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Unformatted text preview: WALTZ I PE M idterm NotesReadings What is a Market? Definition: Markets are interchanges between people, organizations, companies or states in which one good is exchanged for something else. Theoretically In pure market conditions (absence of state/social intervention or influence) people are assumed to behave rationally valuing economic efficiency (the ability to use and distribute resourcesand powereffectively and with little waste) to equal a positive-sum game. Theoretical Position: Robert Gilpin describes the conflicting goals between states and markets. Markets exist within a political arrangement whereby states or international organizations help maintain their existence and decide their function. Adam Smiththough a architect of the doctrine of free trade, recognized that markets will not work without state establishment and a common monetary system. Keynes explained the inequality of markets and the failure of markets as a result of rational consumer behavior and the need for state influence and intervention. Marxists and structuralists look to the forces behind the market and the relations between classes. Significance: Markets involve a relationship between states, markets and societytensions and conflicts often result between states and thus the international political economy is one of constant change and transition. LEVELS OF ANALYSIS: International conflict politically and economically due to I ndividual Level Human Nature 1. State Level National governments, domestic issues/policies/society 2. I nternational Level Balance of Powers Geopolitical positions 3. Global Level M ERCANT I L ISM Definition : Focus = State Security the state and the market must provide for and maintain national security in all forms. All states want to create and sustain wealth and power to preserve and protect national security and independenceeconomic policies and actions are motivated by concern for state security. Classic mercantilist period: rise of the nation-state 15 th-18thc. Europe. New nation states could acquire their needs violently or peacefullybut there was always a constant threat of war, thus territorial security was the primary concerneconomic wealth was linked directly with power and was essential to achieving national security . Viewed state power in absolute gains and lossesstates aggressively motivated to generate wealth. High exports restrictions of imports. Development of ImperialismColonialism became an instrument to control trade (along with military power). Newly emerging nation-states used their economies as a means to achieve wealth and power for the sake of national security....
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- Winter '10