POLS401 Political Economy by Elif Buse Şahin

Chapter 1: Introduction

elifbusesahin — 2023-10-17 16:48:48 UTC

The textbook which is named "Global Political Economy" adopts a historical perspective to analyzing International Political Economy students, the general public, and professionals with a wide understanding of how the current international political economy evolved and attempts to advance outside an endless circulation of prominent theoretical viewpoints such as liberalism, Marxism, etc. on IPE as an umbrella of investigation throughout highlighting an extensive variety of concepts, obstacles, and perceptions in IPE.

In Chapter 1: Theories of Global Political Economy, it is underlined that the Global Political Economy has shown itself in many distinctive events. These will be listed as the 1997 Asian Financial Crisis and the contribution of private business interests in the United States and the United States government in setting the circumstances for an economic downturn. In the end, such circumstances have resulted in the birth of diverse theories in economics, such as liberalism, and its global dissemination to deal with the consequences of crises. Therefore, theories in economics are employed for an assortment of goals, including utilization to organize knowledge and direct people's focus toward the most critical economic concerns, to forecast the outcome of events so that effort can be taken in advance for an expected occurrence, and organization of activity or mobilize support for a specific action in the field of economy.

These theories will be listed as economic nationalism, liberalism, and critical theories. First, economic nationalism also known as mercantilism believes that nation-states are the main actors in the global arena and increasing their wealth is the key to power. Hence, the state should limit its companies to safeguard their national interests without globalization which is composed of cooperation or free trade between countries, and preserve their national interests instead of the preferences of consumers or multinational organizations. Second, liberals choose to concentrate on the individual or a diverse range of participants including the state through companies to interest groups. It brings the idea of the interdependence of states which means cooperation for the mutual benefits in economics. Lastly, critical perspectives which are Marxist, feminist, and environmentalist theories believe that class is the main actor and that wealth accumulation comes from exploitation. Moreover, Marxists believe that this brings war and the consequences for finding resources and labor.

Chapter 2: Approaches to IPE

elifbusesahin — 2023-10-17 16:48:52 UTC

In the beginning, it is crucial to highlight that global political economy is an examination of relationships between the economy on a worldwide scale with both economic and political entities, structures, and organizations whereas international political economy examines the mutually beneficial relationship between economics and politics in the worldwide framework and accepted as a sub-discipline in the 1970s. Also, IPE addresses the division between the fields of economics and politics, in addition to the national and international levels.

In economics, there is a dominant approach which is neoclassical economics with the leading institution, The Chicago School by mainly Milton Friedman and Hayek. The concept refers to the economic idea that governments and government involvement in the economy are considered unproductive. From their perspective, governments are required to supply certain essential public goods, such as armies, and structures that assure the functioning of a free market. However, the thought that arose in opposition to neoclassical economics is called Keynesian economics which argues a strong economy expenditures or invests more than it earns and that demand generates supply. In other words, Keynes believed that governments needed to increase expenditure even if it meant going into debt to generate employment and enhance the buying power of consumers during a period of recession. The debates on this issue are also discussed by critical theorists as well.

Additionally, The Prisoner's Dilemma can be applied in a variety of social and economic contexts, including pricing rivalry among businesses, and issues related to ecology and international relations. It's a crucial idea for comprehending the difficulties associated with collaboration in diverse situations in life as well as how to make strategic choices in economics.

Chapter 3: European Expansionism

elifbusesahin — 2023-10-22 09:26:49 UTC

The dispute over cultural and global historical interpretations of the "rise of the West" is notable because it has direct implications for the past as a whole and the current moment as well as the future. The overarching goal of these discussions has been to clarify why political and economic power is concentrated in just a few Western parts such as Western Europe and the United States. On this matter, two distinct points of view are maintained. The initial hypothesis is referred to as the cultural approach, which holds that effective cultures are what create the wealthy. The reason why Europe has a dominant power in the international economic arena is related to the idea that virtue is considered crucial in their political, social, and economic structures. However, in response to the cultural approach, the global history perspective highlights that authority is attained through force and encroachment not through any beneficial cultural attributes, and that Western triumph is unintentional and transient. Moreover, it emphasizes the significance of different civilizations.

Given the evidence above, it is unambiguous that European Expansion is strongly related to an adjustment in global economic balances. It was preceded by the more than 500-year-long Portuguese and Spanish exploration of Europe, followed by the entrance of countries such as France and England, which inaugurated the enlargement period. Therefore, the interactions between Europeans and the other states they encountered, including the establishment of colonies, the restructuring of foreign economies to benefit European economies, and the introduction of Christianity, superiority based on European race, and Western political philosophies including liberalism. One of the primary obstacles to economic interaction with continents like Africa and Asia has been these relations, notably American-European economic interactions. Furthermore, it indicates that when all aspects of these economic interactions are explored, themes like trade, finance, production, labor, gender, development, environment, security, and governance are incorporated.

