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31 Cards in this Set

  • Front
  • Back
Tensions between State and Market
- society
-collective good
-public choice and state dec.

-self interest
-money and stuff
-invisible hand
Normative Theory
describes or makes argument about how things should be
Positive Theory
theories about how things really are
Three Theoretical Approaches
Liberal Approach
minimum state involvement
individual self interest
invisible hand to greater good
State interests
Power protects people
Wealth is link to power
Realist- conflicts from states
-class determines pol. change
-ranking and international divisions of labor
-International relations come from Lenin
Classical Liberalism
-limited state
-form money, protect interests
-private charities
-social problems b/c of gov.
Adam Smith
-humans are rational
-positive sum game
-invisible hand guarantees gain
-small state
Problems with Liberalism
Collective Action Problem

Free-Rider Problem
Why does protectionism still exist?
1. Domestic Political Pressure
2. National Security
3. Collective Action Problem
4. Misperceptions About Free Trade
International View of Mercantilism
1. State is unitary actor
2. International system is in a state of anarchy
3. Relations between states are driven by power
4. Peace is maintained by balance of power
1. Classes are unit of analysis
2. State reflects the ruling class
3. Economics determines poltiics
Dialectic process
interactions of independent variables create a thesis then an antithesis then sythesis to thesis
Forms of History According to Marx
1. Primative Communism
2. Slavery
3. Feudalism
4. Capitalism
5. Socialism
6. Communism
Falling Rate of Profit
invest in technology to save labor which will lead to unemployment and cause there to be less money to spend, thus there will be a lower profit
Law of Disproportionality
anarchic competition created a boom and bust. There will be overproduction and underconsumption which leads to social instability
Law of Concentration
Capitalism produces inequality and competition leads to low wages and monopolies
protect their own country's interests and are easiest to raise or lower
Import Quota
only import certain amount of product. Domestic more appealing
Export Quota
only export a certain amount
US and European agriculture is supported even though there is no comparative advantage
Currency Devaluations
really cheap to produce goods and export them. Importts are too expensive. Trade issue with China because they are keeping their money down
Nontariff barriers
Difficult for imported goods to be marketed
Lower cost of export while keeping it cheap in country. You are keeping a monopoly inside the country and then after monopoly is established, you raise prices
Genearl Agreement of Tariffs and Treaties
-to stop nations from using protectionist and stop chances of war
-IMF and World Bank were formed to help GATT
-formed by GATT
-lends money to countries in the form of SHORT TERM LOANS
World Bank
Int'l Bank for Reconstruction and Development
-LONG TERM LOANS used to redevelop
-put money in to get money out
-establish comparative advantages
Major Principles of GATT
1. Reliance on Tariffs
2. Reciprocity
3. Most Favored Nation Status
-successor to GATT
-created in 1995
-administers trade agreements
-forum for negotiation and resolution
-research on national trade policies
-assist developming countries
David Ricardo
1.Comparative Advantage
-everybody benefits from finding their skills
2.Promotes Efficiency
-more total world output with less world effort
3.Promotes International Peace
-less incentive to engage in conflict