Politics 240
International Political Economy
Spring 2010

Vincent Ferraro
103 Skinner Hall
Mount Holyoke College
Ext. 2669

Purpose of the Course

This course introduces some of the fundamental relationships between politics and economics, on both the domestic and international levels. Its purpose is not to assert either the primacy of economics or politics, but rather to show how these two aspects of human behavior are mutually dependent and how, over time, economics and politics generally support each other in a coherent social system. Moreover, the course will show how, on the international level, political decisions intervene on all economic decisions and economic constraints shape political possibilities.

Course Format

The format of this course is mixed. We shall try to go through each reading in class and the intention will be to learn how to read critically. My initial conceptualization of the course will be to give a brief overview lecture for each class We will then, as a class, go through each reading in order to parse out the author's intent, and where the author succeeds or fails in making a persuasive point. To this end, the readings for each class are very short. In addition, I have posted a "central" question that each reading poses in the syllabus in order to help you do the readings with a more focused perspective.

Evaluations will be based on a mid-term (due on 8 March) and a final, handed out on 21 April and due no later than the last day of exams, 13 May (Seniors have to hand their finals in no later than 5 pm on 11 May), each comprising 45% of the final grade. Class participation will make up the final 10% of the grade. Both the mid-term and the final are take-home exams with open books and open discussion.

There are no readings to purchase for this course--all the readings are online. You can access this syllabus at: http://www.mtholyoke.edu/acad/intrel/ipe/spring10.htm My office hours are Tuesdays, 10:30-12 and Friday, 10:30-12. Please let me know if you wish to see me at those times.

27 January--Introduction

History of the World Economy

1 February--The Development of the World Economy

Question: Why did Europe grow economically so much faster than the rest of the world in the modern period?

Angus Maddison, The World Economy: A Millennial Perspective (Paris: OECD, 2001), Chapter 1, "Introduction and Summary," pp. 17-25

Excerpt from Ronald Findlay and Kevin H. O'Rourke, Power and Plenty: Trade, War, and the World Economy in the Second Millennium (Princeton: Princeton University Press, 2007), pp. 353-364.

Data on Global Economy Over Time

3 February--Mercantilism

Question: What is the relationship between "Power and Plenty" to "Private and Public Power"?

Jacob Viner, "Power and Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries," World Politics, Vol. 1, no. 1 (October 1948)

8 February--The Historical Significance of Market Capitalism

Question: Is Market Capitalism "Natural"?

Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon Press, 1944), Excerpts from Chapter 6, "The Self-Regulating Market and the Fictitious Commodities: Labor, Land, and Money," pp. 68-76

10 February--The Political Logic of Market Capitalism

Question: Is Economic Freedom a Necessary Condition for Political Freedom?

Excerpts from Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962), Chapter 1, "The Relation Between Economic Freedom and Political Freedom," pp. 7-17.

15 February--The Countermovement

Question: Is the Countermovement populated simply by the "losers?"

Karl Marx and Frederick Engels, Manifesto of the Communist Party (Excerpt), 1848

Globalization as the Underlying Process in International Political Economy

17 February--Globalization 1.0

Question: Is Globalization a Euphemism for Imperialism?

The Largest Historical Empires


John Maynard Keynes, Excerpt from Chapter II, "Europe Before the War", in The Economic Consequences of the Peace (1920)

Martin Walker, "Globalization 3.0," Wilson Quarterly, Autumn 2007

22 February--Globalization 2.0

Question: Was Globalization an Objective of the European States in the late Nineteenth Century?

John Gallagher and Ronald Robinson, "The Imperialism of Free Trade," The Economic History Review, Second series, Vol. VI, no. 1 (1953)

Excerpt from Kevin H. O'Rourke and Jeffrey G. Williamson, Globalization and History: The Evolution of a Nineteenth Century Atlantic Economy (Cambridge: MIT Press, 1999), pp. 33-41.