Chapter 4-5: Industrial Revolution, Imperialism

elifbusesahin — 2023-10-29 12:11:40 UTC

With a particular emphasis on multiple significant subjects, the text delivers a historical perspective of the late 19th and early 20th centuries. Initially, the resources and authority were amassed by state elites who capitalized on innovations in manufacturing technologies. British predominance in the mid-1800s, which is known as Pax Britannica, resulted from the Industrial Revolution, while Germany and the US rose to prominence during the second Industrial Revolution. Second, the liberal market of the 19th century had a human consequence because it confined people in manufacturing facilities and cities and made the manufacturing industry's labor force primarily consist of less powerful individuals like women and kids. Thirdly, the general public was not included in the formulation of policy because the international order depended on certain domestic agreements. The balance of power desired choices that were based on profit rather than ideology, while the gold standard needed instantaneous modifications to trade flows. It was harder to regulate choices in policy, nevertheless, as democracy and expanding nationalism progressed. Lastly, rivalry amongst European states ultimately resulted in open conflict, which cost a great deal in terms of both lives and finances. The liberal imperial order was violently destroyed, and efforts to reconstruct it were mainly unsuccessful until the end of World War II.

When it comes to the Industrial Revolution, the implementation of machinery to production, the development of novel sources of energy to power machinery, and the organization of labor into manufacturers marked the beginning of the Industrial Revolution in Britain. The steel industry, particularly in the shape of railways, accompanied the shifts in the textile industry that commenced with cotton during a 100-year duration. Furthermore, spearheaded by Germany and the US, a second Industrial Revolution revolved around novel goods and technology that dominated the Western world in the 1870s. From the beginning, it has to be underlined that The Industrial Revolution resulted in an altered financial connection between individuals, an innovative manufacturing system, a new way of life as a whole, and a new historical period. In turn, it strengthened the place and influence of substances such as cotton, iron, and coal in the international market. Also, the Industrial Period referred to free trade and the balance of power in the European states.

In addition to all this, imperialism should also be addressed. Europe and economic variables are at the center of the two most prevalent theories regarding the new imperialism. According to economist John Hobson, underconsumption in Western states was the driving force behind imperialism. Because most people were kept in poverty, they were unable to buy the commodities that were being created. Governments were persuaded to expand internationally to sustain profitability by financial interests like financial institutions, foreign arms suppliers, and transportation. On the other hand, another perspective highlights the rivalry between European governments on the armed forces and geopolitical fronts. Rivalries between Britain, France, Germany, Spain, etc. fueled the race for colonies. In addition to being acquired for financial benefit, colonies were often acquired to project strength and dignity and obstruct the goals of competing governments. For example, Africa was divided as a result of this rivalry spreading to other parts of the globe. After all, no matter how one looks at it, it was a process that benefited only powerful states and left the powerless ones doomed to oppression and colonization.

Chapter 6: International Trade

elifbusesahin — 2023-11-06 12:22:59 UTC

The transaction involving the exchange of a particular product for another is known as trade. The exchange of goods and services within a nation which means domestic trade as well as the exchange of goods and services outside national frontiers is known as international trade, and it has been a characteristic of all civilizations. There are two different approaches to the importance of trade in terms of being global or staying inside of the country. Firstly, it is crucial to underline that the globalization of trade is a reality. When it comes to international trade, the existence of obstacles or limitations and the currency utilized in transactions are two key elements of the concept. Therefore, government limitations on the import or export of goods and services result in political obstacles to trade. Also, non-tariff barriers (NTBs) including quotas, subsidies, currency controls, administrative rules, and voluntary limitations on exports are examples of how protection is currently being delivered. To deal with these consequences, Adam Smith's theory of liberalism will be the solution for removing the trade barrier extensively. Based on their experience negotiating tariffs, the majority of nations support trade liberalization in theory but are hesitant to lower trade obstacles unilaterally because doing so would expose their marketplaces to foreign companies.

Second, protectionism in trade is based on the imposition of tariffs or other restrictions on the entry of foreign goods and services into the economy, the authorities of a nation may encourage home manufacturers and increase domestic production of services and goods. The simplest explanation for why protectionism is still a major aspect of the global economy is that every economy requires a certain amount of protectionism to grow in manners that they find valuable.

Furthermore, after the Second World War, more different issues began to take place in the international trade system. The new concept which is called intra-industry trade has emerged. The concept alludes to trade that occurs inside the same industry rather than trade that arises between industries. The phenomena of intra-industry trade have been a key characteristic of postwar trade expansion. Also, these will be listed as intellectual property rights, government procurement, investment protection, and labor and environmental regulations highlighted by WTO as well.

