Michael Soud

International and Global Studies:

Lecture 2; How do we think about global divisions?: y There is the moral/ethical issue of poverty; do poor exist because the rich exist? y The association of poor-sick and rich-healthy as of imperialism and colonialism. y Investment and profit flows, trade and specialisation, wages/cost of production, technology and dynamism, credit and debt and cultural and military hegemony. - This contributes to the centre/periphery relationship of exploitation. y The units of analysis in te rms of wealth and poverty usually concern transnational corporations, individuals, race and even gender.

Lecture 3; The birth of the modern state and rise of generalised markets: y Public sector; the rise of central social, political and economic administra tion. y Nothing can occur at a global level without consensus (or can it? US hegemony). y John Keynes was an economist known for his 'architecture' of the modern state. - Keynesian (regulatory) economics includes the state taking on the responsibility to guarantee a minimum standard of living. - There was a decline of the social democratic vision in the 1960s. y The 1970s saw a winding back of the post -war state and end of economic boom. - A rise of Individualism and market forces in the neo -liberal world. y Milton Friedman taught freedom of the market that neo-liberalists like Thatcher and Reagan put into practice through privatising many state services and assets. - Neo-liberalism includes the small state (individual over the collective), privatisation (private over state ownership), deregulation (market over state rules) and a culture of the virtue of self -interest as a driving force. y The birth of the state and rise of classical liberalism; Treaty of Westphalia (1642). y Thomas Hobbes' Leviathan described the dangers of civil war and a need for a massive form of social order on a global scale. y John Locke described the right to life, liberty and property for all human beings. - Two Treatises of Government (1689) concerns the need for social contracts and some rights are subordinated for a collective agenda.

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Rule of law must be codified and not be arbitrary; rules should thus be subject to those governed and governing and be held accountable. y Generalised markets according to Adam Smith in The Wealth of Nations (1776) includes states that build an economy appealing to self -interested markets. - "... led by an invisible hand" refers to the role of the state in neo -liberalism y End of 19 th century classical liberalism occurred as of Unionism and labour partie s - Classical Liberalism --> Social Democracy (Embedded) --> Neo-liberalism. y Karl Polanyi believes the economy to be socially embedded and like a pendulum. y Are states able to have interests separate from their citizens or are they merely agents of a community?

Lecture 4; The end of empire and rise of the current world economic order: y 19 century globalisation occurred within empires and was very Eurocentric. y Colonies no longer sources of exotic products but specialist industrial producers. y Adam Smith's 'specialisation'; individual entrepreneurs focusing on one thing. - Creation of the world market built on from notions of parochialism. y Karl Marx and Frederick Engels wrote "The bourgeoisie has, through its exploitation of the world market, given a cosmopoli tan character to production and consumption in every country." Manifesto of the Communist Party (1848). y If there are no colonies, is it possible to have open competition in the market? y A world without borders for trade, finance and investment, but not labour. - Labour is the one thing that define s a nation; its people and their abilities and citizenship of individuals allows a country to define itself as a nation. y Nations may facilitate global markets but do they only look after their interests? y The United States is viewed as an empire without colonies but it may operate to protect American interests rather than enforce the vision of Smith and Locke.
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Lecture 5; Debating the global (No Logo): y Exploitation vs. Freedom of the market with decline in post-war social democracy - Belief in individualism, in the markets and in the minimal role of the state. y Economic competition replaced the imperial system as the international system. - Thomas Friedman advocated higher growth rates and consumption and improving incomes in poorer nations, but there are critics. - Environmental neglect and overriding of local cultural/social conventions.

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y Supply chain has two ends: final consumption and basic production. y Global shifts and free trade do not recognise global boundaries; brand -tribes. y The Nike revolutionary supply chain paradigm operates by globally auctioning contracts to make products, causing low-income nations to compete harshly.

Lecture 7; Globalisation, progressive or negative force?: y The World Bank was established in 1944 with the goal of reducing distortions in international trade and forging free and unimpeded markets (Smith's dream). y Globalisation is a contradictory process that both inhibits and promotes freedom. y International trade has grown massively since the 19 50s and financial markets have caused cross-border transactions to grow faster than cross-border holdings. - Free investment but not free movement or liberalisation of labour. y Remittances sent by US workers back to relatives in home countries has grown. y Hyper-globalisers lean towards a single world market in which nation states lose power and become mere facilitators of the market. - Thatcher believed 'there is no alternative' to privatisation of assets. - We live during the "End of History" (Fukuyama), where the "World is Flat" (Friedman) and the "End of the Nation -State" (Ohmae) is at hand. y Thomas Friedman's 'Golden Straitjacket' and three eras of Globalisation: - 1.0 (1492-Early 1800s [Beginning of Global Arbitrage]) shrunk the world and was defined by the dy namic agent which was the country. - 2.0 (Early 1820s-2000) shrunk the world even more and was spearheaded by companies; people went global through their companies. - 3.0 (2000-present) flattened the global world and focuses on individuals. y The left argues that communism will break down national barriers but is based on community collectivism and aims to get rid of parochialism. y Globalisation sceptics believe the state remains powerful by consciously giving power to global market forces but leadership has been weak. - They can deregulate or reregulate the market if they wish (or can they?) - Paul Hirst and Grahame Thompson believe that globalisation is really just regionalisation as of concentration of FDI activity in certain regions. - Conservative rightists see the state as representing order and stability. - Nationalist leftists see it as the discrete site of social/economic reform. - At what cost can states assert independence; can they resist global crises? y Transformationalists propose nations have not disappeared and have not lost power but rather they have been transformed by a role change ; middle-ground. - It is not deregulation but a facilitation of global processes (Polanyi for eg).

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- David Held believes the state can no longer deal with global issues alone. - Belief that globalisation is contested and there is no teleological certainty. y Do autarkical nations truly exist and, if so, where do they rank globally? y Competing powers may severely impact on another states ' domestic self-interest.

