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CUA Summer Online –  Politics 112: Comparative Politics

Week 4: Political Economy 

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Welcome to Week 4.  This week we build on the democracy concepts we discussed last week, and introduce some of the basics of political economy. We’ll also look at the paper we have due at the end of the semester.

Last week we hinted at some of the relationships between politics and economics – this week we make those explicit.  We begin with a founding document of modern comparative politics: Lipset’s “Some Social Requisites….” Then we look at a follow-up to that question, Przeworski’s “What Makes Democracies Endure?”  Is it possible that no middle-class democracy can ever collapse? Why (or why not)?

Lipset, Some Social Requisites of Democracy: Economic Development and Political Legitimacy, American Political Science Review 1959.  Lipset at 35: a Review.  (Do your best with these, they are dense and not easy.)

Przeworski, What Makes Democracies Endure? Journal of Democracy 1996 (en español)


We shift then to the basic division in economics – what is the proper role of government in the economy?  We are leaving aside here advocacy and opposition to Marxism, as a mostly 20th century debate.  We focus instead on Keynes and Hayek – arguments that “the government can and therefore should have an active role in the economy, for economic and political stability” vs. arguments that “government can’t do well because it doesn’t know what price-levels for good should really be, and anyway every government intervention is a whittling away of freedom.”  This debate from the 1920s and 1930s, sometimes word-for-word, is the same debate U.S. Democrats and Republicans (and partisans in other countries) have today.

Keynes and Hayek

Keynes thinks there is an important role for government in the economy, especially when there is market failure.  His ideas became FDR’s New Deal – huge government intervention (spending and laws) to address the Great Depression.  The government should prevent wild up-and-down swings in the economy so it can prevent the social conditions that allow for a demagogic madman to take power.  (Ahem, Germany.)  After World War II, he thought the same ideas should apply globally:  elites (incl. elites in govt) can and therefore should manage the global economy.  And so we get the World Bank and IMF. Read more about Keynes

Hayek was younger but a contemporary of Keynes – they argued directly with each other in correspondence, the academic journals, the halls of power, and occasionally in person. Hayek looked at World War I and said, the old order didn’t work – let’s try socialism. But then he did the math on socialism and determined that it wouldn’t work – it was missing the crucial tool of “prices” – governments can’t know how much stuff should cost, only the market can. Also, anytime the government gets involved in your stuff, it takes away a little of your freedom, until it’s all gone.  Read more about Hayek

Our first video this week is long, but really pretty interesting.  Get yourself a lemonade, settle in comfortably, and enjoy. At 39 minutes, it’s about the length of a podcast or episode of whatever you’re watching on Netflix.  But it does a great job setting the stage. And, really, if you’re stuck somewhere and want to keep watching the whole two hours, go for it.

Next, we take two glimpses at politics and economics today.  The first is a hangover from the 20th century:  “the resource curse” – the role of oil on democratic development.  The second is a prescient look at the power of social media in the Arab Spring and all politics.

Michael Ross, Does Oil Hinder Democracy?, World Politics, 2001.  This is a very technical article – try to make your way through it.  If you get lost, try this summary.  Watch Michael Ross talk about this, in just three minutes (in the video below), or in 30 minutes. (Just depends whether you think oil and democracy matter to a country 😉

Clay Shirky, The Political Power of Social Media, Foreign Affairs, 2011. Copy here.   This essay was in bookstores in December 2010 when a Tunisian fruit seller named Mohamed Bouazizi immolated himself in protest against the government.  You remember Shirky from videos our first week of this semester.   You should look at these short videos from The Carnegie Council (a think tank, in 2014) and from al-Jazeera, while the Arab Spring was underway in Feb 2011.  Al-Jazeera is owned by Qatar, an energy-rich Arab sheikhdom.


End-of-semester papers.   If you haven’t already, please find on our facebook page > Files a document called “PAPER instructions.”  Read all of it, carefully. Then email me your thoughts about the kind of topics or questions you might be interested in exploring.

Your turn.

Think about how often we conflate democracy and capitalism – we can hardly think of one without the other.  Each has explicit commitments to individual freedom.  Think also how we consider the merits of a presidency – is the economy good or not?  How much of our votes rely on whether we think the economy is improving or worsening?  There are countless business and economic questions across the executive branch, Congress, and the courts.

Consider one or more of our readings in an essay-length analysis. Feel free to bring your own particular interests in “politics & economics” to the conversation (China, immigration, etc.) as well. Between you essay and your engagement with your classmates’ essays, you want to demonstrate that you’ve thought carefully about several of the readings and videos.

But first, a quick note on your paper.  If you go to our facebook page, and then click on “Files,” you will find a document called “Paper Instructions.” Read them carefully, and then think about the kind of question you might like to pursue.  By this Wednesday night, you should send me an email about what you are thinking about.   We’ll go from there.

Our schedule for the week:

1 – your email to me about your thoughts on a possible paper question, by Wednesday night,
2 – your essays here by Thursday night,
3 – a news story on facebook by Friday night, (no fb news replies this week), and
4 – your essay-replies (to your classmates’ essays) here by Sunday night.