24 February--The Bretton Woods System

Question: Why Were Multilateral Institutions Necessary to Twentieth Century Globalization?

Robert Gilpin, "The Rise of American Hegemony," in Two Hegemonies: Britain 1846-1914 and the United States 1941-2001 edited by Patrick Karl O'Brien and Armand Clesse (Aldershot: Ashgate Publishing, Ltd., 2002), pp. 165-182

Benjamin Cohen, "Bretton Woods System," Routledge Encyclopedia of International Political Economy

1 March--The Washington Consensus

Question: Were the Roots of the Washington Consensus Economic or Ideological?

John Williamson, "A Short History of the Washington Consensus," Senior Fellow, Institute for International Economics, Paper commissioned by Fundación CIDOB for a conference “From the Washington Consensus towards a new Global Governance,” Barcelona, September 24–25, 2004.

W.W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge: Cambridge University Press, 1960), Chapter 2, "The Five Stages of Growth--A Summary," pp. 4-16

3 March--The World Systems Approach

Question: In What Specific Ways Does the World System Approach Differ from the Neo-liberal Approach?

Vincent Ferraro, "Dependency Theory: An Introduction," July 1996

Midterm Exam is due in class on 8 March.
An article in The Economist, "Onwards and upwards:Why is the modern view of progress so impoverished?" December 17 2009 (http://www.mtholyoke.edu/acad/intrel/ipe/progress.htm) places the development of political economy within a moral framework that can be loosely described as "progress." Please write an essay of no more than 8 pages critically assessing the following question: Is the belief in progress implicit in the liberal political economy justified? Or is the belief in progress merely a self-serving rationalization supported only by those who benefit from that system?

Recommended Reading: Joe Gertner, "The Rise and Fall of the GDP," New York Times Sunday Magazine, 10 May 2010

8 March--Globalization 3.0

Part 1: The Countermovement Collapses

Question: Did the Soviet Union Collapse Because Its System Failed or Because the Countermovement Was No Longer Necessary?

Excerpt from Robert Strayer, Why Did the Soviet Union Collapse?: Understanding Historical Change (New York: M.E. Sharpe, 1998), pp. 56-60

2 March--Globalization 3.0

Part 2: Technology Accelerates the Process

Question: To What Extent are the Technological Changes of the late 20th Century a Direct Outgrowth of Liberal Institutions?

World Trade Organization, World Trade Report 2008, Part IIB, "Globalization and Trade," pp. 15-26

10 March--Globalization 3.0

Part 3: China Joins the Global Economy

Question: How Should We Characterize the Chinese Economy: Neo-liberal or State Capitalist?

David Zweig, "China Joins the Global Economy - Part One: How bureaucratic barriers were breached with a policy of 'No flow, no dough'," YaleGlobal, 15 September 2003

Paul Krugman, "The great illusion," New York Times, 15 August 2008

Katrin Bennhold, "As China Rises, Conflict With West Rises Too," New York Times, 26 January 2010

22 March--Globalization 3.0

Part 4: India Joins the Global Economy

Question: Is India a Liberal State?

Shankar Acharya, "Why did India reform?" February 24, 2004

24 March

The Success of Globalization: The Creation of Wealth

Question: In What Ways are Growth and Development Linked?

Levels of World Economic Performance, 1500-1992

Rainer Falk, "Spreading the Benefits of Globalisation," World Economy & Development in Brief, March 26, 2008

Ashley Seager, "Development: US fails to measure up on 'human index'," The Guardian, July 17, 2008

Alan Beattie, "Brics: The changing faces of global power," Financial Times, 17 January 2010

29 March

The Success of Globalization: The Reduction of Poverty

Question: Is Global Poverty Declining?

David Dollar and Aart Kraay, "Trade, Growth, and Poverty," Finance & Development, September 2001, Volume 38, Number 3

Branko Milanovic, "Why Did the Poorest Countries Fail to Catch Up?" Carnegie Papers, Number 62, November 2005

31 March

The Economic Dimension of Convergence: Incomes

Question: How Equal Should Global Incomes Be?

