Governing International Political Economy: Lessons from the Past for the Future
JA Morrison
IR454. 2015-2016
Draft: 24 Sep 15
‘[T]he ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.’
-- JM Keynes, General Theory (1936), Ch XXIV
Course Overview
This course explores the history of international political economy (understood as the relationship between states and markets in a global context). It examines the canonical theorists and theories, the most significant shifts in policy and practice, and the interaction between the two across the last several centuries. It also considers the broader role of history and historical analysis in the study and practice of international political economy. In doing so, it furnishes a rich perspective on the range of ways the global economic order has been—and could be—organised.
More generally, this course of study will demonstrate the incomparable insights historical thinking offers in addressing contemporary challenges. History has always been central to the study and practice of international political economy. The most influential scholars and practitioners of international political economy have repeatedly turned to history both to explain, and to offer a fresh perspective on, the great challenges of their day. This course is designed to help students cultivate that invaluable skill and habit of mind.
Proceeding from the seventeenth century to the present, it examines:
- seminal theorists' particular treatments of international political economy
- the ongoing, timeless debate between these theorists
- the major shifts in the global economic order
- the interaction between theories and policy in each shift
The course begins with mercantilism and the ‘age of empires.’ It then explores the great critics of mercantilism—Adam Smith and David Hume—and the relationship between their critique and the revolutions in IPE that followed. It goes on to analyse the rise of so-called ‘English’ political economy and the ‘First Era of Globalisation’ in the 19th Century.
The course then pivots to consider two major challenges to this hegemony of thought and practice. First, it traces the development of socialism from an internal critique through the writings of Marx & Engels to an instantiated alternative system in the early Soviet Union. Second, it considers the German Historical School’s return to mercantilism—and Europe’s concomitant return to imperial rivalry in the early twentieth century.
This brings the course into the interwar period. There, the course considers the battles that raged among liberals in their attempts to resuscitate the classical IPE tradition in the wake of the First World War. It looks at two variants of liberal IPE: progressive and Austrian. This leads to examination of both the ideas and influence of JM Keynes. A selection of Keynes’s writings is coupled with analysis of the interwar collapse of IPE that consumed him—and the world. The course then transitions into a discussion of the Anglo-American Postwar Order, of which Keynes was a major architect.
Finally the course turns to the modern era. It examines the evolution of the global trade and monetary regimes. It examines the perspectives and trajectories of both developed and developing countries. It concludes by examining the tension between the apparent ascent of ‘neoliberalism’ within economic theory alongside critiques from ‘non-economic’ perspectives: environmental, democratic, and otherwise.
Aims & Learning Goals
The course is designed to provide a critical and informed understanding of the literature in the history of international political economy, both in theory and in practice.
It has several specific learning goals:
-Students will gain familiarity with the intellectual history of the field by including thinkers in and beyond Anglophone international political economy;
-Students will learn to recognise and analyse the major contours of the international economic system across the last several centuries;
-Students will learn the variety of ways to relating theory, history and policy.
Teaching Methods
The course is divided into 10 ‘units’ or case studies, with each unit given one week. Every unit includes a lecture and a corresponding seminar discussion.
Lectures: Lectures will action-packed–and (hopefully!) delivered in a lively manner. In addition to using PowerPoint slides to display charts, graphics, and tables, I also include the bulk of the lecture’s important points (including pivotal transitions) in prose form on these slides. I have evolved this system of lecture delivery in an attempt to serve different learning styles and to reinforce the essential course themes and concepts.
The lecture slides for each lecture will be posted prior to the lecture. Students are encouraged to download these slides before arriving to class to aid their note-taking.
Seminar/Class: I will vary my role and influence in the discussion based on the material and topics at hand. At points, I may provide some preliminary exegesis or background to set the stage for our discussion. At other points, I will take a less active role, encouraging students to take the discussion in the directions they find most interesting. The direction of discussions will largely depend on the questions and interests developed by the discussion’s participants.
Students will take turns serving as discussion leaders. This will give them an occasion to get deeper into the material and to serve as an interlocutor.
Required readings: The readings have been carefully chosen and cut. Their order has also been deliberately chosen. This is to bring students through the material in a particular way (as when a conversation unfolded in the literature, for instance).
Thus, students are asked to read all of the required readings in the order in which they appear on the reading list (unless otherwise specified). Student presenters are also asked to read the recommended readings as well.
Assessment
The course includes several forms of formative work and several forms of summative work.
Formative: The students will give in-class presentations and prepare discussion notes in advance. Both components will be marked by the instructor according to the department’s formative marking criteria.
