1. Globalization and Trade
Theories of IR: Power, interdependence, ideas

2. Today News Monday: Globalization Theories of IR and trade
Realism: Trade and national security
Institutionalism: Trade and complex interdependence
Constructivism: Trade and human rights
3/31/2008
Hans Peter Schmitz

3. Globalization 1.0: States/colonialism  realism
2.0: Multinational corporations/institutions  institutionalism
3.0: Individuals/ideas  constructivism
Does Friedman give us an accurate picture of world history?
3/31/2008
Hans Peter Schmitz

4. What is behind ‘globalization’?
Realism (power)
Power (United States hegemony) drives technological change
Liberal Institutionalism (institutions)
Technological change drives cooperation; creates ‘complex interdependence’
Idealism/Identity (ideas)
Ideas drive technological change and power (Keynesianism, ‘Washington consensus’, etc.)
3/31/2008
Hans Peter Schmitz

5. The realist story: power
After 1945: U.S. hegemonic decline
European economic growth
Vietnam
Demise of Bretton Woods and Oil crises (rise of OPEC)
After 1991: U.S. back on top?
Ronald Reagan: second Cold War
U.S. economic growth and technological change
3/31/2008
Hans Peter Schmitz

6. The institutionalist story: trade
After 1945: interdependence/institutions
Information revolution---technology
Expansion of global trade: need for institutional cooperation (GATT>>>WTO)
After 1991: loss of control and institutional pathologies?
Loss of state autonomy and culture?
3/31/2008
Hans Peter Schmitz

7. The constructivist story: ideas
After 1945: Economic nationalism/Keynesianism
Liberal economic policies
Alternatives to liberalism: Import substitution and socialism
After 1991: Washington consensus
Export orientation/free trade
Alternative to free trade: Sustainable development
3/31/2008
Hans Peter Schmitz

8. Is free trade a good thing?
Realism: NO.
Expanded trade creates dependencies and shrinks sovereignty. Sustained trade deficits adversely affect autarky and national security.
US hegemony (mercantilism) instead of free trade.
Liberal Institutionalism: YES.
Free trade creates interdependence (peace among nations) and domestic wealth (democracy within nations).
3/31/2008
Hans Peter Schmitz

9. Is free trade a good thing?
Constructivism/Idealism/Identity: NO.
Trade primarily benefits rich nations and impoverishes everyone else.
Trade needs to be balanced against other goals (sustainable development and social policies).
Fair trade instead of (unfair) free trade.
3/31/2008
Hans Peter Schmitz

10. Summary Realism: trade is a function of national security.
Institutionalism: trade is a major independent force transforming global affairs.
Constructivism/Idealism:
Focus on gap between rhetoric of free trade and practice of protecting domestic markets.
Focus on how free trade can lead to environmental degradation and a loss of local culture/identity.
3/31/2008
Hans Peter Schmitz