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Ce cours va fournir au lecteur une brève histoire du capitalisme mondial. Ce que l'on entend par capitalisme mondial ou économie politique internationale est la structure et la dynamique des relations économiques internationales. | Ce cours va fournir au lecteur une brève histoire du capitalisme mondial. Ce que l'on entend par capitalisme mondial ou économie politique internationale est la structure et la dynamique des relations économiques internationales. | ||
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La première est appelée la Première Mondialisation ce que d'autres appellent les années du libéralisme classique, l'âge d'or qui est la période allant du milieu du XIXe siècle à la Première Guerre mondiale. Nous examinerons ensuite l'intégration du capitalisme mondial dans l'entre-deux-guerres. La troisième période est appelée le libéralisme intégré et se réfère à la première étape de l'après-guerre, de la fin des années 1940 jusqu'au milieu des années 1970, puis à la dernière étape qui est l'étape actuelle de la deuxième mondialisation qui commence au milieu des années 1970 et qui continue à se développer. | La première est appelée la Première Mondialisation ce que d'autres appellent les années du libéralisme classique, l'âge d'or qui est la période allant du milieu du XIXe siècle à la Première Guerre mondiale. Nous examinerons ensuite l'intégration du capitalisme mondial dans l'entre-deux-guerres. La troisième période est appelée le libéralisme intégré et se réfère à la première étape de l'après-guerre, de la fin des années 1940 jusqu'au milieu des années 1970, puis à la dernière étape qui est l'étape actuelle de la deuxième mondialisation qui commence au milieu des années 1970 et qui continue à se développer. | ||
=La première mondialisation= | =La première mondialisation= | ||
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[[File:Imperial Federation, Map of the World Showing the Extent of the British Empire in 1886 (levelled).jpg|thumb|250px|Une carte élaborée de l'[https://fr.wikipedia.org/wiki/Empire_britannique Empire britannique] en 1886, marquée en rose, la couleur traditionnelle des dominions impériaux britanniques sur les cartes.]] | [[File:Imperial Federation, Map of the World Showing the Extent of the British Empire in 1886 (levelled).jpg|thumb|250px|Une carte élaborée de l'[https://fr.wikipedia.org/wiki/Empire_britannique Empire britannique] en 1886, marquée en rose, la couleur traditionnelle des dominions impériaux britanniques sur les cartes.]] | ||
A cela s'ajoute un contexte géopolitique dans lequel l'Angleterre est la puissance dominante, que certains auteurs qualifient de [https://fr.wikipedia.org/wiki/Pax_Britannica Pax Britannica] avec une économie mondiale qui est centrée et structurée autour de Londres.<ref>Schedvin, C. B. “Staples and Regions of Pax Britannica.” The Economic History Review, vol. 43, no. 4, 1990, pp. 533–559. JSTOR, https://www.jstor.org/stable/2596734.</ref><ref>Morris, Jan. [https://books.google.fr/books?id=pgftEXaDykkC&printsec=frontcover&dq=Pax+Britannica+By+Jan+Morris&hl=en&sa=X&ved=0ahUKEwiexaDRqp_oAhXODmMBHZUPB3cQ6AEIKTAA#v=onepage&q=Pax%20Britannica%20By%20Jan%20Morris&f=false Pax Britannica : the climax of an Empire]. London: Faber, 1968. Print.</ref> | A cela s'ajoute un contexte géopolitique dans lequel l'Angleterre est la puissance dominante, que certains auteurs qualifient de [https://fr.wikipedia.org/wiki/Pax_Britannica Pax Britannica] avec une économie mondiale qui est centrée et structurée autour de Londres.<ref>Schedvin, C. B. “Staples and Regions of Pax Britannica.” The Economic History Review, vol. 43, no. 4, 1990, pp. 533–559. JSTOR, https://www.jstor.org/stable/2596734.</ref><ref>Morris, Jan. [https://books.google.fr/books?id=pgftEXaDykkC&printsec=frontcover&dq=Pax+Britannica+By+Jan+Morris&hl=en&sa=X&ved=0ahUKEwiexaDRqp_oAhXODmMBHZUPB3cQ6AEIKTAA#v=onepage&q=Pax%20Britannica%20By%20Jan%20Morris&f=false Pax Britannica : the climax of an Empire]. London: Faber, 1968. Print.</ref> Today, New York is the capital of global capitalism; in the 19th century, London was the capital of capitalism.<ref>MARCHILDON, G. P. (1995). From Pax Britannica to Pax Americana and Beyond. The ANNALS of the American Academy of Political and Social Science, 538(1), 151–168. https://doi.org/10.1177/0002716295538000013</ref><ref> Parchami, Ali. [https://books.google.fr/books?id=Pwt6AgAAQBAJ&printsec=frontcover&dq=Hegemonic+Peace+and+Empire:+The+Pax+Romana,+Britannica+and+Americana&hl=en&sa=X&ved=0ahUKEwjMyNGIq5_oAhUAAGMBHYk0AHYQ6AEIKTAA#v=onepage&q=Hegemonic%20Peace%20and%20Empire%3A%20The%20Pax%20Romana%2C%20Britannica%20and%20Americana&f=false Hegemonic peace and empire : the Pax Romana, Britannica and Americana]. London New York: Routledge, 2009. Print.</ref> | ||
Que font Londres et le Royaume-Uni ? Quelles sont les fonctions qu'ils assument ? | Que font Londres et le Royaume-Uni ? Quelles sont les fonctions qu'ils assument ? | ||
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La deuxième grande exception est l'Allemagne peu après l'unification, lorsque les propriétaires terriens représentés par les alliés de Bismarck avec les capitalistes montants, la bourgeoisie montante contre le SPD, contre le mouvement socialiste, contre la classe ouvrière ont mis en œuvre des politiques de protectionnisme généralisé.<ref>Webb, S. B. (1980). Tariffs, Cartels, Technology, and Growth in the German Steel Industry, 1879 to 1914. The Journal of Economic History, 40(2), 309–330. https://doi.org/10.1017/s0022050700108228</ref><ref>Becker, Andreas. “[https://www.dw.com/en/protectionism-from-bismarck-to-trump/a-43134923 Protectionism: from Bismarck to Trump].” DW.COM, 26 Mar. 2018.</ref>En 1879, le Reichstag (sous la direction du chancelier Otto von Bismarck) a imposé des droits de douane sur les importations industrielles et agricoles dans l'Allemagne impériale.<ref>Duggan, Lawrence G., and Karl A. Schleunes. “[https://www.britannica.com/place/Germany/The-economy-1870-90 The Economy, 1870–90].” Encyclopædia Britannica, Inc.</ref> Comme l'explique Asaf Zussman, les droits de douane ont été imposés sur une grande variété de produits industriels et agricoles, marquant ainsi un tournant dans l'histoire tarifaire européenne du XIXe siècle : les décennies précédentes ont été caractérisées par la libéralisation des échanges tandis que les décennies suivantes ont été marquées par un retour au protectionnisme en Europe continentale.<ref>Zussman, Asaf. "[http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.194.6563&rep=rep1&type=pdf The rise of German protectionism in the 1870s: A macroeconomic perspective]." Stanford Institute for Economic Policy Research, Discussion Paper. (2002).</ref><ref>Böhme, Helmut. “Big-Business Pressure Groups and Bismarck's Turn to Protectionism, 1873-79.” The Historical Journal, vol. 10, no. 2, 1967, pp. 218–236., https://www.jstor.org/stable/2637863.</ref> | La deuxième grande exception est l'Allemagne peu après l'unification, lorsque les propriétaires terriens représentés par les alliés de Bismarck avec les capitalistes montants, la bourgeoisie montante contre le SPD, contre le mouvement socialiste, contre la classe ouvrière ont mis en œuvre des politiques de protectionnisme généralisé.<ref>Webb, S. B. (1980). Tariffs, Cartels, Technology, and Growth in the German Steel Industry, 1879 to 1914. The Journal of Economic History, 40(2), 309–330. https://doi.org/10.1017/s0022050700108228</ref><ref>Becker, Andreas. “[https://www.dw.com/en/protectionism-from-bismarck-to-trump/a-43134923 Protectionism: from Bismarck to Trump].” DW.COM, 26 Mar. 2018.</ref>En 1879, le Reichstag (sous la direction du chancelier Otto von Bismarck) a imposé des droits de douane sur les importations industrielles et agricoles dans l'Allemagne impériale.<ref>Duggan, Lawrence G., and Karl A. Schleunes. “[https://www.britannica.com/place/Germany/The-economy-1870-90 The Economy, 1870–90].” Encyclopædia Britannica, Inc.</ref> Comme l'explique Asaf Zussman, les droits de douane ont été imposés sur une grande variété de produits industriels et agricoles, marquant ainsi un tournant dans l'histoire tarifaire européenne du XIXe siècle : les décennies précédentes ont été caractérisées par la libéralisation des échanges tandis que les décennies suivantes ont été marquées par un retour au protectionnisme en Europe continentale.<ref>Zussman, Asaf. "[http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.194.6563&rep=rep1&type=pdf The rise of German protectionism in the 1870s: A macroeconomic perspective]." Stanford Institute for Economic Policy Research, Discussion Paper. (2002).</ref><ref>Böhme, Helmut. “Big-Business Pressure Groups and Bismarck's Turn to Protectionism, 1873-79.” The Historical Journal, vol. 10, no. 2, 1967, pp. 218–236., https://www.jstor.org/stable/2637863.</ref> | ||
La principale différence entre l'Allemagne et les États-Unis est que les propriétaires fonciers allemands sont protectionnistes. En revanche, les propriétaires fonciers des États-Unis sont favorables au libre-échange. Dans ''Commerce and Coalitions: How Trade Affects Domestic Political Alignments'' | La principale différence entre l'Allemagne et les États-Unis est que les propriétaires fonciers allemands sont protectionnistes. En revanche, les propriétaires fonciers des États-Unis sont favorables au libre-échange. Dans ''Commerce and Coalitions: How Trade Affects Domestic Political Alignments'' published in 1989, Ronald Rogowsky applique [[Le modèle Heckscher-Ohlin : différences de dotations en facteurs de production comme déterminant du commerce|modèle Heckscher-Ohli]] à l'économie internationale pour montrer comment les coalitions entre les facteurs de production des classes se sont déroulées au cours du XIXe siècle et ont abouti aux trois résultats mentionnés précédemment : le libre-échange au Royaume-Uni et la protection aux États-Unis et en Allemagne.<ref>Rogowski, Ronald. [https://books.google.fr/books/about/Commerce_and_Coalitions.html?id=LsWBHAAACAAJ&redir_esc=y Commerce and coalitions : how trade affects domestic political alignments]. Princeton, N.J: Princeton University Press, 1990. Print.</ref><ref>Ronald Rogowski. ''Commerce and Coalitions: How Trade Affects Domestic Political Alignments''. Princeton: Princeton University Press. 1989. Pp. xvi, 208. $24.50. (1991). The American Historical Review. https://doi.org/10.1086/ahr/96.3.831-a</ref><ref>Reading summary: Ronald Rogowski, Commerce and Coalitions:How Trade Affects Domestic Political Alignments. http://www-personal.umich.edu/~franzese/ps489.Rogowski.pdf</ref><ref>Diebold, William. “[https://www.foreignaffairs.com/reviews/capsule-review/1991-06-01/commerce-and-coalitions-how-trade-affects-domestic-political Commerce And Coalitions: How Trade Affects Domestic Political Alignments].” Foreign Affairs, Princeton University Press, 28 Jan. 2009.</ref> | ||
===Tendances du commerce international=== | ===Tendances du commerce international=== | ||
