Approaches
to International Commerce and Policy
|
Spring Semester, 2004 |
Todd M. La Porte |
Course Description
OVERVIEW: Welcome to the Spring 2004 session of ITRN 500. This course is about the international political economy, or globalization, or comparative capitalism. Whatever the precise term, it explores the world's economic system, the national strategies for economic and political development that countries use within that system, and a range of issues, such as environmental and labor standards, biotechnology policies, and intellectual property and public health policies, that shape how nations interact with one another.
Both developed and developing nations are considered in this course, as well as countries in transition from centrally-planned economies to more market oriented one. The strengths and weaknesses of different approaches to the interplay of economics and politics will be discussed, as well as important social, economic, political, cultural and ethical issues that play a key role in public debates about strategies and goals. This is a demanding course, but one I believe you will find fascinating and enlightening.
This course may be somewhat different from most courses you took at the undergraduate level. It is taught in part using the case method, which originated at the Harvard Business School, as modified to suit the needs of the ICP program.
This means that you will be expected to review carefully in advance the material assigned for each class and be prepared to discuss the important aspects of the case in class. Our role in this process will be to get the discussion started, assist the class in laying out the facts of the case, pose questions, and help the class to discover general principles running through the case that might be applicable in other situations.
Professors Dinan and La Porte are teaching roughly the same course in the about the same sequence, though each of us approaches the material a little bit differently, and we have somewhat different readings in places.
Grades and Examinations
This is not a lecture course. You, the students, will be uncovering the key lessons from each case. Twenty percent of your grade will be derived from your oral participation in class. If for some reason you cannot attend a class, your participation grade can be maintained by providing me a 1,000 word summary and analysis of each reading. This is to ensure that you have dig into the material, and will therefore not fall behind the rest of the class.
The other four fifths of your grade will be from written and group assignments (25%), a mid-term (25%), a book review and presentation (5%), and a final exam (25%). The mid-term will be an open-book take-home exam, while the final will be in-class, also open-book exam. They will emphasize mastery of the materials in the cases and the readings, particularly your ability to synthesize and analyze. Active participation is a fundamental component of the course.
Group work
Some assignments will be conducted by students in groups. This is because much of contemporary worklife is organized collaboratively. The whole group will receive the same grade for the assignment; individual grades may vary if warranted after my review of the individual critques submitted by each student.
In addition, I strongly encourage you to join with students in your own study groups to discuss the material. Student contact information will be distributed at the first session to help you get these organized.
To help you run your groups effectively, please print out and read:
Brian A. Connery and John L. Vohs, "Group Work and Collaborative Writing," University of California, Davis, Writing Center and Dept. of Rhetoric and Communication, http://www-honors.ucdavis.edu/vohs/index.html
Texts
Class sessions are based on two course texts, which can be purchased at the Arlington Campus Bookstore. The required cases can be purchased from the Law School Library Copy Center, located on the main floor of the Law School building.
Required Books
Robert Gilpin, The Challenge of Global Capitalism: The World Economy in the 21st Century (Princeton: Princeton University Press, 2002). (Note: the 2002 version differs slightly from the 2000 edition).
Diana Hacker, A Pocket Manual of Style, latest edition (New York: Bedford/St. Martin's Press).
Recommended Books
Reinert, Kenneth, Windows on the World Economy, (South-Western Thompson, 2005).
Gaske, Daniel, Understanding U.S. and Global Economic Trends, 2nd ed., (Dubuque, Iowa: Kendall/Hunt Publishing Co., 1998).
Whelen, Charles, Naked Economics: Understanding the Dismal Science, (New York:
Norton, 2002).
The Economist Guide to Economic Indicators: Making Sense of Economics, 5th ed., (New York: Wiley, 2003).Yergin, Daniel and Joseph Stanislaw, The Commanding Heights: The Battle Between Government and the Marketplace that is Remaking the World, revised ed. (New York: Touchstone, 2002).
Yergin and Stanislaw's The Commanding Heights is a popular history of 20th century political economy, concentrating on many of the core concepts of this course. It is recommended particularly for those who are unfamiliar with the economic and political developments that have occurred in the world since 1945: consider skimming the book in its entirety before the semester begins to get a feel for the terrain.
Gaske's and Reinert's books are particularly recommended to those very unfamiliar with economic concepts; Prof. Gaske teaches in the ICP program, as well as at a variety of government agencies, and Prof. Reinert is publishing a wonderful textbook on international economics that is derived in part from his teaching experiences in the program.
