Origins and Evolution of Ipe and Its Relationship with International Relations, Comparative Politics and Economics
Carla Zappala – Undergraduate Student
INS 537 – Comparing Political Economies
ESSAY 1 - Part I
Origins and evolution of IPE and its relationship with International Relations, Comparative Politics and Economics International Political Economy can be defined as the study of how economics and politics influence each other in the global system; the interaction of those two aspects of the global society. IPE focuses how governmental policies affect the way economic resources are used and what are the consequences of those policies, especially economic consequences (welfare consequences). Although the terms “globalization” and IPE are relatively new, global political economy, as the study of interaction between politics and economics, has existed for more than a century. The first global economy took place during the nineteenth century when the British Empire was the center and hegemony of the global economy and trade. In a time when mercantilism was the dominant economic system, Britain made its economy more flexible and opened to the exterior; this first global economy was based on bilateral agreements that reduced tariffs and on a stable international monetary system (starting with the British abolition of Corn Laws and the British-French Cobden-Chevalier Treaty). The gold standard was also adopted by many nations as the fixed rate exchange.
By these years, the first perspectives of international political economy were used to explain the situation and the future of the global economy: • Liberalism: that encourages international economic interactions in order to enrich each of the involved countries. Individuals are the main actors ruling the economy and cooperation benefits all of them. • Mercantilism: which argues that economic power is necessary to gain national power; it supports that the State is the most important actor in economics. • Marxism: that divides the global economy in two groups: advanced countries that explode the poorest
INS 537 – Comparing Political Economies
ESSAY 1 - Part I
Origins and evolution of IPE and its relationship with International Relations, Comparative Politics and Economics International Political Economy can be defined as the study of how economics and politics influence each other in the global system; the interaction of those two aspects of the global society. IPE focuses how governmental policies affect the way economic resources are used and what are the consequences of those policies, especially economic consequences (welfare consequences). Although the terms “globalization” and IPE are relatively new, global political economy, as the study of interaction between politics and economics, has existed for more than a century. The first global economy took place during the nineteenth century when the British Empire was the center and hegemony of the global economy and trade. In a time when mercantilism was the dominant economic system, Britain made its economy more flexible and opened to the exterior; this first global economy was based on bilateral agreements that reduced tariffs and on a stable international monetary system (starting with the British abolition of Corn Laws and the British-French Cobden-Chevalier Treaty). The gold standard was also adopted by many nations as the fixed rate exchange.
By these years, the first perspectives of international political economy were used to explain the situation and the future of the global economy: • Liberalism: that encourages international economic interactions in order to enrich each of the involved countries. Individuals are the main actors ruling the economy and cooperation benefits all of them. • Mercantilism: which argues that economic power is necessary to gain national power; it supports that the State is the most important actor in economics. • Marxism: that divides the global economy in two groups: advanced countries that explode the poorest