GO131: International Relations Professor Walter Hatch Colby College Economic Power

Old Debate over Economic Power Mercantilism versus Liberalism

Mercantilism 16 th to 18 th centuries Gold and Silver Bullion = State Power X > M

Neo-Mercantilism 19 th century economic philosophy Germany (Friedrich List), U.S. (Alexander Hamilton), and Japan (Ministry of Commerce and Industry) Promote and protect manufacturing

Commercial Liberalism Eighteen and nineteenth centuries David Ricardo and Adam Smith Gains from trade via specialization

Comparative Advantage TVsBeerAutarky Ratio Country A1 hour per unit 3 hours per sixpack 1 B: 3 TVs Country B2 hours per unit 4 hours per sixpack 1 B: 2 TVs

Heckscher-Ohlin Theory

Laissez-Faire

So …Why do governments still intervene in markets? Classical liberals: domestic politics Realists: relative gains

Hegemonic Stability (Neo-Realism)

Neo-liberal Institutionalism

The International Economic Order: Fair or rigged? Realists and liberals don’t care Marxist theorists do Leninism Dependency Theory Modern World System Theory