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Poli Econ Chapter 3


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The ideology underlying economic globalization. Based on economic liberal principles and ideas globalism holds that the internationalization and integration of markets will provide a vehicle for enhancing global economic well-being. A popular ideology among supporters of globalization.
The IPE perspective that focuses on the individual and the primacy of freedom or liberty. There are many varieties of liberalism today, which reflect different points of view regarding the proper role of the state in private activities.
Efforts to achieve personal gain by creating an artificial scarcity rather than through efficient production. Many corrupt activities can be viewed as examples of rent-seeking behavior.
positive-sum game
Any interaction between actors that makes all participants simultaneously better off.
zero-sum game
An activity whereby gains by one party create equal losses for others.
Keynesian theory
To be Keynesian is to be in agreement with the general thrust of the political economy of John Maynard Keynes (pronounced "Canes") (1883-1946). Because Keynes's views were complex, original, and constantly changing, there is no precise definition of what it means to be Keynesian, A general definition is to believe that there is a positive role for the state to play in domestic affairs (fighting unemployment and poverty, for example) and in international affairs (the kind of role conceived for the International Monetary Fund and the World Bank). Keynes's views were influenced by the catastrophe of World War I and the Great Depression of the interwar period. His ideas are also reflected in the Bretton Woods institutions and policies.
Keynesian political economy
combines state and market influences in a way that relies on the “invisible hand” over a narrower range of issues, and sees a larger but still limited sphere of constructive state action
paradox of thrift
If one individual saves much more income, that individual may be more secure economically. If everyone does this, however, the combined actions can cause a recession and everyone is less secure economically. The paradox of thrift then is an example of the potential problems of an unregulated economy. Keynes supported an active role for the state in the economy to help overcome this problem.
Bretton Woods system and conference
Bretton Woods is a place, a meeting, and a set of institutions and practices. Bretton Woods, New Hampshire, was the site of a series of meetings that took place in July 1944 among representatives of the Allied Powers of WWII. The Bretton Woods agreements created the international Monetary Fund, the World Bank, and the system of fixed exchange rates that prevailed in international finance until 1973.
Keynesian Compromise
The Keynesian Compromise is one aspect of the Bretton Woods system. Nations retain the ability to intervene in their domestic economies but are limited in this by their agreement to limit interference in international economic markets.
a single dominant state
public goods
Goods or services that, once provided, generate benefits that can be enjoyed by all simultaneously. A lighthouse is the classic example of a public good.
free ride
To utilize a service or contribute to a collective problem without paying the associated costs. A good example of a free rider is high-polluting industry that is not required to pay for the cost of the environmental damage is causes. In this case, the industry gets a free ride because it is able to externalize the cost of pollution onto society at large, but unilaterally realizes the benefits that come with selling the good produced.
A term used in the US to describe a movement that is liberal in fundamental nature and that arose in reaction to the growth of the state in the 1960s.
A viewpoint that favors a return to the economic policies advocated by classical liberal such as Adam Smith and David Ricardo. Neoliberalism emphasizes market deregulation, privatization of government enterprises, minimal government intervention, and open international markets. Unlike classical liberalism, neoliberalism is primarily an agenda of economic policies rather than a political economy perspective.
The process by which all of the structures of IPE have become less strictly associated with the boundaries of the nation-state. Globalization also connotes increasing economic interdependence as well as the spread of Western (US) cultural influence all over the world.
benign mercantilism
seeking to expand a nations political and economic influence over other nations, intentionally and at the expense of other nations beyond what is needed for personal defense - not hostile.
malevolent mercantilism
seeking to expand a nations political and economic influence over other nations, intentionally and at the expense of other nations beyond what is needed for personal defense - hostile, intentionally harming or disadvantaging another nation.

classical mercantilism
state policies that focus on spreading national influence with the aims of acquiring international power and wealth. ex: import/export subsidies or taxes, barriers, currency manipulation, ect.
practice of large powers (UK, France, USA, Japan, etc) taking control of weaker states or regions
IPE school of thought that argues that international structures and institutions have no intrinsic casual power distinct from the values, beliefs and interests that underlie them. States are as social as they are political actors, and never stagnant - only the results of ongoing social construction.
dependency theory
relationship between industrialized (CORE) nations and less-developed (periphery) nations that stresses the many linkages that exist between them to make the periphery/poor dependent upon the core/richer nations. (linkages: trade, finance, technology)
economic nationalism
claims that states have to intervene within their market in order to uphold state of power and wealth (mercantilism theory)
export-oriented growth
tactic for economic growth that focuses on exports and integration into global markets. Ex: China
seeks to describe and explain many of the hidden assumptions about gender in mercantilism, realism, liberalism and structuralism.
budget deficit
Excess of spending over income for a government, corporation, or individual over a particular period of time.

trade deficit
excess of imports over exports
current account deficit
Occurs when a country's total imports of goods, services and transfers is greater than the country's total export of goods, services and transfers

twin deficit
situation in which there occurs a budget and current account deficit at the same time (Ex: USA - bad!)
Wealth of Nations - Liberalism
-Self-Interst: choose rational option
-Private Property: freedom, autonomy
-Competition: increase efficiency, motivation
-Market: supply meets demand, needed to figure out price and worth
-Economic freedom:ability to freely enter/exit markets
-consumer sovereignty: buy what want/need; must choose from availability;advertising = trick? Really free?
-Laissez-faire: leaving things to take their own course, without interfering

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