Understanding Hegemonic Powers & their Role in International Trade - Prof. Edward Weisband, Study notes of Political Economy

Download Understanding Hegemonic Powers & their Role in International Trade - Prof. Edward Weisband and more Study notes Political Economy in PDF only on Docsity! From L’engrenage to Regionalization: European Enlargement and the Deepening of Integration  Market efficiency, competitiveness, monetary union, and deepening of economic and political integration in Europe • Became spatialized geographically through a series of “enlargements”  These enlargements also are designed to extend the logics of economic efficiency • Through specialization, interdependence, risk, and trust  And through regulation and multilateral organization  Enlargement occurs through a series of negotiated phases • Each phase is demarcated by changes in the regulatory interface between institutional structures and market dynamics Lect 15 cont. Managed Interdependence and L’engrenage: Phase I The European Coal and Steel Community (ECSC)  Established by the Treaty of Paris in 1952 • Outlined by French civil servant Jean Monnet and proposed by French foreign minister, Robert Schuman • Monnet and Schuman represent the leading figures in the history of neo-functionalism • The ECSC was designed to overcome the conflicts between France and Germany that had led to both World Wars  Six member states, France, Germany, Italy, Belgium, Luxemburg, and the Netherlands • Pledged to pool their coal and steel resources (leading sectors)  By creating a common public corporation to operate and manage the coal and steel industries, particularly of France and Germany • This helped to create a unified market for European coal and steel products Managed Interdependence and Integration: Phase IV: The European Union  Now includes 27 member states in both Western and Eastern Europe • The European Central Bank (ECB) governs monetary policy across the union  Immigration and employment policies are designed to encourage openness • Political institutions are in search of a common constitution  Tensions between core or large European states and smaller ones remain prominent EC Geographical Enlargements  Bowing to economic pressures, Denmark, Great Britain, and Ireland join in 1973  Greece joined in 1981  Spain and Portugal joined in 1986  Austria, Sweden, Norway, and Finland joined in 1995  Estonia, Latvia, Lithuania, Poland, the Czech Republic, Hungary, Slovakia, Slovenia, Malta, and Cyprus joined in 2004  Romania and Bulgaria joined in 2007  Turkey is now a candidate for accession = European Union 2006 Hl Member States 7 é __|Candidate Countries Inefficiencies of Economic Nationalism Relative to International Market Openness  From the beginning of this course, we have confronted the problem of scapes relative to economic governance • In the absence of global or world economic governance, international activity has remained INTER-national and thus driven by national interests  What is the main problem? • The problem is that economic pluralism will lead to economic nationalism  This means that national economic interests would become defined by protectionism, imbalanced mercantilism, hyper- regulation, and closure • Economic nationalism counters economic efficiency by impeding the capacity of comparative advantage to support world economic productivity Historical Emergence of Hegemonic Powers  The specter of economic nationalism arises during economic periods in which the major national economies • Are in approximate parity with each other in terms of GDP, national income, per capita income  Thus in terms of competitiveness, productivity, and efficiency • The interwar periods between 1920 and 1939 and between 1971 and the present represent such moments  There are historic moments where a single economy becomes paramount – WHY? • The value-addedness of their GDP (goods and services produced and exported) dominate international markets  Generating high levels of income Hegemony, Predominance, and Openness  Thus hegemony refers to a form of economic governance • In which a predominant or hegemonic economy emerges  In ways that align national self-interest • To the dynamics of international markets  Based on openness, comparative advantage, and international competitiveness among all liberal economies  Hegemony represents a combination • Of paramount national economic standing or competitiveness  AND the political vision that works in favor of international trade and openness across national economies False Assumptions of Hegemonic Stability  One way to understand what hegemony as a form of international economic governance represents • As well as to understand what hegemonic economies are and do  Is to examine what hegemony and hegemonic economies ARE NOT  Why are so many national economies that are powerful in both economic and military terms NOT hegemonic? • The question today is whether the People’s Republic of China will emerge as a hegemonic economy  This question will be answered in the future but to understand assess China’s hegemonic potential requires us to look beyond its mere economic size and military strength and even its market competitiveness • This question centers around its political vision relative to its economic size  If China wraps itself around closure and economic nationalism, it will fail as a hegemon Hegemony is NOT Imperialism  Another major misconception often occurs that conflates hegemony and imperialism–THEY ARE NOT THE SAME  An important conceptual distinction exists • Between military preparedness and the imperialist territorial attempt to incorporate “foreign territory”  AND hegemonic practices designed to insure openness and comparative advantage • For purposes of open trade and open international markets and thus international efficiency  Imperialist states tend NOT to be hegemonic • Examples: the Roman Empire, the Holy Roman Empire, the Spanish and Portuguese Empires, Napoleonic France, the Belgian Empire, Czarist or Romanov Russia  Hegemonic states seek to strengthen the competitive capacities of other national economies rather than to incorporate them Hegemony is NOT “Super Power”  Hegemony is to liberalism what polarity is to realism • Hegemony is not polarity (self-help security and closure)  Because hegemony is openness for purposes of interdependence • And polarity is closure for purposes of security  A national economic hegemon sustains multilateral rules, regimes, and institutions and promotes balanced mercantilism on the basis of a regulatory interface that includes international open market access and trade liberalization as well as regulatory institutions • EX: WTO, IMF  Above all, a national economic hegemon favors stability in political order and predictability in economic exchange • War and conflict, based on threat and power, work AGAINST the overall national interests of a hegemon  EX: Militaristic, revisionist states such as Stalinist Russia or Nazi Germany are NOT hegemonic Hegemonic Leadership: Defined  Volatility derived from economic pluralism tends to be dampened or reduced • By the emergence of an economic power  Willing to exert a certain authority in the name of world economic stability—a hegemon • Hegemon = Classical Greek meaning “leadership”  Hegemony arises once a dominant economy recognizes that • Its prosperity and competitive standing depend on  Market and trade openness and sectoral interdependence Hegemonic Leadership – The Questions  The questions that revolve around the emergence of hegemonic leadership ---  How does it emerge?  When has it emerged historically?  What are the key characteristics of hegemonic leadership?  What does the hegemonic state gain from its leadership?  Why do other governments allow the hegemonic state to exert leadership?  What are the rules, regimes, and institutions that signify hegemonic leadership?  Do all states subject to hegemonic leadership gain equally? Hegemonic Economic Predominance  How does a single national economy emerge as a dominant economic power? • Predominant economic power requires that a single national economy achieve competitiveness in leading economic sectors  At the highest levels of value addedness • To enjoy high levels of national income through international trade that then generates two effects:  It aligns the national economic interests of the hegemon to national economic trade and openness  It produces sufficient income that permits the hegemon to pay for the rules, regimes, and institutions that sustain market openness despite free-riding