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Il est important de noter que dans l'histoire de la politique étrangère américaine, vous avez deux grandes étapes : le XIXe siècle et jusqu'à l'entre-deux-guerres, vous avez le protectionnisme et l'isolationnisme. Les États-Unis protègent les marchés systémiques et se tiennent à l'écart des affaires politiques du monde. Et puis à partir de l'entre-deux-guerres, l'Amérique est devenue une puissance mondialiste. Le 24 septembre 2019, [https://fr.wikipedia.org/wiki/Donald_Trump Donald Trump] a prononcé un discours aux Nations unies, et il a déclaré que les mondialistes ne vont pas façonner le 21e siècle, mais que les patriotes le feront.<ref>The White House. “[https://www.whitehouse.gov/briefings-statements/remarks-president-trump-74th-session-united-nations-general-assembly/ Remarks by President Trump to the 74th Session of the United Nations General Assembly].” The United States Government.</ref><ref>Crowley, Michael, and David E. Sanger. “[https://www.nytimes.com/2019/09/24/us/politics/trump-nationalism-united-nations.html Trump Celebrates Nationalism in U.N. Speech and Plays Down Iran Crisis].” The New York Times, The New York Times, 24 Sept. 2019.</ref> Il essaie d'inverser le cours séculaire de la politique américaine. À partir de l'entre-deux-guerres, l'Amérique est devenue une puissance mondialiste, une puissance internationaliste libérale qui a promu le libre-échange dans un capitalisme mondial ouvert et, en même temps, les deux sont devenus interventionnistes à l'étranger. | Il est important de noter que dans l'histoire de la politique étrangère américaine, vous avez deux grandes étapes : le XIXe siècle et jusqu'à l'entre-deux-guerres, vous avez le protectionnisme et l'isolationnisme. Les États-Unis protègent les marchés systémiques et se tiennent à l'écart des affaires politiques du monde. Et puis à partir de l'entre-deux-guerres, l'Amérique est devenue une puissance mondialiste. Le 24 septembre 2019, [https://fr.wikipedia.org/wiki/Donald_Trump Donald Trump] a prononcé un discours aux Nations unies, et il a déclaré que les mondialistes ne vont pas façonner le 21e siècle, mais que les patriotes le feront.<ref>The White House. “[https://www.whitehouse.gov/briefings-statements/remarks-president-trump-74th-session-united-nations-general-assembly/ Remarks by President Trump to the 74th Session of the United Nations General Assembly].” The United States Government.</ref><ref>Crowley, Michael, and David E. Sanger. “[https://www.nytimes.com/2019/09/24/us/politics/trump-nationalism-united-nations.html Trump Celebrates Nationalism in U.N. Speech and Plays Down Iran Crisis].” The New York Times, The New York Times, 24 Sept. 2019.</ref> Il essaie d'inverser le cours séculaire de la politique américaine. À partir de l'entre-deux-guerres, l'Amérique est devenue une puissance mondialiste, une puissance internationaliste libérale qui a promu le libre-échange dans un capitalisme mondial ouvert et, en même temps, les deux sont devenus interventionnistes à l'étranger. | ||
L'enjeu qui a cristallisé cette dynamique géopolitique a été la ratification du [[La paix de Paris et la Société des Nations|traité de la Société des Nations]]. La Société des Nations était le projet avant tout du président Wilson, c'était un projet américain. Le traité a été négocié, mais le Sénat américain a refusé de le ratifier.<ref>Wright, Q. (1933). Book Review:The United States and the League of Nations: 1918-1920. Denna Frank Fleming. Ethics, 43(3), 350. https://doi.org/10.1086/208092</ref> | L'enjeu qui a cristallisé cette dynamique géopolitique a été la ratification du [[La paix de Paris et la Société des Nations|traité de la Société des Nations]]. La Société des Nations était le projet avant tout du président Wilson, c'était un projet américain. Le traité a été négocié, mais le Sénat américain a refusé de le ratifier. Par conséquent, les États-Unis n'ont jamais pris part au regard off.<ref>Wright, Q. (1933). Book Review:The United States and the League of Nations: 1918-1920. Denna Frank Fleming. Ethics, 43(3), 350. https://doi.org/10.1086/208092</ref> | ||
L'enjeu qui a cristallisé cette dynamique géopolitique a été la ratification du traité de la Société des Nations.<ref>“[https://history.state.gov/milestones/1921-1936/protectionism Protectionism in the Interwar Period].” U.S. Department of State.</ref> Cela s'est produit lorsque les républicains ont repris le pouvoir après la guerre et ont rétabli les tarifs élevés habituels, avec le [https://fr.wikipedia.org/wiki/Tarif_Fordney-Mac_Cumber tarif Fordney-McCumber de 1922].<ref>Wikipedia contributors. (2020, February 26). Protectionism in the United States. In Wikipedia, The Free Encyclopedia. from https://en.wikipedia.org/w/index.php?title=Protectionism_in_the_United_States</ref> Ainsi, jusque dans les années 1940, le parti républicain était le parti du protectionnisme et de l'isolement, tandis que le parti démocrate était le parti du libre-échange s'engageant avec l'Europe. Auparavant, le parti républicain était le parti des industriels du Nord. En revanche, le parti démocrate était le parti des esclavagistes du Sud. | L'enjeu qui a cristallisé cette dynamique géopolitique a été la ratification du traité de la Société des Nations.<ref>“[https://history.state.gov/milestones/1921-1936/protectionism Protectionism in the Interwar Period].” U.S. Department of State.</ref> Cela s'est produit lorsque les républicains ont repris le pouvoir après la guerre et ont rétabli les tarifs élevés habituels, avec le [https://fr.wikipedia.org/wiki/Tarif_Fordney-Mac_Cumber tarif Fordney-McCumber de 1922].<ref>Wikipedia contributors. (2020, February 26). Protectionism in the United States. In Wikipedia, The Free Encyclopedia. from https://en.wikipedia.org/w/index.php?title=Protectionism_in_the_United_States</ref> Ainsi, jusque dans les années 1940, le parti républicain était le parti du protectionnisme et de l'isolement, tandis que le parti démocrate était le parti du libre-échange s'engageant avec l'Europe. Auparavant, le parti républicain était le parti des industriels du Nord. En revanche, le parti démocrate était le parti des esclavagistes du Sud. | ||
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En termes de politique économique extérieure, on assiste à la montée du nationalisme économique qui, dans certains cas, prend la forme d'une autarcie économique, notamment dans l'Allemagne nazie, mais aussi en Union soviétique. Dans d'autres cas, comme dans celui du Royaume-Uni, il prend la forme de préférences commerciales impériales et de protectionnisme impérial au sein de l'[[Grande-Bretagne : Le plus grand des empires au service d’une économie dominante|Empire britannique]]. En revanche, auparavant, l'Empire britannique était ouvert au commerce mondial. À partir de 1932, il cesse de l'être. | En termes de politique économique extérieure, on assiste à la montée du nationalisme économique qui, dans certains cas, prend la forme d'une autarcie économique, notamment dans l'Allemagne nazie, mais aussi en Union soviétique. Dans d'autres cas, comme dans celui du Royaume-Uni, il prend la forme de préférences commerciales impériales et de protectionnisme impérial au sein de l'[[Grande-Bretagne : Le plus grand des empires au service d’une économie dominante|Empire britannique]]. En revanche, auparavant, l'Empire britannique était ouvert au commerce mondial. À partir de 1932, il cesse de l'être. | ||
Keynes a écrit deux pamphlets qui ont marqué cette période, à savoir ''A Revision of the Treaty'' en 1922 pour préconiser une réduction des réparations allemandes et ''A Tract on Monetary Reform'' publié en 1823, il dénonce les politiques de déflation de l'après Première Guerre mondiale.<ref>Skidelsky, Robert Jacob Alexander. "John Maynard Keynes, 1883-1946: economist, philosopher, statesman." (2003).</ref> L'une était une critique du traité de Versailles et de la manière dont les Alliés ont essayé de régler la question et l'autre est une critique de la tentative du gouvernement britannique de revenir sur l'or en 1925 en appliquant une politique déflationniste. | Keynes a écrit deux pamphlets qui ont marqué cette période, à savoir ''A Revision of the Treaty'' en 1922 pour préconiser une réduction des réparations allemandes et en ''A Tract on Monetary Reform'' publié en 1823, il dénonce les politiques de déflation de l'après Première Guerre mondiale.<ref>Skidelsky, Robert Jacob Alexander. "John Maynard Keynes, 1883-1946: economist, philosopher, statesman." (2003).</ref> L'une était une critique du traité de Versailles et de la manière dont les Alliés ont essayé de régler la question et l'autre est une critique de la tentative du gouvernement britannique de revenir sur l'or en 1925 en appliquant une politique déflationniste. | ||
==Tendance au protectionnisme dans les années 1920 et 1930== | ==Tendance au protectionnisme dans les années 1920 et 1930== | ||
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Dans le cas de l'Europe, cela fait des étincelles. Elle a pris l'invasion commerciale de l'Europe et a stimulé l'essor d'un grand marché unifié avec l'Europe pour rivaliser avec la taille de l'Amérique et imiter la taille des entreprises américaines. C'est de là que vient l'idée de l'unification européenne. Si l'on examine l'histoire de l'européanisme et des idéologies dans les années 1910, 1920 et 1930, il s'agit clairement d'une réaction à la domination économique américaine, et la domination et l'avancée économiques américaines sont perçues comme une fonction de la taille du marché intérieur américain. L'idée est que l'Europe doit avoir le même marché intérieur que les États-Unis ou au moins égal à celui des États-Unis pour pouvoir développer de grandes entreprises, tout comme l'avait fait l'Américain. De même, le Japon tente d'élargir son marché intérieur par le biais de la [https://fr.wikipedia.org/wiki/Sph%C3%A8re_de_coprosp%C3%A9rit%C3%A9_de_la_Grande_Asie_orientale Sphère de coprospérité de la Grande Asie orientale] (SCGAO). | Dans le cas de l'Europe, cela fait des étincelles. Elle a pris l'invasion commerciale de l'Europe et a stimulé l'essor d'un grand marché unifié avec l'Europe pour rivaliser avec la taille de l'Amérique et imiter la taille des entreprises américaines. C'est de là que vient l'idée de l'unification européenne. Si l'on examine l'histoire de l'européanisme et des idéologies dans les années 1910, 1920 et 1930, il s'agit clairement d'une réaction à la domination économique américaine, et la domination et l'avancée économiques américaines sont perçues comme une fonction de la taille du marché intérieur américain. L'idée est que l'Europe doit avoir le même marché intérieur que les États-Unis ou au moins égal à celui des États-Unis pour pouvoir développer de grandes entreprises, tout comme l'avait fait l'Américain. De même, le Japon tente d'élargir son marché intérieur par le biais de la [https://fr.wikipedia.org/wiki/Sph%C3%A8re_de_coprosp%C3%A9rit%C3%A9_de_la_Grande_Asie_orientale Sphère de coprospérité de la Grande Asie orientale] (SCGAO). | ||
In less developed countries, there is a decoupling that initiates from global capitalism. There was an inward turn because of the degradation in terms of trade which initiated a wave of expropriations of foreign multinational corporations in particular in the oil sector. | |||
Le secteur pétrolier était le secteur qui caractérisait la structure en étoile des investissements internationaux et de la production internationale. La date clé qui caractérise ce virage vers l'expropriation pour investissement est l'[https://en.wikipedia.org/wiki/Mexican_oil_expropriation expropriation pétrolière mexicaine de 1938] qui a créé la société pétrolière nationale [https://en.wikipedia.org/wiki/Pemex Pemex] au Mexique, puis a été suivie en particulier par Saudi Aramco. | Le secteur pétrolier était le secteur qui caractérisait la structure en étoile des investissements internationaux et de la production internationale. La date clé qui caractérise ce virage vers l'expropriation pour investissement est l'[https://en.wikipedia.org/wiki/Mexican_oil_expropriation expropriation pétrolière mexicaine de 1938] qui a créé la société pétrolière nationale [https://en.wikipedia.org/wiki/Pemex Pemex] au Mexique, puis a été suivie en particulier par Saudi Aramco. | ||
== | ==The end of Gold Standard== | ||
