AGENDA Intended learning outcomes
Global Political Economy 1. Global political economy as way of seeing world economy • Restate the aims of global political economy, this course
Perspectives on the origins of the contemporary world market
2. Theoretical traditions reflect assumption, normative stances • Summarize major theoretical traditions in GPE
Jonathan D. London 3. World capitalism on trial – Trade in historical perspective • Compare four key focuses of global political economy
Discover the world at Leiden University Question
Discover the 1
world at Leiden University Discover the on
• Explain GPE perspectives world at Leiden
trade Universitycapitalism
in historical
How can we understand origins of the present world economy?
.. .. ..
3 4
Global Political Economy, An Overview Complimentary insights and counterpoints
Part 1 – International Economics Part 2 – Global Political Economy • Economics useful but alone inadequate, at times misleading
• International Trade • Introduction to Global Political Economy
1. Introducing Global Political Economy – World trade: Absolute/comparative advantage – Historical capitalism • Economy not independent of politics, social/power relations
– Trade policy and regulation – From national development to neoliberalism
• International Production • Transnationalization and state effectiveness
– FDI, theory of the firm, regulation – Global commodity chains, financialization • Study of economy always context specific context matters
• International Financial Systems • Contemporary debates
Discover the world at Leiden University Discover
– Introduction to international finance the world at
– Leiden
Welfare &University
inequality/social reproduction & policy Discover
• GPE also concerns the world atprinciples
mechanisms, Leiden University
but not abstractions
– Exchange rates and the IMF – Democracy, the world market, inclusive growth
– Monetary unions and monetary crises – Debating a more secure and sustainable future
.. .. ..
8
7
What is global political economy? Focuses of contemporary global political economy Global Political Economy
• Addresses world economy, its development, dynamics, effects • Economic growth or Capital Accumulation – key, not privileged • Affirms social, political foundations of the world economy
– Assumes politics & economy may not be understood independently – Historically grounded, attention to path dependence, agency
• Welfare, fulfillment of needs, capabilities dev, ‘real freedom’
• Draws on multiple, sometimes rival theoretical traditions • Recognizes states’ unique roles, limits of state-centered analysis
– Rejects key assumptions of economics, draws on certain insights – Emphasizes increasingly transnational features of world market
• Inequality, i.e. uneven distributions of valued resources
• A multidisciplinary and in respects post-disciplinary field of study • Views world from different standpoints, perspectives
Discover the world at Leiden University Discover
• Environment, the the world
ecosystem as at Leiden
the basisUniversity
of social life Discover the world at Leiden University
– Old, recent, and changing – Does not embrace any particular view of how world is, ought to be
.. .. ..
9 11 12
, New global political economy differs AGENDA Intended learning outcomes
• Rejection of notion an “apolitical” world economy 1. Global political economy as way of seeing world economy • Summarise major theoretical traditions in GPE
– Economy Social, political, cultural, historical, geography.
2. Theoretical traditions reflect assumption, normative stances • Compare four key focuses of global political economy
• Embrace of multi-disciplinary approaches
– Economics, sociology, politics, anthropology, humanities
3. Trade in historical perspective • Explain GPE perspectives on trade in historical capitalism
• Attention to dynamics not top-down processes of change
Discover the world at Leiden University Discover the world at Leiden University Discover the world at Leiden University
– World economy constituted of linked local processes
.. .. ..
14 17 18
Theoretical traditions Analytical focuses and perspectives
I. Liberal, neo-classical (economics) political economy 1. Broadening performance analytics
– Not only/mainly growth welfare, inequality, environment
1. Theoretical Traditions in
II. Critical political economy
Global Political Economy 2. Globalizing global political economy
III. ‘State centered’ | Nationalist | ‘developmentalist’ – Diversity, world history, area studies, interdependence
Discover the world at Leiden University Discover the world at Leiden University 3. Multi-dimensional awareness
Discover the world at Leiden University
E.g., Location, time, status/class,gender, ethnicity, racism
.. .. ..
