1001GIR Lecture Notes - Lecture 10: World Trade Organization, International Political Economy, Bretton Woods System
4 May 2018
School
Department
Course
Professor
L10. International Political Economy and Global
Governance
Global Political Economy
• 'Commanding Heights: The Battle for the World Economy'
o Economic history of the 20th century
• Managing the Global Economy
o Economic globalisation
o Global governance
o The Bretton Woods System
• World Bank
• International Monetary Fund (IMF)
• World Trade Organisation (WTO)
Capitalism
• Capitalism is a system of commodity production and distribution
o In which wealth is owned privately and economic life is organised according to market
principles
• Enterprise capitalism, social capitalism and state capitalism differ in relation to the balance
within them and the market and the state
Economic Globalisation
• Economic globalisation is the process whereby all national economies have, to a greater or
lesser extent, become absorbed into an interlocking global capitalist economy
• Economic interconnectedness achieved global dimensions in the 1990s
o With the collapse of communism and opening up of the Chinese economy (from 1978)
• The general consensus is that economic globalisation is beneficial for aggregate economic
growth and poverty reduction
o But increases inequality within and between societies
Triumph of Neoliberalism?
• Neoliberalism: Dominant from late-1970s to present
o Updated version of 19th century classical political economy
o The economy works best with a minimum of government control and intervention
o Reflects belief in free markets and individualism
o The government should stay out of markets
• The state is a dead hand that saps initiative and innovation and discourages
enterprise
o Critics label it as 'market fundamentalism'
o Sometimes called 'laissez-faire' capitalism
o But, arguably, a partial return to Keynes with the 2007-2008 Global Financial Crisis and
recession that followed
The 'Washington Consensus'
• The neoliberal policy prescription:
o Fiscal discipline
• Balanced budgets but cutting spending
o Tax reform
• Reduce personal and corporate taxation
o Financial liberalisation
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