POLITCAL SCIENCE 222

A1 NOTES

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 WEEK TWO: THEORIES OF GLOBAL POLITICAL ECONOMY, PP. 6-21.
Introduction
The chapter starts by introducing the concept of Global Political Economy and
highlighting its significance. The authors explain that GPE refers to the
interconnections between politics and economics at the global level. They note that
GPE is a contested field, and theoretical perspectives play a crucial role in shaping
our understanding of it.

Three Contending Approaches to GPE

The authors outline the three main theoretical approaches to GPE: Liberalism,
Mercantilism, and Structuralism. They describe the assumptions and beliefs that
underpin each approach and how they differ from each other in terms of actors,
dynamics, and views on cooperation and conflict.

• Different theories can be used to explain the same event.

• Theories can explain, describe & predict/forecast.
• All theories have a set of assumptions about:
o unit of analysis.
o nature of the system.
o motivations of actors.

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Liberalism The authors define Liberalism and its key assumptions, including the
belief in free markets and individual rights. They explain how Liberals view actors
and power in the global economy, with states and markets as the primary actors, and
how cooperation is central to their approach to GPE. They also provide examples of
Liberalism in practice, such as free trade agreements and international organizations
like the World Trade Organization.

Mercantilism The authors define Mercantilism and its key assumptions, including
the belief in the importance of a strong state and the pursuit of national interests.
They explain how Mercantilists view actors and power in the global economy, with
states as the primary actors, and how conflict and competition are central to their
approach to GPE. They also provide examples of Mercantilism in practice, such as
protectionist trade policies and currency manipulation. The state is the main unit of
analysis.

Structuralism : Structuralism and its key assumptions, including the belief that
power imbalances and inequality are built into the global economic system. They
explain how Structuralists view actors and power in the global economy, with the
state, capital, and labor as the primary actors, and how inequality and power
imbalances are central to their approach to GPE. They also provide examples of
Structuralism in practice, such as critiques of international trade and finance
systems.

Dependency Theory

▪ Used to explain poverty in states.

▪ Underdevelopment of poor states = economic exploitation by developed
states.
▪ Development of the West (global North) at the expense of the
underdevelopment of the developing world (global South).
▪ The importance of history in a state’s legacy.
▪ The winners (the West) present their own history as a model for ‘
progress’ , and ‘evolution’ , and ‘development’ , and ‘modernisation’.
▪ GPE = consists of metropoles & satellites:

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 ▪ Metropoles suck surplus out of satellite and repatriates it to the
‘home’ country (exploitative relationship).
▪ Only revolutions can undo the injustice of the past.

Conclusion
The authors conclude the chapter by summarizing the main points of the chapter
and highlighting the significance of theoretical perspectives in shaping our
understanding of GPE events. They argue that different theoretical perspectives offer
different ways of understanding the complex interconnections between politics and
economics at the global level and suggest that a pluralistic approach is necessary to
gain a more comprehensive understanding of GPE.

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 PRACTICE QUESTIONS

What are the three main contending approaches to GPE and their

assumptions?

The three main theoretical approaches to Global Political Economy are Liberalism,
Mercantilism, and Structuralism.

• Liberalism is a theoretical approach that assumes that markets should be free

and unfettered, that economic efficiency is best achieved through competition,
and that individuals should be allowed to pursue their interests. The primary
actors in the global economy, according to Liberals, are states and markets.
Liberals believe that cooperation is the best way to achieve economic growth
and development.
• Mercantilism is a theoretical approach that assumes that a strong state is
necessary to protect and promote national interests. The primary actors in the
global economy, according to Mercantilists, are states. Mercantilists view the
global economy as a zero-sum game, where the gains of one country come at
the expense of another. They believe that conflict and competition are
necessary to achieve economic success.
• Structuralism is a theoretical approach that assumes that power imbalances
and inequality are built into the global economic system. The primary actors in
the global economy, according to Structuralists, are the state, capital, and labor.
Structuralists view the global economy as a system of exploitation, where rich
countries benefit at the expense of poor countries. They believe that inequality
and power imbalances are the root causes of conflict in the global economy.

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 How do the approaches differ from one another in terms of actors

and dynamics, and how do they view conflict and cooperation?

The three theoretical approaches to GPE differ from one another in terms of actors and
dynamics, and in their views on conflict and cooperation.

