Lecture 20: 19 th Century Redux May 12, 2010

THE CHINESE 21st CENTURY? AN EVENING WITH MARTIN JACQUES: "When China Rules the World: The Rise of the Middle Kingdom and the End of the Western World" Thursday, May 13 7:00 - 9:00pm Walker-Ames Room, Kane Hall University of Washington, Seattle Free and open to the public THE CHINESE 21st CENTURY? AN EVENING WITH MARTIN JACQUES: "When China Rules the World: The Rise of the Middle Kingdom and the End of the Western World" Thursday, May 13 7:00 - 9:00pm Walker-Ames Room, Kane Hall University of Washington, Seattle Free and open to the public

Peace Dividends from End of Cold War US defense cuts US defense cuts Proliferation of democracies Proliferation of democracies End of (some) 3 rd world civil wars: Mozambique, Angola, El Salvador, Nicaragua End of (some) 3 rd world civil wars: Mozambique, Angola, El Salvador, Nicaragua End of apartheid in South Africa (1994) End of apartheid in South Africa (1994) Israeli-Palestinian Peace Process (1993-?) Israeli-Palestinian Peace Process (1993-?)

The 1990s in Retrospect A taste of what might have been without Cold War A taste of what might have been without Cold War Unprecedented growth (US grew 27% ) Unprecedented growth (US grew 27% ) Focus on economics, unfocused foreign policy Focus on economics, unfocused foreign policy Dark clouds on the horizon (“rogue states”, civil wars, AIDS in Africa) Dark clouds on the horizon (“rogue states”, civil wars, AIDS in Africa) Democrats: peace, prosperity, US soft power Democrats: peace, prosperity, US soft power Republicans: = “holiday from history” Republicans: = “holiday from history” Future historians: The limbo period sandwiched between the Cold War and Terror War Future historians: The limbo period sandwiched between the Cold War and Terror War

Globalization “Movement of goods, people, and capital across national boundaries” “Movement of goods, people, and capital across national boundaries” End of Communism, rise of free markets End of Communism, rise of free markets Cheaper communication and transportation Cheaper communication and transportation Good Good Comparative advantage Comparative advantage “Rising tide lifts all boats.” “Rising tide lifts all boats.” Bad Bad Erodes power of governments Erodes power of governments Bad for labor, environment (“race to the bottom”) Bad for labor, environment (“race to the bottom”) Distributional consequences Distributional consequences Globalization of crisis Globalization of crisis

Globalization Backlash

Return to 19 th Century but with New Players?

European Union Coal and Steel Community  European Community  EU Coal and Steel Community  European Community  EU Why? Why? Prevent war Prevent war Economic efficiency Economic efficiency Balance against US Balance against US 1992 Maastricht Treaty  Euro 1992 Maastricht Treaty  Euro Common market, common currency, visa-free travel, harmonized laws, common norms/human rights Common market, common currency, visa-free travel, harmonized laws, common norms/human rights Expanded 5 times; largest in 2004 Expanded 5 times; largest in 2004

European Union Coal and Steel Community  European Community  EU Coal and Steel Community  European Community  EU Why? Why? Prevent war Prevent war Economic growth Economic growth Balance US Balance US Common Market, Visa-free travel, harmonized laws, common norms/human rights, social protections, Euro Common Market, Visa-free travel, harmonized laws, common norms/human rights, social protections, Euro Expanded 5 times; largest in 2004 Expanded 5 times; largest in 2004 Problems Problems Backlash against enlargement…what about Turkey? Backlash against enlargement…what about Turkey? National interests first National interests first Punches below its weight internationally Punches below its weight internationally Solution? Lisbon Treaty (EU “president”, “foreign minister”) Solution? Lisbon Treaty (EU “president”, “foreign minister”)

“BRIC” Countries

“BRIC”

Secrets of the BRIC Countries Liberalization of economy Liberalization of economy Lower trade barriers Lower trade barriers Investment in human capital Investment in human capital (Relatively) effective government (Relatively) effective government

China Enters the World Economy Mao’s disastrous policies Mao’s disastrous policies Deng Xiaoping’s gradual reforms Deng Xiaoping’s gradual reforms GDP increase : $150 billion  $2.2 trillion GDP increase : $150 billion  $2.2 trillion Consumes one-third of world’s iron, steel, coal Consumes one-third of world’s iron, steel, coal Foreign exchange reserves: $2.5 trillion Foreign exchange reserves: $2.5 trillion