The prompt this week read: Which international relations theories are evident in the ideas expressed by Gertner, Laduke, Waring, Pinky, Marx (as explained by David Harvey and "Spark Notes"), and President Eisenhower?
The readings reflect different interpretations of political economy, which can be defined as “THE STUDY OF POLITICAL DISTRIBUTIONS OF POWER AS MANIFESTED BY ECONOMIC ACTIVITY.”
Up until the global economic crisis of 2007-8, the dominant theories of political economy were
a) Realism/strategic hegemony. This focuses on the role of the state in the economy, as a matter of national security. Pinky and President Eisenhower address this theory, implicitly. Pinky is more critical of arms spending, from a normative point of view.
b) Liberalism. This theory advocates a market free from government intervention. President Eisenhower advocates a strong defense of the nation, but takes a more liberal perspective, in warning against centralization of elite power through arms spending (the military-industrial complex).
But, advocates of both theories failed to predict coming events accurately. Famously, Queen Elisabeth, in the UK, asked an assembly of UK economists in 2009 why none of them had foreseen the looming economic crisis prior to 2008.
Solutions to the crisis have been both realist and liberal in nature. The governments of the US and UK for example, have released more money into the economy, a form of government intervention, while encouraging fiscal austerity and supply side reform as advocated by liberalism or neoliberalism.
Fiscal austerity=budget cuts, especially of social services. No increase of taxes on the wealthy sector.
Supply-side reform=De-regulation or liberalization means the opening up of markets to greater competition. It advocates the growth of financial products such as derivatives, the gambling on future prices.
Critics say that these solutions are neither innovative or likely to succeed in the long term, because they replicate the same policies that have brought about the crisis in the first place.
One such critic is Adair Turner, a prominent UK economic policymaker. He says that the crises poses fundamental questions about our economic situation. Many of his ideas are reflected in the readings in Week 1, INTL 5400.
Some of his principle questions are:
1) Does the conventional emphasis on maximizing GDP make sense?
2) Should we reconstruct the way in which economics is taught and practised?
3) Should economics be a moral and not a natural science?
Constructivism is the theory that allows for the introduction of moral and ethical norms into considerations of politics and economics.
In Week 1, we are introduced to a number of norms in the context of political economy: Laduke from an indigenous Native American point of view, Waring from a feminist point of view, Marx from the point of view of labor power, without which, he argues, it would be impossible to create profit, or surplus value. Finally, Gertner critiques the Gross Domestic Product as negating moral concerns. He discusses non-monetized standards, such as the Human Development Index (HDI) which introduce norms such as human good health and environmental sustainability, into the measurement of economic activity.