The gold standard broke down in 1914 and countries, including the United Kingdom, started issuing fiat currencies.<ref>Bemanke, Ben, and Harold James. "[https://www.nber.org/chapters/c11482.pdf The gold standard, deflation, and financial crisis in the Great Depression: An international comparison]." Financial markets and financial crises. University of Chicago Press, 1991. 33-68.</ref> What are fiat currencies? Fiat currencies are what you have in your pockets today, namely paper money. It is a currency without intrinsic value that has been established as money, often by government regulation.<ref>Wikipedia contributors. (2020, March 3). Fiat money. In Wikipedia, The Free Encyclopedia. Retrieved 20:42, March 28, 2020, from https://en.wikipedia.org/w/index.php?title=Fiat_money</ref> That value is not fixed to a metallic standard or to precious metal. Its value depends on the money supply, on the volume of money, and that is a decision of the central banks. | |||
Central banks now can decide the value of a currency interactively, and that is the question of monetary policy related to inflation. It is what happened during the First World War to facilitate war finance. | |||
[[File:Tyldesley miners outside the Miners Hall during the 1926 General Strike.jpg|thumb|upright=2.1| | [[File:Tyldesley miners outside the Miners Hall during the 1926 General Strike.jpg|thumb|upright=2.1|Striking miners during the 1926 general strike.]] | ||
From 1919 onward there was an attempt to restore some the gold standard. The major problem here is that for the United Kingdom it would result in deflating its domestic economy, make the British pound too strong for effective exporting, and pushdown wages. With policies associated with Winston Churchill, the standard was reinstated in 1925.<ref>“[https://www.parliament.uk/about/living-heritage/transformingsociety/private-lives/yourcountry/collections/churchillexhibition/churchill-the-orator/gold-standard/ Churchill's speech about the Gold Standard].” UK Parliament.</ref> Ten months later the [https://en.wikipedia.org/wiki/General_Council_of_the_Trades_Union_Congress General Council of the Trades Union Congress] (TUC) called a [https://en.wikipedia.org/wiki/1926_United_Kingdom_general_strike general strike] in the United Kingdom that lasted nine days, from 3 May 1926 to 12 May 1926, and the attempt goes down the drain. There is a general strike because workers did not want to take deflation, lengthening the workday and reducing wages. So the gold standard is history because of the general strike in the United Kingdom in the 1920s. | |||
A new reality emerged, which is that external monetary stability will no longer prevail over domestic economic considerations and policies. There has to be some accommodation between external constraints and domestic imperatives. | |||
The basic political fact behind that is the rise of the labour and the socialist movement which led to wage rigidity and the end of perfectly elastic wages. Because workers are now organized, they can organize and strike to resist pay cuts. Therefore, it is no longer possible to have a monetary system that works automatically by deflating prices and wages. | |||
In practice, the gold standard was over in 1926. Formally it ended in 1930 when the United Kingdom abandoned the gold standard in 1931 under a Labour government.<ref>Morrison, J. A. (2015). Shocking Intellectual Austerity: The Role of Ideas in the Demise of the Gold Standard in Britain. International Organization, 70(1), 175–207. https://doi.org/10.1017/s0020818315000314</ref><ref>Bordo, Michael D., et al. “[https://www.econlib.org/library/Enc/GoldStandard.html Gold Standard].” Econlib.</ref> It led to a sharp devaluation in sterling and helped the United Kingdom to recover from the crisis.<ref>Titcomb, James. “[https://www.telegraph.co.uk/finance/commodities/11330611/How-the-Bank-of-England-abandoned-the-gold-standard.html How the Bank of England Abandoned the Gold Standard].” The Telegraph, Telegraph Media Group, 7 Jan. 2015.</ref> | |||
[[Fichier:Gold standard-the new york time archives.png|vignette|droite|Photo Credit: The New York Times Archive.<ref>Krishna, Mrinalini. “[https://www.investopedia.com/news/when-fdr-abandoned-gold-standard/ When FDR Abandoned the Gold Standard].” Investopedia, Investopedia, 29 Jan. 2020.</ref>]] | [[Fichier:Gold standard-the new york time archives.png|vignette|droite|Photo Credit: The New York Times Archive.<ref>Krishna, Mrinalini. “[https://www.investopedia.com/news/when-fdr-abandoned-gold-standard/ When FDR Abandoned the Gold Standard].” Investopedia, Investopedia, 29 Jan. 2020.</ref>]] | ||
In 1933, in the middle of the [https://en.wikipedia.org/wiki/London_Economic_Conference London Economic Conference] that attempts to rebuild international monetary cooperation and win agreement on measures to fight the Great Depression, Roosevelt announced that the United States will not support the Conference agenda as outlined.<ref>Rauchway, Eric. “[https://www.bloomberg.com/opinion/articles/2013-03-21/how-franklin-roosevelt-secretly-ended-the-gold-standard How Franklin Roosevelt Secretly Ended the Gold Standard].” Bloomberg.com, Bloomberg, 2013.</ref><ref>Edwards, Sebastian. “[https://www.bloomberg.com/opinion/articles/2018-05-22/fdr-s-battle-over-the-gold-standard-changed-the-u-s The Untold Story of FDR and the Battle Over Gold].” Bloomberg.com, Bloomberg, 2018.</ref> Roosevelt did not want to tie his hands by tying the value of the dollar to gold to allow the external value of the Dollar and the exchange rate to float according to the vagaries of his domestic economies. | |||
That corresponds to the collapse of the international trading system in the early 1930s. There is one date that marks the reversal of that trend. It is 1936 and the [https://en.wikipedia.org/wiki/Tripartite_Agreement_of_1936 Tripartite Agreement of 1936] between the United States, the United Kingdom and France. Subscribing nations agreed to refrain from competitive depreciation to maintain currency values at existing levels, as long as that attempt did not interfere seriously with internal prosperity.<ref>Wikipedia contributors, 'Tripartite Agreement of 1936', Wikipedia, The Free Encyclopedia, 18 December 2019, 07:56 UTC, <https://en.wikipedia.org/w/index.php?title=Tripartite_Agreement_of_1936</ref> That is the first attempt to restore some kind of international monetary system based on active cooperation between central banks. Central banks from now pledge to help each other, counteract outflows of gold and money in order to stabilize exchange rates between the major currencies that make up the world economy. The agreement stabilized exchange rates, ending the [https://en.wikipedia.org/wiki/Currency_war currency war] of 1931 - 1936, but failed to help the recovery of world trade.<ref>Robert A. Mundell and Armand Clesse (2000). The Euro as a stabilizer in the international economic. Springer. p. 284. ISBN 978-0-7923-7755-9.</ref> | |||
= | =The postwar economic order: Embedded Liberalism= | ||
The third stage in the history of global capitalism is the stage called Embedded liberalism. The concept of embedded liberalism was introduced by John Ruggie in this article ''International regimes, transactions, and change: embedded liberalism in the postwar economic order'' published in 1982.<ref>Ruggie, J. G. (1982). [https://bbs.pku.edu.cn/attach/20/c5/20c50510067906d7/io82ruggie.pdf International regimes, transactions, and change: embedded liberalism in the postwar economic order]. International Organization, 36(2), 379–415. https://doi.org/10.1017/s0020818300018993</ref> According to Ruggie, embedded liberalism is a commitment to a new kind of liberal multilateralism compatible with 'domestic interventionism' aiming at supporting domestic social security and economic stability within Western industrialized countries.<ref>Helleiner, E. (2019). The life and times of embedded liberalism: legacies and innovations since Bretton Woods. Review of International Political Economy, 26(6), 1112–1135. https://doi.org/10.1080/09692290.2019.1607767</ref> Embedded liberalism is a term designed to convey the fact that the operating principle of this stage of global capitalism was a way to accommodate the imperative of external stability and the imperative of domestic policy autonomy.<ref>Abdelal, Rawi, and John G. Ruggie. "[https://tobinproject.org/sites/tobinproject.org/files/assets/New_Perspectives_Ch7_Abdelal_Ruggie.pdf The principles of embedded liberalism: Social legitimacy and global capitalism]." New perspectives on regulation (2009): 151-162.</ref> | |||
== | ==The advent of Pax Americana== | ||
The major shift takes place after 1947 with the advent of the [https://en.wikipedia.org/wiki/Pax_Americana Pax Americana] and the replacement of the previous hegemon before the First World War, Pax Britannica. | |||
During the second half of the 1930s and the 1940s, liberal internationalism prevails over isolationism and protectionism in the United States. Just at the same time as in the 1930s, American industry turned to free trade, converts to free trade, and the Republican Party gradually also became a pro-free-trade position. | |||
Why is it so? | |||
Because during the Second World War, most of the sectors in the American economy internationalized developping activities with important sources of profit abroad. Therefore there is a stake in the way the international economy works, and sectors want the American state to play a stabilizing role in order to safeguard their investments and markets abroad. | |||
The United States promotes multilateral liberalization in trade and financial flows. It keeps its domestic market open for its allies, and that is a significant feature of the few decades following the end of the Second World War. The United States notably becomes a source of international investment for construction in particular in the late 1940s and the early 1950s operating also in Europe, Japan and Korea. It stabilizes the international economic system by providing finance and creates space by doing so to reconcile external imperatives and domestic policy autonomy across the world. | |||
== | ==The Second and Third Worlds== | ||
But just as the United States is doing, there are vast chunks of the world that stand aside. Those are the so-called second and third worlds. The second world is the world under the domination of the USSR and China after 1949. The Third World is the former colonial world that will, later on, give rise to the non-aligned movement and the [https://en.wikipedia.org/wiki/Group_of_77 Group of 77] (G77) in the United Nations. | |||
[[Fichier:First-Second-Third-world-map.png|vignette| | [[Fichier:First-Second-Third-world-map.png|vignette|Worldmap of the First, Second, and Third World. The map shows the countries of the US aligned countries of the First World (in green), the Communist states (in red), the Third World (in yellow). European neutral states (in white), and countries which have been communist nations for a short period in light red. Image: [https://www.nationsonline.org/oneworld/third_world_countries.htm nationsonline.org]]] | ||
Those states pursue inward-oriented industrialization and development. In the case of Latin America and Asia and particular India that takes the name of [https://en.wikipedia.org/wiki/Import_substitution_industrialization Import substitution industrialization] (ISI).<ref>Silva, E. (2007). The Import-Substitution Model. Latin American Perspectives, 34(3), 67–90. https://doi.org/10.1177/0094582x07300589</ref><ref>Baer, Werner. “Import Substitution and Industrialization in Latin America: Experiences and Interpretations.” Latin American Research Review, vol. 7, no. 1, 1972, pp. 95–122. JSTOR, https://www.jstor.org/stable/2502457.</ref><ref>Sapelli Claudio. 2003. [https://repositorio.uc.cl/bitstream/handle/11534/4837/000352269.pdf?sequence=1 The Political Economics of Import Substitution Industrialization] - [https://www.uc.cl/ Pontificia Universidad Católica de Chile] - [https://economia.uc.cl/ Instituto de Economia]</ref> | |||
To a large extent, ideologically, this is a return to prescriptions that derived from mercantilist thought, in particular from the thinking of economic nationalists like [https://en.wikipedia.org/wiki/Alexander_Hamilton Alexander Hamilton] and [https://en.wikipedia.org/wiki/Friedrich_List Frederick List].<ref>Mehmet, Ozay (1999). Westernizing the Third World: The Eurocentricity of Economic Development. London: Routledge.</ref><ref>Chang, Ha-Joon (2002). Kicking Away the Ladder: Development Strategy in Historical Perspective. London: Anthem Press.</ref> | |||
