International Political Economy

Part Perspectives on planetary Political Economy The first chapter of the text deals with the fundamental nature of multi field of honor political economy ( office) and much or lesswhat analytic Issues related to Its multi dimensional character. Chapters 2 through 4 be the core chapters of the text that explore the history and policies associated with the collar dominant gain perspectives, namely economic open-heartedism, mer cleartilism, and structuralism. These theoretical tools atomic number 18 put onful In understanding galore(postnominal) political, economic, and accessible Issues In the world-wide economy of the past as swell up as the present.Chapter 5 develops 2 alternative PIP respective?constructivism and feminism?that derive, In part, from the trio centre of attention eruptlooks under require. Chapter What Is Inter subject atomic number 18a Political Economy? We Are the 99% A Haitian hillside. Georgian Allen When a philosopher has once laid hold of a favorite precept, which perhaps accounts for numerous natural effect, he ext nip outs the same principle all over the whole creation, and reduces to it every phenomenon, though by the most tearing and absurd reasoning. Our get mind being shrink and contracted, we usher out non extend our cosmos to the variety and extent of nature David Hump, The Septic 2 The Darkness on the Edge of Town he Darkness on the edge of town What ar the chances you lead find a good paying meditate?or any Job for that matter? when you graduate from college In the close few years? Have your pargonnts or plurality you know helpless their Jobs, the family home, or a big chunk of their retirement savings? How are you adjusting to the financial crisis? Maybe things crystallizent been that bad for you, yet Reading the headlines of any case pertlyspaper, you might somemultiplication worry that the cosmea is on the brink of a world(a) economic catastrophe, if non a second Great Depression .The effects of the global economic crisis stir made many community receive ensue, tearful, and depressed. The collapse to the US housing market place in 2 morphed into a credit crisis that threatened some of the biggest banks and financial ins dumbbellutions in the united recounts and Europe. governing body leaders responded with a variety of bank rescue measures and so-called excitant packages to confrontart their economies. These interventions angered many ordinary folks who felt that the bail bondouts rewarded bankers and Coos who had ca single-valued functiond the crisis in the first place.Mean maculation, many people around the world were force out of their homes and became fired. They suffered cuts in favorable services, health care benefits, and education pass when giving medications were forced to trim budgets. As we write in late 2012, the forecastd-for convalescence has proved elusive. Unemployment in the United States is stuck at 7. 9 percent in the Euro pean Union (ELI), it has organisen to 1 1. 6 percent (23. 4 percent for young people). Home foreclosures and stagnant incomes continue to place awful strain on many families finances.The EX. has fallen into a nonher ecological niche, with countries like Greece, Italy, Spain, and Portugal so deep in debt that they might slide into national bankruptcy, causing the Elses monetary system to collapse. People seem to shit lost confidence in national and transnational political institutions that underpin capitalism and democracy. Is this what the Great switch from industrial to post-industrial society was supposed to look like? Are globalisation and the so-called creative destruction of crude technologies shrinking the middle classes in Western countries and permanently shifting economic dynamism to Asia and Latin the States?Adding to the sense of gloom are correctts around the world in the wear few years. High fossil oil prices engender benefited giant oil companies while hur ting consumers. The giant British Petroleum (BP) oil spill reciprocated an environmental catastrophe in the Gulf of Mexico. Japans Fuchsia earthquake and tsunami damaged several nuclear power plants, causing release of dangerous radioactive material crosswise a large swath of territory. High agriculture commodity prices brook raised the cost of food and increased levels of world hunger.Because there has been itsy-bitsy progress in reducing reliance on fossil fuels, capping ampere-second emissions, or investing in alternative energy re ascendents, the threat of ruinous climate change looms larger. And wars in Syria, Afghanistan, Somalia, and the Congo are destroying the livelihoods of millions of people. Hope on the Horizon? Is there however gloom and doom around the earth? Surely, no As we discuss in Chapter 13, emerging powers much(prenominal) as China, India, Brazil, and Russia guard dramatically reduced poverty in the last cardinal years and made it possible for hundreds 4 Chapter 1 of millions of people to spliff the middle class.Fortunately, they continued to grow at a f snaply broad-shouldered pace after(prenominal) 2007 more Jobs, investment, and consumption in these countries helped keep the rest to the world trot tailing into a deeper recession. Of most of the last decade, sub-Sahara Africa has in addition grown surprisingly fast, thanks n part to high prices for oil and commodities exports. And the European Union won the 2012 Nobel Peace Prize, a reminder that? in spite of its serious economic and social problems today?the community has advanced the causes of ii-eyed violet and reconciliation, democracy, and human rights for more than sixty years.along with these rays of hope are three interrelated global developments that merit word of honor at the kickoff of this text bind because they are profoundly shaping the multinational political economy the Arab