China, Japan, South Korea…
Asian tigers: South Korea, Singapore, Taiwan, Hongkong
They are the fastest growing regions in the world.
China’s the largest trading country in the world since 2011. 1.what is political economy?
Political culture: South Korean people’s more obedient to the government so it has strong economy growth in 1960,70. Political economist try to answer:
a. Would democratization help trading, economy growth?
2.what is international political economy?
Focuses on international relationship between countries that trade. Economic international relationship between countries: interest rate, trading, etc..
Economic liberal vs. political liberal
Economic liberal: generally politically conservative, more market oriented, let the market act itself, opposite from political liberal.
naturally operate to the best interest society, the strongest will win the competition, market will operate on its own. -Self-interest
individuals are self-interest, individuals will make rational choices, that’s best for themselves, serves their own needs and desires. -Competition
Social harmony, supply and demand will be balance, market equilibrium. Nobody decides the wealth and resources to be allocated. It will bring the society to larger wealth. No monopoly so there will always be better product come out. -Division of labor and wealth accumulation
* David Ricardo
* -the corn-laws: prohibit import food item at 1800, it negatively effects capitalists class. Result: less selection, higher price, increase wage for the labor because of the higher food price. * Allow importMore selectionLower priceLower labor priceBetter economy * enclosure movement
* John Stuart Mill
* -Market does create unequal income distribution and some people are living in extreme poverty * -State has to provide limited services in selective areas. Such as education or social welfare services. * -Still laissez-faire is the guiding principle. Let the market decide what is best. *
* John Maynard Keynes
* -Great Depression
* -What is the big problem in Adam Smith’s perfect world of the invisible hand? * -unlike Adam Smith’s argument. Good are not met with human wants, but met with demand. E.g. I desire 10 pair of shoes doesn’t mean I demand 10, I might only demand and buy 1. So sometime the state should come in and boost the economy. Keynes was a liberalism so he thought after the state boost the market and avoid the poverty trap it should step back again and let the market decide what is the best. * -Poverty Trap
* -Every boom is constantly threatened with collapse because business does not always invest. *
* -Limited-state role of state in economy
* -State intervention will bring distortion of the market * -Promote growth instead of stability
* -Policies that are promoted:
* -Lower tax rates -- business can invest without paying too much tax * -Deregulate banking system
* -foreign investment can come with no intervention
* -Privatize state-owned enterprises
* -Market-friendly economy policy
* -Example: The Washington Consensus
* Criticism of Neo-liberalism
* -Increased inequality
* -Creation of sweatshops in underdeveloped countries
* -Exporting pollutant? – Ship breakers at Alang, India * -Financial Crisis in 2002 and 2007: neo-liberalism failure *
* -Japanese development strategy in the 60s and the 70s, and ‘unfair practice.’ * -Imperialism or colonialism
* -Response to criticism of Mercantilism
* -it is a natural and rational choice for a sovereign state to seek its best interests. * -to sustain benefits from globalization or to protect themselves from negative effects from...