Globalization & Neoliberalism (Lec 7) Flashcards
Realist View
Rooted in mercantilism
- State as the determining factor of the ‘unnatural’ market
The global economy is characterized by conflict as states compete for power and wealth
Go to strategy is protectionism
Some believe a stable world economy requires a dominant hegemon
Liberal View
Individuals are the key economic actors
Unregulated market economy moves towards long-run equilibrium
‘laissez-faire’ policy
Free trade is good and and economic globalization is mutually beneficial
Critical View
Dominated by marxism
Transnational corporations represent interest of bourgeoisie and are more powerful than national governments (econ over politics)
Global economy characterized by conflict based on oppressive nature
(imperialism; world system)
Globalization and the advance of neoliberalism
- intensified international competition
- encouraged deregulation
- reduction of tax to reduce chances of TNCs moving away
- downward pressure on public spending (esp. welfare budgets)
- emphasis on control of inflation rather than full employment
The growth and productivity rates of US compared to slower alternative states meant neoliberalism appeared to be unchallenged as the dominant ideology in the late 1990s
Criticisms of Neoliberalism
- Widening inequality and social breakdown
- ethic of material self-interest (greed is good)
Led to a modification (not rejection) of neoliberal policies in west
Russia - ‘shock therapy’ application of neoliberal reform led to backlash and call for more state capitalism
Causes of economic globalization
Not new; high point during colonialism
Modern globalized economy a product of 2 phases
- First: End of WWII - 1970s
Characterized new international financial system (Bretton Woods)
Underpinned the long boom of that time
- Second: fall of bretton woods and then communism led to increased web of interconnectedness
Capitalism is an inherently universalist economic system
(Marxist Argument)