20 21
Neoclassical Economics & GPE Diversity with Neo-classical political economy Critical Political Economy
• Markets based on voluntary exchanges • Exploitive nature of capitalist social relations
– Human beings are rational, markets are efficient
• Champions of capitalism, “free-trade” and markets
– E.g. Baghwati and Neoliberals – World economy founded on unequal exchange
• Free trade produces mutual benefits
– Efficient and equitable • Countries’ structural modes of integration
– e.g. comparative advantage, factor-price equalization • Keynesian and post-Keynesian
– Difficult to overcome, limited mobility
• A world defined by market “frictions” – E.g. J. Stiglitz and Dani Rodrik
– Constraints on trade, Gov’t policy, ‘distortions’ • ‘Combined and uneven development’
• Recent ‘discovery’ ofDiscover the world at Leiden University
politics, institutions • New Institutionalism
Discover the world at Leiden University – Internal processes of exploitation
Discover the world at Leiden University
– Liberal institutionalist theory (e.g. Keohane) – E.g. Douglas North, Robinson and Acemoglu – External processes of dependence
.. .. ..
24 25
, Critical Political Economy Diversity in critical political economy State-centered perspectives
• Exploitive nature of capitalist social relations • Marx • States in the world economy
– World economy founded on unequal exchange – Assumes inseparability of politics & economy but….
– Class struggle, exploitation, consciousness, revolution
– Influence of neoclassical economics
– State centrism
• Countries’ structural modes of integration • Weber
– Difficult to overcome, limited mobility • Theories of state behavior – what they do and why
– Class status and party as shaping opportunity, life chances
– Two-level games (domestic/international concerns)
– E.g. states motivated by a singular ‘national interest’
• ‘Combined and uneven development’
• Polanyi
– Internal processes of exploitation
Discover the world at Leiden University Discover the world at Leiden University Discover
• Mix of “markets” and politicalthe world at Leiden University
institutions
– External processes of dependence
– Origins of market-pattern across time as an elite project
– Democratic, authoritarian regimes, etc.
.. .. ..
26 28
Gendered (e.g. feminist) perspectives A Conceptual and Theoretical Tool box
• Why a feminist perspective?
– Sex ≠ gender ≠ gender relations
• Varieties of critical political economy
– Gender is about power relations, differences, conflicts
– e.g. Care: for love or money--or both? (Folbre) 3. Historical Capitalism and Trade
• Varieties of state-centered political Economy
• But is there one or many feminist perspectives? 1431-2020
– Intersectionality
– Third World Women ≅ Underdeveloped • Varieties of neo-classical political economy
• Racial and economic dominance
– Concrete manifestations (e.g.the
Discover feminisation of poverty)
world at Leiden University • Limitless issues,Discover
diversethe world at Leiden University
methods Discover the world at Leiden University
– Ways of thinking (e.g. colonial legacy, modernity)
35
.. .. ..
32 34
Theorizing the historical development of capitalism Development of the world economy or world market A plurality of perspectives, normative orientations
• Neoclassical economics, orthodox/heterodox etc.
• One world economy • Trade • Interstate system, political aspects
– Keynesianism, ‘New Institutional Economics’
• Competing narratives, competing theoretical traditions • Finance • Hegemonic cycles, world economic orders • Old and new varieties of state theory, social science institutionalism
– ‘Effective states’
• Multi-dimensional focuses within these stories • Production • 500–, 70–, 40 year views
• Critical political economy, including Marx, Weber, Polanyi, Harvey
– Critical because developed through critique
• Labor flows/limits • Phases of the world market
• Advantages and Discover
drawbacksthe world at Leiden University
of theoretical pluralism Discover the world at Leiden University Discover the world at Leiden University
• Perspectives on issues: growth, welfare, inequality, ecology
• Intersectionality: place, sex/gender, ethnicity, racism, other…
.. .. ..
36 38
, ‘Economic globalization’ – Realization of world market When did globalization start? Phases of Historical Capitalism up to 20th C
• Expansion, intensification of cross-border ties • 1990s? • Markets trace to antiquity • ‘Imperialism’ and its meanings
• Increased integration and interdependence o • 1930s, 1945? • Capitalism’s origins • Industrial capitalism
– First in Europe, Europe-centered – Massive uptick in productivity
• Facilitated by politics and institutional change • 1870s-1914
• Long distance merchant trade • Post WWII Development project
• Facilitated by advances in transport, ICT, financial instruments • 1431, 1492 – Mercantilism – National development/ISI
Discover the world at Leiden University Discover the world at Leiden University
• Limits on scope of national economic management • Conquest, colonialism, capitalism formation of world market • Colonial expansion • Accelerated globalization
– Conquest, exploitation – Neoliberal marketizing phase
.. ..