The idea is that to develop industrial capacities and technological capacities, a country has to see a lot of itself from the world economy. In order to keep out the imports of more advanced countries that prevent its own industry from acquiring those capacities and developing its own economies of scale, the country has to reserve the domestic market to its own industrial firms. It is, therefore, necessary for them to replace these imports with domestic production to gaining their independence. They do so notably by placing high tariffs on imports and by implementing protectionist and inward-looking trade policies. For those countries, it is an attempt to reduce foreign dependency through local production of industrialized products, whether through national or foreign investment, for domestic or foreign consumption. | |||
In those cases in the Second and the Third worlds, the shift towards neo-economic nationalism goes hand in hand with the political victory of urban classes, industrial capital, intellectuals the industrial working classes over landowners. Those were the forces that dominated Latin America before the 1930s, and those were no longer the forces that dominated Latin America after the 19th. The same goes before India. | |||
== | ==Multilateral trade liberalization== | ||
=== | ===Multilarization=== | ||
How did multilateralization in trade play out? | |||
The United States promoted the setting up of international organizations to promote multilateral trade liberalization. The original idea was to have an [https://en.wikipedia.org/wiki/International_Trade_Organization International Trade Organization]. A treaty began to be negotiated. It is in this context that, in 1948, the [https://en.wikipedia.org/wiki/International_Trade_Organization Havana Charter] attempted to establish international rules to regulate and facilitate trade between the various signatory countries. But it filtered in 1948 because the United States Senate refused to ratify the Charter of the International Trade Organization.<ref>Van den Bossche, Peter. The law and policy of the World Trade Organization: text, cases and materials. Cambridge University Press, 2008.</ref><ref>P.B. Kenen, The International Economy, I, 376</ref><ref>Bronz, George. "[https://heinonline.org/HOL/LandingPage?handle=hein.journals/hlr62&div=68&id=&page= The International Trade Organization Charter]." Harv. L. Rev. 62 (1948): 1089.</ref><ref>Diebold, William. "[https://heinonline.org/HOL/LandingPage?handle=hein.journals/niulr14&div=18&id=&page= Reflections on the International Trade Organization]." N. Ill. UL Rev. 14 (1993): 335.</ref><ref>Bronz, George. “An International Trade Organization: The Second Attempt.” Harvard Law Review, vol. 69, no. 3, 1956, pp. 440–482. JSTOR, https://www.jstor.org/stable/1337394.</ref> In order to understand the reason for this refusal, it is necessary to see that the Havana Charter provides for an organisation fully affiliated to the United Nations. However, the United Nations has a court of justice: the International Court of Justice sits in The Hague replacing the Permanent Court of International Justice of the League of Nations in 1946. The United States, the world's largest economic power at the time, did not want to be under the binding authority of international court judges who would take over the affairs of states.<ref>Organisation internationale du commerce. (2020, mars 19). Wikipédia, l'encyclopédie libre. Page consultée le 22:38, mars 19, 2020 à partir de http://fr.wikipedia.org/w/index.php?title=Organisation_internationale_du_commerce&oldid=168582489.</ref> In the absence of an international trade organization to coordinate their commercial policies and deal with problems related to their trade relations, countries will turn from the early 1950s to the only established multilateral international trading institution: the General Agreement on Tariffs and Trade (GATT). It highlights the continuing influence of protectionist and isolationist currents within the United States even if declining. The United States ratifies the United Nations Charter, ratifies the International Monetary Fund Charter, and the World Bank charter. In this regard, the case of the International Trade Organization is an isolated victory for the protectionists. | |||
At the same time as the International Trade Organization fails, the [https://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Trade General Agreement on Tariffs and Trade] (GATT) takes shape. It is not a formal organization, it does not have formal rules, it does not have arbitration panels, it does not have all sorts of instruments standing to some limited extent above the sovereignty of national states. It is a forum for multilateral negotiation where liberalization takes place. As per its preamble, its purpose is the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis." It is the answer to the World Trade Organization (WTO), which is the ITO reason from its ashes and set up in 1995. And within GATTS are organized a series of rounds of trade liberalization.<ref>“[https://www.joc.com/history-gatt-rounds_19931214.html History of GATT Rounds].” | [https://www.joc.com/ JOC.com].</ref><ref>[https://exhibits.stanford.edu/gatt GATT Digital Library 1947–1994 at Stanford University]</ref> | |||
The reasons why those negotiations are successful is that negotiations in the 1950s the 1960s and even the 1970s are mostly between the United States and Western Europe and to a lesser extent Japan. In particular, after the treaty of Rome comes into effect in 1958, those negotiations until the Uruguay round are mostly a match between Washington and Brussels. | |||
Multilateral trade liberalization is organized along a set of norms and rules that are set to guide the way in which international trade corporation is to take place. There is gradually liberalization. The United States does not push for a total elimination of tariffs and other barriers to trade. However, it promotes a gradual liberalization because it recognizes that to abruptly liberalization can stimulate resistance to trade. | |||
An important principle is the pne of non-discrimination with the [https://en.wikipedia.org/wiki/Most_favoured_nation most favorite nation rule] by which each signatory state undertakes to grant to the other any advantage that it would grant to a third state.<ref>“[https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm Understanding the WTO - Principles of the Trading System].” WTO.</ref> In the World Trade Organization (WTO) agreements, the most-favoured-nation (MFN) clause states that any trade advantage granted by one country to another must be immediately extended to all WTO members. It is the idea, for example, that if the United States lowers tariffs for the United Kingdom for inputs, it has to do the same across the board for all other trading partners in the system. Therefore, it is the idea that there has to be liberalization across the board and not simply preferential trade liberalization. With this principle, what is given to one is given to all without discrimination. | |||
=== | ===Preferential Trade Agreements=== | ||
There are several safeguards against the stabilizing effects of trade liberalization. The norms of the system allow countries to reinstate barriers to trade, to close up their economies temporarily if the effects of liberalisation result in political and economic destabilization. | |||
That is the theory, in practice, things fold out differently. Why is that so? | |||
That is mainly because the most important trade liberalisation effort during the Embedded Liberalism stage is preferential in nature and not multilateral. That is, for example, the setting of the European customs union progressively in the 1950s and the 1960s which is also the origin of the European Union of today. | |||
It is important to realize that the setting of the customs union in Europe in 1957 goes against the spirit of the rules of the system. Because it is a [[Preferential Trade Agreements|preferential trade agreement]], it is a preferential liberalization creating trade diversion and to the detriment of American exporters. American opposed the European customs union because they know that they are going to lose out. However, the United States allows and promotes that kind of liberalization because it sees liberalization of trade within Europe as a key plunk very construction of the Western European economy. That takes precedence over multilateral liberalization. | |||
Most importantly, the customs union in Europe sets a precedent for what is going to come in the next stage, namely from the early 1980s a wave of preferential trade agreements. That becomes much more important in terms of the volume of world trade that what multilateral liberalization will be. | |||
In a way, the system promotes one thing in theory, and, in practice, does something different. | |||
== | ==Structural investments and multinational enterprises== | ||
=== | ===Structural investments=== | ||
There are two aspects to this. One is the way infrastructural investment in the developing world is going to be financed from now. It is no longer done through private funds and bank lending done from London and New York. It is to be done by public credits extended by international organizations or the United States Treasury. That is the origins of [https://en.wikipedia.org/wiki/World_Bank_Group the World Bank Group] (WBG) composed by five members institutions which are the [https://en.wikipedia.org/wiki/International_Bank_for_Reconstruction_and_Development International Bank for Reconstruction and Development] (IBRD), the [https://en.wikipedia.org/wiki/International_Development_Association International Development Association] (IDA), the [https://en.wikipedia.org/wiki/International_Finance_Corporation International Finance Corporation] (IFC), the [https://en.wikipedia.org/wiki/Multilateral_Investment_Guarantee_Agency Multilateral Investment Guarantee Agency] (MIGA) and the [https://en.wikipedia.org/wiki/International_Centre_for_Settlement_of_Investment_Disputes International Centre for Settlement of Investment Disputes] (ICSID). The first two are sometimes collectively referred to as the World Bank.<ref>Wikipedia contributors. (2020, March 29). World Bank Group. In Wikipedia, The Free Encyclopedia. Retrieved 09:01, April 4, 2020, from https://en.wikipedia.org/w/index.php?title=World_Bank_Group&oldid=948011839</ref> | |||
[[Fichier:GDP history Since 1950 ~ 2016.png|vignette| | [[Fichier:GDP history Since 1950 ~ 2016.png|vignette|Gross national income per capita history 1950~2016]] | ||
The International Bank for Reconstruction and Development (IBRD) was precisely established in 1944 to offers loans and finance infrastructure projects in middle-income developing countries such as Africa, Latin America and Asia. Along with that, there are American initiatives for reconstruction in Western Europe and Japan. That is the [https://en.wikipedia.org/wiki/Marshall_Plan Marshall Plan] and its Japanese equivalent introduced in 1947. A functional equivalent to those plans is the boost to the Korean economy that comes out of wars spending during the Korean War in the Korean Peninsula in the 1950s. | |||
