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2018 Summer Online – Politics 212: International Relations
Week 3: July 9

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Welcome to Politics 212: International Relations –
Week 3: Global Political Economy


This week we introduce a few ideas about global political economy.  We’ll start (every week) with a review of our “four columns” – our four models of IR theory.  Then we’ll take a selective tour of the role of economics in International Relations.  First, we’ll see that each of our “four columns” has a set of corresponding economic ideas.  Second, we’ll meet Keynes and Hayek, and explore how their key questions apply internationally.  Next, we’ll look at a examples of International Political Economy at work.  What has driven U.S. foreign policy in the Middle East for the last 40 years?  (Yes, oil, but that’s not enough of the answer, according to Andrew Bacevich.)  And how can the U.S. play a positive role in the world economy?  We’ll look at a good example from the Clinton era, and ask whether those lessons still apply.  Finally, we’ll take a look at an important, and typically overlooked, aspect of international political economy – illicit, underground, illegal, whatever term you prefer.  If international organized crime were measured as a country, one study found, it would be the 20th largest economy in the world.

One word on nomenclature.  We’ve already discussed how “International Relations” itself is a dated term for what the relevant material really is – some “relations among states”, but also the impact of global manufacturing and finance, climate change, refugees, al Qaeda, etc.

So too IR Theory’s term  “international political economy,” often IPE.  IPE has at least two meanings.  Sometimes, including for us this week, IPE is the general term for the study of the impact of politics on economics and the impact of economics on politics (with “international” scattered in there). Other times, the term IPE is used more narrowly, implying particular attention to that column of ours dealing with Marxist politics and economics (again, with “international” in there somewhere) – that is, sometimes IPE means a Marxist approach to the structural relationship between the United States (capital) and Latin America (labor), or something like this.

Some movement has been made to more accurately reflecting the field as “global political economy” (GPE) – recognizing that Exxon, Bitcoin, Google, and refugee crises are not sufficiently described as “political economy between nations (i.e., international).” Maybe you’ve already made the leap:  “international relations” itself is hardly an accurate title for this field of study that includes so many essential elements that are not “nation-states”.  “International Relations” is a long-outdated name for the field, but it is nevertheless still the dominant term; so too IPE.

I.  Four Models of IR.  We start this week, and every week, by looking at our four columns.

Look over our columns carefully, and then try to summarize each column.










Realism? states in conflict. (We do call-and-response in class; imagine a one-room schoolhouse where the teacher says, “Realism?” and in unison the class responds, “States in Conflict!”)

Liberalism?  (The bumper stickers get smaller print from here on.)  “States and non-state actors, sometimes in conflict, sometimes in cooperation.” (Told ya.)

Marxism?  “Capital exploits labor, north exploits south.”  (Remember, these are short-cuts, not dissertation-length analyses.)

Constructivism?  “Ideas, interests, and identities; flexible norms.”  My own short-cut for this one is, “When things other than power and money matter most,” but I can’t find this quote in the scholarly literature yet. If you think each country should have a voice in a debate, no matter how rich or poor or small or large or well-behaving they are; if you believe a government’s commitment to human rights matters; if you believe that your god is better than everyone else’s god; if you think that states matter but they choose whether to see the world as Realist or something else; if you think the rules of global politics are “socially constructed” (agreements among people, and flexible/changeable) instead of natural  (determined by nature) and immutable; if you don’t mind borrowing from Realism and Liberalism and adding your own stuff….then you might be a Constructivist.  That’s a big bumper sticker.

II.  Keynes and Hayek

John Maynard 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

Friedrich 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.

III.  In An Uncertain World

Sometimes events outside a government’s control, or sometimes the effects of a government’s own policies, contribute to troubling outcomes.  By late 1994, Mexico was in trouble: it would not be able to make payments on its debt to its various creditors. President Bill Clinton was nearing the end of his second year in the White House, facing Newt Gingrich and a new Republican House of Representatives for the first time in 40 years.   Clinton and Gingrich faced the question: should the United States bail out Mexico, or let Mexico’s currency (and possibly its government) collapse.