40
Thinking about Trade Three divergent perspectives on trade Geopolitics and historical capitalism
• ‘Interdependent master processes’ or ‘logics of power’
• Think comparatively, historically about experiences • Trade benefits all force for prosperity
– Europe, North America – Smith, Ricardo arguments about efficiency – Creation of international system of states, Westphalia (1648)
– East Asia, Latin America, Middle East, Africa – Recognizing states and sovereignty – territorial logic of power
– Commodity-centered perspectives are useful • Potentially beneficial to national, general interests
– Formation, motion of world capitalist market – ‘logic of capital’
– List protections to avoid subjugation
• Trade, national and particular interests, hegemony – Problem of late development Gerschenkron
– From past to present – who writes, enforces the rules? – Trade can but has not always (or even mostly) promoted benefits • Role of hegemonic leadership
– Rules of game governing world economy
• Drawing on insights of multiple perspectives • Trade as unequal exchange – Concept of ‘general interest’
Discover the world at Leiden University Discover the world at Leiden University Discover the world at Leiden University
– Motivations, politics, classes, effects on groups – Social relations, organization of activity
– ‘Underdevelopment’ result of social relations – Where do these rules come from?
.. .. ..
43 50
Arrighi’s Argument From the Big Bang ‘til Now
• Money is most fluid form of capital • World Economy has grown exponentially since 1900
– Commodities and production are cumbersome
• World hegemonic powers become financiers • Periods of crisis, immense wealth, important gains
– Hegemonic powers dominate, money goes to production
– Aspiring hegemons can dominate trade, production via institutions
• The current pandemic, geopolitics introduces uncertainty
Discover the world at Leiden University
• Power of finance has massively transformed capitalism
Discover the world at Leiden University Discover the world at Leiden University
– Where has capital gone? China. • Effects will be felt globally, across and within countries
– Most spectacular and rapid industrialization every 2020
.. .. ..
Discover the world at Leiden University Discover the world at Leiden University 56
Global Political Economy 1. Global political economy as way of seeing world economy • Restate the aims of global political economy, this course
Perspectives on the origins of the contemporary world market
2. Theoretical traditions reflect assumption, normative stances • Summarize major theoretical traditions in GPE
Jonathan D. London 3. World capitalism on trial – Trade in historical perspective • Compare four key focuses of global political economy
Discover the world at Leiden University Question
Discover the 1
world at Leiden University Discover the on
• Explain GPE perspectives world at Leiden
trade Universitycapitalism
in historical
How can we understand origins of the present world economy?
.. .. ..
3 4
Global Political Economy, An Overview Complimentary insights and counterpoints
Part 1 – International Economics Part 2 – Global Political Economy • Economics useful but alone inadequate, at times misleading
• International Trade • Introduction to Global Political Economy
1. Introducing Global Political Economy – World trade: Absolute/comparative advantage – Historical capitalism • Economy not independent of politics, social/power relations
– Trade policy and regulation – From national development to neoliberalism
• International Production • Transnationalization and state effectiveness
– FDI, theory of the firm, regulation – Global commodity chains, financialization • Study of economy always context specific context matters
• International Financial Systems • Contemporary debates
Discover the world at Leiden University Discover
– Introduction to international finance the world at
– Leiden
Welfare &University
inequality/social reproduction & policy Discover
• GPE also concerns the world atprinciples
mechanisms, Leiden University
but not abstractions
– Exchange rates and the IMF – Democracy, the world market, inclusive growth
– Monetary unions and monetary crises – Debating a more secure and sustainable future
.. .. ..
8
7
What is global political economy? Focuses of contemporary global political economy Global Political Economy
• Addresses world economy, its development, dynamics, effects • Economic growth or Capital Accumulation – key, not privileged • Affirms social, political foundations of the world economy
– Assumes politics & economy may not be understood independently – Historically grounded, attention to path dependence, agency
• Welfare, fulfillment of needs, capabilities dev, ‘real freedom’
• Draws on multiple, sometimes rival theoretical traditions • Recognizes states’ unique roles, limits of state-centered analysis
– Rejects key assumptions of economics, draws on certain insights – Emphasizes increasingly transnational features of world market
• Inequality, i.e. uneven distributions of valued resources
• A multidisciplinary and in respects post-disciplinary field of study • Views world from different standpoints, perspectives
Discover the world at Leiden University Discover
• Environment, the the world
ecosystem as at Leiden
the basisUniversity
of social life Discover the world at Leiden University
– Old, recent, and changing – Does not embrace any particular view of how world is, ought to be
.. .. ..