Lecture 9; International investment, MNCs and supply chains: y Direct/Portfolio investment acquires assets across national boundaries and includes capital gain and dividends. - It gains seats on the company board, giving the investor much power. y Do transnationals echo their home country's values or do they assimilate? y There has been a trend into retail services and a move away from manufacturing. y Mid 20 th century 'exceptionalism' caused an outgrowth of national business. - Globally integrated production systems arose at th e end of the C20 th with global business being the focus rather than national business. y TNCs usually have a Head Office, regional office and region -specific subsidiaries. y Producer-driven value chains are usually transnational manufacturers who play central roles in coordinating production networks (such as aircrafts and cars). y Buyer-driven value chains are manufacturers without factories which includes foreign buyers in usually developing nations who carry out production. - Profits come from design, sales, marketing and financial services rather than scale, volume and technological advances in producer -driven chains. - Brands matter as it allows control without ownership of factories.

Lecture 10; Case Study (Wal-mart): y Shift from local to global sourcing with 1985 'Buy American' to 1991 outsourcing. y Wal-mart responded to social pressure for labour standards and compliance. y Foreign Direct Investment (FDI) includes inward and outward investment but excludes investment via purchasing shares; it is usually long -term. y Mergers and acquisitions may be hostile or friendly takeovers. - Reverse takeovers denotes a private company acquiring a public one. y Greenfield; starting from scratch in a piece of land where there is nothing. y Brownfield; modifications or upgrades of once-Greenfield projects. y Capital markets are those in which money is invested for a long period of time (at least one year) and runs on financial instruments. - Bonds markets deal with debt and stock markets exist in the public sphere

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Lecture 11; Multinational corporations and nationality: y The state is unique as it can create law s and has means of enforcing them. y Governments support businesses through private ownership protection but also support society through consumer protection, ethical standards, labour laws etc. y MNCs are "central organisers" and "engines of growth" (Strange, 1996). - They are considered more important to developing nations than aid. - MNC's are political institutions with close relations to civil society. y Sales revenue of some companies (e. g. Wal-mart) is higher than some countries. y Multinationals sometimes engage in predatory pricing to rid small competition. - They can provide cheaper insurance to workers and create work. - Greenfields and Brownfields may be used in expansion of MNCs. y Market power; ten US companies are responsible for 90% of US patents. y Huge companies control the supply and demand of the market; parallel power. - There is no competitive market as it has become oligopolistic and there is a 'myth' of competition as it does not occu r on the basis of market forces. y Political processes: 'the ability of A to affect the behaviour of B' (Weber). - The market authority of corporations could rival nation states. y The "Regulatory State": the liberal economy is unregula ble; provider state. y Competition is good in markets but creates monopolies and mega corporations. - This competition has therefore created the 'Regulatory State'. - Some people believe that neo -liberalism is largely a 'fairytale' and the states have grown to become regulators of capitalism (Braithwaite, 2006). y Instrumentalist approaches are actor-centred and describes relational power. - Relative power determines an actor's position and behavioural options. - Its causality is mechanistic and has a one-dimensional view of power. y Structuralist approaches emphasise the "input side of policy and politics" (Fuchs, 2007) which concerns agenda -setting power. - Firms generate structural power by wealth generation and jobs which underpin governments , yet this is harder to 'see'. y Discursive approaches are sociological and revolve around the power of ideas. - One may influence, frame and control the desires of the other through 'symbols' and 'story lines' as evidenced through environmental policies. - Authority comes through legitimacy; the GFC posed a c risis of legitimacy. - Discursive approaches are the dominant discourse and rely on persuasion, perception of legitimacy and voluntary compliance. y Three Dimensions of Power; instrumental (lobbying), structural (implicit threat of capital mobility) and discursive (privatisation by acquiring political legitimacy).

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Lecture 12; Varieties of Capitalism: y Most MNC's have their headquarters within Western Europe or the USA. y Neoliberal Globalisation includes the retreat of the state as it has been dispersed. - Thomas Friedman's 'Golden Straitjacket'; backlash of the market if the government of a nation is too powerful and taxing. - Tiberghien's 'Golden Bargain'; either way the state has to become small or give the corporations what they want. y Myth of the powerless state; corporations seek to conquer other states' markets. y Sovereignty is now shared between states and non -state actors (corporations). y Institutional regulation is neither private or public (deregulation or reregulation? Privatisation of public sector but also publicisation of private sector). y Normative-Institutional factors; the way in which states choose to control corps. - Norms: 'Shared common beliefs' that give rise to institutions defined as the 'rules of the game in a society'. y Firms do have national bases of production and distribution that still do matter. - Majority of assets are still held at home; ownership, management and returns and development. - Value-adding in the production process usually occurs in home bases. - Profits and sales highest in home bases; they are MNC's and not TNC's. - Regionalisation of companies has been prevalent. y Rationality depends on norms of behaviour which vary greatly between nations. y Hegemony of academia; pronouncements about how a market works usually shows the dominant view of t he country itself. y Liberalism underpins individual freedom with less emp hasis on social goals. - Wary of a Government that seeks to act in the interests of the nation. - Interest groups compete for representation/ lobby for political leverage. - Economic liberalism criticism: profoundly democratic but they tend to neglect social and economic inequalities. y Socialist democracies have strong labour movements with more people in union. - Negotiations with business and unions (not stressed as much in Australia as it is in Scandinavia as of different values). - Government intervention in the economy is accepted; high taxation and state co-ordination of the economy. - Goals of full employment and equality; democracy therefore encompasses social and economic aspect to those with in a social democracy. - Will there be i nevitable decline as of a global crisis? y Statist nations includes states that play a central role in their economy. - Economic nationalist goals; industrial chan ge and economic development.