The students will also complete a formative essay by theend of Week 6.
Students will receive feedback on all of this work so that they can measure their progress in achieving the learning goals specified above.
Summative: The students will be assessed according to a 2000-word essay, due on the Thursday of Week 10. It will be double-marked according to the department’s summative marking criteria.
Course Schedule
1. Mercantilism and the Age of Empires
Approaches to the intellectual history of international political economy. The difference between economic history and the history of economic ideas. The evolution and influence of mercantilist thought.
Background
Grieco, Joseph, Robert Powell, and Duncan Snidal. “The Relative-Gains Problem for International Cooperation.” The American Political Science Review 87, no. 3 (September 1993): 727-743. (16 pp)
Pincus, Steven.‘Rethinking Mercantilism: Political Economy, the British Empire, and the Atlantic World in the Seventeenth and Eighteenth Centuries’. William and Mary Quarterly, 3d ser., 69(1), January 2012. Just pp 12-29. (17pp)
Recommended: North, Douglas & Barry Weingast. ‘Constitutions and Commitment: The Evolution of Institutional Governing Public Choice in Seventeenth-Century England.’ The Journal of Economic History, Vol. 49, No. 4 (Dec., 1989), 803-832.
Primary Texts
Hobbes, Thomas. “On the Natural Condition of Mankind,” Part I, Chapter XIII of Leviathan [1651]. (6 pp) Available via:
Mun, Thomas, England’s Treasure by Forraign Trade. Chs, 2, 4, 8, 21.
Cary, John, Essay on the State of England. (1695) pp 48-51; 130-141
Locke, John. Further Considerations Concerning Raising the Value of Money. 1695.pp 410-420
Locke, John. “For a General Naturalisation.” In Locke: Political Essays, edited by Mark Goldie, 322-26. New York: Cambridge University Press, 1997. (4 pp)
2. The Birth of Classical Liberalism: David Hume and Adam Smith
The foundations of classical liberalism as a system of national political economy during the Scottish Enlightenment. The meaning of laissez faire andthe role of the state. Economic and political economy aspects of international trade in Smith and Hume. Hume and Smith's conception of the international political system.
Background
Morrison, JA. “Before Hegemony: Adam Smith, American Independence, and the Origins of the First Era of Globalization.” International Organization 66(3): 395-428. (2012)
Recommended: Jacob Viner, Essays on the Intellectual History of Economics, Chs 8 and 10. HB75 V78
Primary Texts
David Hume, Writings on Economics, "Of the Balance of Trade", "Of the Jealousy of Trade.HB75 H92
Smith, Adam. Lectures on Jurisprudence. pp 207-209. (3 pp)
Smith, Adam. The Wealth of Nations. Bk IV, Ch 2; and Selection on Free Trade. (24 pp)
Smith, Adam.Theory of Moral Sentiments. I.III.II (12 pp)
Burke, Edmund. “First Letter on a Regicide Peace.” 1796. Para. 3.1.1-3.1.20; and Note 60. (11 pp) Available via:
3. English Political Economy and the First Era of Globalisation
The ascent of the ‘English’ school of political economy and its ascent with British hegemony. The origins and contours of the ‘First Era of Globalisation.’ Developments in theories of trade and international financial systems. Strategies to reform foreign economic policy.
Background
Kindleberger, Charles.1975. ‘The Rise of Free Trade in Western Europe, 1820–1875.’ Journal of Economic History 35 (1):20–55.
Schonhardt-Bailey, Cheryl. From the Corn Laws to Free Trade: Ideas, Interests, and Institutions in Historical Perspective. Cambridge, MA: MIT Press, 2006. Ch 1. (30 pp)
Recommended: Douglas Irwin, Against the Tide, Ch 6. HF1713 I71
Primary Texts
Ricardo, David.Principles of Political Economy and Taxation.(1819) Ch 7, ‘On Foreign Trade’ and Ch 27, ‘On Currency and Banks’.
Cobden, Richard. ‘On the Total and Immediate Repeal of the Corn Laws’. Speech to the House of Commons, 15 January 1846.
Mill, JS. Principles of Political Economy. 1848II.V, ‘Of Slavery’; III.XVII, ‘On International Trade’;III.XXI, ‘Of the Distribution of the Precious Metals Through the Commercial World’.
4. The Socialist Alternative: From Marx to Stalin
Marx’s historical materialism. Marx on international development and globalisation. The evolution of Marxism after Marx.Lenin on imperialism. Soviet international political economy.
