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Study Guide and Things to Think About
PE 101 2014
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• The Families of our Theories • Shifts in Political Economy over time
– Changing relationship between society and the market • What the market is good at • Fatal flaws of the market (four of them)
– Market values overtaking other values in social life
• Bring society back into political economy – On a local or national scale
• Use the market as a tool • Redistribute income • Reduce the realm where money matters
– On a global scale • Embedded liberalism and embedded environmentalism • Redistribute income globally • Empathic civilization
• Can our theories survive Shifts in the Business Cycle? • Conclusion
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PEIS 101 Review
I. “Families” of Modern Theories of Political Economy: Three Family Trees
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Political Economy of Freedom: The Liberal Family
• Economic Liberalism – Neo-liberalism – Comparative Advantage – Rational choice theory
• Political Liberalism – Embedded liberalism (international Political
liberalism) – Keynesianism – Hegemonic Stability Theory (International Political
liberalism) – Distributive Justice
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More “relatives” in the Liberal Family
– Economic Liberalism Focused on Economic Development • Modernization theory (Rostow)
• Staples Theory
• Product-cycle theory
• State-led or institution-led liberalism focused on development – Institutional incentives and constraints
– State-led development (East Asia)
– Export oriented development
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Economic Liberal language: some terms
• Transaction costs
• Strategic interaction
• Stages of economic growth
• Property rights
• Laissez-faire
• Business cycle
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Policies
• Economic Liberal Policies – Minimal state intervention in markets
– Structural adjustment
– Multilateralism
– Gold Standard……
• Political Liberal Policies – Distributive Justice
– Welfare state
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Liberalism
Neo Liberlaism Comparative Advantage
Rational Choice/game Theory
Embedded Liberalism
Keynesianism
FREEDOM (code Word)
Hegemonic Stability Theory
Institutional paths to development/ overlaps with state-led development/ community
Property Rights
Competition
Indifidualismn
Collective action problems
Development.. Modernization Theory, Staples Theory , Product Cycle
Free Markets need rules
Distributive Justice/ egalitarianism
Creative destruction
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Political Economy of Equality : The Family
• Liberal Equality (Critique of Economic Liberalism and solution: Freedom with equality) – Democratic Socialism
– Welfare State
– Embedded Liberalism
– Hegemonic Stability (means to ensure embedded liberalism)
– Political liberalism (spans both the freedom and equality school
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Radical Equality Language
• Marxism • Language criticizing liberalism
– Exploitation – Surplus value
• And with regard to Third World development – Unequal exchange – Dependency theory – Imperialism – Unequal terms of trade – Core – Periphery
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…and policies to bring about “radical equality”
• Death of Capitalism and the “Free Market”
• Revolution
• Central Planning
• Communal ownership of property
• Gift economy
• Communal sharing
• Kibbutz?
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Equ
alit
y
Exploitation Surplus Value
Welfare State (diminishes salience of class)
EQUALITY (code word)
Imperialism
Core-Periphery Relation
Unequal Terms of Trade
Unequal Exchange
)
Class conflict
Social Democracy
Norm of equal citizenship
Redistribution of Wealth
Solution: Communism-hybrid With Community
Solution for Development: See Community….Econ. Nationalism
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The Political Economy of Community: The Family
• Community: General Characteristics – Common identity – Mutual Obligation – Cooperation and successful collective action
• Radical community: Communism – Communal Sharing – Common property ownership
• Nationalism – Common Land, religion, language, ethnicity, religion, history, tradition, myths, or some combination
• Economic Nationalism – General
• Protectionism – Tariffs – Currency controls – Capital controls – Regaliation
• Market control – Currency manipulation – Dumping – Strategic trade
– For developing countries: • ISI and Infant Industry protection • State-Led Development • Export orientation with market control • planning
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Community And Nation
Communal Sharing
Gift Economy
Capital Controls
Trade Protection
COMMUNITY (code word)
Currency Manipulation
Infant Industry protection
State-Led Development planning
Mutual Obligation
Fairness
Cooperation
Communal Ownership
Collective action
Communal identity
Market Control
Retaliation
Strategic trade
Export-led growth
Languade Religion Ethnicity
Tradition Land History
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Scenerios for the Future: How can our theories help?
On a local or national scale Use the market as a tool Redistribute income Reduce the realm where money matters
On a global scale Embedded liberalism and embedded environmentalism Redistribute income globally Empathic civilization
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II I. Theories and the Business Cycle in 20th and 21st century History
19th Cent. Britain Provides “Hegemonic Stability” Classical EconomicLiberalism
Great Depression: Keynes and the “Liberal” welfare state
Post War Embedded Liberalism, Hegemonic Stability
Rise of “Neo-liberalism” And developmental states
Financial Crisis, environmental Crisis, Crisis of sovereignty 1970s Recession