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y y

y y y

Governments address cyclical unemployment and facilitate industrial development with less concern for individual rights. 'New Right'; Economic Rationalism and social conservatism combined (colloquial term for neo-liberalism). - They attack the welfare state, public service and unionism. Dynamic conception of the role of the State; Great Depression, Rise of Fascism. - The state leads market reconstruction efforts after WWII; welfare state. - The 1970's saw economic difficulties suggest ing failure of the market and the need for more state intervention with pressures for privatisation and deregulation. - Today is more of a 'partnership with business' role for Government. Structures, processes, cultural imperatives encompass 'Institutional inertia'. Liberal Market Economies (LMEs) have firms that co-ordinate their activities primarily via competition in markets. - Prefer formal contracts and define shorter -term profit levels. - Prefer deregulation over heavier state guidance and intervention; react more efficiently to clearly specified regulations. Coordinated Market Economies (CMEs) have firms characterised by non-market cooperative relationships to coordinate their activities. - Consensus decision-making between governments and companies. Persistence of Diversity; National institutional variations are im portant. - There has been movement, but the gap remains big and is getting bigger. - Convergence on the CME model. Businesses determine the spread of wealth by making and distributing products. Does trade rely on the imaginary borders that separate nations or is it possible to have an individualised economy (free movement of labour; globalisation 3.0). 'Race to the bottom' for nations in terms of who can hamper businesses less. - Competitive LMEs allows wages to be set by market forces.

Lecture 13; Introducing International Organisations: y Issue of accountability; voting of members of international organisations. y We must live in a system defined by stat e sovereignty as international government is too far off; international anarchy. - Inter. law can exist only if st ates surrender elements of the ir sovereignty. y Sovereignty has two aspects; internal supremacy of the ruler, external equality with other states in terms of International Organisation s. - States provide legitimacy for other states and their respective rulers.

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Question of what makes a state a state; army, territory, flag, government, recognition by other countries, passports, right to declare war etc. y Anarchy distinguishes domestic politics and international politics; fear of being cheated and conquered with re gard to other international actors. y Monopoly on the use of force -legitimacy; governments just 'provide order'? y As states are sovereign, there is no superior power; thus international anarchy. y Realist; studying International Organisations is a 'big yawn' be cause one should be looking at the puppeteers (states) rather than the puppets (IOs). - Realists are pessimistic as they are impressed by the logic of anarchy. - States just wish to survive through their own self -interest and thus they make other states less secure as a by-product. - Analysis is based on the assumption that states are 'rational' actors. y Liberalism; states not to be treated as unified actors; rather liberalism is grounded on a pluralist conception of civil society and the state. - State preferences rather than capabilities is the primary determinant of behaviour (interaction on political, economic, cultural levels). - Institutional change can alter incentives for groups in civil society, leading to support of policies that would promote further integra tion of nations. - Neoliberals believe that 'progress is better sought through market processes rather than through 'interventionist' government policies.' (Stilwell, 2006). y Constructivism; emphasises the role of norms and behaviours of individuals and states being determined by shared cultural norms and socially constructed rules. y Liberal, Neo-liberals and Constructivists believe that people are perfectible and injustice and war are not inevitable but can be eliminated through collective or multilateral action and international institutional reform. - What kind of sovereignty is threatened by globalisation, if any? - If states are unwilling to give away sovereignty, what role is left for IOs? y Realists believe there is no such thing as International Law because there is the absence of an enforcer. - Most people comply with laws because they believe them legitimate. y International Law comes through: - Treaty Law; agreements between states which are written. Treaties , protocols etc bind only those states that ha ve ratified them. - International Customary law; not written but are created by state practice over time and thus are legally binding on all states. - General principles of law; provide guidance in cases of gaps with treaty and customary law such as the presumption of innocence.

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y y

Judicial decisions; decisions made within courts in all states . Teachings of publicists/jurists; Hugo Grotius had important influence. Jus cogens; norms of general international law are the norms accepted and recognised by the international community (prohibitions of slavery). Inter-Government Organisations include 3 or more states founded by agreement. - Typically an IGO includes representatives and a secretariat which is supposedly above national interests. - Some are geographically related and others formed for a specific purpose . - "To belong to the international (ie. Political) system of states, a state must be sovereign". (Shirley Scott, p.22). IGOs function as informational organisations and forums to provide a place for the exchange of views and decision-making. - They establish normative rules for standards of behaviour. - They create rules and provide a supervisory commission to monitor compliance, settle disputes and take enforcement measures. - They function operationally by allocating resources and technical aid. States join IGOs to permit rapid reactions in times of crisis and to participate in a stable negotiating forum on a world scale. They provide mechanisms for dispute resolution; take advantage of centralised organisation in the implementation of collective tasks. - In this way they shape international behaviour and forge critical norms.

y IGO's create opportunities and constrain member states through international agendas and thus are able to force governments to take positions on issues. - States are subjected to surveillance through information sharing. - Pressure on states occurs through moral avenues but most IGOs can only make recommendations (with the exception of the supranational EU). y IOs influence policy through economic sanctions and legally binding decisions and even the threat of losing aid as it is usually on a conditional basis (IMF). - Influence by moral authority, scientific knowledge and media focus. y NGOs are usually private voluntary civil society organisations and members are often individuals that come together to achieve a common purpose. - Many are called pressure, lobby or interest groups. y IOs allow many countries to co-operate and thus it is necessary that countries' interests must overlap so that all feel as if they are gaining something. y International Organisations create trust through information and monitoring and being a trusted third party. y Regulation of war through non -proliferation of weapons of mass destruction requires international trust created through IOs.