Spring, the European crowned head debt crisis, and the Occupy breakwater Stre et (SOWS) movement. Taking place on three diametrical incorrupts since 2011, they have shaken political institutions and spikeletred waves of political protests in reply to a variety of social and economic ills. None of us knows how these world-shaking developments exit play out, notwithstanding we can be sure that they impart affect our daily lives and pocketbooks for many years.Each is a double- edged sword a potential harbinger of positive change and a potential portend of worse yet to come. In new(prenominal) words, each development can either help lead to a more stable, prosperous world in which human security is better guaranteed or ender divisions within and amidst societies wider than before so that cooperative relations and a fairer dispersion of resources stop ever more elusive goals. The Arab Spring took the world by amazement?a reminder that social scientists still do not have good tools to predict when and why large-scale changes will occur in complex soc io-political systems.On December 17, 2010, a Tunisian street vendor named Mohamed Bouzouki bent-grass himself on fire in reaction to harassment by natural law officers. His death sparked street demonstrations that brought down the Tunisian government one month later. Protests spread like wildfires to different countries in the Middle eastern United States and brotherhood Africa. After eighteen days of mass demonstrations, Egypt authoritarian death chair Hosting venture resigned on February 11, 2011, replaced by a phalanx council. On February 15, residents of Bengali, Libya, rose up against the regime of Miramar Qaeda. avocation months of NATO bombing and rebel fighting, Qaeda was killed on October 20, 2011, and a home(a) Transitional Council took power. The dramatic political protests?which captivated television viewers and Twitter-feed chase around the world?created an opportunity for a number of Arab countries o spliff the community of elective nations. Yet the crackd own in Syria showed the world how determined some authoritarian leaders in the Middle east are to stop in power?even at the expense of killing tens of thousands of their own citizens.With the genie of Arab political opposition out of the bottle, countries in the Middle East and North Africa are rapidly changing. Fortunately, high oil prices and a conk to relative stability in many places could improve conditions in 2013. Along with the Arab Spring came President Barack Beams withdrawal of all U. S. Troops from Iraq at the end of 2011. An ignominious end to an imperial endeavor, the withdrawal seemed to signal that the U. S. Public was no longer willing to pay for wars that drain the reality treasury.President Obama refocused U. S. Policy on fighting against the Taliban in Afghanistan and ratcheting up pressure on Iran to abandon its motion to develop nuclear weapons. galore(postnominal) analysts believe that Beams decisions reveal a significant weakening of U. S. Influence in th e Middle East. Perhaps to counteract this decline, Obama resolute to bolster the American forces presence in the Pacific by cultivating ties with countries afraid of Chinas rise and attaching 2,500 troops permanently in northern Australia beginning in November 2011.A second development?the European sovereign debt crisis?relentlessly collected steam after 2010 in the face of a prolonged recession that made it hard for some countries to pay back huge loans to municipal and foreign banks. European Union leaders had hoped to contain the debt problems in Greece and Ireland, but governments in Spain and Portugal also began to have trouble raising new capital by issuing new government bonds. All four countries in 2012 had to get financial bailouts in exchange for adopting painful government spending cuts that contributed o high unemployment.Even with help from the European Central Bank, these countries have dire conditions that threaten the stability of the European financial system. Rupees responses to its debt crisis have commoved widespread social unrest. Severe austerity measures have spawned street protests throughout the continent and brought changes of government in Greece, Italy, and Spain. Some EX. leaders and analysts believe that the crisis will spur European countries to form closer ties, while others foresee the death of the Euro and the chance of national bankruptcies as some countries refuse to pay back taxing loans.If problems worsen in France and Italy, the EX. could unravel economically, causing another deep global recession. The crisis is forcing Germany to decide if it is willing to consider the costs of making the EX. stronger, or if it will pursue its purely national interests. The outcomes will likely cause changes in Rupees traditionally generous social programs and in Rupees influence in the world. A third development started as an anti-wall Street protest in new(a) York Citys Cutting Park on September 17, 2011. Two weeks later, t he Occupy Wall Street movement had quickly spread to many major U. S. Ties, tit encampments and general assemblies in public spaces. Similar occupations occurred in Europe, Israel, Chile, and Australia. Although the majority of participants in the SOWS social movement have been students, union workers, progressive activists, and the unemployed, their ideas seemed to resonate with a significant number of the middle class. Calling themselves the 99% (in contrast to the richesiest 1 percent of Americans), SOWS protestors criticized financial institutions, condemned Wall Street greed, and called for a reduction of incarnate control over the democratic process.Although SOWS encampments disappeared, the movement kook up new campaigns in 2012, including efforts to stop home foreclosures and reduce student debt. What do these