GPE lecture 2 readings

This set of flashcards covers foundational concepts, definitions, and theories from the lecture notes on Global Political Economy, focusing on key approaches, structures, and influences in the field.

What is the primary stress of economic liberalism, also known as neoliberalism?

It stresses a limited state and a strong belief in free markets.

What are the core focuses of capitalism within economic liberalism?

• Competition

• Individual freedom

• Market coordination

According to economic liberalism, what does 'liberty under the law' mean for human nature?

It sees humans as rational and competitive in productive ways.

How do Physiocrats view state interference in the economy?

They introduce the concept of 'laissez-faire,' arguing that state interference harms society.

Who attacked mercantilism and argued that markets and competition serve the public interest?

Adam Smith.

Define Adam Smith's concept of the 'invisible hand.'

It explains how self-interest unintentionally benefits society.

What are the foundational principles of capitalism as described in economic liberalism?

• Market-driven exchange

• Competition

• Private property

• Freedom to trade

According to David Ricardo, how do all states benefit from free trade, even if one is more efficient in all goods?

Free trade is a positive-sum game because specialization increases total global wealth.

What event exemplified a 'liberal victory' over protectionism and showed how changing economic structures reshape political power?

The repeal of the British Corn Laws.

What did John Stuart Mill argue about classical liberalism and market failures?

He argued that classical liberalism fosters progress, but markets alone cannot ensure social welfare, and he called for selective state intervention to correct market failures.

What fundamental belief did John Maynard Keynes challenge regarding markets?

He challenged the belief that markets naturally self-correct, especially after the catastrophic failure of the 'invisible hand' during the Great Depression.

What economic concept did Keynes argue drives economic stability and must be supported during downturns?

Aggregate demand.

What is 'embedded liberalism' as it emerged after World War II?

It is a post-WWII economic order that blends free markets with state intervention to ensure stability and social welfare, balancing open markets with domestic economic management.

What led to the backlash against Keynesianism in the 1970s and the rise of neoliberalism?

Economic stagnation in the 1970s.

What do Hayek and Friedman argue about state intervention?

They argue that state intervention threatens freedom and harms efficiency.

List key characteristics of neoliberalism.

• Deregulation

• Privatization

• Low taxes

• Reduced welfare programs

Which administrations institutionalized neoliberal reforms in the 1980s?

The Reagan and Thatcher administrations.

What did Thomas Friedman argue globalization requires?

A 'golden straightjacket' of liberal policies.

What are some criticisms highlighted by critics of neoliberalism and globalization?

• Rising inequality

• Sweatshops

• Environmental destruction

• Loss of state autonomy

How do 'heterodox liberals' differ from 'orthodox liberals' regarding markets?

Heterodox liberals argue markets must be embedded in social institutions to function fairly, supporting regulated markets and welfare protections, while orthodox liberals trust markets and argue state intervention distorts efficiency.

According to Adam Tooze (2021), what did the Covid-19 crisis expose about the market-driven global system?

It exposed the risks and weaknesses of a neoliberal order built on austerity, deregulation, global supply-chains, and minimal social safety nets.

What shift in governing response did Covid-19 demonstrate?

It demonstrated a massive return of state intervention through emergency income support, public health measures, and economic rescue packages, challenging core neoliberal assumptions.

Why might neoliberalism not be dead yet, despite recent state interventions?

Some argue interventions are temporary, and core neoliberal elements like deregulation, privatization, and globalized production networks still remain largely intact.

What did the Covid-19 crisis revive debates about?

The role of the state, social welfare, and collective resilience.

What future possibility might Covid-19 signal, according to Tooze?

The beginning of a 'great recoil' from neoliberal globalization, with growing demand for stronger social protections, economic regulation, and public investment.