Ok – short semester, almost over – catch up, keep up!

18 Replies to “112-week4”

  1. The article called Political Power of Social Media by Clay Shirky in my opinion was a little difficult to read. Although, I found it interesting and I liked how he used many examples about how social media plays a role for political movements. I like how he not only he mentioned examples expressing the success of social media, but also he had examples where social media was sometimes not as successful. I find it crazy that by just a text or email could arise big riots and or protests, like the protest Shirky talked about in the beginning of his article about the angry Filipino’s. It surprises me so much because I am so used to getting this kind of information from twitter or Facebook, not by people texting me. The emails and texts I have ever received like this one has never became so big unless it was something that started by a tweet. A quote from his article that stood out to me is when he said,”…social media have become a fact of life for civil society worldwide, involving many actors — regular citizens, activists, nongovernmental organizations, telecommunications firms, software providers, governments.” I feel like this can be problematic in a way because we do get a lot of our information about the world from social medias, and people are not reading the newspaper or listening to the radio or watching the news on TV as much because it was summarized from someone’s tweet. But social media in a lot of ways has helped, so I am not saying social media is bad for the world.

    1. Lots good here, Mia. It’s interesting how fast the media have changed – newspapers for a couple of hundred years before radio – half of America had radio by the mid-1930s, half of America had tv by the mid-1950s. It was about 1990 before half of America had cable (and CNN). These were really the only telecom advances (ok, the fax machine at work) in the 20th century. Since then, in the early 2000s half the people had a cell phone (the first one was in the 1970s), by 2005 for half of America to have broadband at home – there was no real Internet until the 1990s).

      Almost no one used social media in 2005, half of America did six years later. There were no smart phones until 2007, half of Americans had one five years later. So after centuries of newspapers, and decades of radio and television, we’ve accelerated the pace and ubiquity of communications, as well as democratized it: there were only three or four massive companies that could get video to the masses in the 1980s – by 2007 anyone could YouTube anything, from their phone, worldwide, for free.

    2. The ultimate rise of social media can more or less be summed up just by looking at Trump’s success with Twitter. During his campaign his tweets seemed to resonate with many voters more than TV news stations could, like CNN or MSNBC. I agree with your feelings that social media could be problematic, because all the information is so concise, it is very easy to misconstrue information or take facts out of context.

  2. conflate democracy and capitalism
    this stands out because I read many articles recently on the manner of government and economic policy in Euroepan nations. They are often very linked to socialism, not in a far left socialism, but in a more middle ground economic and social manner that seems to be very compatible with the way that the people like to live and their cultural preferences. Anything taken too far and slung to too strongly is disastrous. This is the same for the right wing, nationalism, far left socialism (I recommend the German film “The Baader Meinhof Complex” by Uli Edel to really understand the far left and what that looks like, we hear so often of the far right, but the far left is as violent), and even capitalism. Capitalism has no real soul without the entry of a democratic system that can control it and the people. The US, and any nation that clings to capitalism as a religion, is too far to one side and it is not a good place to be. The markets do not control themselves well because they regulate based on the bottom lines and not the human factor. The late 19th century is a prime example of this as the robber barons were ruthless and corrupt, and they corrupted the government until anti-trust laws allowed for control and labor unions allowed for some worker rights. But the people who cling so hard to pure capitalism again seem to prefer removing the anti-trust slash and burn methods and unionization, and run terrified from the word socialism, and I am not sure why when in reality it takes a careful middle of the ground balance to make everything work out right? I have to blame misinformation for some, and simple knee-jerk reaction fear for others.

    1. You do a nice job identifying a couple of things here, Mohammed. First, yes, the pendulum swing from too much government regulation of the economy to too little is a regular theme in American history. Second, democracy and capitalism are tied together in a philosophical way in the US – not just in a pragmatic way – the link is the importance of individual freedom – if I want to be a banker or farmer or invent facebook, Americans often think of it as a God-given right that the government needs to stay out of my way. On the other hand, we expect our government to protect us from fake drugs, polluted air, and bad meat. Tricky.

    2. The idea that markets do not control themselves leaves out a major component of how markets work. Markets are not simply the businesses that produce goods/services, but also the consumers that purchase and consumer those goods/services. It is the ability of producers and consumers to interact within a free and open market that leads to innovation and falling prices. Because of the freedom consumers have within capitalism to take their business elsewhere, companies like Amazon and Google invent new and exciting products to retain customers and improve people’s lives. Similarly, companies like Uber lose business when people feel the company’s culture needs to be fixed. The free market and capitalism allows consumers (people) to impact businesses in substantial and real ways that are not possible with other economic systems like socialism.

      1. You make such an important point that we forget once nobody-start-ups like Amazon and Google (and Wal-mart and McDonalds before them) become huge – amazon and google were new and people – consumers – had to make a deliberate choice to change the way shopped (or lived) before – consumers chose amazon and google (and wal-mart before them) – maybe today people choosing Uber over taxis or Skimm (4m) over WaPo (70m) will make lasting changes later – Uber and Skimm were literally nothing and competing against giants….