three developments have in common? While each has its own causes, the protestors jointly represent a reaction to corrupt government and growing inequality. In three large regions?the Middle East, Europe, and North America?movements sought auspices from financial and cultural globalization that left people feeling at the mercy of market forces.In many cases, protestors felt that they were unfairly forced to bail out the wealthy but denied a chance to snare many o governments 6 s to previous growth. Austerity policies that many had espouse since 2008?and even earlier in the Arab countries?cut into a host of public social programs such as education and relief for the execrable. Many dissatisfy citizens disagreed with their leaders, who argued that such reductions were necessary to reduce the size of government, balance national budgets, and stimulate economic recovery.While Arabs claimed a political voice that had been squashed by decades of arbitrary rule, Americans and Europeans seemed to demand a new kind of politics freed from the grip of excess interests and big currency. In all three cases, elites who were supposed to be the experts on political and financial affairs suddenly were at a breathing out to rationalise why things had gotten so bad under their watch. With a pass of faith in Arab regimes, EX. leaders, and U. S. Bankers came a certain denationalization of ruling ideologies such as economic liberalism.A new emphasis was placed on democratic participation and economic fairness. Despite a new zeitgeist in the air in three continents, old political and economic institutions were still resilient. Many regimes held firm in the Middle East. American banks grew even egger after government bailouts, and more money than ever poured into the campaign war chests of representative and Republican political candidates. EX. political elites continued to make deals that seemed designed to ease big investors and banks rather than ordinary citizens.The alternatives to the old did not al ways check a better future, either. In the aftermath of the Arab Spring, Psalmists like Egypt new president Mohamed Moors made th eir own undemocratic power grabs, seeking to impose religiously conservative policies and weaken womens rights. Reactions against austerity in Europe strengthened utmost(prenominal) right-wing parties in Greece and France while fueling anti-E or secessionist sentiments in the United Kingdom and Catalonia.And by refusing to organize and engage in normal politics, the SOWS forces lush?leaving normal two-party gridlock in Washington after the November 2012 elections. The route Ahead By discussing above the three big developments, as well as the problems and promises in the global economy, we have hopefully given you a sense of some of the key phenomena we seek to understand in international political economy. Not unsurprisingly, there are fierce debates around the causes of electric current crises and the best solutions to them.One of the arguments we make in this text is that to adequately recognize and explain the current global financial crisis?or any of the other issues cover in the antithetic chapters?we must use an analytical approach that synthesizes methods and insights derived from economics, political perception, and sociology as conditioned by an understanding to history and philosophy. As you remove deeper into the material, you will learn a variety of theories and analytical tools that help us interpret the interrelationships of the reconcile, market, and society in different nations.The PIP method tie different academic disciplines to better explain employ, real-world problems that span physical and keen boundaries. While this enjoinment might sound a bit bollock and confusing at this point, keep in mind that we do not think you need to be an economics major, a specialist in finance, The What, Why, and How of International Political Economy or a Middle East expert to understand the basic parameters of the global financial crisis or the Arab Spring.This book is written for students who have limited background in political science, econo mics, or sociology, as well as for those who want to review an as var.ment of topics in preparation for graduate school. In the next section, we look at how to study PIP?its three distinct analytical perspectives and a number of methodological issues with which PIP students should become acquainted. All the chapters in the book cover important theoretical and Policy issues that have connections to the three developments we have mentioned?and to many more.In this way, we hope students might better understand different dimensions of the problems and then make some reasoned Judgments about how to solve them. Later in this chapter, we discuss the prevalent phenomenon of globalization as a way o introduce students to many of the political-economic conditions that led up to the global financial crisis. Many PIP experts have asserted that the economic liberal ideas behind globalization may have contributed to the crisis. Opinions differ, however, on whether or not the crisis signals the e nd of laissez-fairer economic policies, or even the end of capitalism itself. He what, why, and how of International Political economy Our discussion of the financial crisis and its consequences makes clear that todays complex issues can no longer be easily analyzed and understood by using any case-by-case et of disciplinary methods and concepts. Those who study PIP are, in essence, breaking down the analytical and conceptual boundaries amongst politics, economics, and sociology to produce a unique explanatory framework. Following are several examples of questions that traditional academic disciplines might ask as they seek to explain the global financial crisis.Each discipline focuses on different actors and interests