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Lecture 14; Global Governance?: y Civil Society groups bring people together non -coercively in deliberate attempts to mould formal laws and found informal norms that regulate social interaction. y Global Governance denotes the means by which public and private institutions manage common affairs on an international scale. - Governance is backed by police powers for implementation and enforcement but Global Governance has no real formal aut hority. y International laws are limited in their application to states and thus cannot bind individuals, TNCs, NGOs, para-military forces etc. y The UN and EU treaties provide enforcement mechanisms through sanctions. y "Soft Law" is standards of behaviour but not in fact binding and includes some human rights/labour laws, framework conventions on climate change etc. y IGOs operate globally, regionally and on other smaller levels; International Courts - IGOs bound by formal agreement and may be single (OPEC) or mult i-purpose. - Countries join as they provide a supportive administrative organisational apparatus that can be used for dispute resolution. y International regimes encompass rules and norms and compel states into honouring certain obligations such as nuclear non-proliferation. - It is crucial to note that the creation of an IGO doesn t constitute a regime. - Causes integration of principles and ideals (third wave of democratisation). y Third wave of Democratisation sees globalisation as fostering the transmission o f images of successful democracies that are advanced and modern and hence should be emulated in other nations around the world. y Globalisation is tied with wealth and it is seen to be the only plausible system. - UN endorses this with democracy considered the system all states should strive towards such as the re-creation of a democratic Iraq demonstrates. y Samuel Huntingon s The Third Wave (1991); considers the first wave from 1826 to 1926 and ended because of the Great Depression and Fascist regimes. - 2nd wave from 1945 to 1960s and ended as of decolonisation. rd - 3 wave began in 1970s with end of Portuguese dictatorship and it swept Latin America and Eastern Europe in the 1980s. y Democracy-only clubs and democratic conditionality in international lending emerged such as with the EU and IMF respectively. y Post-WWII Bretton Woods Trade architecture has fundamental orientation towards free trade, regulating currency and opening borders to investment. - Embedded liberalism gained a momentum of its own, precipitating ev erexpanding liberalisation and accelerating technological progress.

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y Liberalism is paradoxical in the sense that it has tarnished the capacity of a nation-state to intervene in market processes in order to cushion issues. y Growth of Global Civil Society doe s not mean fall of the nation-state. y Denationalisation includes supra -national and transitional institutional features which may be constituted nationally but have transnational components. - Economic sanctions and conditional lending give IOs power over oth er states but significantly through the power of other states. y IOs are able to label, define and classify and therefore make institutional facts and norms on genocide, aggression, human rights, market economy etc. - They are quasi-judicial settlement bodies, monitoring bodies and international agents for the collection and dissemination of knowledge. y Australia is heavily influenced by international regulation, such as Boeing defining our air safety standards and the EU defining our car standards. - Growing internationalisation of practices such a s the OECD with the 100 point identification system for verification of identity. y Governments are able to conduct themselves privately in IOs without opposition. y Global Government is impossible at the present as the transposition of state-level institutions would be unsuitable on an international level. y Experts dominate decisions but formal misrepresentation and accountability is an issue such as the UN Permanent Five and IMF Weighted Voting. y Transnational Advocacy Networks consist of activists united by principles and they often frame issues to make them comprehensible to a wider audience. y Civil Societies are distinct from institutionalised politics and thus don't seek office y Civil Societies allow for transparency, policy monitoring and review, pursuit of redress, promotion of formal accountability and setting of normative standards. y Global Civil Societies attempt to address democratic deficit in global governance. - Even when they genuinely represent an issue of broad international concern, they vary greatly in terms of their own transparency/efficiency. - Leaders of IOs aren't usually popularly elected and the vast majority stand for left-liberal ideals and are usually from Northern countries. y Governments are increasingly affected by developments at a global level yet the agencies of development - markets and transnationals - operate without accountability and Global Civil Societies attempt to fill this democratic vacuum. - Legitimacy of global governance falls short in accountability but NGOs have tried to organise themselves into groups for improved democracy. - They are able to create debate and dissent by broadening public agenda. y IOs are only as influential as their reputations are good and thus if they lose credibility they risk losing funding and member state support. - IOs must allow for evaluation of decision -makers, transparency etc.

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y Anti-globalisation movements have ironically expanded internationally through new technology that reduces distance; 'The World is Flat 3.0 ' by T. Friedman. y Thinkers such as Waldon Bello believe de -globalisation may occur in which nations attempt to regain control over their political and economic destinies. y Global Civil Societies have had an increasing impact on global politics by adding dimensions of participation that caused the shift from entirely unaccountable global governance to one that faces opposition from the public gaze. y Globalisation is an inequitable process that does not allow broad participation. y " ... the new international ins titutions with transnational and supranational features - are answerable to a few governments, but not to all the societies in to which they intrude and certainly not to a transnational society." (Zurn, 2004). y There has been a rise in private authorities s uch as Moody's Investors Service and global consultancy oligarchies such as Deloitte; who oversights IOs?

Lecture 15; Governing Global Finance: y The Gold Standard guaranteed convertability and it balanced the trade equilibrium; value of exports should have equalled the value of imports. - Failed during WWI and Great Depression and was dumped in 1914 . - Confidence in the system disappeared with competitive devaluations. y John Keynes argued for state intervention to stimulate growth in the 1930s. - Reason that an institution like the IMF could put pressure on countries to maintain high employment and provide liquidity if needed. y The Bretton Woods System (BWS [1944-73]) marked a shift from ad hoc bilateral cooperative arrangements to a formalised multilateral system. - 44 founding countries established the IMF (maintain order in monetary system) and the World Bank (promote general economic development). - Fixed exchange rates were pegged to the US dollar which was pegged to gold at $35 per ounce; currencies maintained 1% of fixed rate. y The International Development Agency (IDA ; part of the World Bank) raises funds from members and loans to poorer nations at 1% interest per year for 50 years. - The World Bank was overshadowed by the Marshall Plan post WWI. y The main reason for the collapse of the BWS was the pressure mounting on the US dollar to devalue as of speculative attack caused by a rising inflation rate. - 1971 saw US imports exceed exports causing investors to purchase German Deutschmarks hoping it would be re -valued against the US dollar; the Bundesbank allowed the Deutschmark to float, pulling out of the BWS. y Jamaica Agreement of 1976 formalised the collapse of the fixed exchange rate.