Recommended video/webcast
The Commanding Heights was adapted very successfully as a 6-hour PBS broadcast, rebroadcast locally from time to time, also available in video. I found it a compelling production that plays like a thriller; it is exciting to watch. I strongly recommend watching it if you can.
It may also be viewed on the Web with a fast Internet connection: http://www.pbs.org/wgbh/commandingheights/
After choosing your connection speed ("Got broadband?"), click on "Storyline" to view the broadcast segment by segment. The low speed version doesn't have the broadcast, but does have transcripts, timelines, short histories, data and explanations, and essays that explain key ideas. Recommended, particularly for those students with little economics background.
Books for book review assignment
As mentioned above, students will prepare a critical book review and make a short presentation during the final weeks of the term. Reviews will be due April 15, and will be circulated among the students. Some of the books to be used are listed here. A complete list of will be provided in class.
Chua, Amy, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability, (New York: Doubleday, 2002).
de Soto, Hernando, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, (New York: Basic Books, 2003).
Derber, Charles, People Before Profit: the New Globalization in an Age of Terror, Big Money, and Economic Crisis, (New York: St. Martin’s Press, 2002).
Kagan, Robert, Of Paradise and Power: America and Europe in the New World Order, (New York: Alfred A. Knopf, 2003).
Landes, David S., The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor, (New York: Norton, 1998, 1999).
Norberg, John, In Defense of Global Capitalism, (Washington, DC: Cato Institute, 2003).
Petras, James and Henry Veltmeyer, Globalization Unmasked: Imperialism in the 21st Century, (Halifax: Fernwood Publishing, 2001).
Sen, Amartya, Development as Freedom, (New York: Anchor Books/Doubleday, 1999).
Singer, Peter, One World: The Ethics of Globalization, (New Ahven and London: Yale University Press, 2002).
Stiglitz, Joseph, Globalization and its Discontents, (New York: Norton, 2002).
Zakaria, Fareed, The Future of Freedom: Illiberal Democracy at Home and Abroad, (New York: Norton, 2003).
Electronic Reserves
Some readings will be on Electronic Reserves: they are * in the reading assignments below. Using Electronic Reserves substantially reduces copyright costs to students.
To access these readings, go to http://library.gmu.edu. Select "e-reserves" from the drop-down menu, click on "e-reserves" in the title at the top of the screen, then select "Search electronic reserves." Finally, select course OR instructor (but not both) in the drop-down menu.
The password is "lemon" (no quotes).
Periodical Literature
In order to get the most out of this course, and out of the ICP program, you are advised to subscribe to or read regularly in the specialized journals or press. Professionals in the fields of international commerce and policy universally are readers of the New York Times, the Wall Street Journal, and the Washington Post. Journals such as Foreign Policy, Foreign Affairs, or the Atlantic Monthly are worth keeping up with as well. Getting in the habit of reading these will help immeasurably in getting and keeping your skills honed their sharpest.
Writing help
Good writing is vital to a your success, both in a graduate program and in your career. We strongly urge you to think hard about writing competently and formulating solid and well-supported arguments. John R. Trimble's Writing With Style is the best single book on writing, and how to think about writing, that I know. I strongly encourage you to read it; it is delightful as well as exceedingly informative. If you can incorporate even a few of his suggestions in your work, it will be greatly improved, no matter how much, or little, experience you have.
John R. Trimble, Writing with Style: Conversations on the Art of Writing, 2nd ed. (Upper Saddle River, N.J.: Prentice Hall, 2000).
The essential items in Trimble's book may be found at the link below. This summary is taken from a webpage on writing term papers by Prof. Roger Hart, Departments of History and Asian Studies, University of Texas. It is best used as a reminder, not a replacement, of Trimble's advice. http://uts.cc.utexas.edu/~rhart/courses/materials/papers/trimble.html
Diana Hacker's A Pocket Manual of Style is the standard style manual in use in the School, and you should become familiar with it. Use of it will not on its own make you into a good writer. If you would like help with learning about how to compose your arguments or write more clearly, please contact the University Writing Center, http://writingcenter.gmu.edu, or see the instructors
Plagiarism
All work must be your own. Although the exams for this course are to be taken in-class, care still must be taken not to misrepresent your efforts. In general, where the work of others is used, even in paraphrased form, it must appropriately referenced. When in doubt, cite! Plagiarism is an Honor Code violation: http://www.gmu.edu/facstaff/handbook/aD.html
Plagiarism is surprisingly confusing. For more on what it is, how to identify it, and how to avoid committing it, read the information at: http://mason.gmu.edu/~tlaporte/plagiarism.html
Course Outline
This course deals with the nature of globalization, and its impact on various forms of capitalism and political systems. Our text and the other assigned readings introduce some important economic concepts, current global political and economic trends, and leading ideas about globalization. We will examine the tradeoffs between economic growth, employment, and income inequality.