To a large extent, the origins of what later on was to be called the Western European economic miracle, the [https://en.wikipedia.org/wiki/Japanese_economic_miracle Japanese Economic Miracle], and the [https://en.wikipedia.org/wiki/Miracle_on_the_Han_River Korean Economic Miracle] have to do with the fact that early on the American government decided to fund major investments in infrastructure in those countries to provide them with a platform on the basis of which economic development was going to take place in its allies.<ref>Crawford, Robert J. "Reinterpreting the Japanese economic miracle." Harvard Business Review 76.1 (1998): 178-183.</ref><ref>Hassink, R. (1999). South Korea’s economic miracle and crisis: Explanations and regional consequences. European Planning Studies, 7(2), 127–143. https://doi.org/10.1080/09654319908720508</ref><ref>Foreman-Peck, J. (2014). European Industrial Policies in the Post-War Boom: “Planning the Economic Miracle.” In Industrial Policy in Europe after 1945 (pp. 13–47). Palgrave Macmillan UK. https://doi.org/10.1057/9781137329905_2</ref> | |||
=== | ===Multinational enterprises=== | ||
The other important trend is the culmination of the shift away from the [https://en.wikipedia.org/wiki/Spoke%E2%80%93hub_distribution_paradigm hub and spoke structure] of the Classical Era towards the years of multinational enterprises. That is a trend that began in the 1920s with American corporations investing in Europe and to a much lesser extent in Japan, but mostly Europe. | |||
That trend comes mature during the 1950s and 1970s. There is a pattern for interactive investments in which investments between developed countries largely dominate in terms of the volume of investment and takes place in global countries. Between 85% to 90% of foreign investments during the Embedded Liberalism period are done between developed economies and no longer between North and South, no longer between advanced and developing countries. | |||
For instance, American car manufacturers invest in Europe and European car manufacturers a bit later begin investing in the United States. So it is a deeper form of economic integration than integration that takes place through trade. It has a major impact in the 1970s, from the 1970s onwards in terms of the resistance of the global economy too. Nevertheless, it is a fundamental shift. It is the most important developed shift change in the way global capitalism operates during the 20th century. | |||
There is an exception to this trend. The Second and Third worlds shun incoming for indirect investment from the United States, Europe and Japan. | |||
[[Fichier:Chart for expropriations of foreign companies.png|vignette|center]] | [[Fichier:Chart for expropriations of foreign companies.png|vignette|center]] | ||
If you look at the chart for expropriations of foreign companies, they pick in the 1970s because it is the time when the attempt to take over for investments is at its highest and so the equivalent attempt to keep out for investment is also at its pick. | |||
==Bretton Woods and the International Monetary Fund== | |||
{{Article détaillé|Bretton Woods System: 1944 - 1973}} | |||
[[File:WhiteandKeynes.jpg|thumb|right|John Maynard Keynes (right) and Harry Dexter White at the inaugural meeting of the International Monetary Fund's Board of Governors in Savannah, Georgia, U.S., March 8, 1946. They were the two main protagonists of the conference held in Bretton Woods.]] | |||
[[ | That is probably the most well-known feature of in Embedded Liberalism because the pre-war international monetary system was thrashed out at the [https://en.wikipedia.org/wiki/Bretton_Woods_Conference Bretton Woods Conference] that took place at the Mount Washington Hotel in New Hampshire in the United States between July 1 to 22 in 1944, so just before the war ended. It embodied a consensus between American and United Kingdom policymakers in the persons of [https://en.wikipedia.org/wiki/John_Maynard_Keynes John Maynard Keynes] and [https://en.wikipedia.org/wiki/Harry_Dexter_White Harry Dexter White] for the United States. | ||
On the need to reconcile the drive for the liberal global financial system, but also domestic policy autonomy, Keynes and White disagreed on the details and in particular on how much the hegemon would have to do to stabilize the system. Keynes wanted the hegemon to do everything it could to stabilize the system by providing liberal countervailing finance to countries whose money was not the dollar. White was not very keen on that and wanted to limit the extent to which the United States would have to intervene. He wanted to limit the extent to which the international regime would force the United States to intervene in cases of financial destabilization and financial crisis. | |||
The international monetary system created through Bretton Woods was a revised form of the [[International triumph of the gold standard: 1871 - 1914|gold standard]] in that the dollar's value to gold was fixed and the value of all other currencies was fixed to the dollar. It was a system where the dollar was as good as gold, and by extension, countries did not have to hold gold, it was enough for them to hold dollar to know that they had stability. But obviously, that held as long as the dollar's value was packed to the gold and had an anchor and it wasn't allowed to freely float up and down as it will happen from the 1970s. | |||
There were fixed rates between national currencies, but they were adjustable. That is another major difference with the classical gold standard. It is that countries agreed that within the International Monetary Fund (IMF), they could negotiate between themselves the adjustment of exchange rate values to facilitate adjustment of the domestic economies through the exchange rate. | |||
Another major feature was countervailing finance. The idea that if there was an outflow of capital in countries that suffered a dollar shortage, the IMF and the United States Treasury would provide dollars to the country experiencing the capital outflow in order to neutralize the effect of the capital outflow. In a way, the United States Treasury was pledging to fight speculators by annulling the effect of capital outflow in particular from Western Europe. | |||
[[Fichier:IMF Article XI Capital Control.png|vignette|centré]] | [[Fichier:IMF Article XI Capital Control.png|vignette|centré]] | ||
The third major feature was capital control.<ref> Helleiner, Eric. States and the reemergence of global finance : from Bretton Woods to the 1990s. Ithaca, N.Y. London: Cornell University Press, 1996. Print.</ref><ref>Garber, Peter M. "[https://www.nber.org/chapters/c6876.pdf The collapse of the Bretton Woods fixed exchange rate system]." A Retrospective on the Bretton Woods system: Lessons for international monetary reform. University of Chicago Press, 1993. 461-494.</ref><ref>Guitián, Manuel. "[https://search.proquest.com/openview/52720d68fcbce842c5b87640d7d1ff4d/1?pq-origsite=gscholar&cbl=1819673 The challenge of managing global capital flows]." Finance and Development 35.2 (1998): 14.</ref> It is the idea that countries could just refuse to accept capital outflows, and they could simply tell the speculators that their money was captive and would not continue to be held in the domestic banks. It was an administrative block to the free movement of capital across.<ref>Ariyoshi, A., Kirilenko, A., Ötker, I., Laurens, B., Canales Kriljenko, J., … Habermeier, K. (2000). Capital Controls: Country Experiences with Their Use and Liberalization. In Occasional Papers. https://doi.org/10.5089/9781557758743.084</ref><ref>Ostry, J., Ghosh, A., Habermeier, K., Chamon, M., Qureshi, M. S., & Reinhardt, D. B. S. (2010). Capital Inflows: The Role of Controls. IMF Staff Position Notes, 2010(4), 2. https://doi.org/10.5089/9781462347513.004</ref> Types of capital controls include exchange controls that prevent or limit the purchase and sale of a national currency at the market rate, caps on the volume of permitted international sales or purchases of various financial assets, transaction taxes, or even limits on the amount of money a private citizen is allowed to take out of the country. | |||
Keynes maintained that capital control was an essential feature of the system to be held in place for as long as necessary in order to stabilize international monetary systems. Probably capital control is the key feature that characterizes Embedded Liberalism, the fact that you both had a gold standard and at the same time you had capital controls. | |||
The International Monetary Fund embodies these set of rules, and New York became the centre of international finance. | |||
This stage broke ended in the 1970s ushering into the stage of the second globalization which is still underway. | |||
= | =The Second Globalization= | ||
== | ==Geopolitical developements== | ||
The same developments that were at the basis of the development of international political economy as an academic discipline were also at the basis of the birth of the liberalism stage and the beginning of the second globalization namely the relative decline of American hegemony in the 1970s. | |||
Apart from the United Kingdom, most other major economies in the world economy grew more quickly than the United States in the 1950s and in the 1960s. From a situation where the United States’s share of industrial production was around 50% at the end of the Second World War, that came down to about 30% in the 1970s. On the opposite, the share of industrial production of Western Europe and Japan went up by a lot, in particular in the cases of Germany and Japan the major antagonists of the Second World War. | |||
The fact that crystallized the relative decline of American hegemony was the crisis of the dollar that began sometime in the 1960s culminated in 1968 and 1971 and became an open feature of the global economy in the 1970s with the policy of the American administration of letting the dollar float and letting it depreciate that became known as the B9 neglect on the part of the American administration.<ref>Strange, Susan. “The Dollar Crisis 1971.” International Affairs (Royal Institute of International Affairs 1944-), vol. 48, no. 2, 1972, pp. 191–216. JSTOR, https://www.jstor.org/stable/2613437.</ref><ref>Triffin, Robert. [https://ies.princeton.edu/pdf/E132.pdf Gold and the dollar crisis: yesterday and tomorrow]. International Finance Section, Department of Economics, Princeton University, 1978.</ref> | |||
At the outset, many people said that American hegemony itself was over. It has been the first major theoretical debate in international political economy.<ref>Ikenberry, G. John. “Rethinking the Origins of American Hegemony.” Political Science Quarterly, vol. 104, no. 3, 1989, pp. 375–400. JSTOR, https://www.jstor.org/stable/2151270.</ref> International political economy itself is to begin with a discipline that emerged as a debate about the future of American hegemony. Today, there is a debate about the future of the distribution of power in the global economic system.<ref>Jackson, R., and G. Sorensen. "[https://www.academia.edu/30472605/International_Political_Economy_Contemporary_Debates International Political Economy: Contemporary Debates]." Introduction to international relations: Theories and approaches (2013): 179-207.</ref> Some authors debate the extent to which China is threatening American hegemony, and some authors used to debate in the early 2000s the extent of which the emergence of the European Union was a challenge to American hegemony.<ref>Yong, W., & Pauly, L. (2013). Chinese IPE debates on (American) hegemony. Review of International Political Economy, 20(6), 1165–1188. https://doi.org/10.1080/09692290.2012.761641</ref><ref>Telò, Mario, ed. European Union and new regionalism: regional actors and global governance in a post-hegemonic era. Ashgate Publishing, Ltd., 2013.</ref> In the field of international political economy today, there is no debate over that most academics take it for granted that American hegemony has declined to some extent, but it is still very much around. | |||
There was also the idea that the United States was losing ground and very quickly the very opposite happened as a result of the collapse of the USSR in the 1990s. During the same time in the 1970s and the 1980s, the Second and Third worlds opened up and decided to reintegrate global capitalism. | |||