9 11 12
, New global political economy differs AGENDA Intended learning outcomes
• Rejection of notion an “apolitical” world economy 1. Global political economy as way of seeing world economy • Summarise major theoretical traditions in GPE
– Economy Social, political, cultural, historical, geography.
2. Theoretical traditions reflect assumption, normative stances • Compare four key focuses of global political economy
• Embrace of multi-disciplinary approaches
– Economics, sociology, politics, anthropology, humanities
3. Trade in historical perspective • Explain GPE perspectives on trade in historical capitalism
• Attention to dynamics not top-down processes of change
Discover the world at Leiden University Discover the world at Leiden University Discover the world at Leiden University
– World economy constituted of linked local processes
.. .. ..
14 17 18
Theoretical traditions Analytical focuses and perspectives
I. Liberal, neo-classical (economics) political economy 1. Broadening performance analytics
– Not only/mainly growth welfare, inequality, environment
1. Theoretical Traditions in
II. Critical political economy
Global Political Economy 2. Globalizing global political economy
III. ‘State centered’ | Nationalist | ‘developmentalist’ – Diversity, world history, area studies, interdependence
Discover the world at Leiden University Discover the world at Leiden University 3. Multi-dimensional awareness
Discover the world at Leiden University
E.g., Location, time, status/class,gender, ethnicity, racism
.. .. ..
20 21
Neoclassical Economics & GPE Diversity with Neo-classical political economy Critical Political Economy
• Markets based on voluntary exchanges • Exploitive nature of capitalist social relations
– Human beings are rational, markets are efficient
• Champions of capitalism, “free-trade” and markets
– E.g. Baghwati and Neoliberals – World economy founded on unequal exchange
• Free trade produces mutual benefits
– Efficient and equitable • Countries’ structural modes of integration
– e.g. comparative advantage, factor-price equalization • Keynesian and post-Keynesian
– Difficult to overcome, limited mobility
• A world defined by market “frictions” – E.g. J. Stiglitz and Dani Rodrik
– Constraints on trade, Gov’t policy, ‘distortions’ • ‘Combined and uneven development’
• Recent ‘discovery’ ofDiscover the world at Leiden University
politics, institutions • New Institutionalism
Discover the world at Leiden University – Internal processes of exploitation
Discover the world at Leiden University
– Liberal institutionalist theory (e.g. Keohane) – E.g. Douglas North, Robinson and Acemoglu – External processes of dependence
.. .. ..
24 25
, Critical Political Economy Diversity in critical political economy State-centered perspectives
• Exploitive nature of capitalist social relations • Marx • States in the world economy
– World economy founded on unequal exchange – Assumes inseparability of politics & economy but….
– Class struggle, exploitation, consciousness, revolution
– Influence of neoclassical economics
– State centrism
• Countries’ structural modes of integration • Weber
– Difficult to overcome, limited mobility • Theories of state behavior – what they do and why
– Class status and party as shaping opportunity, life chances
– Two-level games (domestic/international concerns)
– E.g. states motivated by a singular ‘national interest’
• ‘Combined and uneven development’
• Polanyi
– Internal processes of exploitation
Discover the world at Leiden University Discover the world at Leiden University Discover
• Mix of “markets” and politicalthe world at Leiden University
institutions
– External processes of dependence
– Origins of market-pattern across time as an elite project
– Democratic, authoritarian regimes, etc.
.. .. ..
26 28
Gendered (e.g. feminist) perspectives A Conceptual and Theoretical Tool box
• Why a feminist perspective?