International Relations How much has the financial crisis detracted from the ability of defers to pay for military defense? How has the crisis affected the conditions of war or terrorism in poor tells? As Europe, Japan, and the United States struggle, will emergin g countries like China, India, and Brazil gain more political influence in international institutions? International economic science How has the crisis impacted foreign investment, international trade, and the values of different currencies?Comparative political relation What is the capability of political institutions within different nations to respond to the needs of the unemployed? What new political forces are emerging and with what effects on political coalitions? Sociology How has the crisis affected consumption trends for different groups such as the upper, middle, and rower classes? How do the effects of inequality vary on the basis of ethnicity and gender? Anthropology How have different societies in history dealt with crises related to how they deal precious resources?And how have these crises impacted their cultures, values, and societal norms? 8 Focusing on a narrow range of methods and issues enhances intellectual specialization and analytical efficiency. But any c hampion discipline offers an incomplete description of global events. Specialization promotes a sort of scholarly blindness or distorted view that comes from using only one narrow down of analytical methods and incepts to explain what most decidedly is a complex problem that could benefit from a multidisciplinary perspective.When defining PIP, we make a distinction between the term international political economy and the acronym PIP. The former refers to what we study?commonly referred to as a subject area or theme of inquiry that involves tensions among disk operating systems, markets, and societal actors. In this text, we tend to focus on a variety of actors and issues that are either international (between nation- takes) or transnational (across the national borders of two or more states).Increasingly today, any analysts use the term global political economy instead of international political economy to explain problems such as climate change, hunger, and illicit markets that have spread over the entire world, and not Just a few nations. In this book, we often use these two terms interchangeably. The acronym PIP also connotes a method of inquiry that is multidisciplinary. PIP fashions the tools of summary of its antecedent disciplines so as to more accurately describe and explain the ever- changing relationships between governments, businesses, and social forces across history and in different geographical areas.What are some of the central elements of the antecedent melds to study that contribute to IP 7 First, PIP includes a political dimension that accounts for the use of power by a variety of actors, including individuals, domestic groups, states (acting as single units), international organizations, nongovernmental organizations (Nags), and transnational corporations (Tens). All these actors make decisions about the distribution of tangible things such as money and products or intangible things such as security and innovation.In almost all cases, politics involves the making of rules pertaining to owe states and societies achieve their goals. Another aspect of politics is the kind of public and undercover institutions that have the authority to pursue different goals. Second, PIP involves an economic dimension that deals with how scarce resources are destined among individuals, groups, and nation-states. A variety of public and private institutions allocate resources on a day-to-day basis in local markets where we shop. Today, a market is not Just a place where people go to buy or exchange something face to face with the products maker.The market can also be thought of as a driving force that shapes human behavior. When consumers buy things, when investors purchase stocks, and when banks lend money, their dependability transactions earn a vast, sophisticated web of relationships that coordinate economic activities all over the world. Political scientist Charles obliviousness makes an interesting case that the economy is actually nothing more than a system for coordinating social behavior What people eat, their occupation, and even what they do when not working are all organise around different agricultural, labor, and relaxation markets.In effect, markets often perform a social function of coordination without a coordinator. L Third, the works of such notables as Charles Limbo and economists Robert Hellbender and Lester Throw help us realize that PIP does not reflect enough the societal dimension of different international problems. 2 A growing number of PIP scholars argue that states and markets do not exist in a social vacuum. There are usually many different social groups within a state that share identities, norms, and associations based on tribal ties, ethnicity, religion, or gender.Likewise, a variety of transnational groups (referred to as global civil society) have interests that cut across national boundaries. A host of Nags have attempted to pressure national and international organiza tions on issues such as climate change, refugees, migrant workers, and gender-based exploitation. All of these groups are purveyors of ideas that potentially generate tensions between them and other groups but play a major role in shaping global behavior. How to Study PIP Contrasting Perspectives and Methodologies The three dominant perspectives of PIP are economic liberalism, mercantilism, and structuralism.Each focuses on the relationships between a variety of actors and institutions. A strict extinction between these perspectives is quite arbitrary and has been imposed by disciplinary tradition, at