Theoretical Approaches in IPE
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What is considered a key consequence of economic liberalism?

  • Increased competition among local industries
  • Reduced productivity in local markets
  • Greater global economic integration (correct)
  • Long-term barriers to trade

    • Which principle emphasizes the importance of self-interest in economic transactions according to Adam Smith?

  • Benevolence of producers
  • Protectionism
  • Absolute advantage (correct)
  • Mercantilism

    • What does protectionism aim to achieve in the context of economic policies?

  • Promoting local industries by limiting imports (correct)
  • Encouraging free trade on a global scale
  • Facilitating international competition
  • Enhancing economic cooperation globally

    • In which way did the industrial revolution impact economic theories?

    <p>It highlighted the benefits of free markets and self-interest</p> Signup and view all the answers

    What does the concept of absolute advantage refer to?

    <p>The capacity to produce a specific good at a lower cost than competitors</p> Signup and view all the answers

    What is the primary view of economic relations according to liberalism?

    <p>Harmonious and mutually beneficial</p> Signup and view all the answers

    What is the role of markets in the liberal economic perspective?

    <p>To be prioritized over state interests</p> Signup and view all the answers

    According to Adam Smith, how do producers ultimately serve society?

    <p>By pursuing their self-interest to benefit society collectively</p> Signup and view all the answers

    What does Malthus suggest as a preventive check to control population growth?

    <p>Limiting the number of children</p> Signup and view all the answers

    According to David Ricardo's 'iron law of wages', what happens to wages in a competitive labor market?

    <p>Wages are driven down to subsistence level</p> Signup and view all the answers

    Which concept explains that a state can benefit from specializing in the production of goods with lower opportunity costs?

    <p>Comparative advantage</p> Signup and view all the answers

    What does Malthus argue against regarding government assistance?

    <p>Assistance for the poor</p> Signup and view all the answers

    How does Ricardo's theory explain poverty in society?

    <p>Poverty is an inevitable outcome of competition</p> Signup and view all the answers

    Which of the following is true about the opportunity cost in China compared to Australia for producing iron?

    <p>China has a lower opportunity cost for iron production</p> Signup and view all the answers

    What is one assumption made in Malthus's theory about the relationship between population and resources?

    <p>Population growth will outstrip food supply</p> Signup and view all the answers

    What should individuals do according to Ricardo's perspective on personal responsibility?

    <p>Work hard and save earnings</p> Signup and view all the answers

    What is meant by absolute advantage in production?

    <p>The uncontested superiority of a country to produce a good better than others.</p> Signup and view all the answers

    According to the economics discussed, what should countries specialize in?

    <p>Producing goods with the lowest opportunity cost.</p> Signup and view all the answers

    Which characteristic is NOT typically associated with capitalism?

    <p>Centralized planning by the state.</p> Signup and view all the answers

    What is one critique that Marx made about capitalism?

    <p>It creates alienation between workers and their work.</p> Signup and view all the answers

    How is wealth distributed in capitalist societies, according to the critiques?

    <p>Wealth is concentrated in the hands of a few.</p> Signup and view all the answers

    What does the term 'invisible hand' refer to in a market economy?

    <p>The self-regulating nature of the marketplace.</p> Signup and view all the answers

    Which of the following is a characteristic of a market economy?

    <p>Goods and services are exchanged at prices determined by supply and demand.</p> Signup and view all the answers

    What is the profit motive in capitalism largely driven by?

    <p>Economic laws of supply and demand.</p> Signup and view all the answers

    What is the primary motivation behind the proletariat seizing control of the government according to Marxist theory?

    <p>To end poverty and desperation</p> Signup and view all the answers

    What does the concept of the 'dictatorship of the proletariat' entail?

    <p>Economic equality among all classes</p> Signup and view all the answers

    Which of the following reflects a key aspect of historical materialism in Marx's theory?

    <p>Economic forces influence historical development</p> Signup and view all the answers

    What was a significant effect of Marxist thought in the 20th century?

    <p>Hysteria over perceived communist threats</p> Signup and view all the answers

    What does the term 'class struggle' refer to in Marxist theory?

    <p>Conflict between the bourgeoisie and proletariat</p> Signup and view all the answers

    What is a characteristic feature of communism according to its theoretical framework?

    <p>Shared ownership of means of production</p> Signup and view all the answers

    Which economic doctrine was dominant between the 16th and 18th centuries, particularly associated with colonization?

    <p>Mercantilism</p> Signup and view all the answers

    What is the goal of economic nationalism as described in the context of mercantilism?

    <p>To support domestic monopolies</p> Signup and view all the answers

    What do mercantilist arguments suggest is the best way to foster national wealth?

    <p>National wealth and military power are fostered effectively by protecting domestic producers from overseas competition</p> Signup and view all the answers

    According to Adam Smith's theory of absolute advantage, what explains the benefits nations gain from specialization?

    <p>Why nations will profit from specialization in producing cheaper goods</p> Signup and view all the answers

    What does the concept of a zero-sum game imply in mercantilist/realist viewpoints?

    <p>One party's gain is another's loss</p> Signup and view all the answers

    What best describes the relationship emphasized by radicalism (Marxism) concerning societal classes?

    <p>Society is conflictual, with tensions between owners of wealth and workers</p> Signup and view all the answers

    What is the defining characteristic of comparative advantage?