In the 1990s, after the second and third worlds stopped pretending to pose a challenge to the American economy, reintegrated fully the global economy dominated by the United States. There was a lot of talks about the American unipolar moment, a moment of unprecedented dominance by one single grade power of the global system.<ref>Sheetz, M., & Mastanduno, M. (1998). Debating the Unipolar Moment. International Security, 22(3), 168–174. https://doi.org/10.1162/isec.22.3.168</ref> | |||
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Fichier:Nixon shakes hands with Chou En-lai.jpg| | Fichier:Nixon shakes hands with Chou En-lai.jpg|U.S. President Nixon shakes hands with Chinese Premier Zhou Enlai. | ||
Fichier:Deng Xiaoping and Jimmy Carter review troops during arrival ceremony for the Vice Premier of China. - NARA - 183168.tif|Deng | Fichier:Deng Xiaoping and Jimmy Carter review troops during arrival ceremony for the Vice Premier of China. - NARA - 183168.tif|Deng and President Jimmy Carter inspected the joint-service honor guard during an arrival ceremony for Deng at the White House. | ||
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Another feature of the geopolitical picture that is important is the rise of China. And again, the rise of China begins with a realignment of China away from the Communist world and towards the United States with the famous <ref>https://en.wikipedia.org/wiki/Richard_Nixon%27s_1972_visit_to_China</ref> and the opening up of the Chinese economy to inward investments under [https://en.wikipedia.org/wiki/Deng_Xiaoping Deng Xiaoping] in 1979.<ref>Ash, Robert F., and Y. Y. Kueh, eds. The Chinese Economy Under Deng Xiaoping. Clarendon Press, 1996.</ref> That initial stage of the rise of China is synonymous with alignment with the United States.<ref>Bramall, Chris. "[https://ideas.repec.org/b/oxp/obooks/9780198296973.html Sources of Chinese economic growth, 1978-1996]." OUP Catalogue (2000).</ref> | |||
That lasts more or less until the early 2000s. From the early 2000s, there are growing discussions about how China poses a challenge to the United States, and there is debate within the United States about revising its China policy from the quality of cooperation promotion shifting towards the quality of containment.<ref>Beeson, M. (2009). Comment: Trading places? China, the United States and the evolution of the international political economy. Review of International Political Economy, 16(4), 729–741. https://doi.org/10.1080/09692290802427766</ref> To a large extent it remains the main debate about the future of global capitalism today. | |||
Ideologically, Keynesianism is on the decline from the 1970s onwards because it is accused of fostering inflation and because a greater proportion of domestic electorates become inflation adverse. Before, under the gold standard, it was mostly investors and wealth-holders that were averse to inflation and were also the first sections of the electorate. After suffrage became the norm in the first half of the 20th century that change, and moreover because the vast majority of people before the Second World War had a lower stake in the fight against inflation or state because they did not have financial assets. | |||
That changes to a large extent after the 1950s because a good share of the working class develops savings of its own and so the share of the total population that has a stake in low inflation goes up. In this regard, the importance of fighting inflation becomes more important. | |||
[[Fichier:John-williamson.jpg|vignette|John Williamson. Source: [https://voxeu.org/ VoxEU.org] – CEPR’s policy portal.<ref>“[https://voxeu.org/users/johnwilliamson John.Williamson].”| VOX, CEPR Policy Portal.</ref>]] | [[Fichier:John-williamson.jpg|vignette|John Williamson. Source: [https://voxeu.org/ VoxEU.org] – CEPR’s policy portal.<ref>“[https://voxeu.org/users/johnwilliamson John.Williamson].”| VOX, CEPR Policy Portal.</ref>]] | ||
Along with the relative decline of Keynesianism ideology, there is the rise of what many people call [https://en.wikipedia.org/wiki/Neoliberalism neoliberalism] or the [https://en.wikipedia.org/wiki/Washington_Consensus Washington Consensus] as it was coined by [https://en.wikipedia.org/wiki/John_Williamson_(economist) John Williamson], an economist in 1990 describing policy reforms that the International Monetary Fund, World Bank, and U.S. Treasury advocated for emerging-market economies.<ref>"[https://web.archive.org/web/20170715151421/http://www.cid.harvard.edu/cidtrade/issues/washington.html Washington Consensus]". Center for International Development | Harvard Kennedy School of Government. April 2003. Archived from the [https://www.hks.harvard.edu/centers/cid original] on July 15, 2017. Retrieved August 24, 2016.</ref><ref>Williamson, John. "[https://heinonline.org/HOL/LandingPage?handle=hein.journals/lbramrca15&div=5&id=&page= A short history of the Washington Consensus]." Law & Bus. Rev. Am. 15 (2009): 7.</ref><ref>Naím, Moisés. “Washington Consensus or Washington Confusion?” Foreign Policy, no. 118, 2000, pp. 87–103. JSTOR, https://www.jstor.org/stable/1149672.</ref><ref>Williamson, John. "[https://elibrary.worldbank.org/doi/pdf/10.1596/0-8213-5872-3#page=47 The Washington Consensus as policy prescription for development]." Challenges in the 1990s 33 (2004).</ref><ref>Agarwal, Prateek. “[https://www.intelligenteconomist.com/washington-consensus/ Washington Consensus].” Intelligent Economist, 10 Feb. 2020.</ref> According to Williamson it "refer to the lowest common denominator of policy advice being addressed by the Washington-based institutions to Latin American countries as of 1989.”<ref>Williamson, John. “[http://documents.worldbank.org/curated/en/624291468152712936/What-should-the-world-bank-think-about-the-Washington-consensus What Should the World Bank Think About the Washington Consensus?]” World Bank Research Observer. Washington, DC: The International Bank for Reconstruction and Development, Vol. 15, No. 2 (August 2000), pp. 251-264.</ref> It is a set of broadly free-market economic ideas with the dominant view of that the economy has to be privatized, has to be deregulated and has to be opened up to international. Williamson identified ten principles which are:<ref>Pettinger, Tejvan, et al. “[https://www.economicshelp.org/blog/7387/economics/washington-consensus-definition-and-criticism/ Washington Consensus – Definition and Criticism].” Economics Help, 22 Dec. 2017.</ref> | |||
# | #Low government borrowing. Avoidance of large fiscal deficits relative to GDP; | ||
# | #Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment; | ||
# | #Tax reform, broadening the tax base and adopting moderate marginal tax rates; | ||
# | #Interest rates that are market determined and positive (but moderate) in real terms; | ||
# | #Competitive exchange rates; | ||
# | #Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs; | ||
# | #Liberalization of inward foreign direct investment; | ||
# | #Privatization of state enterprises; | ||
# | #Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions; | ||
# | #Legal security for property rights. | ||
== | ==Global trade liberalization: from multilateral trade liberalization to new regionalism== | ||
How does that play out in terms of the international trade system? | |||
There is a wave of protectionism called New Protectionism in the late 1970s.<ref> Ethier, Wilfred J., and Ronald D. Fischer. “The New Protectionism.” Journal of International Economic Integration, vol. 2, no. 2, 1987, pp. 1–11. JSTOR, https://www.jstor.org/stable/23000022.</ref><ref>Baldwin, Robert E. "[https://www.nber.org/papers/w1823 The New Protectionism: A Response to Shifts in National Economic Power]," The New Protectionist Threat to World Welfare, ed. by Dominick Salvatore, North-Holland, 1986.</ref><ref>Gandolfo, G. (2013). [https://link.springer.com/chapter/10.1007/978-3-642-37314-5_12 The “New” Protectionism]. In Springer Texts in Business and Economics (pp. 277–295). Springer Berlin Heidelberg. https://doi.org/10.1007/978-3-642-37314-5_12</ref> At the time, one of the major debates in international political economy is the fracturing of the world global capitalism as it did during the interwar period. | |||
However, this time it does not. Helen Milner explores this topic in her article published in 1988 ''Trading Places: Industries for Free Trade''.<ref>Milner, Helen. “Trading Places: Industries for Free Trade.” World Politics, vol. 40, no. 3, 1988, pp. 350–376. JSTOR, https://www.jstor.org/stable/2010217.</ref> And why doesn't that happen? It does not happen because of the rise of multinational production, the rise of [https://en.wikipedia.org/wiki/Multinational_corporation multinational enterprises].<ref>Wilkins, M. (1998). Multinational Enterprises and Economic Change. Australian Economic History Review, 38(2), 103–134. https://doi.org/10.1111/1467-8446.00026</ref><ref>Rugman, Alan M., and Simon Collinson. "Multinational Enterprises in the New Europe: Are They Really Global?." Organizational Dynamics 34.3 (2005): 258-272.</ref><ref>Wilkins, Mira. "Multinational enterprise to 1930: Discontinuities and continuities." Chandler, Alfred D./Mazlish, Bruce (2005): 45-79.</ref><ref>Buckley, P. J., & Ghauri, P. N. (2004). Globalisation, economic geography and the strategy of multinational enterprises. Journal of International Business Studies, 35(2), 81–98. https://doi.org/10.1057/palgrave.jibs.8400076</ref><ref>Markusen, J. R. (1995). The Boundaries of Multinational Enterprises and the Theory of International Trade. Journal of Economic Perspectives, 9(2), 169–189. https://doi.org/10.1257/jep.9.2.169 </ref> | |||
Justice and cooperation have begun to spread across state borders. Firms have begun to have to earn a major share of the profits abroad either through export or production abroad itself. Therefore they have begun to conduct what economists called intra-firm trade which corresponds to international flows of goods and services between parent companies and their affiliates or among these affiliates. Thus, intra-firm trade arises only when firms invest abroad.<ref>Lanz, R. and S. Miroudot (2011-06-24), “Intra-Firm Trade:Patterns, Determinants and Policy Implications”, OECD TradePolicy Papers, No. 114, OECD Publishing, Paris.http://dx.doi.org/10.1787/5kg9p39lrwnn-en</ref><ref>Corcos, Gregory, et al. "[https://www.bruegel.org/wp-content/uploads/2015/09/EFIGEWP14.pdf The determinants of intra-firm trade]." (2009).</ref> Because companies do that and they do that because it is more efficient to produce things now that way, they do not want protectionist barriers to go up because that would have as consequence to interfere with their intra-firm trade and will raise costs and to manage profitability. | |||
The 1970s see a lot of trade liberalization. There is a new GATT round, the Tokyo Round that lasted from 1973 to 1979 and involved 102 countries with the aim to progressively reduce tariffs.<ref>“[https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm Understanding the WTO - The GATT Years: from Havana to Marrakesh].” WTO.</ref><ref>Winham, Gilbert R. [https://www.jstor.org/stable/j.ctt7ztgcg International Trade and the Tokyo Round Negotiation]. Princeton University Press, 1986.</ref><ref>Krasner, S. D. (1979). The Tokyo Round: Particularistic Interests and Prospects for Stability in the Global Trading System. International Studies Quarterly, 23(4), 491. https://doi.org/10.2307/2600327</ref><ref>Jackson, John H., et al. “Implementing the Tokyo Round: Legal Aspects of Changing International Economic Rules.” Michigan Law Review, vol. 81, no. 2, 1982, pp. 267–397. JSTOR, https://www.jstor.org/stable/1288518.</ref><ref>Deardorff, Alan V., and Robert M. Stern. “Economic Effects of the Tokyo Round.” Southern Economic Journal, vol. 49, no. 3, 1983, pp. 605–624. JSTOR, https://www.jstor.org/stable/1058704.</ref> The share of exports in international trade grows more quickly than the international economy does, so the share of international trade in international economic activity goes up. The new protectionism is a dog that does not bark. | |||