You can watch Clinton’s chief economic advisor, Robert Rubin, discuss this with Gingrich and the Clinton team. Then read the fuller version, Robert Rubin, In An Uncertain World, chapter 1, on Blackboard > Readings.

Start at 27m:54s through 32:47 (five minutes), or open to 27:54 in a new window.

IV.  The Real World War IV

Andrew Bacevich was a career soldier, a retired Colonel from West Point, Vietnam, and the 1990-1991 Persian Gulf War.   From there he went to a Ph.D. at Princeton and a prolific academic career at Boston University.  Bacevich became concerned about the overreliance of the United States and its citizenry on military solutions to geostrategic problems.  He was especially opposed to the 2003 Iraq war.  And then in 2007, he lost his son, 1LT Andrew Bacevich, Jr., to an IED in Balad, Iraq.

We look at who Bacevich blames for the militarization of U.S. foreign policy in the Middle East.  If after WWI and WWII we unofficially consider the Cold War to be WWIII, then when does World War IV begin?  Some might say when the U.S. invaded Iraq in 2003 or Afghanistan in 2001, or it began when al Qaeda flew planes into building September 11, or maybe it began with the Persian Gulf War in 1990-1991, or some other time.

Bacevich says it began in the Carter era, in the late 1970s, when he told you to put on a sweater, and you said, “Hell, no!  I’m Amer’can, and the Constitution says I get life, liberty, and cheap reliable oil from them Saudis, so make it happen, you peacenik peanut farmer hippie.”  And so, President Carter began to put into place the ideas and treaties and materiel and training to secure, by military force if necessary, cheap reliable oil for Americans.  Reagan, Bush, and Clinton continued this. And who does Bacevich blame? Find out here, in The Real World War IV.  Take your time with it – it’s really one of my favorite articles on the American society, United States foreign policy, the politics of the Middle East, and of course IPE.

V.  Transnational Organized Crime

In 2010, the United Nations published a report on transnational organized crime – a summary of some of the world’s illicit, “underground” economy.  You should read at least the press release, the preface, and the introduction.

un transnational organized crime map


Take a look at this map from the report.  Details have changed since 2010, but not the main story. A lot of it is what you might expect: drugs and people from South to North, weapons from North to South, etc.  But most people don’t know that you may be closer to all this than you think – as close as your cell phone.  Begin with this April 2017 summary from Deutsche-Welle. Understanding how it worked should make you very uncomfortable. There were efforts to address this; now, the Trump administration is considering repealing those efforts – that probably seems bad, but do the reform’s unintended consequences make repeal at lble a east worth discussing?

(Yes, Internet/cyber/social/etc. is a big new part of GPE. Don’t worry, we’ll do cyber in a future week.)

Ok, your turn

There is really a lot to think about here.  Take your time with these readings and videos, and then create your own prompts.  You might want to go back and review What Makes a Good Post.  And then:

— news on facebook by Wednesday night

— your essays here by Thursday night – which of these issues above really made an impact on you? how do some of the issues coalesce, or contrast? which of these is really illuminating, or somehow not quite right? how does one of these help us understand what’s going on today?

— your facebook comments by Friday night, and

— your essay-replies (to your classmates’ essays) here by Sunday night – some of your comments to each other have really been thoughtful and helpful and extended the discussion – read each other’s work humbly but critically – what are you learning from your classmates, or how are your thinking about something a little differently – it’s ok to disagree with each other and to ask each other questions, if what you’re really doing is making the conversation richer, fuller, and at the same time respectful and humble and civil.