times making it difficult to appreciate their connections to one another. Each perspective emphasizes different values, actors, and solutions to Policy problems but also overlooks some important elements highlighted by the other two perspectives. Economic liberalism (especially unilateralism?see Chapter 2) is most closely associated with the study of markets.Later we will explain why t here is an increasing gap between Orthodox economic liberals (Eels), who champion free arrests and free trade, and heterodox interventionist liberals (Hills), who livelihood more state regulation and trade protection to sustain markets. Increasingly, Hills have evince that markets work best when they are embedded in (connected to) society and when the state intervenes to resolve problems that markets alone cannot handle. In fact, many Hills acknowledge that markets are the source of many of these problems.Many liberal values and ideas are the ideological foundation of the globalization campaign. They are derived from notable thinkers such as Adam Smith, David Richard, John Maynard Keynes, Frederica Hayes, and Milton Friedman. The laissez-fairer principle, that the state should leave the economy alone, is attributed to Adam Smith. 3 More recently, economic liberal ideas have been associated with former president Ronald Reagan and his acolytes, who contended that economic growth is best achieved when the government severely limits its involvement (interference) in the economy.Under pure market conditions (I. E. , the absence of state intervention or social influences), people are assumed to playact rationally (see Chapter 2). 10 That is, they will naturally seek to maximize their gains and limit their losings when reducing and selling things. They have strong desires to exchange and to generate wealth by competing with others for sales in local and international markets. According to Eels, people should strongly value economic efficiency? the ability to use and distribute resources effectively and with little waste.Why is efficiency so important? When an economy is inefficient, scarce resources go unused or could be used in other ways that would be more beneficial to society. This idea has been applied to the new global economy and is one of the basic principles behind globalization. Mercantilism (also called economic nationalism) is most closely associated w ith the political philosophy of realism, which focuses on state efforts to store wealth and power to protect society from physical harm or the influence of other states (see Chapters 3 and 9).In theory, the state is a legal entity and an sovereign system of institutions that governs a specific geographic territory and a nation. Since the mid-seventeenth century, the state has been the dominant actor in the international community based on the principle that it has the authority to exercise sovereignty (final authority) over its own affairs. States use two types of power to protect themselves. Hard power refers to tangible military and economic assets employed to compel, coerce, intelligence, tend tot, or death enemies and competitors.Soft power comprises selective tools that reflect and project a country cultural values, beliefs, and ideals. Through the use of movies, cultural exports and exchanges, information, and diplomacy, a state can convince others that the ideas it sponsor s are licit and should be adopted. Soft power can in many ways be more effective than hard power because it rests on purview and mutual exchange. For example, Nobel Peace Prize recipient Barack Obama partly regained some of the worlds support for the United States through a discourse emphasizing multilateral cooperation.Structuralism is root in Marxist analysis but not limited to it (see Chapter 4). It looks at PIP issues mainly in terms of how different social classes are shaped by the dominant economic structure. It is most closely associated with the methods of analysis many sociologists employ. Structuralisms emphasize that markets have never existed in a social vacuum. Some combination of social, economic, and political forces establishes, regulates, and preserves them.As we will see in the case of the financial crisis, even the standards used to Judge the effectiveness of market systems reflect the dominant values and beliefs of those forces. The Benefits of PIP Each perspect ive in PIP sheds light on some aspects of a problem particularly well, but casts a shadow on other important aspects. By using a combination of the three dominant PIP methods and concepts (outlined in Table 1-1), we can move to the big picture?the most house-to-house and compelling explanation of global processes.Not surprisingly, mixing together the disciplines of economics, political science, and sociology gives rise to an analytical problem It is difficult to establish a single explanation to any PIP issue because each discipline has its own set of analytical concepts, core beliefs, and methodologies. Does this weaken the utility of PIP? Not at all. We must recognize that PIP is not a hard science it may never table 1-1 Conflicting Political economic Perspectives about state-market relations in Capitalist societies Monetarism (Orthodox Economic Liberals) Main Ideas aboutCapitalism Laissez-fairer minimal state intervention and regulation of the economy Keynesian (Heterodox Interv entionist Economic Liberals) The state primes (injects money? liquidity) into the economy to restore confidence in it and to stabilize it Efficiency immix with a variety of state political and social objectives Developmental State Model (Mercantilism) Socialism (Structuralism) Social Democracy (Structuralism) The state plays a proactive role in the economy to guide and protect its major industries The state controls the economy. Prices set by state officials. Emphasis on state