Lecture 3 - October 7, 2009 INTERNATIONAL POLITICAL ECONOMY...

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October 7, 2009 INTERNATIONAL POLITICAL ECONOMY MEREDITH HUBER PS 186 Lecture 3 Midterm Monday, 19 th Paper Due during section on the 12 th or 13 th of Nov Current Events: Role of the Dollar—currency in which all trade in oil and natural gas is denominated and conducted. Role of the dollar in the world energy market is essential to the benefit of the United States. Saudi Arabia is the dominant oil exporter. INTERNATIONAL ECONOMIC HISTORY—NINETEENTH CENTURY We are living in a world with “path dependency” what we do in the future will be framed by what has happened in the past. 1. Three Major Developments: From the Napoleonic Wars—WWI Monetary System: Classical gold standard (defined the monetary relations between individual countries) o Two Defining features: Each national currency was freely convertible into gold—countries would set their currency to an amount of gold Countries allowed free import and export of gold—there was an international monetary system where there were fixed rates of exchange between countries. o Classical gold standard was a major deal!! Before that there was just monetary chaos —it was the smoothest monetary operating system in the world Trading system : movement toward free trade in 1860s-70s, then back toward protectionism o Britain was the heart of the world economy at this time (Had energy, exported a lot of manufactured goods, set the tone for the world trade environment) o Gradually Britain became adopted to a doctrine of free trade (LIBERALISM—Adam Smith) By the beginning of the 19 th century Liberalism was a popular doctrine in Britain—development of the Liberal Party (wanted the dismantlement of trade regulations—free trade) and Conservative Party (wanted a more mercantilist era)
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This note was uploaded on 10/12/2009 for the course POLY SCI 186 taught by Professor Cohen during the Spring '08 term at UCSB.

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Lecture 3 - October 7, 2009 INTERNATIONAL POLITICAL ECONOMY...

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