World Politics VII: Political Economy of Global Trade

Flashcards covering key vocabulary and concepts related to world politics, international trade, mercantilism, free trade, and globalization, based on lecture notes.

Mercantilism

An economic theory (16th-18th century) emphasizing national wealth accumulation through trade surpluses and state intervention. Key strategies include protective tariffs, subsidies, and navigation acts.

Core Idea of Mercantilism

Advocates for a trade surplus, where exports exceed imports, supported by tariffs, governmental intervention, and monopolies. Aimed at maximizing national wealth and power.

Tariffs

Taxes imposed on imported goods to increase their cost, making domestic products more competitive. A protectionist measure under mercantilism and economic nationalism.

Quotas

Limits on the quantity of goods that can be imported. Used to protect domestic industries by restricting foreign competition.

Subsidies

Financial assistance provided to domestic industries by the government. Aims to lower production costs and enhance competitiveness in both domestic and international markets.

Navigation Acts

A series of laws restricting trade to a nation's own ships. Designed to promote domestic shipping industries and control trade routes.

State Monopolies

Exclusive rights granted by the state to certain entities for trading specific goods. Ensures control and revenue for the state, often criticized for hindering competition.

Mercantilism

Economic system focused on state control and regulation to accumulate wealth through controlled trade and protectionist policies. Contrasted with capitalism, which emphasizes free markets and private ownership.

Capitalism

Economic system characterized by private ownership, free markets, and competition. Promotes economic growth through market forces with limited government intervention (laissez-faire).

Economic Nationalism

Policies that emphasize domestic control of the economy, including protectionist measures like tariffs and quotas, to protect national interests.

Free Trade Agreement (FTA)

Agreement between two or more countries to reduce barriers to trade, fostering increased economic cooperation and trade volume.

Free-trade policy

Absence of trade restrictions, promoting laissez-faire trade or trade liberalization. Encourages efficiency and competition in the global market.

Comparative advantage

The ability of countries or businesses to specialize in producing goods and services at the lowest cost and most efficiently. Underpins the rationale for international trade and specialization.

Free Trade Area

A group of countries that have eliminated tariffs among themselves. A step towards deeper economic integration.

Customs Union

A free trade area with a common external tariff. Member countries apply the same tariffs to non-member countries.

Single Market

A customs union that also allows for the free movement of goods and people, with common rules and regulations. Enhances economic integration and cooperation.

Globalization

The increasing interconnectedness of countries through various forms of exchange. A complex process affecting economies, cultures, and societies worldwide.

Globalization

The shrinking of the world through technology and increased interaction. Heightens awareness of global issues and interconnectedness.

Globalization

The integration of the world's peoples into a single global society. Involves economic, cultural, and political dimensions.

Globalization

The intensification of worldwide social relations, linking distant localities and shaping local events by faraway occurrences. Illustrates the interdependence of global communities.

Globalization

The process of world shrinkage, reducing distances and bringing people closer together through various means of connection.

Economic globalization

The increasing share of economic activities occurring between people in different countries. Manifested through international trade, investment, and financial flows.

Facets of Economic Globalization

Expansion of international business and multinational corporations, which operate across national borders and influence global markets.

Facets of Economic Globalization

An increasing percentage of world GDP is accounted for by international trade, indicating greater global economic integration.

Facets of Economic Globalization

Investment made by a company or entity based in one country, into a company or entity based in another country. Important for economic development and globalization.

Facets of Economic Globalization

The movement of large sums of money out of a country, often due to economic or political instability, which can destabilize the country's economy.

Facets of Economic Globalization

Trade of goods and services that is conducted illegally, evading taxes and regulations. Examples include smuggling and counterfeiting.

Index of Globalization

A metric developed by the Swiss Federal Institute of Technology in Zurich to measure the extent to which a country is integrated into the world system economically, politically, and socially.