• Liberals view the state and the market as the primary actors in the global economy,
and they believe that cooperation is the key to achieving economic growth and
development. They view conflict as a deviation from the norm and believe that
cooperation can solve most economic problems.
• Mercantilists view the state as the primary actor in the global economy and believe
that conflict and competition are necessary to achieve economic success. They see
cooperation as useful only if it serves their national interests and view economic
competition as a way to maintain and enhance their power and influence.
• Structuralists view the state, capital, and labor as the primary actors in the global
economy, and they see the global economic system as inherently exploitative and
unequal. They believe that power imbalances are at the root of most conflicts in the
global economy, and that cooperation is difficult because of these power imbalances.

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How do these approaches influence the way we look at GPE events?

The three theoretical approaches to GPE influence the way we look at GPE events in
different ways.

• Liberals tend to view GPE events in terms of cooperation and mutual benefit. They
emphasize the role of markets and free trade in achieving economic growth and
development. For example, they might view a free trade agreement between two
countries as a win-win situation that benefits both countries.
• Mercantilists tend to view GPE events in terms of conflict and competition. They
emphasize the importance of a strong state and the pursuit of national interests. For
example, they might view a trade dispute between two countries as a zero-sum
game, where one country's gain is the other's loss.
• Structuralists tend to view GPE events in terms of power imbalances and inequality.
They emphasize the role of exploitation and the need for more equitable distribution
of resources. For example, they might view the exploitation of workers in a
developing country by a multinational corporation as evidence of the unfairness of
the global economic system.

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 Week three: O'Brien & Williams (2016), Evolution, pp. 39-100

Page 39-100 is chapters 2-6 of part two of the book. It focuses on the historical development
of the global political economy. The section covers the period from the emergence of
capitalism in the 16th century to the present day. It is divided into five chapters, each of
which covers a different period in the evolution of the global political economy.

Chapter 2:
The Emergence of the Capitalist World Economy, 1450-1640
This chapter covers the emergence of capitalism in Europe during the 16th century and its
spread to other parts of the world. It focuses on the rise of merchant capitalism, the growth
of trade, and the colonization of the Americas.

Chapter 3:
The Industrial Revolution and the Rise of Free Trade, 1640-1846
This chapter covers the period of the Industrial Revolution in Europe and the rise of free
trade. It explores the development of the factory system, the growth of industrial capitalism,
and the emergence of a global division of labour. It also covers the rise of free trade,
including the ideas of Adam Smith and David Ricardo.

Industrial Revolution
▪ Mid- 1700s – 1870s
▪ Machinery & production
▪ New sources of energy
▪ Reorganisation of the labour force
▪ Textile industry the first to benefit...
▪ Steam-powered machinery in the textile industry = increased
productivity
▪ Mechanized production = Factory system
▪ 1805 – Working day was lengthened with the introduction of artificial
light and gas lighting
▪ British society changed.

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 ▪ Large Metropolitan areas
▪ New economic relationship between the people, the system, life and
society.

▪ 3 Key elements of this new system

▪ 1. Division of society (capitalist employers & workers).
▪ 2. Production changed using machines and specialized labour.
▪ 3. Economy dominated by capitalists in search of profit.

▪ Emergence of large-scale international trade

▪ Cotton for British textile industry largely came from the US
(through slave labour)
▪ Creation of foreign markets for products
▪ British textile manufacturers held a Comparative Advantage –
drove the Indian Textile industry into the ground.

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Chapter 4: The Age of Imperialism, 1846-1914
This chapter covers the period of imperialism and colonialism during the late 19th and early
20th centuries. It explores the expansion of European empires, the scramble for Africa, and
the development of the global economy. It also covers the emergence of new forms of
capitalism, such as finance capitalism and monopoly capitalism.

Chapter 5:
The Interwar Years and the Great Depression, 1914-1945
This chapter covers the period of the interwar years and the Great Depression. It explores
the impact of World War I on the global political economy, the rise of fascism and
communism, and the Great Depression. It also covers the emergence of new international
institutions, such as the League of Nations and the International Monetary Fund.

The time period of 1914-1918 saw:

▪ Disruption of global trade
▪ Switching of trading partners by states
▪ Switch in Europe from export orientated to wartime production.
▪ Gold standard abandoned – was re-established after WWI.
▪ Balance of power was no longer.
▪ Treaty of Versailles – end of WWI
▪ League of Nations – 1920
▪ Creation of a more liberal international system
▪ Securing peace and security
▪ Respect territorial integrity
▪ The League of Nations failed.

