1. Lecture #10
Perspectives on International Political Economy: Mercantilism, Liberalism, & Marxism

2. Introduction
Countries and non-state actors have historically pursued several different approaches to the international political economy:
Mercantilism
Liberalism
Marxism

3. Mercantilism
Dominant approach until 1800s
Goal is to maximize state wealth (originally gold and silver)

4. Wealth cannot be created, only acquired
Mercantilism
Wealth cannot be created, only acquired
Through conquest and theft (imperialism)
Through exporting more than you import and protecting domestic industries
Economics is a zero-sum game
One country’s gain is another’s loss
Emphasis on relative gains

5. Economic Liberalism (Capitalism)
Became popular in 1800s
Economics is a positive-sum game
It is possible to expand the pie, not just fight over how it will be divided
Emphasis on absolute gains

6. Economic Liberalism (Capitalism)
Assumes a harmony of interests (Adam Smith): pursuit of self-interest will make everyone better off
Example: Those who produce the highest quality products at the lowest prices not only make consumers’ lives easier/more enjoyable but reap the highest profits

7. Economic Liberalism (Capitalism)
“Laissez-faire” approach
Comparative advantage (Ricardo)
Countries should focus on producing those goods & services they can produce most cheaply/efficiently and trade for the rest
An absolute advantage is held by any country that can produce a given product more efficiently than any other country in the world

8. Marxism
Prominent perspective in the 20th century (particularly after the Bolshevik Revolution in 1917), but popularity has declined since fall of communism in FSU/Eastern Europe and apparent success of market model among “Asian tigers,” etc.

9. Marxism
Key actors include social classes, MNCs, and transnational elites (states are tools of these elites and cogs in the capitalist system—not independent entities)
Assumes capitalism contains seeds of its own destruction

10. Marxism
Material economic conditions determine outcomes (reductionism?)
World system is stratified: core vs. periphery, dependency theory

11. Marxism
Both empirical and normative: describes the capitalist world system, then critiques it
Imperialism as highest stage of capitalism (Lenin) and cause of war among capitalist powers