INS3003 EXAM 2

Greek word "demos" means

the people

Greek word "kratia" means

power of the authority

The nation-state and democracy are seen in

The United Nations

Fukuyama wrote the

"end of history"

Fukuyama believed that with the collapse of communism...

would usher in a new age of democratization and prosperity

What are the three waves of democracy?

1. 1776-1800s (WW1 stopped it)

2. after WW2

3. end of Cold War into the 2000s

Every region except ________ were impacted by the 3rd wave of democracy

Arab world

By 1970 there were _____ democracies

38

The US is considered a _____ democracy

flawed

Only ____% of the world lives in a full democracy

8

Examples of hybrid democracies:

Mexico, Ukraine, Turkey

___% of the world lives in a full or flawed democracy

45

Hegel's 3 components to mankind

1. survival

2. ability to reason

3. natural spiritedness that desires recognition

Most important of Hegel's 3 components?

Natural spirit that desires recognition

What is the "Great Equalizer"?

democracy, states have recognition of being equal, negates the need to compete = less wars

Fukuyama's preeminence of ideas:

ideas are the influence behind systems and wars

Teleological development is the

term for linear process/constantly evolving process of ideas

Beginning of teleological history

primitive life to systems of domination

Middle of teleological history

liberal democracy: consent of government, limited government, capitalism

End of teleological history

liberal democracy wins, 20th century challengers

Fukuyama believes it is the end of

ideological wars because we found the best system

3 challenges of Fukuyama's idea

1. story of the west

2. capitalism has flaws

3. no new ideologies

Would China represent a challenge to Fukuyama?

No, because other countries are not looking to adopt their system

Another explanation for democracy is called

modernization theory

Modernization theory is the idea

that modernization leads to democracy by transforming society and thus political systems

Bourgeoisie are

businessmen and industrialists who owned means of production, making them wealthy

Bourgeoisie want

the system to accommodate them

Proletariats are

the workers

Proletariats want

to overthrow system; find power through unions

Two new classes:

Bourgeoisie and Proletarait

Urbanization

the growth of cities; movement of people towards cities for work

Education in urbanization is

very important

Educated populations can

move it forward (engineers, architects)

Education in cities poses as a big

threat against governments

Civil Society is putting

power into the hands of people

Correlation between

wealth and democracy

Challenges of modernization theory

China is not very democratic but very rich; what about the poor countries that have democracies?

Democratic Stability Theory

drops the cause-effect relationship, doesn't cause democracy but helps democracies achieve greater stability

Fukuyama and Democratic Stability Theory

are in agreement

What is Immanuel Kant's Toward Perpetual Peace theory

when citizens get to choose, they will choose peace and reject war

In a democracy, the citizen is

the primary stakeholder

Important statement from Bill Clinton's Union Address

Democracies don't attack each other

3 main points to democratic peace

1. Democracies don't fight each other

2. Democracy solves the security dilemma created by anarchy

3. Democracies prefer each other in trade and diplomacy

Constructivism is

not a theory

Perception is linked to

social constructs

Social Constructs are

everchanging

Why are 500 British nukes less scary than 5 North Korean nukes?

Perception (Alexander Wendt)

Constructivism and Liberalism ______ with democratic peace while Realists _____

agree; unsure

As democracy has expanded

wars have been smaller and democratic powers have not fought each other

What two ways does democracy help prevent war

democratic culutre and audience costs

Democratic culture

you were voted in, you can be voted out

Audience costs means

reputation and respect on threats and promises

Two exceptions to democracy

Guatemala and Iran

In Guatemala and Iran examples,

CIA worked against democratically elected leaders to prevent the spread of communism

Howard Wiarda's definition of globalization

increasing scale, extent, variety, speed, and magnitude of international cross-border social, economic, military, political, and cultural interrelations

Thomas Friedman wrote

The World is Flat

Globalization 1.0 is the age of

Mercantilism and Colonialism 1492-1800s

Globalization 1.0 focused on

power and influence to make money

Globalizaiton 1.0 perception

shrank the world from large to medium

Globalization 2.0 was called

Pax Britannica 1800-WW2

Globalization 3.0 was called

Pax Americana WW2-Now

British East India Company

largest company in the world; owned ports

Globalization 3.0 is the age of

the internet

Globalization 2.0 shrank

the world from medium to small

Globalization 3.0 shrank the world from

from small to tiny

David Riccardo

comparative advantage

Ability to produce goods at the lowest cost results from

efficiency, specialization, free trade

Dependency: they higher the share of GDP,

the greater the dependency

Our top 2 trade partners?

Mexico and Canada

Asymmetric Trade example

US and Mexico

3 Risks of Trade

vulnerability, comparative advantage, trade deficits

Trade deficits means you

import more than you export

3 aspects of trade vulnerability

import/export dependency, market volatility competition, supply and demand

Comparative Advantage risk example

Nigeria's strategic shift causing job loss

The US dollar is the

currency for international trade and commerce

Global Demand and Supply today is to ______ is to ______

irrelevant; relevant

Gold Standard is decided in three ways:

currency in international trade, money markets, trade agreements

Trade agreement for standardized currency

EU using Euros

Fiscal policy + Monetary policy =

government's responsibility to maintain a standard currency value in our economy

Foreign Reserve Currency

one that is widely held in the international central bank, the dollar is currently dominant

Declining/low valued currency

benefits: helps our exports, goods are cheaper; cons: reduces spending power

Rising/high valued currency

benefits: we can buy more, better for abroad,; cons: reduces spending power

London was the

financial capital of the world

The US dollar was

pegged to gold

The Bank of England canceled the Gold Standard due to

the Great Depression in 1931

US Gold Reserve Act 1934 was unconstitutional because it

nationalized gold

The US Gold Reserve Act casued the US dollar to be

devalued by 69%

The US Gold Reserve Act caused the gold value to

increase from $4B to $7.35B

After the US Gold Reserve Act 1934, gold's role

changed, now a commodity not a currency

The US held ____ of world's gold supply after the US Gold Reserve Act 1934, which helped us during times of war

70%

Beggar Thy Neighbor Protectionism created

high tariffs and currency devaluation, halting trade

The Beggar Thy Neighbor was

counterproductive

After WW2, the US emerged as the

world's new dominant power

One reason why we emerged as the world power

US wanted to ensure capitalism would expand, rather than communism

Mussolini and Hitler rose in times of

economic crisis

Europe's Economic Crisis post WW2 (6 points)

inflation

unemployment

massive debt

trade deficits

balance of payment deficits

depleted gold and dollar supply

After London, _______ was the financial capitol of the world

Washington DC

Why did other countries peg to the dollar and not gold?

They didn't have enough gold

Pegging to the dollar makes it the

world currency

The world trusted this dollar-gold standard because

it was a stable system since we have gold to back the dollar