Ok, let’s have fun


32 Replies to “CUA-212-IR-2018-july9”

  1. To begin with, I gained a good understanding of global political economies and in particular the impact Keynesian Economics has had since the turn of the 20th century. I believe Hayek’s free market principles did not gain popularity due to the circumstances of the time period. After WWI, Keynes laid the foundation for his principles in macroeconomics to be later implemented after WWII and the Great Depression because FDR needed to find a solution to the failing economy. Just as in post WWI Russia, where people were looking towards Lenin to end the economic oppression of man, which created a turn to socialism and communism. In both cases, Keynes’ principles of central government involvement to manage the economy were implemented. In the case of the U.S., FDR’s New Deal was successful in implementing deficit-borrowing to jumpstart the U.S. economy and therefore the world economy.
    It is illuminating to me that the world economies unwittingly support the globalization of crime. If we rely on the information in the UNODC press release, that the, “the world’s biggest economies are also the biggest markets for illicit trade,” and that world governments established the economic and political policies, then aren’t they also responsible to spend more of their resources to police global crime? Never is the statement truer that, “Global governance has failed to keep pace with economic globalization.” If international crime is not being policed, then the governments are contributing to its existence and success. All governments need to take seriously the cyberthreats, economic loss and disruption of market forces caused by organized crime.
    Something that particularly impacted me was the global demand for coltan, 80% of which comes from Africa and is used in components for phones and electronics. The human right’s abuses in mining coltan from the beginning to exportation were unsettling to say the least. This leads me to question the Trump administration’s expected repeal of the law requiring U.S. companies to source minerals from non-conflict regions. With a lack of government intervention, the world might see an increase in rebel groups vying to illegally source the minerals to fund their militant groups. The whole point of the law was to cut off the monetary source to the militant groups, thereby reducing conflict because of the lack of funds. However, we cannot ignore the negative financial impact this has on the local miner, who relies on this work to support himself.

    1. I love that the themes of Keynes and Hayek 90 years ago are the same – sometimes the same words – as 60, 40, 20 years ago and today…

      And it’s really moving to think, “I have war-crimes minerals in my iPhone…” – international relations isn’t just far away….

    2. Hello, Sophia.

      We agree when we say that all governments should put efforts to creating policies that help curb transnational crime because if the big economies maintain in silence stones lets see that they are complices of the growth of organized crime globally.

      1. I agree with both Euclides and Sophia’s take. I believe the US is seen as the policing force of the world. America is a world power, whose actions affect the rest of the world. I believe America could be responsible in leading the way to help stop transcontinental crime. Although I think there would be major backlash, because new policies would mean prices increasing. You wonder what percentage of people would be willing to pay more for an iphone if that meant coltan miners got better rights?

      2. Sophia , I love your post. I think international relation have to play part here especial on the countries that have big economies. they should work together to curb the ways of transfer funds to militant groups without care were it goes or coming from.

    3. I agree with you that the governments that turn a blind eye to illicit activity like human or drug trafficking are only helping these types of organizations. All governments throughout the globe must realize the imminent danger hundreds of thousands of people face every day being trafficked by these repulsive groups. I also found it very interesting hearing your take on the demand for coltan. Trump’s administration is playing with fire when buying goods or resources from non-conflict groups.

    4. I agree with you that the larger nations are more vulnerable for “illicit trade.” However, they are under the rule of law, therefore they are required to abide by certain standards.

  2. The one issue, within the topics presented in this weeks lesson, that remains the most relevant in 2018 is our problems with Mexico. The economic problems of 1994 caused foreign investment to flee which created a national economic crisis in Mexico. There was potential for the Peso to implode which would cause their government to become very unstable. Ultimately, it was looking like the government was going to default on their debt. The economic bailout package presented by the Treasury Department to President Clinton had a high risk/high reward to it. In addition, the package was extremely unpopular, because if it did not work the borders would flood with refugees, causing a multitude of problems for Mexico and the United States. And overall, the international view of American smugness and capitalistic corruption would be confirmed. When the bailout package had worked Mexico paid America back in a shorter amount of time than expected. However, it set a huge precedent; signaling to foreign investors that the United States now had established a bailout policy.
    This is the problem that America faces today; we are careless in our bailouts and giveaways. Foreign markets depend on America’s market. Which is a good thing, and a very bad thing. It should not sit right in someone’s mind that if one nation halfway around the world goes belly up, the United States will be there for them. If a nation is hostile or friendly, rich or poor, big or small, they should have help from foreign partners, but not a full-scale bailout from the United States of America. It sickens me to see small, foreign nations beg for capital when their markets are perfectly stable. The United States government must shatter the thought that every time a nation needs help, we will be there. We have too many problems of our own to worry about.

