Term
| IPE has been described as the study of the “intersection between the state and society.” Some have suggested that there is an inherent contradiction in this intersection. What is it? |
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Definition
A) States and Markets want different things
i. States want to preserve their state power
ii. Markets want less barriers and more openness
iii. They are extremely complementary. The Market needs the state for security and rule of law.
*conflict btwn evolving sovereignty and globalization |
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Term
| What are the differences between mercantilists and economic nationalists? |
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Definition
a. Mercantilism : a policy of states from 16-18th C to increase their relative power and wealth largely by maintaining a balance of trade surplus. Believed that a state could use its gold to increase its power by building up its military etc. States therefore took all necessary measure to accumulate gold by increasing their exports and decreasing their imports. Highly effective and liberal views of free trade became dominant in England. (agriculture)
b. Economic Nationalists: emphasize domestic control of economy, labor, and capital formation. Stress the role of power in the rise of a market and the conflictual nature of international econ relations, econ interdependence must have political foundation. (industry) |
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Term
| Liberals and Marxists often agree on the importance of trade. Why is trade important to both of these groups? |
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Definition
| Trade ensures that resources are handed out etc. Economic growth is important. |
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Term
| What are the three characteristics of market economies that are responsible for the dynamism found in these systems? |
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Definition
1)critical role of relative prices in the exchange of goods and services
2)the centrality of competition as a determinant of individual and institutional behavior
3) importance of efficiency in determining the survivability of economic actors Market Economy: In which the market coordinates individual choices to determine the types of good and services produced and sold as well as the methods of production. |
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Term
| What was Adam Smith reacting to / critiquing in his economic theories? |
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Definition
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Term
| List the three key assumptions of economic liberalism. |
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Definition
1) Assume that individuals are principal actors within political economy and proper unit of analysis
2)Assume that individuals are rational, utility-maximizing actors
3) Assume that individuals maximize utility by making trade-offs between goods |
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Term
| List the three key assumptions of economic realism. |
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Definition
1)Assume nation-states are the dominant actions within the international political economy and that they are the proper unit of analysis
2)Assume nation-states are power maximizers
3)Assume nation states are rational actors in the same sense that liberals assume individuals are rational |
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Term
| List the three key assumptions of Marxism. |
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Definition
1) Believe that classes are the dominant actors in the political economy, appropriate unit of analysis
2)Assume that classes act in their material economic interests
3)assume that the basis of the capitalist economy is the exploitation of labor by capital |
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Term
| What key idea did Lenin add to Marxist theory? |
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Definition
| While Marx wrote primarily about domestic political economy, Lenin extended Marx's ideals to the international political economy to explain imperialism and war. He argued it was endemic to modern capitalism. |
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Term
| Realists argue that states may make either value maximizing or value satisficing decisions based on the situation. What is the difference between these two? |
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Definition
a. Value Maximizing Decision: describe states as rational actors that seek to maximize the benefits and minimize the costs of pursuing their objectives
b. States may settle for satisficing decisions rather than maximizing because policy makers have misperceptions and may lack information and capabilities needed to make optimal choices |
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Term
| What is a realist view of the role of institutions from a political/economic perspective? |
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Definition
1)They give priority to politics over economics
2)View the economy as a creature of the state
3) Believe that the distribution of political power has a major effect on international economic relations |
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Term
| What is Friederich List’s key criticism of liberals like Adam Smith? |
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Definition
| In List's view, Adam Smith's arguments favoring a division of labor and free trade overemphasized the existence of natural peace and harmony and underestimated the importance of national conflict |
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Term
| Why do realists/neo-realists argue that a hegemon is needed for international economic relations? |
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Definition
intl economic system is more likely to be open and stable
A) Realists define it as an extremely unequal distribution of power, in which a single powerful state controls or dominates the lesser states in the international system
B)Hegemonic stability theory:asserts that the international system is more likely to be open and stable when a dominant of hegemonic state is willing and able to provide leadership |
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Term
| The International Financial Institutions are often criticized for pushing biased policies on the developing world that limit actual development. How do economic liberals explain the failure of IFI policies in the developing world? |
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Definition
| They believe that they uphold liberal economic principles, and liberals therefore have a positive view of international economic relations as currently structured. If IR do not result in growth and the efficient allocation of resources, the problem is not with the global economic system, but with the government failure to pursue liberal economic policies. |
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Term
| What two benefits did Adam Smith see in free trade among nations? |
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Definition
1) Carries out surplus produce of land/labor for which there is no domestic demand (Made too much, trade outside to get the best benefit)
2)More competitive market encourages domestic product to improve productivity (leads to an increase in real revenue and wealth, competition comes in |
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Term
| What did Adam Smith view as the problem with merchants and manufacturers in terms of foreign trade? |