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y Gold was abandoned as the reserve asset and the IMF permitted its members to sell their own gold reserves at the market price. y Speculation has increased with the removal of exchange rate controls and the transfer of control of currencies to market forces. - It is estimated to represent 97.5% of the US $1.5 trillion traded per day. y OPEC quadrupling oil prices in 1973 compounded inflation in the US particularly. y Orientation towards neo-liberal policies between 1980 -2008 is termed the Washington Consensus (WC) and it was supposed to help emerging markets. - WC advocates market deregulation; is ass ociated with Thatcher/Reagan. - Noam Chomsky believes it is a way to open the labour market of underdeveloped nations to exploitation by developed nations' companies. y Conditionality has allowed the IMF and WB to infiltrate domestic policies. - Enhanced Structural Adjustment Facility (IMF ESAF) has been criticised for their 'one-size-fits-all' approach which lacks regard for local conditions. - "Neo-liberal policy is manifest through the p ractices of the IMF, WB and WTO." (Stilwell, 2006). y Joseph Stiglitz (2003) believes that "market fundamentalists dominate the IMF", which is a public institution created to ironically address market failures. y IMF share-voting marginalises developing countries and gives powerful, wealthy nations like the US an effective veto vote with 17.5% of votes for an 85% majority y East Asian countries ('Tigers') developed through policies counter to the WC. - They focused on promoting exports and gradual market liberalisation. - Governments helped to create enterprises rather than privatise. - This 1997-8 Asian Fiscal Crisis saw IMF/G7 bailout packages skyrocket but with conditions that undermined these nations' economic sovereignty. - Global growth slowed and commodity prices fell, causing countries like Brazil who were very separate from the pr oblem to be impacted. y IOs lack international enforcement mechanisms; often termed 'soft law'. y G8 Financial Stability Forum marginalises opinion of developing nations.

Lecture 16; Governing Global Trade: y World Trade Organisation (WTO) aims to liberalise trade and produce a forum for inter-governmental agreements and dispute resolution and enforces the GATT. - It is the successful version of the International Trade Organisation (ITO). y The General Agreement on T ariffs and Trade (GATT) prevented nations from resorting to protectionism to respond to balance of payment issues.

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y y

Mutual monitoring allowed countries to report GATT violations to the Geneva-based bureaucracy to investigate a trading violation. Protectionism arose in the 1980s as of Japanese economic success, the US trade deficit and avoiding of GATT regulations with bilateral agreements. The Uruguay Round (1986 -94) extended GATT coverage to intellectual property and services with the General Agreement on Trade and Services. - It established the World Trade Organisation to supersede the GATT. - Non-membership of WTO can lead to costly tariffs and trade barriers but some sovereignty of nations need s to be given up to join the WTO. - Success of WTO was left to the Washington Consensus and Thatcherism. Non-discrimination includes most favoured nation (MFN) status in which all WTO members apply the same conditions on trade with all other WTO members. - 'National treatment' dictates that imported goods are to be treated no less favourably than domestically produced goods. - Exceptions to MFN are granted to give developed countries regional free trade areas and custom unions preferential treatment. - Cross-border trade in financial services and telecommunications. 3/4 of the membership is developing countries; emphasis on consensus decisions

y Current Doha Round wanted Anti -Dumping Actions, Protectionism in Agriculture and further Protection of Intellectual Property (TRIPS). - It has been essentially suspended and it may collapse into total failure. y Comparative Advantage theory dictates that states produce efficiently and trade for what they are less efficient in producing. y A world of interconnected freely trading states allows levels of wealth to be achieved by all nations and their individual citizens (cosmopolitanism). y Natural, cultural, market, policy and service barriers try to be broken down. y Liberalists promote the WTO and are those who believe trading is socially integral and markets are best for exchange on the basis of comparative advantage. - Some believe it ignores too many non-economic factors and leads to undemocratic and non-consensual change. - WTO disrupts socially and culturally and promotes globalisation. y Tariffs on manufactured goods from developing countries are four times higher than those from OECD countries, causing global inequalities. - Developing nations' agricultural producers lack market access, information, finance, credit and endure weak legal systems. y Fair trade aims to create positive externalities and distribute benefits equally. - Minimum prices, direct purchasing from producers, transparent trading partnerships, provision of credit, no labour abuses in production, etc. - Developed countries have free trade groups and certification processes.

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y "Fair trade is a sustainable, market-based solution to global tr ade failures" (Nicholls and Opal, 2005) and provides a system in which everyone benefits. - Those in Fair Trade schemes have a high self -esteem and self-confidence. - Emphasis on cooperation rather than competition causes many of those within Fair Trade schemes to form new groups such as Credit Unions. y Sustainable production bans pesticides and puts resource management plans in. y Farmers are organised democratically in horizontal networks and social premiums are disbursed via one vote, one farmer democratic grou ps. - Provision of credit to producers as needed allows pre -financing of crops and smooth income stream. y Fair Trade is uncompetitive and therefore defies rules of the free market forces. - It is humanitarian rather than supply and demand and intends to elicit irrational consumer behaviour. - Some profess that targeted official development aid would be better.

Lecture 17; What is Unsustainable Development: y Sustainable practices are those which meet the needs of current populations without endangering the prospects and livelihoods of future generations. y "Tragedy of the Commons" dictates that self -interested maximisers seek to increase without limit and receive 100% of profits but only share some of the cost y Extreme population growth is pl acing huge strain on the planet's finite resources. - There was a tendency to view growth as linear; Club of Rome 'The Limits to Growth' in the 1970s expected severe constraints by 2050 -70. y The world's oil reserves are estimated at 1333bb, which would mean there is oil to last for 40 years (but probably lower with growth of developing nations). y The Global Energy Report of 2008 held the view that current global trends are unsustainable environmentally, economically and socially. - The notion of those that generate radioactive wast e should make all arrangements needed for its disposal has become more prevalent. y Arable land and food security has become an issue with only 5.46 acres per person of the world's 6.68 billion in 2006. y Water security includes many underdeveloped and develop ing nations as having a high demand for water and low supply; developed intervention. - Responses to sustainable water use in Asia include the Chinese proposal to redirect water from Tibet and Indian use of hydroelectric power. y 'Desertification' is the persi stent degradation of dryland ecosystems. - Drylands were occupied by 1/3 of the human population in 2000.