Chapter 7: Transnational Production

elifbusesahin — 2023-11-13 09:06:23 UTC

The global production system is an intricate system that integrates a lot of employees and workplaces into many local, national, regional, and worldwide networks. A method of attempting to comprehend the worldwide production system is to concentrate on the function of the primary players in this procedure, who are the big multinational companies known as "transnational corporations" (TNCs).

Moreover, although there is no consensus in the literature on transnational production and its causes and consequences, it is commonly agreed that the expansion of transnational production substantially impacts the development of the global economy. When it comes to the content, the huge international company's function as the main mediator in this procedure is frequently highlighted in the literature on transnational production. In short, the arrangement and coordination of financial transactions across national borders is referred to as transnational production. It entails putting in place international production procedures, distribution systems, and management frameworks.

Also, it is crucial to note that two different concepts which is related to international political economy as FDI and foreign indirect (portfolio) investment. An investment initiated by a corporation in one nation into a business situated in another state is known as foreign direct investment or FDI. It comprises the handoff of management expertise, capital, and technological resources from the investing company to the receiver.

However, an investing strategy known as foreign indirect investment, or portfolio investment, consists of an investor buying assets from a foreign corporation, such as stocks, bonds, or mutual funds.

When it comes to explaining the growth of TNCs, its definition is the company that conducts business beyond borders. TNCs are distinguished by their intricate organizational frameworks aimed at overseeing their worldwide operations, their extensive global presence, which encompasses research and development and marketing departments across the globe, and their noteworthy influence on the world economy, which stems from a substantial portion of international trade and investment. A company that conducts business beyond borders is referred to as a transnational corporation (TNC) or multinational corporation (MNC). TNCs are distinguished by their intricate organizational frameworks aimed at overseeing their worldwide operations, their extensive global presence, which encompasses research and development and marketing departments across the globe, and their noteworthy influence on the world economy, which stems from a substantial portion of international trade and investment. On the other hand, there will be a few challenges including ecological damage, the disappearance of national identity, and labor exploitation.

Chapter 8: Global Financial System

elifbusesahin — 2023-11-27 18:19:34 UTC

The global financial system refers to the set of economic actors such as legal agreements and institutions including banks, stock exchanges, and insurance companies with the global frameworks. At this point, two points are crucial: the global credit system and the international monetary system (IMS). Although these systems are considered distinct for analytical reasons, they are interconnected and have experienced notable transformations since the mid-1940s. For instance, the shift from fixed to floating exchange rates was made in the IMS, and certain states chose regional currencies such as the euro. Also, thanks to financial deregulation and IT advancements, the global credit system saw a shift in credit generation from governments to firms, resulting in rapid international exchanges of capital.

Moreover, to understand the whole situation more effectively, the Mundell-Fleming model has to be underlined with the ideas of understanding the interplay between the movement of capital, currency rates, and domestic policy. However, economists Mundell and Fleming proposed in the 1960s that states could not have open capital flows, stable exchange rates, and an independent monetary policy all at the same time. It was possible to pursue two of these goals, but accomplishing all three would be incompatible with the other two, making it unworkable. Therefore equations will be listed as:

First, the exchange rate will fluctuate if independent monetary policy and capital flows. Second, capital flows need to be restrained if there is a fixed exchange rate and autonomous monetary policy. Lastly, monetary autonomy must be given up if capital flows and a stable exchange rate are to exist.

On the other hand, there were major developments in the global financial system through the ideas that IMS: from fixed to floating and regional currencies, credit: financial innovation and repeated crises, global credit crises, and corporation and individual tax abuse.

Chapter 9: Global Division of Labour

elifbusesahin — 2023-12-12 05:49:47 UTC

The term "division of labor" was put forward by Adam Smith and relates to an economic notion referring to the specialization of tasks and duties within a group, organization, or society. It entails breaking down a complicated manufacturing procedure or a broader task, which has become more common as the economy has become more globalized, into smaller, more particular tasks, with each individual or group concentrating on one particular component of the overall process. Smith (2016) emphasized that the division of labor appears to have resulted in the greatest enhancement in the productive capacities of labor, as well as the majority of the ability, dexterity, and judgment that it is guided or used anywhere. (pg. 181) With the concept of fordism as its most prominent illustration, it reached human life extensively. The main focus of the division of labor is based on a rise in efficiency and productivity in local and international communities. There are 3 ways to increase productivity. At first, experience at a certain task improves dexterity, which improves speed. The more often someone performs a task, the more proficient and faster they become at it. Secondly, time is saved by avoiding the requirement to switch between jobs. Thirdly, machinery will be used for the activities by streamlining the production process with task specialization for fast production.