Liberalization is also spurred by the fact that less developed countries abandoned input substitution industrialization. This happens first in Eastern Europe opening up gradually most importantly in Poland and Hungary. It is also the case for Latin America who starts importing capital from abroad to fund the growing share of inputs in its economy who therefore turns towards the global market.<ref>[https://www.imf.org/external/np/exr/ib/2001/110801.htm Global Trade Liberalization and the Developing Countries - An IMF Issues Brief]. (2001).</ref> | |||
The way trade liberalization is going to deepen during the stage of the second globalization is not through multilateral trade liberalisation. It's not mostly through multilateral trade liberalization, but through the new regionalism with the spread of preferential trade agreements, just as the customs union was set up in Western Europe in 1957. | |||
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Importantly the United States itself turns towards preferential trade agreement in the early 1980s. Until the late 1970s, the United States itself refused to enter into preferential trade agreements with countries because it did not want to undermine the norms and rules of the international trading system that it had promoted. | |||
{{World economic integration}} | {{World economic integration}} | ||
From the 1980s onwards as the international position of American industry comes under threat from the Japanese and the Western European challenge, the United States shift gear and adopting regionalism itself. There is a series of agreements that lead up to the [https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement North American Free Trade Agreement] (NAFTA). The first one is the [https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement Canada–United States Free Trade Agreement] in 1988 that is joined by Mexico in 1992 after Mexico opens up during the 1980s.<ref>"Decreto de promulgación del Tratado de Libre Comercio de América del Norte" Decree of promulgation of the North American Free Trade Agreement. Decree of December 20, 1993 ([http://www.economia-snci.gob.mx/sicait/5.0/doctos/TLCAN.pdf PDF]) (in Spanish). [https://www.senado.gob.mx/ Senate of the Republic] (Mexico).</ref><ref>Pacheco-López, Penélope. "[https://www.tandfonline.com/doi/abs/10.1080/01603477.2005.11051459 The effect of trade liberalization on exports, imports, the balance of trade, and growth: the case of Mexico]." Journal of Post Keynesian Economics 27.4 (2005): 595-619.</ref><ref>Pastor, Manuel, and Clyde V. Prestowitz. “Mexican Trade Liberalization and Nafta.” Latin American Research Review, vol. 29, no. 3, 1994, pp. 153–173. JSTOR, https://www.jstor.org/stable/2503947.</ref><ref>Burfisher, M. E., Robinson, S., & Thierfelder, K. (2001). The Impact of NAFTA on the United States. Journal of Economic Perspectives, 15(1), 125–144. https://doi.org/10.1257/jep.15.1.125</ref> On January 1, 1994, NAFTA enters into force. It's the opposite of the Spirit of multinational trade liberalization promoted by America in the 1940s and the 1950s.<ref>Chase, K. A. (2003). Economic Interests and Regional Trading Arrangements: The Case of NAFTA. International Organization, 57(1), 137–174. https://doi.org/10.1017/s0020818303571053</ref><ref>Bhagwati, J. (1992). Regionalism versus Multilateralism. The World Economy, 15(5), 535–556. https://doi.org/10.1111/j.1467-9701.1992.tb00536.x</ref><ref>Doran, Charles. "[https://books.google.fr/books?hl=en&lr=&id=cGf_bQpTxxgC&oi=fnd&pg=PA40&dq=nafta+multilateralism&ots=bYDahVcw8f&sig=u8pUa6PjfP5VW9KXxcL7wKiqlDw#v=onepage&q=nafta%20multilateralism&f=false The two sides of multilateral cooperation]." International cooperation: The extents and limits of multilateralism (2010): 40-59.</ref> | |||
On 26 March 1991 Mercosur is created by the [https://en.wikipedia.org/wiki/Treaty_of_Asunci%C3%B3n Treaty of Asunción], which establishes: "The free movement of goods, services and productive factors between countries in the establishment of a common external arsenal and the adoption of a common commercial policy, the coordination of macroeconomic and sectoral policies between States and the harmonization of legislation in order to achieve a strengthening of the integration process". Mercosur's purpose is to promote free trade and the fluid movement of goods, people, and currency. At the same time, the deepening of the European Union and the debate about the rise of Fortress Europe, which is the fact that as Europe is gradually coming closer together, is going to be detrimental to American export to the European market.<ref>Hanson, B. T. (1998). What Happened to Fortress Europe?: External Trade Policy Liberalization in the European Union. International Organization, 52(1), 55–85. https://doi.org/10.1162/002081898550554</ref> | |||
Japan pursues its own network of preferential trade agreements that mostly are done bilaterally instead of bringing its trade partners into a block.<ref>Manger, M. (2005). [https://core.ac.uk/download/pdf/95576.pdf Competition and bilateralism in trade policy: the case of Japan’s free trade agreements]. Review of International Political Economy, 12(5), 804–828. https://doi.org/10.1080/09692290500339800</ref> Japan signs a series of treaties with individual countries in the East Asian basin mainly with countres of the Asia Pacific Economic Cooperation (APEC).<ref>Capling, A. (2008). Preferential trade agreements as instruments of foreign policy: an Australia–Japan free trade agreement and its implications for the Asia Pacific region. The Pacific Review, 21(1), 27–43. https://doi.org/10.1080/09512740701868765</ref><ref>Manger, M. (2005). Competition and bilateralism in trade policy: the case of Japan’s free trade agreements. Review of International Political Economy, 12(5), 804–828. https://doi.org/10.1080/09692290500339800</ref><ref>Manger, M. S. (2014). The Economic Logic of Asian Preferential Trade Agreements: The Role of Intra-Industry Trade. Journal of East Asian Studies, 14(2), 151–184. https://doi.org/10.1017/s1598240800008894</ref><ref>Hertel, Thomas W., et al. “Dynamic Effects of the ‘New Age’ Free Trade Agreement between Japan and Singapore.” Journal of Economic Integration, vol. 16, no. 4, 2001, pp. 446–484. JSTOR, https://www.jstor.org/stable/23000768.</ref><ref>Baccini, L., & Dür, A. (2011). The New Regionalism and Policy Interdependence. British Journal of Political Science, 42(1), 57–79. https://doi.org/10.1017/s0007123411000238</ref> | |||
On 28 January 1992 is signed in Singapore the AFTA agreement which gives birth to the [https://en.wikipedia.org/wiki/ASEAN_Free_Trade_Area#ASEAN_Plus_Three ASEAN Free Trade Area].<ref>"[http://eresources.nlb.gov.sg/history/events/bf07b77f-68fd-4473-9ccb-1197fe323cb8 ASEAN leaders agree to create an ASEAN Free Trade Area - Singapore History]". [http://eresources.nlb.gov.sg/history eresources.nlb.gov.sg].</ref> ASEAN is one of the largest and most important free trade areas (FTA) trade bloc agreement supporting local trade and manufacturing, and facilitating economic integration with regional and international partners. It is a bloc of developing countries in the Southeast Asian region which notably includes Thailand, Malaysia, Korea, Indonesia, and the Philippines that are high-growth economies of the 1990S as Taiwan and Hong Kong. | |||
The global trade system is characterized by competitive liberalisation. That is a term coin by an economist called [https://en.wikipedia.org/wiki/C._Fred_Bergsten Fred Bergsten] that was very influential in Washington in the international trading policy.<ref>Bergsten, C. Fred. [https://www.piie.com/publications/working-papers/competitive-liberalization-and-global-free-trade-vision-early-21st Competitive liberalization and global free trade: a vision for the early 21st century]. No. WP96-15. 1996.</ref><ref>Baier Scott L, Bergstrand Jeffrey H, Egger Peter, « The New Regionalism: Causes and consequences », Économie internationale, 2007/1 (n° 109), p. 9-29. URL : https://www.cairn.info/revue-economie-internationale-2007-1-page-9.htm</ref><ref>Andriamananjara, Soamiely. "[https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/0305/0305002.pdf Competitive Liberalization or Competitive Diversion?]." Preferential Trade Agreements and the Multilateral Trading System. Washington, DC: US International Trade Commission. May 7 (2003).</ref> The difference here is that even if there is a competition just as there was a competition in the interwar period; this time, competition does not spur economic nationalism and an inward trend but competitive liberalization. The major powers such as the European Union, Japan, the United States and also China compete with each other for preferential access to third markets so that their own multinationals can better position themselves in the global competitive struggle that takes place. | |||
Another feature of the trading regime that it takes the shape of deep liberalization. That often comes along with [https://en.wikipedia.org/wiki/Bilateral_investment_treaty bilateral investment treaties]. It is no longer just about tariffs. It is also about so-called non-tariff barriers. Why? Because trade is coupled as it wasn't before with production. Therefore, it's important for multinationals to know that not simply will they be able to import and export out of given market commodities but also that they can organize production within those markets without fear of interference from the local government with their property rights. | |||
[[Fichier:Evolution of trade agreements in the world 1948-2008.png|vignette|centré]] | [[Fichier:Evolution of trade agreements in the world 1948-2008.png|vignette|centré]] | ||
This chart shows the evolution of trade agreement in the world. It is possible to see the tremendous spike in the number of such agreements from 1991 onwards. This is the kind of thing that the GATT and later on the WTO were sets up to prevent. That's the key thing. | |||
==Libéralisation des investissements et développement économique : le rôle des traités bilatéraux d'investissement== | ==Libéralisation des investissements et développement économique : le rôle des traités bilatéraux d'investissement== | ||
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Du point de vue des investisseurs internationaux, les TBI sont l'équivalent fonctionnel du colonialisme.<ref> Vandevelde, Kenneth J., A Brief History of International Investment Agreements. U.C. Davis Journal of International Law & Policy, Vol. 12, No. 1, p. 157, 2005; Thomas Jefferson School of Law Research Paper No. 1478757. Available at SSRN: https://ssrn.com/abstract=1478757</ref> Cela ne veut pas dire que le système est néocolonial, il est tout comme le colonialisme dans le passé était là pour sauvegarder les droits de propriété des investisseurs du monde avancé. Aujourd'hui, les traités bilatéraux d'investissement jouent le même rôle.<ref>Mahnaz Malik. 2008. [https://www.iisd.org/pdf/2008/dci_recent_dev_bits.pdf Recent Developments in Regional and Bilateral Investment Treaties]. International Institute for Sustainable Development</ref> | Du point de vue des investisseurs internationaux, les TBI sont l'équivalent fonctionnel du colonialisme.<ref> Vandevelde, Kenneth J., A Brief History of International Investment Agreements. U.C. Davis Journal of International Law & Policy, Vol. 12, No. 1, p. 157, 2005; Thomas Jefferson School of Law Research Paper No. 1478757. Available at SSRN: https://ssrn.com/abstract=1478757</ref> Cela ne veut pas dire que le système est néocolonial, il est tout comme le colonialisme dans le passé était là pour sauvegarder les droits de propriété des investisseurs du monde avancé. Aujourd'hui, les traités bilatéraux d'investissement jouent le même rôle.<ref>Mahnaz Malik. 2008. [https://www.iisd.org/pdf/2008/dci_recent_dev_bits.pdf Recent Developments in Regional and Bilateral Investment Treaties]. International Institute for Sustainable Development</ref> | ||