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y Deforestation has occurred with the reliance on Timber as a renewable resource. y Earth's 'waste-sink' capacity has been consumed environmentally and soci ally. - Emphasis on international environment education with ecological implications of consumed waste-sinks not being understood by many. y The Millennium Ecosystem Assessment in 2005 declared that there has been an irreversible loss in the diversity of life on earth attributed to human (in)actions.

Lecture 18; Genuine Stability: y 'Malthusian' is a term used pejoratively to denote war, pestilence, plague and famine as natural 'levelers' of population in reference to Thomas Malthus. y "Our Common Future" is used by the Brundtland Report which is concerned with intergovernmental equity. - Development understood as an advance in material/moral circumstances. y Geopolitical conflicts have arisen as of energy needs; US intervention in Georgia. - Relative poverty regarding t rade and future development has generated further tensions between the North and South (post -Kyoto-UNFCCC). y Agenda 21 from the Rio Earth Summit of 1992 was an action plan on environmental threats endorsed by 178 countries to realise common goals. - Crucially, it did not address consumption and over -consumption. - Established that rural poor are driven by necessity to overcut, over fish etc - Neoliberal agenda; government restrictions on trade should be avoided to promote innovation and efficiency to stim ulate environmental repair. - Poverty was a main focus with environmental protection seen as a luxury best afforded once relative affluence has been attained. - Free trade hasn't alleviated poverty; issue of 'overgrazed' global commons y South believe that the N orth, having caused most environmental issues, should pay the majority of consequences ; corrective justice. y 'Sustainable' practices are those that don't compromise future generations. y The Millennium Development Goals include a global partnership for develo pment ensuring environmental sustainability and eradicating 'extreme' poverty. y Sustainable development focuses on processes rather than institutions, practices. y Emphasis on 'qualitative' development as global norm; not 'quantitative' growth. - A sustainable world shouldn't be rigid and thus nothing should be held pathologically constant like population or production. y Biofuels from Algae, increased Photosynthetic Capacity, soil carbon sequestration y Growth/consumptions paradigms must be redirected with focus on 'renewables'.

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According to Carruthers, Sustainable Development would be the opposite of sustained growth as the aim is stabilisation and not zero growth. - Developed world must recognise its affluence is linked to poverty. - No resources for the universalisation of developed lifestyles/consumption. - "A few can live like this but the rest cannot" (Carruthers); Sustainable Development ultimately implies a redistribution of resources and wealth. y Genuine Progress Indicator (GPI) is a metric used to measure economic growth which replaces GDP; takes into account negative effects related to growth. y EU and US protectionism of farmers hurts developing nations significantly.

Lecture 19; What is Climate Change?: y Climatic variations are amplified by carbon dioxide and meth ane. y Climate Change is occurring in a time where there is an unprecedented human population dependent on climate for food, water and life. y Lovelock s Gaia hypothesis: life at the surface works to stabilise an enormous and dynamic environment to ensure it will always remain habitable. - 2001 Conference in Amsterdam determined earth is self -regulating. - Removal of forests has reduced the ability of the earth to repair itself. - In general, higher concentrations of GHG s reduce the absorptive capacity of the carbon cycle (IPCC 2007). y Radiative warming is a term used to quantify the instantaneous warming effect attributed to certain concentrations of GHG s in the atmosphere. y Climate sensitivity is used to denote the response of the climate system to changes in GHG concentrations. y A1F1 is one scenario that predicts a continuation of strong economic growth and strong dependence on fossil fuels; highest emission growth of all IPCC scenarios. - A1B scenario has strong emission growth rates until 2030 and then plummeting emissions, declining from the middle of the 21 st century (unlikely) y Growth of CO 2 has risen sharply; increased from 1.1% p/a from 1990-1999 to 3.1% p/a from 2000-2006 despite extraordinarily large increases in petrol prices. - Actual emissions have grown faster than even scenario A1B predicted which has the fastest short-term growth of all SRES scenarios (Garnault 2008). y Global growth will accelerate in coming decades as developing countries grow. y It is not yet completely possible to attribute risi ng temperatures and changes in precipitation trends to anthropogenic climate change. y Deforestation (but especially fuel burning ) has caused the unprecedented increase of CO 2 levels in the atmosphere (increased 31% since 1750).

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y There are many effects of Cli mate Change: - Decline of flow of fresh water from the Arctic will collapse the Gulf Stream. - Drought could kill the Amazon forest and its carbon sink would be released. - Coral bleaching and acidification of the oceans will disrupt food production. y Climate change will decrease the amount of available food, contributing to an already dire worldwide hunger issue.

