Global Governance and Economic Systems

War Capitalism

• Refers to the early phase of global capitalism
• Relies on violent conquest, forced labor, slavery, and colonial expansion
• Characterized by military power and coercion, not free markets, to accumulate wealth
• Sven Beckert introduced the term in Empire of Cotton
• Describes how European nations used force to integrate non-European regions into the global economy
• The British Empire's use of slavery in the Americas and military force in India to secure cotton supplies serves as an example

Sovereignty

• The principle that a state has supreme authority over its territory and domestic affairs
• Freedom from external interference
• Foundational to international relations and statehood
• The Treaty of Westphalia (1648) established modern sovereignty
• Recognized the authority of states over their own territories

The Great Divergence

• The growing economic gap between Western Europe (and later North America) and the rest of the world after 1750
• Industrialization and colonial exploitation drove it
• Explains why some regions became wealthy while others remained underdeveloped
• Britain's Industrial Revolution fueled its economic rise
• India and China, once economic powerhouses, lagged due to colonial policies

Late Development

• Challenges faced by countries industrializing later than early industrial powers like Britain
• These nations often rely on state intervention and protectionism.
• Contrasts early industrialization with state-driven models
• South Korea's government-supported industrialization in the 20th century helped companies like Samsung compete globally

Mercantilism

• An economic policy where states seek to maximize exports
• Accumulate wealth (gold/silver) while minimizing imports through protectionism
• Dominated European economic policies from the 16th to 18th centuries
• Britain's Navigation Acts restricted colonial trade to benefit the British economy

Economic Openness

• Policies that promote free trade, investment, and reduced barriers to economic exchange between nations
• Contrasts with protectionism
• The post-World War II Bretton Woods system encouraged global economic openness
• Institutions like the IMF and GATT (now WTO) facilitated this

Tariff

• A tax imposed on imported goods
• Protects domestic industries or generate government revenue
• A key tool in trade policy
• The U.S.-China trade war saw increased tariffs on Chinese goods to protect American industries

Economic Globalization

• The increasing integration of national economies through trade, investment, and financial markets
• Driven by technological advances and trade liberalization
• Companies like Apple rely on global supply chains
• Parts are sourced from multiple countries

Structural Power

• The ability of powerful actors (e.g., states, corporations) to shape the rules and institutions that govern the global economy
• The U.S. dollar's dominance in global finance gives the U.S. significant structural power

Visions or Regulatory Models for Governing the Digital Economy

• Different regulatory models define how digital platforms and data should be governed globally
• Includes U.S., EU, and Chinese approaches
• The EU's General Data Protection Regulation (GDPR) prioritizes privacy
• Contrasts with the U.S.'s market-driven model

Multistakeholder Initiatives

• Involve governments, businesses, and civil society working together
• Goal is to create global standards and policies
• An alternative to state-led governance
• The Internet Governance Forum (IGF) brings together different actors to discuss internet regulation

Inequality of Wealth and Income

• Disparities in financial resources among individuals or groups
• The Gini coefficient measures this
• 0 = perfect equality
• 1 = maximum inequality
• The U.S. has a Gini coefficient of around 0.41, indicating significant income inequality

Global Inequality

• Economic disparities between countries and regions
• Often driven by historical and structural factors
• The income gap between developed nations and developing countries remains large

Global Value Chain

• The international production process where different stages of production occur in different countries
• A Nike shoe is designed in the U.S., manufactured in Vietnam, and sold worldwide, illustrating a GVC

Constituent Crises of the Polycrisis of Economic Globalization

• Eric Helleiner describes the polycrisis of economic globalization as the convergence of multiple, interconnected crises that challenge the global economic order
• Crises include:
  • Financial instability
  • Trade tensions and protectionism
  • Inequality and social backlash
  • Environmental crisis
  • Geopolitical shifts

Global Inequality, Development, and Global Value Chains

• Global inequality refers to the economic disparities between countries and within societies
• Driven by colonial history, technological gaps, and global trade structures
• Development is the process by which economies grow, industrialize, and improve living standards
• Global Value Chains (GVCs) occur when different stages of production take place across multiple countries
• Developed economies often control high-value segments
• Lower-income countries engage in labor-intensive production

Corporate Power in Politics Beyond Borders

• Corporations exert influence in global politics through:
  • Structural power
  • Regulatory influence
  • Soft power
  • Legal power
  • Supply chain control

Origins of Modern Capitalism

• Modern capitalism emerged from:
  • Mercantilism (16th-18th centuries)
  • War capitalism
  • Industrial Revolution (18th-19th centuries)
  • Financial and corporate capitalism (19th-20th centuries)
  • Neoliberalism (late 20th century)

Explore economic openness, trade disputes, and multinational corporations. Understand currency dominance and digital economy regulations. Examine multistakeholder initiatives and structural power in global governance.