    1. When Clinton and U.S. set the precedent with Mexico in the bailout, they had their hands tied because as you stated, they couldn’t ignore the impact on our borders if they didn’t help (and also we would have appeared to the world as capitalist pigs) and once we did help then obviously we solidified our reputation as a wealthy nation with money to lend to all those in need. However, given Trump’s most recent stance to the UN that the U.S. will not be a country supplying the UN with 80 percent of their funding and that other nations must contribute in kind, maybe that precedent set in the Mexico bailout is slowly being put in check. Whether we agree or disagree with Trump’s stance and his delivery method of U.S. policy, he definitely seems to making other cig tries think twice about what the U.S. is will to contribute to the world economies going forward. He does not seem concerned with how other countries perceive the U.S., a factor with which Clinton, in his interview stated, he was seriously concerned and rightly so because of the border issue and world perception and world perception of the U.S. as an uncaring economic superpower. Conversely, Trump seems to have little to no concern about other countries’ perception of the U.S.

    2. Some people share the idea that foreign bailouts make for a series of consequences that the US doesn’t want, and that can be true. But in the Mexico case we read about, there are also consequences to not bailing out Mexico: the Govt of Mexico owed money to US banks – so it is the US banks that would have suffered – the US Govt was bailing out US banks. Every 26-year-old and 56-year-old third grade teacher in California has her retirement savings in the California state retirement system, which invests all over the world, including in US banks and in Mexican companies – if the US banks were not bailed out and the economy of Mexico collapsed, those American teachers (and many other people) would have been harmed. As Pres Clinton indicated, there could have been a rush to the US borders. Etc. So it’s useful to think sometimes of the direct consequences but also sometimes of the second-order possibilities…

      1. But aren’t there more appropriate, or at least, more indirect ways in which the United States could have supported Mexico in this instance short of an outright bailout? Couldn’t the IMF have facilitated direct negotiations between Mexico and its creditors without so directly involving the United States?

        I would also imagine that there would be resentment towards the United States taking on such an active role in stabilizing the Peso while, during crises among other struggling central / South American states, the U.S.decided against direct interference. Ecuadorian hyperinflation in the 1990s would be one example: while the United States cooperated with Ecuador’s dollarization, an outright bailout could have propped up the Sucre before it became completely worthless.

        If the U.S. holds Mexico to one standard and the rest of the world to another, doesn’t that leave the U.S. vulnerable to criticism that it uses economic aid as a mechanism to interfere with the political system of sovereign states? Not that this isn’t exactly what we are doing, or perhaps even why we did it — but I would imagine it would be more beneficial for our relationship among central and south American states to avoid the perception that the United States picks which economies are allowed to fail and which it chooses to save.

    3. The US faced very difficult decisions when faced with the 1994 bailout of Mexico. The world economy faced taking a huge hit due to the fall of the peso and the Mexican government and economy. I think in today’s America, we can be too eager sometimes in aiding those that we may not have any business helping.