– Sex ≠ gender ≠ gender relations
• Varieties of critical political economy
– Gender is about power relations, differences, conflicts
– e.g. Care: for love or money--or both? (Folbre) 3. Historical Capitalism and Trade
• Varieties of state-centered political Economy
• But is there one or many feminist perspectives? 1431-2020
– Intersectionality
– Third World Women ≅ Underdeveloped • Varieties of neo-classical political economy
• Racial and economic dominance
– Concrete manifestations (e.g.the
Discover feminisation of poverty)
world at Leiden University • Limitless issues,Discover
diversethe world at Leiden University
methods Discover the world at Leiden University
– Ways of thinking (e.g. colonial legacy, modernity)
35
.. .. ..
32 34
Theorizing the historical development of capitalism Development of the world economy or world market A plurality of perspectives, normative orientations
• Neoclassical economics, orthodox/heterodox etc.
• One world economy • Trade • Interstate system, political aspects
– Keynesianism, ‘New Institutional Economics’
• Competing narratives, competing theoretical traditions • Finance • Hegemonic cycles, world economic orders • Old and new varieties of state theory, social science institutionalism
– ‘Effective states’
• Multi-dimensional focuses within these stories • Production • 500–, 70–, 40 year views
• Critical political economy, including Marx, Weber, Polanyi, Harvey
– Critical because developed through critique
• Labor flows/limits • Phases of the world market
• Advantages and Discover
drawbacksthe world at Leiden University
of theoretical pluralism Discover the world at Leiden University Discover the world at Leiden University
• Perspectives on issues: growth, welfare, inequality, ecology
• Intersectionality: place, sex/gender, ethnicity, racism, other…
.. .. ..
36 38
, ‘Economic globalization’ – Realization of world market When did globalization start? Phases of Historical Capitalism up to 20th C
• Expansion, intensification of cross-border ties • 1990s? • Markets trace to antiquity • ‘Imperialism’ and its meanings
• Increased integration and interdependence o • 1930s, 1945? • Capitalism’s origins • Industrial capitalism
– First in Europe, Europe-centered – Massive uptick in productivity
• Facilitated by politics and institutional change • 1870s-1914
• Long distance merchant trade • Post WWII Development project
• Facilitated by advances in transport, ICT, financial instruments • 1431, 1492 – Mercantilism – National development/ISI
Discover the world at Leiden University Discover the world at Leiden University
• Limits on scope of national economic management • Conquest, colonialism, capitalism formation of world market • Colonial expansion • Accelerated globalization
– Conquest, exploitation – Neoliberal marketizing phase
.. ..
40
Thinking about Trade Three divergent perspectives on trade Geopolitics and historical capitalism
• ‘Interdependent master processes’ or ‘logics of power’
• Think comparatively, historically about experiences • Trade benefits all force for prosperity
– Europe, North America – Smith, Ricardo arguments about efficiency – Creation of international system of states, Westphalia (1648)
– East Asia, Latin America, Middle East, Africa – Recognizing states and sovereignty – territorial logic of power
– Commodity-centered perspectives are useful • Potentially beneficial to national, general interests
– Formation, motion of world capitalist market – ‘logic of capital’
– List protections to avoid subjugation
• Trade, national and particular interests, hegemony – Problem of late development Gerschenkron
– From past to present – who writes, enforces the rules? – Trade can but has not always (or even mostly) promoted benefits • Role of hegemonic leadership
– Rules of game governing world economy
• Drawing on insights of multiple perspectives • Trade as unequal exchange – Concept of ‘general interest’
Discover the world at Leiden University Discover the world at Leiden University Discover the world at Leiden University
– Motivations, politics, classes, effects on groups – Social relations, organization of activity
– ‘Underdevelopment’ result of social relations – Where do these rules come from?
.. .. ..
43 50
Arrighi’s Argument From the Big Bang ‘til Now
• Money is most fluid form of capital • World Economy has grown exponentially since 1900
– Commodities and production are cumbersome
• World hegemonic powers become financiers • Periods of crisis, immense wealth, important gains
– Hegemonic powers dominate, money goes to production
– Aspiring hegemons can dominate trade, production via institutions
• The current pandemic, geopolitics introduces uncertainty
Discover the world at Leiden University
• Power of finance has massively transformed capitalism
Discover the world at Leiden University Discover the world at Leiden University
– Where has capital gone? China. • Effects will be felt globally, across and within countries
– Most spectacular and rapid industrialization every 2020
.. .. ..
Discover the world at Leiden University Discover the world at Leiden University 56