    <p>A country has a lower opportunity cost in the production of a good than other countries</p> Signup and view all the answers

    Which international relations theory is closely linked with the theory of comparative advantage?

    <p>Liberalism</p> Signup and view all the answers

    What concept suggests that markets function best when free from government intervention?

    <p>Liberalism</p> Signup and view all the answers

    In which time period did colonialism expand significantly and European states industrialize?

    <p>From the 19th century to World War I</p> Signup and view all the answers

    What is the primary outcome of specialization according to the theory of comparative advantage?

    <p>An increase in overall consumption and efficiency</p> Signup and view all the answers

    In Marxist theory, who are the owners of property and the means of production?

    <p>Bourgeoisie</p> Signup and view all the answers

    Which political economic system is best characterized by laissez-faire economics?

    <p>Liberalism</p> Signup and view all the answers

    What does laissez-faire primarily advocate for in economics?

    <p>The state should not interfere in the detailed operations of the economy</p> Signup and view all the answers

    What type of government system does Marx predict will emerge in socialism?

    <p>A centralized state with a command economy</p> Signup and view all the answers

    What is the term for the working class in Marxist theory?

    <p>Proletariat</p> Signup and view all the answers

    Which concept represents the interaction between supply and demand?

    <p>Markets</p> Signup and view all the answers

    Which system seeks to replace the free market with a centrally planned economy?

    <p>Communism</p> Signup and view all the answers

    Study Notes

    Theoretical Approaches in IPE

    • Countries and non-state actors have historically used various approaches to the international political economy.
    • Key approaches include Mercantilism (Realism/Economic Nationalism), Liberalism/Capitalism, and Marxism.

    Introduction

    • Countries and non-state actors historically used varied approaches to the international political economy.
    • These include Mercantilism (Realism/Economic Nationalism), Liberalism/Capitalism, and Marxism.

    Mercantilism

    • Goal is to maximize state wealth (originally gold and silver).
    • A nation's economic health is assessed by the level of precious metals owned (e.g., gold or silver).
    • Methods involve government intervention, protectionism, and exporting.
    • Examples of Mercantilist policies include the Navigation Act of 1651 and the Sugar Act of 1764.
    • The goal of mercantilist policy is to export more than import, increasing the country's wealth.
    • The state is the key actor; companies are subordinate to the state.
    • The state is more important than the market.
    • International anarchy; markets are zero-sum; might is right.
    • Economics is a zero-sum game.
    • One country's gain is another's loss.
    • Emphasis is on relative gains.
    • National wealth and culture is protected by barriers against foreign penetration.
    • Trade is a tool used to enhance a state's economic power.
    • Establish colonies to increase home construction.
    • Increase agricultural output, and a strong merchant fleet to provide additional markets.
    • Control and regulate production.
    • Encourage colonies to export raw materials to Mother Country and finished products from Mother Country to colonies.
    • Favorable trade balance for mother country.
    • Wealth is not created, only acquired.
    • A balance of trade in favor of the mother country is sought, with more exports than imports.

    Liberalism/Capitalism

    • Became popular in the 1800s.
    • Focuses on the individual (households, enterprises), and rational self-interest.
    • Economics drives politics.
    • Markets are more important than states.
    • Nature of economic relations is harmonious, with reconcilable interests.
    • Economics is a positive-sum game; it is possible to expand the economic pie.
    • Emphasis is on absolute gains, not relative gains.
    • Global economic integration is an aim, bringing increased peace.
    • International regimes help maintain order.
    • Adam Smith's theory of absolute advantage says that individuals, pursuing their self-interest, bring general benefits to society.
    • Specialization and absolute advantage allow countries to produce goods at the lowest cost.
    • Free markets, without government intervention, lead to higher productivity and economic growth.
    • Focuses on the individual, self-interest, and free markets.
    • Economics often drives the political system.
    • Markets are more important than states.
    • Sees cooperation between states as beneficial to all sides.
    • Includes ideas by Thomas Malthus, predicting population would outpace food supply, and advocating limiting population growth; and David Ricardo, introducing the iron law of wages, where wages are driven down to subsistence levels due to competition.

    Marxism/Communism

    • A reaction to the social consequences of the Industrial Revolution.
    • Emphasizes class struggle, where the ruling class (the bourgeoisie) exploits the working class (proletariat).
    • Capitalism is inherently flawed, prone to internal contradictions, and a system that will eventually collapse.
    • Capitalism causes alienation among workers.
    • Ownership of capital creates conflicts between the capitalist classes and the exploited working classes.
    • Advocates for the working class to seize control through a violent revolution.
    • A stateless society and a classless society would emerge eventually after capitalism's collapse.
    • The idea is that history is shaped by economic forces.
    • Class struggle continually happens between the wealthy and the poor.
    • In industrial times, the wealthy are the capitalists; the poor are the laborers.
    • Private property is a social construct; it is not natural.
    • Workers create surplus value, but capitalists appropriate most of it.
    • Capitalism causes imperialism and creates conflict between capitalist states.
    • The accumulation of capital in the hands of capitalists can also lead to war.
    • Capitalism will eventually collapse.
    • The state plays an oppressive role; to be abolished.

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    Theoretical Approaches in IPE Lecture 2 PDF

    Description

    Explore the various theoretical approaches commonly used in International Political Economy (IPE). This quiz covers key concepts including Mercantilism, Liberalism, and Marxism, illustrating how countries and non-state actors engage with the global economy. Test your understanding of these fundamental theories and their implications.

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