Moreover, the international division of labor is the method by which countries concentrate on the manufacturing of specific items for export. The location in the world has a significant impact on the type of work that may be obtained in the worldwide economy. There are major developments in the production process with significant changes. For example, Taylorism was established in the late nineteenth century by Frederick Winslow Taylor as a management theory aimed at improving industrial efficiency. Taylorism is based on time and motion studies, which break down procedures for work into their most productive constituents. It promotes task standardization, piece-rate compensation to incentivize productivity, and a hierarchical organization with strict managerial control. Also, fordism was underlined above.

However, a few key consequences of the division of labor have also emerged. One of the numerous significant challenges surrounding the global division of labor is migration. It will continue with the process in which two massive, populous countries are gradually integrating into the global division of labor which are India and China; the struggle for the rights of employees in the global economy; gendered approaches to the global economy and division of labor, and the connection between workers' rights and global stability.

Chapter 10: Gender

elifbusesahin — 2023-12-19 07:37:55 UTC

The complex intersections of gender, economics, and international relations are one of the main issues for both the international global economy and the global economy. With the idea that the framework for feminist ideas in various domains provides crucial definitions and historical context, as an outcome, it is crucial to emphasize that the importance of studying the interaction between men, women, and the global economy in effectively comprehending political economy. Therefore, a gender focus is significant because it draws the spotlight to an essential dimension of power in society. For instance, gender roles profoundly affect the manufacturing, distribution, and consumption processes both within and beyond national boundaries. Thus, gender influences access to occupation, financial status, leisure, education, health, political power, and decision-making processes. Moreover, gender discrimination has been demonstrated to impair economic growth, offering an economic incentive and political debate for addressing gender disparity. At this point, the feminist perspective came to the scene to fight these consequences due to gender blind concept of traditional IR approaches such as realism, marxism and liberalism. Feminists demonstrate how the prevalent perspective overlooks both women's reality and their significant participation in political and economic life.

When it comes to the gendered analysis of the global political economy, it is significant to look with a feminist lens to cover what is going on in the economy within gendered ideas. There are a few beneficial ideas based on this issue. Firstly, it broadens the range of analysis by going beyond established frameworks to show the complete extent of the system, including formerly neglected or marginalized features. Sometimes looking outside of the traditional approaches brings broader solutions. Secondly, it introduces revolutionary, gender-related subjects to the center, expanding the comprehension of financial procedures and dynamics while eliminating hidden pieces of knowledge. Thirdly, it emphasizes development and poverty alleviation worries, advocating for a transition toward more diverse and balanced economic arrangements. Lastly, it brings into question long-held beliefs and reshapes the notions of power, agency, and value in the worldwide financial system. In short, this new approach provides opportunities for an investigation of the internationalization of global gender policy, with an emphasis on the rising worldwide demand for women's economic engagement.

With these ideas, there are a few major developments happened. These will be listed as employment trends and prospects, which comprised women’s employment related to lack of wages and earnings, gender and global public policy, which refers to bias about the emergence of women onto the international agenda, intra-household inequalities, global sex trade and work, the purchase of brides, etc. At the end of the day, it is an obvious fact that one of the primary issues facing the establishment of a global political economy is the search for enhanced gender equality.

Chapter 11: Economic Development

elifbusesahin — 2023-12-28 11:26:50 UTC

Economic development is a wide and comprehensive phrase that refers to the method of enhancing a nation's, local community's, or even an individual's economic well-being and quality of life. It is not only concerning boosting the economy in terms of absolute numbers, but additionally about spreading the advantages of such expansion in an equitable and sustainable manner. Moreover, the global pursuit of economic development since the conclusion of WWII with the ideas of major subjects in global politics and economy through examination of how states and other actors have dealt with the difficulty of material desires in the face of persisting global inequality.

For a deeper explanation, in the early postwar period, development was characterized as a measure of economic growth, with the gross national product (GNP) of a country serving as the standard metric. This method concentrated on economic variables while paying little or no attention to the cultural and social components of development. Furthermore, as a result of the concentration on aggregate growth, internal redistribution, i.e. the varied rates of growth between various regions, and the effect of development on various socioeconomic groups, have not been taken into consideration. A naive belief in the referred to as 'trickle-down effect' underpinned. Furthermore, plenty of economists still evaluate development by means of income - gross national income per capita (GNI) - production - gross national product per capita (GNP) - or gross domestic product per capita (GDP). This should not be interpreted as a resistance to updating their methodology, but rather as a reflection of the benefits of employing a single metric. In addition to these, the human development index (HDI) centered around an explanation of growth that incorporates social aspects into account such as education level, health, and knowledge.

When it comes to major developments in the area, the development and national, capitalism; neoliberalism will be listed. The transformation of capitalism which means a free market or independent business system is a type of economic system with various distinguishing features to neoliberal ideas which focus on free market competition and privatization of government-owned companies by private individuals or companies signaled a shift to the organization of development. For instance, the World Bank, the North and South conflict, and Third World solidarity and fragmentation.