The major conflicts of the 20th Century can be described in fundamentally economic terms: the First World War was about imperial expansion and access to resources and markets; the Second World War was about living space (lebensraum) and domination of the European economy; the Cold War was about the competition between centrally planned and market economies. The conflicts and instabilities of the post-Cold War world are occasioned by the discontents of globalization and the predations of unconstrained neoliberalism. This version of events might be called “economic determinism” or “materialism” summed up in Bill Clinton’s campaign slogan against George Bush the elder – “It’s the economy, stupid!” – rejecting the failed economic theory of Reagan’s trickle-down economics. As domestic political debates illustrate, theories of economic prosperity and development can be as contentious within the capitalist world, between classes and interests, as they have been between the capitalist First World, the communist Second World, and the Third World of developing and sometimes non-aligned states. When we consider system formation and fracture, we’ll look again at Wallerstein’s World Systems Analysis (WSA) which combines political, economic, and social factors. Here, we focus on economic events.
If politics is about power, and security is about protection from physical and structural violence then economics is about the production and distribution of wealth. Market enthusiasts believe that markets provide the optimum means of producing and distributing wealth, while market sceptics believe that markets are often imperfect and require regulation and management by governments. All markets are created and managed in some way (there are no ‘natural’ markets). Legitimate markets are taxed and regulated by governments; grey markets (legal activities carried out without official sanction) evade taxation and regulation through mutual agreement; black markets (illegal activities) are supported by non-governmental coercion. These definitions imply a framework of government and laws, and the question of who gets to make the laws is a question of politics. Taxing, legitimizing, or criminalizing activity is a function of power. Wealth is a tool that can increase power, depending on the rules. Making rules to govern economic relations between states also requires power, but that power is diffuse, and not limited to states. Markets favour major players, and their tendency is to concentrate size and wealth over time (Hopkins and Wallerstein, 1980; Piketty, 2014) but their advantages can be consolidated and magnified by judicious making, bending, and breaking of rules, a process in which wealth plays a part (Naylor, 2004; Woodiwiss, 2005). Some have argued that this is a necessary and useful part of the process of capital accumulation in transition from a state-controlled economy (Holmstrom and Smith, 2000). But resistance to this tendency is also widespread. We are seeing a wave of nationalism and anti-globalization protest, sometimes led by “wolves in sheep’s clothing” who stand to benefit from the perpetuation of the processes they claim to oppose (see Greg Ip, for a presentation at Carleton University, 15 Sep – let’s see if we can get someone from the class there to report on it). Mark Blyth has presented persuasively on “Global Trumpism” of the left as well as the right. These anti-market forces push-back and resistance are similar in some ways to the fascist and communist movements of the early 20th century (Polanyi, 1957), but in the modern era of Cambridge Analytica and big data gleaned from individual economic actions, can they be coopted by the very forces that stimulate them in the first place?
Depending on the cases selected, we will have an opportunity to explore some of the issues surrounding international trade rivalry and regional blocks, world economic leadership, systemic and anti-systemic movements in global capitalism, and the pros and cons of neoliberal globalization. China has invested trillions in domestic and international infrastructure over the same decades in which the US has invested little in domestic infrastructure and a lot in expeditionary wars of dubious utility
Shiraev, Chapter 7
Other resources according to cases considered
Student coordinators will select two of the following cases to explore this week. Note that each of the cases can be seen within a strictly domestic political context, but our aim is to consider them in the context of international relations – both state and non-state actors, including the impact on social dynamics:
Blyth, M. (2013). Austerity: The history of a bad idea. Oxford: Oxford University Press.
Holmstrom, N., & Smith, R. (2000). The necessity of gangster capitalism: primitive accumulation in Russia and China. Monthly Review, 51(9), 1.
Hopkins, T.K. and I. Wallerstein, eds. (1980) Processes of the World-System. Volume 3 Political Economicy of the World System Annuals. Boulder, CO: Sage.
Naylor, R. T. (2004). Wages of crime: Black markets, illegal finance, and the underworld economy. Cornell University Press.
Polanyi, K. (1957). The great transformation:(The political and economic origin of our time). Beacon Press.
Piketty, T. (2014). Capital in the 21st Century. Cambridge, MA: Harvard University Press.
Swaine, M. D. (2015). Chinese views and commentary on the ‘One Belt, One Road’initiative.
China Leadership Monitor, 47(2), 3.
Woodiwiss, M. (2005). Gangster capitalism: The United States and the global rise of organised crime. Constable.
Ostry, S. (2008). The post-cold war trading system: who’s on first?. University of Chicago Press.
Delener, Nedjet () Strategic Planning and Multinational Trading Blocs
Baldwin R. and Low, P. () Multilateralizing Regionalism: Challenges for the Global Trading System. World Trade Organization, Cambridge. [this is a good illustration of why major economic events get less coverage than relatively insignificant violent events]
Baru, Sanjaya and Suvi Dogra, eds. (2015) Power Shifts and New Blocs in the Global Trading System, London: IISS.
OECD (2009) Foreign Acquisitions and National Security
Potter, C., & Tilzey, M. (2005). Agricultural policy discourses in the European post-Fordist transition: neoliberalism, neomercantilism and multifunctionality. Progress in Human geography, 29(5), 581-600.
Hettne, B. (1993). Neo-mercantilism: the pursuit of regionness. Cooperation and Conflict, 28(3), 211-232.
Hudson, M. (2015). Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy. CounterPunch.
Langman, L. (2013). Occupy: A new new social movement. Current Sociology, 61(4), 510-524.(go to page 158 on the attached proceedings, or search Langman)
Rickards, J. (2012). Currency wars: The making of the next global crisis. Penguin. Commentary by Investors’ Podcast.
Naylor, R. T. (2014). Counterfeit Crime: Criminal Profits, Terror Dollars, and Nonsense. McGill-Queen’s Press-MQUP.
Perkins, J. (2011). Confessions of an Economic Hit Man: The shocking story of how America really took over the world. Random House.
Sparke, M. (2013). From global dispossession to local repossession: Towards a worldly cultural geography of Occupy activism. The Wiley-Blackwell companion to cultural geography, 387-408.
Senftleben, A. From Washington Consensus to Economic Shock Therapy in Europe: Blog Commentaries on Economic Policies during the Eurocrisis, 2101-2014. Self-published e-book.
Lyne, M. M. WHY THE WASHINGTON CONSENSUS MISDIAGNOSED ECONOMIC REFORM IN DEVELOPING COUNTRIES: NOT RENT-SEEKING BUT CLIENTELISM.
Rothkopf, D. (2012). Power, Inc.: The Epic Rivalry Between Big Business and Government–and the Reckoning That Lies Ahead. Macmillan. (extracts on Moodle)
Johnston, J., & Laxer, G. (2003). Solidarity in the age of globalization: Lessons from the anti-MAI and Zapatista struggles. Theory and Society, 32(1), 39-91.