Primary Texts
Marx, Karl. The German Ideology, in Karl Marx: Selected Writings, David McLellan, ed. pp 180-201.
Friedrich Engels and Karl Marx, The Communist Manifesto HX276 M39
VI Lenin, Imperialism, the Highest Stage of Capitalism. 1917. Ch 10, ‘The Place of Imperialism In History.’
Trotsky, Leon. The Revolution Betrayed. 1937. Appendix ‘Socialism in One Country’.
5. New Empires and the Collapse of the Liberal Order
American imperialism. The Germans’ return to mercantilism. The last gasps of the 19th Century liberal order.
American Imperialism
William Jennings Bryan. ‘Cross of Gold’ speech.
George Kennan, American Diplomacy, (1951), Chs 1, 3.
Kipling, Rudyard. “The White Man’s Burden: The United States and the Philippine Islands.” [1899]
Recommended: Frieden, Jeffry A. 1997. Monetary populism in nineteenth-century America: An open economy interpretation. Journal of Economic History 57(2): 367-395.
Nationalist Imperialism
Gustav von Schmoller. The Mercantile System and Its Historical Significance Illustrated Chiefly from Prussian History. (1884) pp 50-80
Brooke, Rupert. “1914.” In Collected Poems. [1915]. Sonnets, I-V (pp 107-11). Available via: Google Books.
The Last Liberals
Angell, Norman. The Great Illusion: A Study of the Relation of Military Power to National Advantage. New York: G. P. Putnam’s Sons, 1909. Ch 3: “The Great Illusion.” (20 pp) Available via: Google Books.
Keynes, JM. The Economic Consequences of the Peace. [1919] Chs 1-2. (16 pp) Available via:
6. Economists at War: Fighting for, over Liberalism
How did liberal theorists of IPE respond to the challenges of the First World War? Two varieties of liberals: Austrian and progressive. International versus domestic order. The state and foreign economic policy.
Background
Kennan, George. American Diplomacy. Ch 4: “World War I.” (19 pp)
Sally, Razeen. ‘Hayek and international economic order’. ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft Bd. 51, (2000), pp. 97-118.
Primary Texts
Wilson, Woodrow. The Fourteen Points. January 8, 1918. (5 pp) Link
Keynes, JM. The Economic Consequences of the Peace. [1919] Ch3. (28 pp) Chs 4-6 Recommended.
Keynes, JM. “The of End of Laissez-Faire.” [1926] Reprinted in Essays in Persuasion. (22 pp)
JM Keynes. ‘Am I a Liberal?’
Hayek, FA. ‘Am I a Conservative?’
Hayek, FA.The Road to Serfdom. Ch 15, ‘The Prospects of International Order’.(20 pp) HD82 H41
Viner, Jacob.Essays on the Intellectual History of Economics, Ch 4. HB75 V78
7. Interwar Descent and the Rise of Keynes
The international political and economic consequences of the First World War. Keynes’s response and his attempt to provide a new foundation for liberal IPE. His concern with international monetary organization: War Debts and Reparations, the Gold Standard, and the international financial crisis. The connection between the international financial system and the international trade regime.
BACKGROUND
Kindleberger, Charles P. The World in Depression, 1929-1939. Berkeley: University of California Press, 1973. pp 288-300. (12 pp) Eres
Eichengreen, Barry J. Globalizing Capital. Ch 3, pp 45-50. (5 pp)
Recommended: Eichengreen, Barry, and Douglas Irwin. 1995. “Trade blocs, currency blocs and the reorientation of world trade in the 1930s.” Journal of International Economics 38(1-2): 1–24.
Primary Texts
Keynes, JM.Essays in Persuasion. Part III, Chs 5-7. (42 pp)
Roosevelt, FD. First Inaugural. 4 March 1933.
Keynes, JM. The General Theory of Employment, Interest, and Money. Ch 23, Parts I-V. (19 pp)
8. Building the Anglo-American Postwar Order
Background
Ikenberry, G. John. After Victory. Ch 6: “The Settlement of 1945.” (52 pp)
Kennan, George. American Diplomacy. Pt I, Ch 5: “World War II.” (17 pp)
Recommended:Lake, David A. “British and American Hegemony Compared: Lessons for the Current Era of Decline.” (In Frieden & Lake.)
Primary Texts
Gandhi, Mohandas K. Hind Swaraj or Indian Home Rule. [1909] Read all but Chs 2-3, 9, 15, and appendices. Text available via Eres.