== | ==From Bretton Woods to ad hoc cooperation== | ||
The [[Bretton Woods System: 1944 - 1973|Bretton Woods system collapsed]]; the revised gold dollar standard collapse is 1968-71. Why 1968-1971? Because in the late 1960s, it becomes obvious that the stock of dollars held abroad is greater than the stock of gold held in the United States.<ref>Kirshner, J. (2008). Dollar primacy and American power: What’s at stake? Review of International Political Economy, 15(3), 418–438. https://doi.org/10.1080/09692290801928798</ref><ref>Triffin, Robert. “The International Role and Fate of the Dollar.” Foreign Affairs, vol. 57, no. 2, 1978, pp. 269–286. JSTOR, https://www.jstor.org/stable/20040114.</ref><ref>Université de Sherbrooke. “15 Août 1971 - Dévaluation Et Non-Convertibilité En or Du Dollar.” 15 Août 1971 - Dévaluation Et Non-Convertibilité En or Du Dollar, perspective.usherbrooke.ca/bilan/servlet/BMEve?codeEve=529.</ref> Therefore, if all of the holders of dollar assets abroad attempt to redeem their holdings for gold, the United States goes bust.<ref>Kunz, Diane B. "[https://heinonline.org/HOL/LandingPage?handle=hein.journals/fora74&div=64&id=&page= The Fall of the Dollar Order-The World the United States Is Losing]." Foreign Aff. 74 (1995): 22.</ref><ref>Mundell, Robert A., and Robert Alexander Mundell. [https://heinonline.org/HOL/LandingPage?handle=hein.journals/fora74&div=64&id=&page= The dollar and the policy mix: 1971]. Vol. 85. International Finance Section, Princeton University, 1971.</ref><ref>Mundell, Robert. "[http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.691.6904&rep=rep1&type=pdf#page=19 Dollar standards in the dollar era]." Journal of Policy Modeling 29.5 (2007): 677-690.</ref> | |||
In May 1971, West Germany left the Bretton Woods system, unwilling to revalue the Deutsche Mark.<ref name="'70s 295">{{cite book |title= How We Got Here: The '70s|last= Frum|first= David|authorlink= David Frum|year= 2000|publisher= Basic Books|location= New York, New York|isbn= 0-465-04195-7|pages= 295–98|url= https://books.google.com/books?id=hNsSttYnmxsC&pg=PA296 }}</ref> In the following three months, this move strengthened its economy. Simultaneously, the dollar dropped 7.5% against the Deutsche Mark.<ref name="'70s 295" /> Other nations began to demand redemption of their dollars for gold. Switzerland redeemed $50 million in July.<ref name="'70s 295" /> France acquired $191 million in gold.<ref name="'70s 295" /><ref>Michael J. Graetz & Olivia Briffault, A "Barbarous Relic": The French, Gold, and the Demise of Bretton Woods, THE BRETTON WOODS AGREEMENTS, TOGETHERWITH SCHOLARLY COMMENTARIESAND ESSENTIALHISTORICAL DOCUMENTS, NAOMI LAMOREAUX & IAN SHAPIRO, EDS., YALE UNIVERSITY PRESS, 2019; YALE LAW & ECONOMICS RESEARCH PAPER NO. 558; COLUMBIA LAW & ECONOMICS WORKING PAPER NO. 560(2016). Available at: https://scholarship.law.columbia.edu/faculty_scholarship/2541</ref> On August 5, 1971, the United States Congress released a report recommending devaluation of the dollar, in an effort to protect the dollar against "foreign price-gougers".<ref name="'70s 295" /><ref>Ricchiuto, Steven R. [https://books.google.fr/books?id=Bod0DwAAQBAJ&pg=PT52&lpg=PT52&dq=August+5,+1971+us+congress+devaluation&source=bl&ots=K0uBOgjrAa&sig=ACfU3U2QRZirubcgPOtBuqks361HthRzHg&hl=en&sa=X&ved=2ahUKEwj1yvbfhIbpAhUCx4UKHbBAATcQ6AEwCnoECAgQAQ#v=onepage&q=August%205%2C%201971%20us%20congress%20devaluation&f=false Symptomatic to Systemic: Understanding Postwar Cycles and Financial Debacles]. Greenleaf Book Group Press, 2018.</ref><ref>[https://www.nytimes.com/1971/08/08/archives/devalued-dollar-is-asked-in-study-congress-unit-sees-benefits-in.html DEVALUED DOLLAR IS ASKED IN STUDY]. By Edwin L. Dale Jr. Special to The New York Times. Aug. 8, 1971</ref> On August 9, 1971, as the dollar dropped in value against European currencies, Switzerland left the Bretton Woods system.<ref name="'70s 295" /> The pressure began to intensify on the United States to leave Bretton Woods.<ref>Wikipedia contributors. Nixon shock. Wikipedia, The Free Encyclopedia. April 19, 2020, 10:05 UTC. Available at: https://en.wikipedia.org/w/index.php?title=Nixon_shock&oldid=951875513.</ref> No one is talking about a gold standard except some libertarians in the fringes of the Republican party in the US are talking about a gold standard today. | |||
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What happens is that the dealing of the dollar from the gold, actually reinforced the position of the dollar in the international monetary system. The dollar was as good as gold before. But now the dollar is as good as the dollar. IT means that because the dollar is so important international economic transactions, the United States enjoys an exorbitant privilege in the sense that it can print dollars and pay for whatever it needs to import and suffers no consequences. | |||
The United States is today the only country in the world for which there is no contradiction between external stability and domestic autonomy. The United States can pursue the domestic policies it wants, and that has a negligible impact on the value of the dollar. It was a way to understand the financial crisis happened in 2008. There was an inflow of capital into the US economy just as the giants of American finance world were collapsing. | |||
Just as there was a major crisis in the heart of the system, investors believed that the most safest of assets was still the US government, and so the dollar went up, whereas in the past, any sensible person would be fleeing the dollar. In any economy in which there was a crisis of that scale would have suffered a collapse of its exchange rate. For the dollar, it was different, it was the other way around. | |||
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Fichier:G7 leaders 1978.jpg| | Fichier:G7 leaders 1978.jpg|4th G7 summit in Bonn - Five of the leaders at the 4th G7 Summit. From left to right: Giulio Andreotti, Takeo Fukuda, Jimmy Carter, Helmut Schmidt, Valéry Giscard d'Estaing. | ||
Fichier:Plaza Accord 1985.jpg| | Fichier:Plaza Accord 1985.jpg|The 1985 "Plaza Accord" is named after New York City's Plaza Hotel, which was the location of a meeting of finance ministers who reached an agreement about managing the fluctuating value of the US dollar. From left are Gerhard Stoltenberg of West Germany, Pierre Bérégovoy of France, James A. Baker III of the United States, Nigel Lawson of Britain, and Noboru Takeshita of Japan. | ||
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What took the place of the Breton Woods system was ad hoc cooperation between the United States and its allies. The [https://en.wikipedia.org/wiki/4th_G7_summit Bonn summit] in 1978, the [https://en.wikipedia.org/wiki/Plaza_Accord Plaza Accord] in 1985 and the [https://en.wikipedia.org/wiki/Louvre_Accord Louvre Accord] in 1987 where the allies of the United States agreed to adjust their economies in a way that would help the United States to stabilize the value of the dollar.<ref>Putnam, Robert D., C. Randall Henning, and Richard N. Cooper. "[https://scholar.harvard.edu/robertputnam/publications/bonn-summit-1978-case-study-coordination The Bonn summit of 1978: a case study in coordination]." Can Nations Cooperate? (1989).</ref><ref>Frankel, Jeffrey. [https://www.nber.org/papers/w21813 The Plaza Accord, 30 Years Later]. No. w21813. National Bureau of Economic Research, 2015.</ref><ref>Richter, Rudolf. “The Louvre Accord From the Viewpoint of the New Institutional Economics.” Journal of Institutional and Theoretical Economics (JITE) / Zeitschrift Für Die Gesamte Staatswissenschaft, vol. 145, no. 4, 1989, pp. 704–719. JSTOR, https://www.jstor.org/stable/40751253.</ref><ref>Commins, Kevin. “LOUVRE ACCORD TERMED MAJOR FACTOR IN CRASH.” LOUVRE ACCORD TERMED MAJOR FACTOR IN CRASH | JOC.com, 17 Nov. 1987, https://www.joc.com/louvre-accord-termed-major-factor-crash_19871117.html.</ref> Why did they agree to do that? Because they wanted the dollar to stop depreciating and they wanted the United States to stop exporting dollars because that fueled inflation in Europe and Japan. | |||
One major epiphenomenon of the breakdown of the Bretton Woods system was European monetary unification.<ref>[https://www.europarl.europa.eu/RegData/etudes/BRIE/2015/551325/EPRS_BRI(2015)551325_EN.pdf History of European Monetary Integration] - European Parliament</ref><ref>EICHENGREEN, B., & FRIEDEN, J. (1993). THE POLITICAL ECONOMY OF EUROPEAN MONETARY UNIFICATION: AN ANALYTICAL INTRODUCTION. Economics and Politics, 5(2), 85–104. https://doi.org/10.1111/j.1468-0343.1993.tb00069.x</ref><ref>Eichengreen, Barry. “European Monetary Unification.” Journal of Economic Literature, vol. 31, no. 3, 1993, pp. 1321–1357. JSTOR, www.jstor.org/stable/2728243.</ref><ref>Eichengreen, Barry, and Fabio Ghironi. "[https://escholarship.org/uc/item/10d518tg European Monetary Unification and International Monetary Cooperation]." (1997).</ref><ref>Eichengreen, Barry, and Jeffry A. Frieden. The Political Economy of European Monetary Unification. Boulder: Routledge, 2018. Print.</ref><ref>Apel, Emmanuel. European monetary integration 1958-2002. London New York: Routledge, 1998. Print.</ref> Initially the European attempted to restore the Bretton Woods system which corresponds to the period between 1971 and 1973 with the Smithsonian Institute agreements. That fails because the United States does not care to restore the link between the dollar and gold.<ref>Morse, Edward L. “Crisis Diplomacy: The Demise of the Smithsonian Agreement.” The World Today, vol. 29, no. 6, 1973, pp. 243–256. JSTOR, https://www.jstor.org/stable/40394706.</ref> What the Europeans do is to begin to restore a regional Breton Woods, a European monetary system. Then, later on, to make sure that arrangement is stable, they replace fixed exchange rates with a central bank and a single currency, and that is the euro that you have today. | |||
Probably the most important feature in terms of the international global financial system is the lifting on capital controls. Universally during the 1970s and the 1980s, countries lift capital controls in advance countries. In the 1990s the process is accomplished in most of the developing worlds with the notable exception of China. In China, there is still no free convertibility of the local currency, an administrative agreement is required to exchange Yuan to another currency and still in 2019. | |||
The last feature of the global financial system is that just as the Bretton Woods system breaks down and international financial flows grow exponentially at a much greater pace than the international economy or the international trading system, that comes with increased financial fragility across the globe. There is a wave of financial crises because investors can shift money across jurisdictions. Very quickly also because of technological developments with the rise of ICT technologies and so on. | |||
There are therefore three waves of financial crises: the [https://en.wikipedia.org/wiki/Latin_American_debt_crisis Latin American debt crisis of the 1980s], the [https://en.wikipedia.org/wiki/1997_Asian_financial_crisis 1997 Asian financial crisis], and then the crises come to the heart of the system resulting in the [https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308 financial crisis of 2007–2008] and the [https://en.wikipedia.org/wiki/European_debt_crisis eurozone crisis] of the early 2010s. That is the result of the fact that global finance is no longer constrained by capital controls and so many holders can shift vast amounts of money across borders very quickly. | |||
=Annexes= | =Annexes= |