    3. You are absolutely right that the far left and far right are disastrous, so one must find the right balance in the middle, and it’s unlikely that we have found the right balance yet. I don’t agree with your statement that the markets do not control themselves well, as supply and demand is the very heart of capitalism. The ability of the consumer to control the prices by purchasing better quality product for a better price creates competition that drive the economy. This, of course, is far from perfect as you pointed out with your example of the robber barrons, which is why it is important to find the right balance between pure capitalism and government control.

  3. Politics and economics tend to go well together as areas of study, almost like two sides of the same coin. John Maynard Keynes and F.A. Hayek are two people whose ideas are fundamental to discussing politics & economics. Keynes’ economic theory posited that governments have a necessary role to play in the economy through fiscal policy and government spending. Fredrich Hayek on the other hand believed that a free market, with limited government intervention, not only worked best but gave a people the greatest amount of freedom. These ideas are still widely discussed and debated today, and have contributed to the debate on the influence of democracy and capitalism on one another. It is impossible to separate capitalism from democracy, to the point that without capitalism, in any measure, it is impossible to have democracy. No democracy has ever gone directly to totalitarianism without first doing away with the free market. Conversely, economic liberalization often leads to some form of democratization. The opening up of goods and services that results from capitalism tends to also open up the flow of information. This free exchange of information has become infinitely more powerful in today’s world with social media and the internet. With the ability to reach millions of people without traveling at all, gives the internet the potential to serve as an incubator for social change. So, while capitalism and social media sometimes receive a bad rap, they have done, and have the potential to do, monumental good throughout the world.

    1. Good, Anthony. Your idea that “Conversely, economic liberalization often leads to some form of democratization” has been the dream of policymakers and well-wishers for a long time – but we just can’t convince the Chinese! In fact, we see that economic liberalization did precede political liberalization in many East Asian countries that took an export-oriented industrialization path. And so we imagine that China is on that same path. And yet….

    2. There do however seem to be limits to the idea of the economic freedom and the democratic freedoms coming together. I have noted recent attempts to made BDS or the desire to not make certain purchases as a form of political protest actually illegal in the US, a supposedly free and democratic nation as well as an economically free nation. Should there be limits? Can there be limits? Or is this not really possible?

      1. Great, Mohammed. But there’s also something very interesting here. On the one hand, much of America is anti-Semitic. And much of Congress is pressured by AIPAC, even though only about 2% of the US is Jewish (and not all of them support AIPAC). On the other hand, much of America is anti-Muslim, too (and to some extent, a lot of those are the same people).

        Any effort to ban free speech about politics (any law that limits political speech, including pro-BDS speech) will be struck down 9-0 in the Supreme Court. Of course, if Congress passes a bill, and the president signs it into law, and the Court invalidates it – that’s always a good question for “what do we mean when we say “democracy”?”

  4. John Maynard Keynes and F.A. Hayek act as prime examples of the differences between modern liberal and conservative views on the government role in the economy; a ‘liberal’ would argue that government intervention in the economy is important to provide services, raise the minimum wage, provide an economic safety net, and to protect workers rights. These ideas relate to Keynes ideas of government spending to stimulate the economy. A ‘conservative’ would argue that government intervention hinders the growth of the economy by placing too many restrictions on small businesses. This is similar to Hayek’s arguments, that limited government intervention provided the most freedom. This relation between freedom and capitalism also draws attention to the connection between democracy and capitalism. The two seem to go hand in hand; one very rarely performing without the other. While they are separate, autonomous entities, one will not find either of these thriving without the presence of the other. No one country, however, has any true form of capitalism. Many Northern European countries like Denmark and Sweden practice a light socialism called a social market economy, where the market is still free but government programs are huge and taxes are high, but there is very low poverty and a great standard of living. Unfortunately, these economic and political systems are difficult to implement in countries struck by the ‘resource curse’. This ‘curse’ occurs when a third world country attempting democratization attempts to run its economy through a natural resource. An example of a country like this is Nigeria; Nigeria is one of the most oil-rich countries in the world, but has a terrible poverty rate as a result of corruption. In addition, there have been a number of coups and a civil war that have kept the nation from being stabilized. However, once Nigeria is able to expand it’s economy beyond oil, it could shape into the most powerful democracy in Africa.

    1. Do you think that in some nations the manner in which business is run is just a matter of corruption? I know for example in Italy, a democratic nation, corruption is a part of the way they operate in business, it is the norm to say bribe and haggle. In nations like Russia and China, with many inputs into their economy, they too have corruption as a norm, and even in MENA nations, say Iran for example, that has oil, LNG, Coal, as well as many other lucrative angles to its economy (caviar, rugs, pistachios, etc.), has a natural affinity it seems for corruption in business and government. Perhaps with these nations, across many continents with these examples, China, Russia, Iran and Italy, corruption and an inability to overcome it, is based on far more variables than we can imagine.

  5. The debates between Keynes and Hayek are almost verbatim the debates we have today – we need more government of one kind or another, or less. You’d also maybe be interested to see that we have almost verbatim debates in international trade today as the ideas argued for free trade in 1776 (Adam Smith) and opposed by protectionists Alexander Hamilton and Friedrich List in the subsequent decades.

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