Upload
arron-mckenzie
View
217
Download
1
Embed Size (px)
Citation preview
Chapter 13: Global Markets and Politics: International
Political EconomyPolitical Science 100
Thursday, August 6th, 2015
Ultimately, a focus on the interaction of the state and the market, while also focusing international norms and relationships
Political Economy: “The study of the relationship between the state, as the leading authoritative actor in affluent societies, and the economy, the site in these economies where wealth is produced and exchanged.” – Rand Dyck
Local and international focuses on international economic systems
Defining international political economy
Free markets Individual freedoms Creation of wealth
International cooperation◦ Elimination of tariffs
Primary goal to limit the role of states in the market, allowing for market forces to determine distribution of wealth, competition and price
Liberal Political Economy
‘an emphasis on class and class conflict, and identifies interests of the dominant class…as the main influence on social institutions, including the state’
Capitalist system a tool of oppression, locally and globally
Tends to analyze inequality of outcomes
Identify exploitation in the systemand find ways to fix it
Marxism in Political Economy
Not entirely unlike realism
A fight for advantage, both of limited resources and for dominance
Economic development is, in effect, a competition
Strong state control of the economy locally leads to a more effective interaction globally◦ Mercantilism◦ National Socialism
Nationalistic Political Economy
Looking at bigger questions – different ways governments interact in the market.
Typically a comparative study. Looks at outcomes, similarities and differences in policy. (Why are states prosperous? What are the implications of an active government?)
Comparisons usually done at macro-level (state to state)
Government involvement often mirrors social values
Political Economy as a Big Tent
When one state’s actions drastically impact the economy or politics of another state
The United States and Canada are one major example of interdependence
The EU, more and more, also appears to be built on this (no matter what the framer’s may have initially thought)
Economic Interdependence
Often under-conceptualized component of trade is the cultural exchange
While the positives of trade are often emphasized, not always seen as such◦ Protectionism
Tariffs and Non-Tariff Barriers◦ Cultural exchanges
Global Trade
The Rise of Economics and Trade
While international trade is as old as history, it didn’t really increase exponentially until mid 1800s
Wealth of Nations (1776)
Mercantilism
British trade, the Corn Laws and imports◦ Railroads and the Royal Navy
GATT initially meant as temporary, but failure to create international trade organization (in 1947), led to it remaining in place◦ Multilateralism◦ Reciprocity◦ Non-discriminatory trade (this has become a key
component of free trade◦ Free Trade
LDCs chose not to participate, as it would dictate trade practices based on deals that other states made
Reviewing the GATT
Uruguay Round (negotiations) in 1986, led to the formation of WTO (in 1995)◦ GATT was folded into the WTO, was basically rules of
international trade
WTO sets rules for virtually all trade you can think of between member states◦ Also provides dispute resolution
2001 Doha round led to the beginning of a long-term deadlock◦ Europe and US don’t want agricultural liberalization◦ China, India, Brazil, Mexico and South Africa working to ensure
no agreements that hurt their interests
Reviewing the WTO
Regional trade blocs (might) be arising as a serious threat to broader international trade◦ Canada-EU trade deal my signal a change in this (also,
regional trade is still international)
Moderately challenging relationship between US and Europe◦ An issue of political culture
Growing economic power of China, India, Mexico and Brazil mean that trade deals are more dependent on their wills than before
Looking Forward
Ensures the movement of liquid capital
Relative value of currencies◦ Fixed and floating exchange rates
Financial Systems (dominated by IMF and World Bank)◦ Redistribution of ‘excess’ wealth
Bretton-Woods was, originally, a set of rules to regulate financial systems◦ 1971 saw the introduction of floating exchanges◦ Allowed for more private institutions◦ Speed of communication and trade◦ Deregulation
International Monetary and Financial Systems
Defining event in the relationship between North, Central and South America
Banks loaned significant sums to Latin American states, at high interest rates.◦ Upwards of $200 billion was loaned◦ Ineffective projects and corruption ensure that the
investments could not berepaid when coupled witheconomic slow-down
Banks, in turn, stopped lending, so states defaulted
The Latin American Debt Crisis
A series of significant monetary and financial crises ricocheted around the world throughout the latter half of the 1990s◦ Deregulation
1994 Mexico◦ Devalue currency, caused rush of int’l money to be pulled from
the economy, leading to further devaluation (and economic crisis)
1997 Asian Flu◦ Thailand’s economic problems impact Indonesia, South Korea and
Japan
1998 Economic crises arise in Russia, Brazil and Argentina
Repeated Failures in the 1990s
Most recent serious economic downturn due to deregulation◦ Subprime lending in the US and Britain◦ First extended contraction of the economy since
1940s◦ Wide range of impacts
Though impact briefly delayed in Europe, impact has, in fact, been much longer lasting and due in part to EU wide spread
The Great Recession - 2008
Rise of regional trade blocs◦ NAFTA, EU
The Transpacific Partnership and Canada◦ Agricultural production and protectionism
Is this an example of the Marxist interpretation of Political Economy?
Economic Regionalism (in a bit more depth)
Rise and power of OPEC◦ Iran, Iraq, Kuwait, Saudi Arabia, Venezuela
The impact of high oil prices on developed economies◦ China’s impact
Energy independence◦ Shale gas and low oil prices
High prices and the environment◦ Why shale may be fools gold
Oil and Politics
Large companies are, well, large◦ Exxon earns $500,000,000/year◦ This is more than Denmark or Argentina (41 million people!)
US producers, in the aftermath of WW2, had little competition to grow
Relative, particularly to LDCs, corporations have significant power◦ Realist world – where power matters◦ Race to the bottom◦ Political interference◦ Espionage
Global production
The Rise of the MNC
Staples theory (or trap): Economic development unique in the world. Resources so abundant, it didn’t develop economically, or politically, like anyone else. Still, a huge exporter of raw resources.
Regionalism and strong provinces
Higher levels of government involvement
Whither Canada?
Stronger welfare state than other Anglo-Saxon countries
Brokerage Party System: parties try to broker coalitionsbetween regions, each with their own interests – strict ideology is too constraining
Aggregates so many interests, cuts to welfare cannot be as strong here
Internal political economies…
More About Canada…