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The time period of 1930-1945 saw:
▪ Series of events led to failure of the League of Nations.
▪ 1931 invasion of Manchuria by Japan
▪ 1935 Fascist Italy invasion of Ethiopia
▪ Germany under Hitler annexation of Austria and Czechoslovakia
▪ Unable to prevent WWII.
▪ Balance of global economic power changed.
▪ Shift in power from Europe to the US
▪ War = end to depression years in the US
▪ Emergence of Welfare States in Western Europe
▪ What is a welfare state?
▪ European states focus on rebuilding and distributing benefits more evenly in post-
war years.
▪ Beginning of the end for most of Europe’s coloni

Chapter 6:
The Cold War and Globalization, 1945-Present
This chapter covers the period of the Cold War and globalization. It explores the rivalry
between the United States and the Soviet Union, the emergence of new forms of capitalism,
such as neoliberalism, and the growth of the global economy. It also covers the emergence
of new international institutions, such as the World Trade Organization and the World Bank.
Overall, Part 2 of the book provides a historical overview of the evolution of the global
political economy, highlighting key developments and changes over time.

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 ▪ The time period from 1945- present day has resulted In:
▪ US dominance in:
▪ Military
▪ Political
▪ Economic
▪ Cultural
▪ International Economic system aligned with US interests
▪ US now the global Hegemon
▪ GPE a Western economic system
▪ Cold War era
▪ Capitalist West (dominated by the US)
▪ Soviet Union (Russia) & its allies
▪ Mutual Assured Destruction (MAD)
▪ Proxy wars
▪ NATO (North Atlantic Treaty Organisation)
▪ Decolonisation
▪ WWII
Growing nationalist movements in colonies.

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 PRACTICE QUESTIONS
CHAPTER 3
1. What were the consequences of the rise of sovereign territorial states in Europe?
The rise of sovereign territorial states in Europe in the 16th and 17th centuries
had significant consequences for the development of the global political
economy. These states, such as Spain, France, and England, sought to
consolidate power within their borders and expand their territories through
colonization and imperialism. This led to the formation of large colonial
empires, which provided raw materials and labour for the European powers to
use in their production and trade activities. The establishment of sovereign
territorial states also facilitated the emergence of modern capitalism, as the
consolidation of political power allowed for the development of more stable
economic systems and the accumulation of wealth.

2. What was the “transatlantic triangular trade” which developed in the period
between 1400 and 1800?

The transatlantic triangular trade was a system of trade routes and practices
that developed in the period between 1400 and 1800. It involved the
exchange of goods between Europe, Africa, and the Americas, and was
characterized by the trade of raw materials such as gold, silver, and sugar
from the Americas to Europe, manufactured goods from Europe to Africa, and
slaves from Africa to the Americas. The triangular trade was facilitated by the
establishment of colonial empires in the Americas, which provided a source of
cheap labor for the European powers. The trade in slaves had significant
social and economic consequences, leading to the forced migration of millions
of Africans to the Americas and the establishment of a system of racial
hierarchy and oppression.

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 3. Briefly analyse the period between 1400-1800 in terms of trade, production,
labour, finance, governance and ideas.

The period between 1400 and 1800 was characterized by significant

developments in trade, production, labour, finance, governance, and ideas.
Trade routes expanded and became more complex, with the establishment of
colonial empires and the development of the transatlantic triangular trade. This
period also saw significant changes in production methods, with the emergence
of the factory system and the growth of capitalist enterprises. Labour practices
were transformed, with the forced migration of millions of Africans to the
Americas to work as slaves. The emergence of modern finance systems, such
as the development of joint-stock companies, facilitated the growth of capitalist
enterprises and the accumulation of wealth. Governance systems were
transformed, with the emergence of sovereign territorial states and the
development of more centralized political systems. Finally, this period saw
significant changes in ideas, with the rise of Enlightenment thought and the
emergence of new concepts such as liberalism and democracy.

CHAPTER 4

1. Innovations in the British textile industry during the late 1700s illustrate
three important defining aspects of the first industrial revolution.
Explain.

The innovations in the British textile industry during the late 1700s
demonstrate three key aspects of the first industrial revolution. Firstly, they
illustrate the development and application of new technologies, such as the
spinning jenny and power loom, which allowed for increased efficiency and
productivity. Secondly, they reflect the emergence of a capitalist system of
production, with entrepreneurs investing in machinery and technology to
increase profits. Lastly, the innovations in the textile industry led to significant
social and economic changes, including the growth of urbanization and the
factory system.