Lecture 20; The Stern Review and Garnault Report - political and economic implications: y y y Roger Revelle proved for the first time that atmospheric concen trations of CO2 were increasing in the 1930s after Svente Arrhenius pointed it out in 1896. Intergovernmental Panel on Climate Change (IPCC) set up in 1988. UN General Assembly approved the start of treat y negotiations in Dec. 1990. - 1992 UN Framework Convention on Climate Change (UNFCCC) was signed by 154 states at Rio de Janeiro's "Earth Summit." The Special Report on Emission Scenarios (SRES) in 2000 produced plausible scenarios for future emissions up to 2100 which supplements the IPCC reports. The concern is for sustainability even beyond 2100; even if GHGs are stabilized at their present levels, IPCC believes sea levels would continue to rise for centuries. To stabilize at 450ppm CO 2 global emission would need to peak for the ne xt ten years, then fall at more than 5% per year, reaching 70% below current levels by 2050 (Stern) which would cost 1% of GDP by 2050 if action is taken now. Geopolitical impacts of Climate Change according to the Stern Review: - Declining crop yields and increased deaths on account of malnutrition. - Climate refugees increasing with millions exposed to regular flooding. Higher temperatures will increase positive feedback cycles and thus the Amazon rainforest may be vulnerable. - "The poorest countries will suf fer earliest and most" (Stern). Higher latitude nations may experience some initial benefits from temp. increase. Political upheaval by extremists may occur with lack of food and/or water.

y y y

y y

y The Kyoto Protocol of 1997 sets binding targets for 37 industrialis ed nations. - It allows emission trading to occur with countries having leftover emission units selling their excess capacity to countries over their limit. - Clean Development Mechanism and Joint Implementation allow countries to gain Certified Emission Reduction (CERs) credits or Emission Reduction Units (ERUs) respectively for developing sustainable practices in other countries. y Copenhagen 2009; "the increase in global temperature should be below 2 oC." - It claims peaking of global/nation emissions must occur as soon as possible.

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y y y y y y y y

Developed nations agreed to commit $100bn a year by 2020 to address the needs of developing nations. - Poorer countries were threatened with less funds if they didn't comply with the Copenhagen Accords. World People's Conference on CC an d the Rights of Mother Earth (Bolivia, 2010). Carbon pricing to eliminate externalities may cause consumers to switch to lower-carbon alternatives in order to cut costs. Infrastructure and development, encouraging research and development, setting up PPPs to further promote sustainable infrastructure alternatives. Removal of barriers to behavioural change comes with information, education, accountability and governments helping to cover costs of adaptation. The Greenhouse Development Rights framework (GDRs) operationalises the UN FCCC according to eco-equity and driving rapid global emissions reductions. Business As Usual (BAU) is a term used to denote current emissions trends. Deontological perspective; rights-based decision and priority of 'right' over 'easy'. - Consequentialist; purely gold -based and evaluated by aggression. Equity "does not seek to make equal what nature has made unequal." (ICJ).

y The US abandoned the Kyoto Protocol in 1997 which caused globa l shocks. y Non-state actors have the ability to seriously impact Climate Change policy. - Major insurers would be faced with the threat of bankruptcy.

Lecture 21; Contemporary global financial markets - volatility and sustainability: y People live via the concept of trust in money as it is not static like 'metres' is. y Commodity money; based on gold or any type of (usually scarce) asset. - State; valueless money as it is backed by the state that requires citizen trust. - National currency is often considered the hal lmark of an autonomous nation. y Classical Liberalist 'gold-standard' meant gold settled all global currency issues. y States have control of their currency within boundaries but it is completely at the whim of market forces on a global scale. y Bretton Woods Agreement within embedded liberalism caused the US dollar to become the global reserve currency (as it could be traded for $35 per gold ounce) - The 'Nixon Shock' of 1971 categorises the ending of the Bretton Woods era. y The beginning of the neo -liberal era caused countries to float their currencies with no anchor and in a market rather than state regulated process. y Pricing of the volatility of currencies occurs in Derivative markets of risk. - Derivative or 'futures' market trade exposure to performance of an asset without one necessarily buying an asset (e.g. oil).

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- Crisis of a lack of liquidity can create insolvency and unsustainability. y Countries are able to buy and sell carbon credits causing commodification. y States are not able to regulate outside of their jurisdiction without heavy economic impacts; laws made domestically may not have an international impact y With finance global, and regulation of finance predominantly national, the stability of finance and sustainability of current processes is questionable .

Lecture 22; The Crisis and responses to the crisis - is there a sustainable future?: y Interpretation 1: Property rights were inadequately specified causing quality products to become useless. - Lack of transparency; markets cannot function without all being privy. - Lack of competition; barriers weren't clear between secure funds and security investments and banks became 'too big to fail' according to free markets. - Lack of rationality; financial bubbles formed within the market. - The policy answer is that held by Polanyi's 'double movement' or resistance in that the market can work better by being contained or 'tamed'. y Bundled loans are 'securitised'; what is sold is ownership of the income stream. y International Investment Institutions have the capacity to advise and recommend to sovereign nations and to place conditions on assistance; Basel Accords. y Banks being bailed out may create a fashion for less responsibility in the future. y There is a fear that re-regulation by nation states may cause large MNCs to move to other, more attractive, countries. - There is 'competition' between regulatory policy; Regulatory Arbitrage arises. y Interpretation 2: Andrew Haldane believes 'complexity' theory is crucial. - Ecology, epidemiology and other scientific theories are appli ed financially. y Interpretation 3: Financial markets may have a n inherent propensity for failure. - Markets create bubbles as psychology enters the market; herd following. - Socially, the financial system warrants bailouts that flow through to budget cuts and thus lower standards of living. - Economically, it causes sovereign debt, overheating in emerging markets, commodity price bubbles, excessive risk taking, risk of capital flows etc. - It also allows for the 'too-big-to-fail' financial institutions such as banks. y As it stands, nothing can be done unless there is a global regulatory body. y The GFC began with the Sub -Prime Mortgage crisis in the United States. y Leverage is borrowing money to amplify the outcome of a deal.