  3. The organized crime links really piqued my interest, mostly because of how globalization hasn’t just affected the legal economy and legitimate nations, but it has expanded illegal crime operations exponentially; now it’s that much harder to stop these organizations, requiring international cooperation and massive amounts of resources. Human trafficking specifically is an interesting topic, in part because of how such a barbaric and seemingly “old world” trade can be so huge and global in this day and age of human rights and feminist activism. I never would have guessed that it was a $3 billion a year industry, with millions of slaves “traded at a price not higher in real terms than centuries ago.” The world has almost stood still for these traffickers, and somehow with modern security and technology it thrives.
    Another part of this report is the illegal drug industry, which the whole world has experienced. Here in the U.S., opioids like heroin and fentanyl have killed thousands, including some high-profile celebrities (particularly young rappers). Illegal trade of these drugs continues to thrive, especially in richer countries, as this report notes: “most drug profits are made in the destination (rich) countries.” I’m not entirely sure why that happens; I’m guessing that richer countries have higher average disposable incomes, and thus more money for illicit drugs. In poorer countries, they simply grow and distribute these drugs to “make a living”, not necessarily to enjoy the actual drugs.
    I do have some… Unorthodox ideas for solutions to problems like global illicit drug trade, however I’m not sure how realistic they are for the current world. Maybe in an ideal world, we could experiment with legalizing all drugs and seeing how that impacts the “illegal” drug economy, seeing as how marijuana legalization has impacted marijuana trade in the US (Unfortunately, due to government interventions like taxation and regulation, black markets for weed are still often preferred). I’m in no way advocating for that, however it’s an intriguing idea that could at least be looked at by governments across the world, I think.

    1. Your idea about one path to solving some of the trafficking issues is one that others are proposing as well. Think of cigarettes or alcohol – the 18th Amendment didn’t end alcohol in the US, and there were so many negative consequences that we repealed it. Legalizing alcohol and tobacco doesn’t get rid of their negative effects, but it gets rid of the negative effects of their being outlawed.

      But by that logic, do we get rid of national borders to combat human trafficking? No, of course not… these are complex and tricky issues, and they’re goo to wrestle with…

      1. I think the biggest difference between human trafficking and drugs is the fact that human trafficking violates other people’s human rights, while drugs are a choice of that individual, independent of any other human. Borders could also be argued as a consequence to private property rights. If we didn’t have borders, my property could be invaded freely by any other person without any repercussions. However, I could agree with the dissolution of national borders if it meant I could protect my private property rights, so instead of a global, open-border society, there could be a world made up of individuals/businesses with their own property, with the right to protect that property by any means necessary; i.e. instead of states enforcing property like they do now, the individual decides. It might be a bit of far-fetched idea, however I think we as a society need to get back to thinking about individual rights over the collective. I believe it’s the clearest path to freedom for everyone, where everyone has the ability to make their own decisions and chart their own course. Human trafficking is in direct contradiction with this, while drug legalization aligns with individual rights and freedoms.

        1. I agree strongly with Brendan’s first point on how we should view drugs and human trafficking. Even though I do not agree with your point on the dissolution of national borders, I like the eventual goal of there being more individual rights. What is to stop groups from taking over and invading other properties. I think of drug cartels in Mexico, who are able to pay off police and stay out of jail. They don’t respect individual’s property rights. Would a law stating that stealing property rights would be illegal stop them? People/groups/states take other peoples’ land; we have seen this constantly repeated throughout history. This has happened during multiple forms of government too. Like you wrote, I believe individual’s should have the freedom to make their own choices and pursue whatever life they want. In order for that to happen, there has to be a government protecting these individual’s rights. How far should the government go though? That is a debate we find ourselves in today.

    2. I agree with Brendan in that I found it very interesting that organized crime is a $3 billion-dollar industry. Some say that globalization resulted in allowing and promoting illegal activity. It is simply ironic that globalization, (an idea that is in theory supposed to benefit states) is contributing to this illicit trade market. Antonio Maria Costa puts it best when he states, “…global governance has failed to keep pace with economic globalization.” In order for us to protect our states from organized crime, we must look from a global perspective and spend more resources on transnational crime markets and trends.

    3. I really like the connection you make between drug trafficking and pop culture consequences. It is interesting to me that when a famous person dies due to illegal drug overdose, or in some conflict regarding the buying and selling of illegal drugs, that people care so little about how these people are gaining access to these markets. The drug market is right under our nose and is so prevalent, and there seems to be little public concern for how to put an end to it. It is clearly causing problems in the United States, and not just for lower-income workers, but for multimillionaires in the music industry. People seem to care, but there is a lack of activism in efforts to restrict illegal drug abuse.