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Definition
A) too involved in government
B) Self-Interest makes profits, sell to government, and want government to protect you, help you
C) Best thing is to lobby for what you want
D*) Big Problem: gain greatest benefits in monopolies in Homeland, benefits them more |
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Term
| What two exceptions did Adam Smith suggest were good reasons that countries might not want to engage in free trade? |
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Definition
A) Defense: stupid to get cannons from somewhere else
B) Tax: imposed @ home, must impose tax on imports |
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Term
| J.M. Keynes suggested that classical liberals were incorrect when theorizing about what would happen in the area of labor/employment during economic downturns. What was this problem? |
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Definition
A) Boom and Bust Economy
i. Boom: buy buy buy
ii. Bust: stop buying, save money, markets crash |
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Term
| How did J.M. Keynes suggest that governments should become involved to remedy economic downturns? |
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Definition
| A) "Ditch Digging": high unemployment, government hire them to dig, so they can make money, then spend money, that creates jobs, puts money into the cycle, which leads to real growth. During downturn, the government should also go into debt in order to pay the workers to get out of the downturn. |
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Term
| Briefly describe how the Mont Pelerin theorists critiqued Keynes’ view of the Great Depression. |
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Definition
A) Milton, Freedman
B) What actually stimulates government growth is money moving around from future to current
C) Anti-Tax came from them "tax is theft"
Hayek-> simply money from future being brought to present
They believe government is bad allocator of capital, competitive market, efficient allocation of resources
Separation of politics favored and economics |
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Term
| What are the three main characteristics of complex interdependence? |
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Definition
1) Multiple Channels connect societies , including informal ties between government elites as well as formal foreign office arrangements
2)Agenda of interstate relationships consists of multiple issues that are not arranged in a clear hierarchy
3) Military force is not used by governments towards other governments within region, or on the issues, where complex interdependence prevails |
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Term
| Describe the concepts of sensitivity and vulnerability in complex interdependence. |
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Definition
Sensitivity: degree to which states are sensitive to changes taking place in another state
Vulnerability: refers to distribution of costs incurred as states react to such changes |
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Term
| What is the “dead hand” described by Brink Lindsey? |
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Definition
Defense of liberal IPE perspective/free markets. Argues instability in global markets is due to dead hand over unchecked markets.
Failed ideology of top/down control/central planning forces that interfere in market promote reinvigor of market act. |
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Term
| Essay:How might Adam Smith critique capitalism in America today? Be as specific as possible,but limit yourself to Smith’s direct ideas (no other liberals are needed). |
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Definition
| America is not purely capitalist but it is more of a "mixed" economy. Would be against monopolies and state intervention, |
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Term
| Essay: Alexander Hamilton’s “Report on the Subject of Manufactures” makes a strong argument for economic nationalism. What is this argument? Why was it made? How does it compare to liberal arguments on the same issues? |
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Definition
Response to Jefferson,wanted us to have a strong economy and for the government to promote industry. Wanted the US to be independent of foreign trade. Promoted econ development through industrialization, govt intervention, and protectionism.
Liberalism in general: purpose in intl econ activity is to achieve optimum use of world's scarce resources, North v. South example , trade, foreign investment more important, more likely to gain from open economic relationships. Interdependence is beneficial.
Adam Smith believed in free trade and absolute advantage so he wouldn't agree with protectionism. Believed society can regulate itself best w/o interference from the state. The welfare of society depends on the individuals ability to pursue interests. Cannot stop globalization. Too focused on relative gains and politics, not econ. |
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Term
| Essay: Neo-realists argue that a hegemon is needed for international economic relations to work. Describe this argument in detail, including the reasons why this is necessary and how hegemony contributes to a stable system. What leads to conflict under this system? What are liberal critiques of hegemonic stability theory? |
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Definition
If you want peace, security, and stability you need a country to dominate. Asserts that the intl economic system is more likely to be open and stable when a hegemonic state is willing and able to provide leadership and when most other states view hegemon's policies as beneficial.
US Example: Marshall plan worked too well, 70s moved off gold standard and became less competitive b/c of fixed standard, others had grown as well.
Conflict: pushes idea that power is fungible (exchangeable), it's not. What happens when we don't want to be the hegemon and no one else does either?
Liberal: Hegemons may help create international regimes but doesn't mean necessary for maintenance of regimes. |
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Term
| Essay: Describe, compare and contrast the three main variants of economic liberalism. |
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Definition
Orthodox: negative freedom-> freedom of mkt to function with minimal interference from state, Smith and invisible hand, mkt regulate self best w/minimal interference,welfare of society depends on individuals ability to pursue interests. Govt limited to creating open environment where individuals/private firms can freely express econ prefs -> provide public goods (infrastructure, natl defense) ->creates national division of labor
Interventionist:believe negative freedom not sufficient b/c market doesn't always produce widespread benefits SO support some govt involvement to promote more equality and justice in a free market economy. Support some activism by govt b/c of mkt limitations on dealing with problems like unemployment (unlike Smith) Post WW2, postwar efforts to maintain open liberal intl econ embedded in societal efforts to provide domestic security and stability , favored intervention to counter socially unacceptable aspects of market but opted for measures that would reinforce rather than replace mkt
Institutional: also view some outside involvement necessary to supplement mkt, favor strong international institutions. |
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