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y Sub-Prime Mortgages are those that are risk y and given to people who were almost guaranteed to default (miss a payment) as they had little financial security - As houses with Sub-Prime Mortgages were increasingly placed on the market, the general value of houses began to decline. - Prime-Mortgage holders were not content to pay for a mortgage that greatly exceeded the actual value of the house. y Fannie Mae and Freddie Mac used ultra -low rates and securitisation in order to attract Sub-Prime Mortgages. y Banks would not lend to each other for fear that the bank they lent to might be holding bad assets and would go broke; liquidity dried up. y An international fear of spending arose and thus little money was circulated. - The Millennium Development Goals were sidelined in favour of rigorous economic recovery. - Official Development Assistance from high to low income countries declined. y 'Chimerica' is a neologism that denotes the symbiotic relationship of China/US. - If the Chinese were to decouple from the US it would spark a currency war. - Guido Mantega believes a cur rency war is still ongoing; there is debate. y 'Bretton Woods II' denotes a growing east -west interdependency that involves states with generally higher savings lending to those with higher expenditure. y The US printed dollars to pay for its military spending and the dollar is based on a system of trust as it is not backed by any asset as in the gold -standard. - Many nations demanded fulfilment of America's 'promise to pay', that is the redemption of US dollars for the tangible, static asset of gold. y A reserve currency is held in significant quantities by many governments as part of their foreign exchange reserves and the dollar holds 70% of reserves globally. y US is able to purchase commodities at a marginally lower rate than other nations as others must exchange their currencies and pay a transaction cost. - The debts of the US are the assets of the world, forming their credit systems. y The Glass-Steagall Act prohibited commercial banks from operating as investment banks but it was repealed in 1999, allowing merging . - No cap on greed for the banks as US commercial lenders were able to underwrite trade instruments such as mortgage -backed securities. y Government bonds are not based upon tangible assets but rather a claim on future government tax revenue. y George Soros believes "Markets were seen basically as self-correcting. That paradigm has proven to be false". - The GFC collapsed previous ideas of financial and economic ideologies. y Governments need to sustain US debt levels for the benefit of the GF System.

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Lecture 23; The UN System: y The international system is anarchic (according to realists) and security is based on self-interest and defence by strengthening relative power and alliances. y Collective Security in its constructivist, universal approach, aims to eliminate the recourse to war by means of peaceful settlements. - A commitment by all members to peace, agreement in advance to act promptly to aggression, ability to find consensus, universal membership etc. y The League of Nations is often named the 'toothless tiger' as states would not surrender any national sovereignty; US did not join and war not totally outlawed. - It failed because of a lack of consensus, lack of will to enforce sanctions, security obligations became selection and absence of the US and Germany. y The UN Charter aimed to prohibit any force, allow collective right to self-defence, Security Council determining threats of aggression, (non-)military sanctions etc. - Negotiation, enquiry, mediation, conciliation, arbitration, adjudication and regional solution is the UN keystone to avoiding violence. - Peacekeeping isn't mentioned in the Charter but is cited as 'Chapter 6.5'. - Stymied by the use of the US and previously USSR veto (during the Cold War). y Chapter 7 is concerned with action with respect to threats to peace/aggression. - Breach of peace (1950 Korea), aggression (Israel), authorised force (Korea). y Uniting for Peace Resolution of 1950 is a General Assembly Resolution. - GA recommendations are not binding on states but SC resolutions are. y Rwanda 1993-1994 was an appalling genocide and was determined a threat to peace resulting from internal armed struggle. - The UN did not consider it 'genocide' but acted to protect civilians. y Effectiveness of the UN depends on the will of states to achieve solutions. y There is a General Assembly, Security Council, Secretariat, International Court of Justice, Economic and Social Council and other specialised institutions. - GA: Multilateral discussions are held with only a majority or 2/3 needed. - SC: 1 member, 1 vote and the existence of the five permanent veto powers. - Trustee Council: Currently suspended as last UN trust territory is independent - ICJ: Fifteen judges elected multilaterally for nine year terms. - Secretariat: Responsible for carrying out administrative tasks; Ban -Ki Moon.

Lecture 24; Peacekeeping and Humanitarian Interventions: y Regional Arrangements are encouraged within the UN; African Union (AU). - Although no regional enforcement action shall occur without UNSC consent. y Peacekeeping is more a 'cure' rather than 'prevention' of collective security.

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y y

y y y

y y y y y y y y

- It is a lightly-armed impartial observer force that mediates warring parties. Peacekeeping now responds to civil wars together with state collapse and humanitarian emergencies; 'complex humanitarian emergencies'. - Although less ambitious than collective security, PKOs run for decades. First Generation PKOs: UNSC or combatants determine a ceasefire and UN member nations provide forces to maintain ceasefire line and observe. - Emphasises impartiality as a key element for peacekeeping deployment. Revival of PKOs in 1988 brought the Second Generation: UN guided adversaries to political settlements based on compromise. Third Generation: these middle -ground operations have been precipitated by the resurgence of more primordial animosities like genocide. - PKOs have been launched where is no peace to keep but where this is strong international desire to support humanitarian assistance. - Second and Third Gen. involve humanitarian, electoral and militaristic aspects and co-operate with civilian police and NGOs crucially. First Gen. were not able to use force but in Third Gen. they did use force and thus, by their nature, are partial in their responses. Humanitarian Intervention (HI): 'coercive action against a state to protect peopl e within its borders from suffering grave harm.' 'Responsibility to protect' rather than 'right to intervene' is the new rhetoric. - Exceptional circumstances such as large-scale loss of life or ethnic cleansing. - Right intention (avert human suffering), last resort, (only after non-military options are exhausted), proportionate means (duration should be minimum). - Reasonable prospect of success and the question of the 'right' authority. Western Democracies argue that humanitarian intervention is legal accordin g to international law but Russia and China view this sceptically. US since 2001 has emphasised preventative war as opposed to HI. Deontological views state that either international law must be followed or that engaging in war is always wrong, no matter the consequences of inaction. Consequentialists may hold that if fewer innocent people are killed by intervening compared to non-intervention, than it is moral. The UN Charter has become a major component of International Customary Law. Targeted sanctions (on individuals with assets being frozen) have arisen in response to mandatory sanctions affecting innocent civilians. "Nothing should authorise the intervention in matters essentially within the domestic jurisdiction of any state" (UN Charter). Casus Belli means 'justification of war'.