold is closest thing to international money o  holds it own against inflation  value is increasing  How can you make trades with paper money when all paper money is only national?  How do we make transactions with paper money?  o currency trade o exchange rates -- prices for money o  when market moves (exchange rate changes), can cause political repercussions  exchange can impact politics  Currency losses may cause people to not trade  when currencies move, there are winners and losers  o form coalitions to try to decrease this movement International Money "Adjustments"  try to not import as many goods from over seas  o population control o slow growth o raise interest rates o trade restrictions/tariff barriers o Can be very controversial  try to increase value of your currency  o buy your money back from exchange officers o it's difficult to move currency values  borrow hard currencies you need for imports  o from a financial institutions o which one? MONEY 1) A global financial system governed by international financial institutions  International Monetary Fund (possible forerunner for world govt. in embryonic form)  managing the world with an international currency that is part of one international bank  o gold backed world currency? o facilitate world trade o US dollar is closest thing to globally accepted currency (82% of world trade done in dollars) vs. 2) Regional monetary systems -- currency blocs -- governed by region financial institutions  regions use the same currency  central regional banks  resonates with multipolarity  example: Euro/European Monetary Union  o PIGS: Portugal, Ireland, Greece, Spain o  huge deficits  IMF loaning money, coming between the regional currency bloc o Asian Monetary Regionalism (possibility) o
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