Chapter 12 - International Political Economy

 

If politics is "war by other means," or "war is politics by other means" - all economics is political and all politics has an element of economics.

Have a scared you off with this yet?

Many students' eyes glaze over when we turn to the topic of economics and that is really too bad because everything we do has a cost, a price and short and long term consequences. If only we, as individuals and as a planet could think in those terms, the wonders we could do together ...

First - Let me personally apologize for my inability to get the online application "www.BetweenNations" up and running for this class - I just couldn't get it to work - sorry. ...

The three theories the authors put forth on page 371 are the basic theories we have been working with since before "neo" was around - not the Matrix guy, but as is "neo-mercantilism" and "neo-Marxism."

The whole "neo" thing kind of makes me laugh, like that somehow gives it more authority (or less) or cache or something. Some scholars even use the term "Marxian" rather than Marxist because they are some how not Marxists but, well, you know, kind of, well, Marxian.

By the way - notice no "neo-liberals" - yet!

But if you want a simple breakdown of the three main starting points, I guess these are as good as any.

Many scholars would argue that Japan is a good example of a "neo-mercantilist" state.

But, it seems nearly wide open which states we could call "neo-marxist." South American countries that use the language of Marx like Peru or actual "communist" countries like Cuba. Those who are still single party like China or those who continue the language of revolution but deliver only more poverty, like the struggling states of sub-Saharan Africa.

It may be easy to dismiss others' view as marxist or neo or whatever but most of it comes down to the impact of globalization.

One's view of development depends almost exclusively upon where one is sitting in the world or ours.

To extend the logic of John Rawls: do not expect those who have less, know less or hope less than you to see the world as you see it. The danger is that they cannot see the world as we see it.

What may be good for the world (or at least the so-called first world) may not be seen as good for most of the world. Even if WE "know better" and "they" are poor, ignorant, peasants. Development always comes down to the questions: development for whom?

Free trade is rooted in the beliefs of Adam Smith and every other product of the enlightenment and the western tradition in general - you and me - it comes from individualism, greed, lust, thrist, all those things that drive humans to cooperate AND to stab each other in the back.

The reality is that no one is really a TOTAL free trader - at least no country practices 100 per cent total free trade - no domestic government could afford to do that to whatever its major export industries happen to be.

The "rational choice" discussion on pages 378 - 380 is a good place for you to start to think about the basic assumptions of all your thinking. Are humans really rational? Is that what motivates us to act? Is the market place a product of rational choices by people with all the information acting in purely a rational way?

Or are we humans "rational animals."? We are both rationality and animal instinct, need, insecurities, etc.

Rational Choice sounds so cool, but is it a computer game, or is it an accurate reflection of the human reality? You decide, or better, keep thinking about this throughout your entire academic career, or longer.

There is no doubt that one of the biggest realities in trade is not tariffs (taxes) but non-tariff barriers. These can be legitimate issues of health, safety, quality, environmental concerns, etc, but they can and often are equally misused to keep out foreign competition or to raise the cost of those foreign goods so as to protect the domestic industry.

Never under estimate the creative capacity of a customs agent, nor his level of graft. Never forget what Frank Herbert (author of Dune books etc) said about how "government is the best organized organized-crime."

Again, many would point out that Japan does a highly effective job of using non-tariff barriers to keep out foreign goods from domestic industries that the government wishes to protect.

I'm not sure how realistic or useful is the "Trading Blocs" discussion on pages 382 - 384. What we have seen in the recent economic collapse is that there is no "Fortress North America" nor "Fortress Europe." I think that's all rather silly and fanciful, but there are many in the study of international relations who love to talk in such terms. It makes the whole world seem like a board game, simple, understandable, and nobody really gets hurt. I dislike that about the study of IR - the glib dismissal of human suffering and death as just some how part of it all ... And of course, human suffering and death is just part of it all ...

Throughout my entire career as a student, I watched GATT grow and change and morph and eventually, by the time it became the WTO, I was teaching at the community college level. Like the Euro - I always just assumed they would keep talking about it and it would never really happen. But the world progresses even if you think it never will.

Has the WTO delivered on all the promises and hopes of the long GATT process, of course not. Will it ever? Who knows. Is the world a better place because of the WTO? There is a student who has picked the WTO as their international organization so I'll leave my thoughts in my head, but it's really an issue we should all continue to think about.

Many people can not seem to understand that all currency is just a commodity, like pork bellies and cotton futures, currencies are bought and sold by speculators who hope to make money on the trade. But most currencies of the richer countries are held by governments, banks and other financial institutions that can never fail, right?

Or does money really only exist in the mind of rational animals who somehow interact with this thing called the market ...

Some of my professors in the eighties talked about a global credit freeze causing a global banking meltdown, but that's not what has happened today, right? No, its just a down turn, an adjustment, yeah, that's what we'll call it ... an adjustment.

Anyway, no matter how bad the economy may look to you or me - just stay in school, get at least a BA - but, smarter to get an MA. Sure a BA (or BS) gets you more money in your thirties, forties, fifties, etc, but a Master's gets you even better money throughout your life. You could get a masters from any Cal State school. If you can succeed at LACC, all you need to do is continue to put in the work and before you know it, you'll have a bachelor's degree and then a master's and then, well it's up to you (as it always is).

The end is near.

The end of the semester, that is ...