We will devote considerable time to looking national political and economic strategies, often using Harvard University cases. We will examine the transformation of Russia and China the enlargement of the European Union, and Asian regionalism. You will be introduced to the approaches used in a variety of countries to promote economic growth and development, and overcome economic instability.
Class discussions will focus on explaining why states chose particular strategies and assessing the effectiveness of strategies in producing desired results and minimizing unintended negative consequences. You will also be encouraged to compare strategies with the objective of drawing generic conclusions about the effectiveness of strategies under certain conditions. You will take an at home mid-term essay examination after section 7.
The second half of the course will include sessions on Germany's current economic problems and the special situation of the Islamic world in the global system, including a look at the politics of energy, which in particular links the Arab states to the advanced industrial economies of the West and Asia.
We will evaluate concerns about global climate change and how environmental issues affect international trade and international institutions. We will then study the response of companies and states to increasing economic interdependence.We will read cases about the consequences for states and industries of the globalization of production.
We will also discuss how states incorporate economic values (e.g. efficiency, aggregate growth) and non-economic values (e.g., environmental quality, culture, security, autonomy, differentiated development) into arrangements designed to facilitate and regulate international transactions. One class discussion will be focused on biotechnology and its impacts on the international market and the prospects for economic development.
Our final class meetings will examine criticisms of globalization and recommendations for minimizing its negative impacts. We will also conduct a review of all of the cases presented during the semester.
You will take an in-class exam at the end of the semester to assess your ability to integrate the insights from the course into a coherent analysis of international trade and economic issues.
COURSE SYLLABUS
Session 1: The Contemporary Global System
Before class please read and be ready to discuss (see study questions):
Robert Gilpin, Challenge of Global Capitalism, Preface, Introduction: "The Fragile Global Economy," chapter 1: "The Second Great Age of Capitalism, "chapter 2: "The Cold War International Economy."
*Daniel Yergin and Joseph Stanislaw, The Commanding Heights: the Battle Between Government and the Marketplace That Is Remaking the Modern World, (New York: Touchstone, 2002): Introduction: "At the Frontier," and chapter 13: "The Age of Globalization: The Battle for the World Economy" (see electronic reserve information above for instructions on accessing).Study questions
1. In your mind, what is "globalization"?2. What are the "commanding heights" and why do they matter so much?3. What are Gilpin's main arguments about the future of the global economic system? Why does he think it is so fragile?4. What were the key events in the post-war period that concern him?5. How did economic liberalism triumph, in Gilpin's view?6. How do politics affect economic system functioning and stability?Assignment
Prepare an outline or talking points for each of the chapters. Aim for 750 words total. Hand in your assignment at the first class session.
The end of the Cold War heralded a major change in the international system.
This session will discuss the characteristics of the contemporary system,
based on key, sometimes controversial, interpretations of it.
*Samuel Huntington, "The Clash of Civilizations?" Foreign Affairs, vol. 72, no. 3, 1993.
*Francis Fukuyama, "The End of History?" The National Interest, Summer 1989.
*Robert D. Kaplan, "The Coming Anarchy," The Atlantic Monthly, vol. 273, no. 2, February 1994, pp. 44-76. http://www.theatlantic.com/politics/foreign/anarchy.htm
*Fareed Zakaria, "The Rise of Illiberal Democracy," Foreign Affairs, vol. 76, no. 6, 1997.
*Paul Kennedy, "Preparing for the 21st Century: Winners and Losers," New York Review of Books, February 11, 1993, pp. 32-44.Assignment
In your assigned study group, write a 1,000-word essay comparing and contrasting the arguments made in the Fukuyama, Huntington, Kaplan, Zakaria and Kennedy. Hand in your group's paper during Session 2. You must provide references and footnotes.Use Hacker's A Pocket Manual of Style to guide your work; choose one of the reference styles (Chicago, MLA, APA).
In addition, each group member will provide a short paragraph (~250 words) critique or evaluation of the group process.
Session 3: Managing the Global Economy
Gilpin, chapter 3: "The Insecure Trading System," chapter 4: "The Unstable Monetary System," chapter 5: "Global Financial Vulnerability," and chapter 11: "Managing the Global Economy."
*Kenneth A. Reinert, chapter 12: "Accounting Frameworks," Windows on the World Economy: An Introduction to International Economics, (South-Western Thomson, forthcoming 2005).
