Download Intro to International Political Economy and Trade - b

Theories of International Political Economy
I.
Introduction- emphasis began in the 1970s
II.
Mercantilism
-oldest approach to IPE
-17th century saw the rise of nation states who sought to consolidate power
-wealth and power linked to possession of silver and gold
*did so by exporting a lot and limiting imports
*GB desired a trade surplus
-emphasis on relative power
III. Liberalism
A.Adam Smith- domestic specialization by individual w/in the state
-belief that the pursuit of self interest can lead to cooperation
-two countries can benefit from free trade by using resources optimally
and importing what they do not have while exporting surplus goods
B. Comparative Advantage- exporting what they have advantage
at producing and importing what they do not. All sides gain; absolute
gains
IV. Marxism (1840s/1850s)
A.Marx- profits in capitalist systems are gained by squeezing more labor
out of people with less $ (exploitation of workers)
*structural differentiation btw capitalists and workers
* concentration of wealthworkers revoltcommunism
~did not occur in reality
~workers actually enjoyed rising standards of living in
industrialized countries
B. Lenin (1917)
-colonization & imperialism, exploitation of workers
C. State of the Poor
D.Colonialism and decolonization- argues that capitalist
states would have to expand internationally
*colonization
-sees capitalist north playing an active role in sustaining poverty in the
southern, underdeveloped countries
E. Dependency Theory- Latin American countries after WWII did
not develop
-economic growth of developing is linked to those of the developed
*believed that the developed countries would not let the
developing catch up
~developing countries specializing in declining forms of
trade where there are only limited uses for their products
(ex. agriculture)
- poor countries need to produce their own goods
*import substitution, not export led growth
*domestically develop
*debt prevents development
V.
Wrap Up
- Liberal economic theorists believe that international trade is good for poor
countries
- gap between rich and poor is widening, even though the per capita GDP
have increased since 1970