Churchill, Winston. “Our Duty in India.” Speech given at Albert Hall, March 18, 1931. Available via:
The Atlantic Charter. August 14, 1941. (1 p) Available via:
The Charter of the United Nations. June 26, 1945. (Just skim this document.) Available via:
Keynes, JM. “Proposals for an International Currency Union.” 2nd Draft. November 18, 1941. (19 pp)
Joint statement by Experts of United and Associated Nations on the Establishment of an International Stabilisation Fund. April, 1944. (10 pp)
9. The Evolution of the New World Order
IPE in the Second Era of Globalisation. Debates over the nature and influence of international regimes. The collapse of the Bretton Woods System. The evolution of the global trade regime.
International Order
Churchill, Winston. “Sinews of Peace (Iron Curtain).” Commencement address given at Westminster College, Fulton, Missouri, March 5, 1946. Available via:
Keohane, Robert O. After Hegemony: Cooperation and Discord in the World Political Economy. Princeton: Princeton University Press, 1984. Ch 4. Ch 5 Recommended. (16 pp)
Mearsheimer, John J. “The False Promise of International Institutions.” International Security, no. 19 (1994), pp.15-26 only. (11 pp)
Money
Friedman, Milton. “The Case for Flexible Exchange Rates.” In Essays in Positive Economics, 157-203. Chicago: University of Chicago Press, 1953. Parts IV-V (pp 196-203). (7 pp)
Nixon, Richard. Speech Closing the Gold Window, August 15, 1971. Available via:
Gowa, Joanne S. Closing the Gold Window: Domestic Politics and the End of Bretton Woods. Ithaca: Cornell University Press, 1983. “Introduction.” (20 pp)
Trade
Barton, et al. The Evolution of the Trade Regime: Politics, Law, and Economics of the GATT and the WTO. Princeton: Princeton University Press, 2006. Ch 1. “Political Analysis of the Trade Regime.” (26 pp)
Gowa, Joanne S. Allies, Adversaries, and International Trade. Princeton, N.J.: Princeton University Press, 1994. Ch 1. (8 pp) Ch 3 Recommended.
10. The End of History: Markets, More or Less?
The international political-economic order after the end of the Cold War. The 2008 Global Financial Crisis and its implications for economic ideas and policies. The concern with economic development and the growth of modern ‘development economics’.
Background
Ikenberry, G. John. After Victory. Ch 7: “After the Cold War.” (42 pp)
Recommended: Grieco & Ikenberry. State Power and World Markets. New York: WW Norton, 2003. Ch 9: “Mechanisms for Governance, Reform, and Expansion of the World Political Economy.” (39 pp)
International Order
Gorbachev, Mikhail, Margaret Thatcher, George Bush, Francois Mitterrand, Brian Mulroney, and Fidel Castro. “What Did We End the Cold War For?” New Perspectives Quarterly 13, no. 1 (1996): 18-28. (10 pp)
Wallerstein, Immanuel. “The World-System after the Cold War.” Journal of Peace Research 30, no. 1 (1993): 1-6.
Money
Krugman, Paul. “How Did Economists Get It So Wrong?” New York Times Magazine, September 2, 2009.
Summers, Lawrence H. “Reflections on Economic Policy in a Time of Crisis.” Council of Foreign Relations, June 12, 2009.
Watch Niall Ferguson’s ‘The Ascent of Money’ (2009). Available here.
Rodrik, Dani. The Globalization Paradox. Norton: New York, Norton, 2011. Ch 11. (17 pp)
Recommended: Cohen, Benjamin J. The Future of Money. Princeton, N.J.: Princeton University Press, 2004. Ch 1.
Emerging Powers
LeVine, Steve. “China’s Yuan: The Next Reserve Currency?.” BusinessWeek, May 26, 2009.
Kahler, Miles. ‘Rising powers and global governance: negotiating change in a resilient status quo’. International Affairs. 89(3), 2013: pp 711–729.
Recommended: Eichengreen, Barry. “China’s Exchange Rate Regime: The Long and Short of It.” Working Paper, March 23, 2006.
Environment
Malthus, T. R. An Essay on the Principle of Population. [1898] Edited by Donald Winch. Cambridge: Cambridge University Press, 1992. (Selections)
Keohane, R. O. and Victor, D. G. (2011). 'The Regime Complex for Climate Change.' Perspectives on Politics 9(01): 7-23
Recommended: Bernstein, S. (2002). 'Liberal Environmentalism and Global Environmental Governance.' Global Environmental Politics 2(3): 1-16
1