Case: Collapse in AsiaRecommended reading:
"Survey of East Asian Economies," The Economist, March 5, 1998, http://www.economist.com/surveys/showsurvey.cfm?issue=19980307Study questions
1. What is comparative advantage, and why is it so important? How is it better than competitive advantage? W hat is the difference?2. Why does Gilpin think the global trading, monetary and financial systems are insecure and vulnerable? What does he think should be done to strengthen them?3. What were the causes of the Asian financial crisis? Pay special attention to the Minsky theory.4. What made some of the Asian countries particularly vulnerable to the crisis and what countries were less badly affected and why?5. Why did the problem spread to other parts of the world?6. What were the impacts of the crisis, in the region and outside?7. What do crony capitalism and moral hazard mean, and what have been the good and bad effects of the "medicine" administered by the IMF?8. Be sure you understand the concepts discussed in Reinert: national income, investment, savings and balance of payments.
AssignmentWhat has happened to the affected Asian countries since early 1998? In your assigned groups, prepare an update of no more than 750 words. Use the Library's online databases at http://library.gmu.edu/ to find five or six articles that provide an overview, and summarize them. Do not use the public Internet.
Click on "Databases," then "Business and International Commerce," then login to either: ABI-Inform, Expanded Academic ASAP, EUI Country Information, Factiva, LexisNexis Academic, or ProQuest General Reference. Provide references and footnotes, using one of the reference styles in Hacker.
Also provide a ~250 word critique of the group's work and the collaboration process.
Session 4: National Approaches to Economic Development
Case: 1-800 Buy Ireland
Case: Brazil Confronts an Interdependent WorldRecommended reading:
Yergin and Stanislaw, chapter 3: "Tryst with Destiny: Rise of the Third World," chapter 5, "Crisis of Confidence: The Global Critique," and chapter 9: "Playing the by the Rules: The New Game in Latin America"Study questions
1. What context items and past development strategies help explain Ireland's economic difficulties in the first 50 years of independence?2. How has membership in the EU affected Ireland?3. What was Ireland's "economic miracle" strategy of 1987 and how successful was it? What does the evidence show about how the country was doing?4. What policies and institutions are responsible for Ireland's success?5. Will Ireland be able to sustain its strong performance? Why or why not? What are the factors working against sustaining Ireland's miracle?6. How did Brazil get into the situation it faced in the early 1990s? (look at Brazil's historical/political/economic/social context and past development strategies).7. What steps did Cardoso take (as finance minister and president) to deal with Brazil's problems?8. How do domestic politics impede reform efforts? What groups stand in the way? What structures need to be changed?9. What were the results of Cardoso's efforts, and what still needs to be done?Assignment
Using library databases, write a short update on the Irish and the Brazil cases, and comment on major elements of their economic development strategies, and the factors leading to their success or failure. Your essay should be based on at least five sources, which must be referenced correctly. It must be 500 to 1,000 words. Be sure to provide economic performance data (GDP, inflation, exchange rates, balance of payments, employment figures) to support your findings.
Session 5: Transformation of Centrally-Planned Economies
Case: Russia: End of a Time of Troubles?
Case: China: The Great AwakeningRecommended reading:
Yergin and Stanislaw, chapter 7: "The Color of the Cat: China's Transformation," and chapter 10: "Ticket to the Market: The Journey After Communism"
"Survey of Russia," The Economist, July 21, 2001, http://www.economist.com/surveys/showsurvey.cfm?issue=20010721
"Survey of China," The Economist, June 15, 2002, http://www.economist.com/surveys/showsurvey.cfm?issue=20020615Study questions
1. What are the main elements of a socialist economy and a capitalist economy? In each, what role does the state play and what role does the market play?2. Russia's transition to capitalism did not go as planned. What went wrong?3. In looking at the key stakeholders in the Russian situation, which of them is most to blame for the country's economic problems?4. What specifically might Putin do to regain control?5. What was Deng's strategy for reform? Why did it succeed?6. Why has China's performance been more successful than Russia's?7. What are Zhu's problems in 1993? What specifically can he do to address them?Assignment
Much has happened in both China and Russia since the end of these cases. In your assigned groups, use one of the newspaper or newsmagazine databases from the library to find out what has happened since the end of these cases, and summarize your findings, with pertinent data and examples.
Provide references to three substantial journal articles, for example Foreign Policy. In the group's essay, include your collective assessment of how successful each leader was or is likely to be. Would you rather live in Russia or China today? Why? Limit yourselves to a 750 well-chosen words.
Also prepare a ~250 word critique of the group's work and the collaborative process.
Session 6: Dilemmas of the Welfare State: Budgets, Jobs and Welfare Reform