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 2. During the Pax Britannica the gold standard was the foundation of the
existing monetary system. How did this work and why was it politically
feasible?

During the Pax Britannica, the gold standard was the foundation of the
existing monetary system. Under the gold standard, the value of a country's
currency was linked to a fixed amount of gold, and countries were required to
hold gold reserves to back their currency. This allowed for stable exchange
rates and facilitated international trade. It was politically feasible because it
provided a system that was predictable and credible, and it enabled Britain to
maintain its economic dominance by providing a stable monetary system for
the rest of the world.

3. The repeal of the Corn Laws in 1846 was a key event in the attempt by
Britain to establish free trade as a universally accepted doctrine.
Explain?

The repeal of the Corn Laws in 1846 was a critical event in Britain's efforts to
establish free trade as a universally accepted doctrine. The Corn Laws
imposed tariffs on imported grains, protecting domestic farmers but driving up
food prices for consumers. The repeal of these laws removed the tariffs,
enabling the import of cheaper foreign grains and lowering food prices. This
move was a significant step towards free trade, as it demonstrated Britain's
commitment to reducing protectionist measures and promoting international
trade.

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 4. Explain the liberal theory of comparative advantage as a motivation for
free trade.

The liberal theory of comparative advantage is a motivation for free trade,

which argues that countries should specialize in the production of goods that
they can produce more efficiently than other countries. This specialization
allows countries to trade with each other, with each country benefiting from
the lower costs of production. According to this theory, even if a country has
an absolute advantage in the production of all goods, it can still benefit from
trade by specializing in the goods in which it has a comparative advantage. By
promoting specialization and efficiency, the theory of comparative advantage
suggests that free trade can increase overall economic welfare for all
countries involved.

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 CHAPTER 5

1. What is the "double movement" referred to by Karl Polanyi (1957)?

The "double movement" referred to by Karl Polanyi in his book "The Great
Transformation" (1957) is a cyclical process of social and economic change. It
describes how free market capitalism can produce negative consequences for
society, and how society then responds by enacting protective measures to
counteract these negative effects. The "double movement" refers to this back
and forth movement between the forces of the market and society's efforts to
regulate it.
2. The post-1945 world order, at the outset, was founded on the principle of
embedded liberalism” (Ruggie, 1982). What does this concept refer to?
The concept of embedded liberalism, as coined by John Gerard Ruggie in his
1982 book "International Regimes, Transactions, and Change: Embedded
Liberalism in the Post-war Economic Order," refers to the post-World War II
economic system which combined free market principles with state
intervention and regulation. This system was characterized by a commitment
to free trade, international cooperation, and social welfare policies, with the
goal of promoting economic growth and stability.
3. Why did the "welfare state" emerge in Europe after WWII?

The welfare state emerged in Europe after World War II as a response to the
social and economic devastation caused by the war. The welfare state was
seen as a way to address the needs of citizens who had suffered during the
war and to prevent the recurrence of the social and economic problems that
had led to the rise of fascism in the 1930s. The welfare state provided a range
of social services, including healthcare, education, and unemployment
benefits, with the aim of promoting social and economic security for all
citizens.

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 4. The international trade and payments system which was negotiated after
WWII reflected multilateralism and liberal economic principles. Explain.

The international trade and payments system negotiated after World War II
was based on the principles of multilateralism and liberal economic policies.
The system, which was established under the Bretton Woods agreement, was
designed to promote international trade and cooperation by creating a stable
system of exchange rates and promoting the free flow of goods and capital
across borders. This system was based on the principles of liberal economics,
which emphasized free trade, open markets, and the importance of the private
sector in driving economic growth.

5. Briefly outline the four impacts of the information revolution.

The information revolution, which began in the late 20th century with the
advent of digital technologies, has had several impacts on global
political economy. These impacts include:

1. Increased globalization and the integration of national economies into a global

network of production, trade, and finance.
2. The rise of new industries and the decline of traditional manufacturing sectors,
leading to a shift in the structure of the global economy.
3. The emergence of new forms of communication and social interaction, such
as social media and online communities, which have changed the way people
connect and engage with each other.
4. The development of new forms of governance and regulation to address the
challenges posed by the digital age, including issues of privacy, security, and
intellectual property rights.

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Notes made by Taaha Azzakani (26280353) and may not be sold by anyone but him.