International Development Economics Associates, "Globalisation and Income Inequality: A Survey," 19 August 2002

Sandra Polaski, "U.S. Living Standards in an Era of Globalization," Carnegie Endowment for International Peace, July 2007

Jagdish N. Bhagwati, "Technology, not globalization, driving wages down," Financial Times, January 4, 2007

30 March

The Social Dimension of Convergence: Work Standards

Question: Are Global Work Standards Desirable?

Kimberly Ann Elliott and Richard B. Freeman, Can Labor Standards Improve Under Globalization?, Chapter 1, "Globalization vs. Labor Standards?" Washington, DC: Peterson Institute for International Economics, 2003

5 April

The Environmental Dimension of Convergence: How Clean is Clean?

Question: Should Global Interests Override National Political and Economic Objectives?

William Antholis, "Five 'Gs': Lessons For Governing Global Climate From World Trade," The Brookings Institution, June 2008

7 April

The Cultural Dimension of Convergence: Is a Global Culture Emerging?

Question: Should We Aspire to Universal Standards for Human Rights?

Mahmood Monshipouri, "Identity and Human Rights in the Age of Globalization: Emerging Challenges in the Muslim World," Zaman Online (Turkey), May 2, 2005

Michael Kimmelman, "D.I.Y. Culture," New York Times, 14 April 2010

12 April

The Political Dimension of Convergence: Are Nation-States Obsolete?

Question: What are the Proper Roles for Nation-States in a Globalized Economy?

Benjamin R. Barber, "Shrunken Sovereign: Consumerism, Globalization, and American Emptiness," World Affairs, Spring 2008

Sovereign Wealth Funds, 2008

14 April

The Question of Governance: Has Political Power Been Privatized?

Question: Does the Concentration of Wealth Threaten the Liberal State?

David Rothkopf, "Superclass and the Inequity of Globalization," YaleGlobal, 14 May 2008

Catharin E. Dalpino, "Does Globalization Promote Democracy?: An early assessment," The Brookings Institution, Fall 2001

19 April

Is Globalization Inexorable?

Question: Can Globalization Be Stopped? Should It be Stopped?

Joe Nocera, "A Wall Street Invention Let the Crisis Mutate," New York Times, 16 April 2010

Center for Responvie Politics, "Securities & Investment: Industry Profile," 2009

Jim Puzzanghera and Nathaniel Popper, "Goldman Sachs case likely to increase calls for Wall Street reform," LA Times, 17 April 2010

US, Securities and Exchange Comission, Complaint against Goldman Sachs, 15 April 2010

Roger Lowenstein, "Gambling With the Economy," New York Times, 19 April 2010

New York Times, "Credit Default Swaps," 10 March 2010

New York Times, "Derivatives," 16 October 2009

Ben Schott, "U.S.A.A.." New York Times, 2 February 2010

21 April

Question: Will Politics or Economics Define the Liberal Paradigm in the Future?

Francis Fukuyama, "They Can Only Go So Far: The world's bullies are throwing their weight around. But history isn't on their side," Washington Post, August 24, 2008

Michael Parenti, "Globalization and Democracy: Some Basics," CommonDreams, May 25, 2007

Robert B. Reich, "China: Capitalism Doesn't Require Democracy," CommonDreams, January 10, 2006

Andrew Leonard, "How Wall Street broke the free market," Salon, January 15, 2008

26 April

Question: Will a New Countermovement Arise?

Dani Rodrik, "The Death of the Globalization Consensus," Policy Innovations, July 25, 2008

David E, Sanger, "Beyond the Trade Pact Collapse," New York Times, 3 August 2008

Matt Taibbi, "The Big Takeover," Rolling Stone, 19 March 2009

Jagdish Bhagwati, "The selfish hegemon must offer a New Deal on trade," Financial Times, 19 August 2008

28 April-5 May