  4. The issue I found most interesting and relevant in today’s world is Mexico’s bailout in 1994. Mexico was facing potential economic disaster. Foreign investors began to make off before disaster struck. This abandonment by foreign investors could have blown up the Peso. If the Peso failed, it would have caused an international economic crisis with nations from all over the globe aiding Mexico to try and keep the global economy afloat. President Clinton at the time, as well as his economic advisors had a very important decision to make. Will we bail out Mexico, or will we let the economy and possibly the government fall. Clinton was faced with a high risk, high reward solution. Lend Mexico $50 bn and help save their economy. It was a very unpopular decision at the time, but Clinton and his advisors saw it as a no brainer. America needed to help it’s failing neighbor to the south. Clinton worried about how the rest of the world would view us if we failed to do anything to aid Mexico. So, Clinton bailed out Mexico and they managed to pay us back early. This is still extremely relevant to today’s world. American money is often used to bail out failing economy, leaving the rest of the world to look to us in times of trouble. I see this as mainly detrimental to us. We are often stretched out far to help a failing country thousands of miles away while their neighbors merely observe. I think we as a global society needs to stop looking to America in times of trouble, and instead work as a global community using globalization to solve these problems.

    1. I wonder if any of you also noticed…. an unpopular idea among the public but the leading Dems and GOPs in Washington thought it was the right thing to do so did it anyway, in the face of public opinion – seems like you could see this either as “Profiles in Courage” or “elites ignoring the majority’s will”?

      1. I’m strictly against bailouts by government (of any kind)… Mexico made their bed, they needed to lie in it. However, Mexico *did* pay the United States back quickly, so in the end it seems the U.S. wasn’t hugely affected. But, this just allows for Mexico to ask for our aid again and again in times of trouble, along with other nations. We see this with out military too: we’ve protected Europe from the Soviets/Russia for a long time now, with barely any help from the Europeans. Of course, if America wants to stay as the world’s premier “superpower” and waste gigantic amounts of money on foreign aid and the military, then I guess these moves further that goal.

        1. Brendan,

          While I do not share your firm anti-bailout stance (the 2008 Troubled Asset Relief Program is, for me, an example of a bailout whose benefits vastly outweighed its many negative ramifications), I do agree with you that the 1994 Mexico bailout only reinforces the dangerous perception that the U.S. will always be there with a handout in times of trouble. What raises a red flag for me with this particular bailout is that it did not address the underlying causes of the crisis so much as it merely wrote-off losses resulting from risk freely assumed by foreign investors. If the result of the bailout were lasting economic and political stability, that might be another issue entirely — but we know now that this was not the case. The same ramifications that would have accompanied the collapse of the Peso — illegal immigration, political instability, a weakened trade partner — would still accompany any crisis Mexico faces today. This is problematic for me.

    2. Hello Harry.

      I think your point of view is very interesting, especially when you say that the countries should solve their problems on their own without the intervention of the United States, in this part I agree but I must say that a country considered the power of the world it is affected when the allied countries and especially the neighboring countries have economic problems and enter a state of economic resection.

      Because of the above, I believe that if the economic support plan for the neighboring country had not been approved, this would have resulted, as a consequence, of a greater problem of illegal immigration in the specific case of Mexicans towards the United States of which we are currently living. I believe that policies should be created to help countries have economic stability so that the population can enjoy all the basic services and have the right to education, health, and work which would prevent citizens from having a dream American.

  5. This week I had the opportunity to receive much knowledge of which I must emphasize that what most caught my attention is how there is a globalization of organized crime observed in the report where through several crimes that are indicated leave us several doubts about the financing and support for that can happen virtually in our noses without receiving a direct action through a serious global policy that can eradicate these transnational crimes as they are; Trafficking in persons, the illegal drug industry, illegal exploitation of coltan among others, which have greater global relevance and are being expanded using cybernetic tools that although being watched, there is a persecution that they are out of control.

    From my point of view, the problems that are still present for decades until today have to do with one of those listed above, the control of drugs and human trafficking that comes from the colonization that allowed the colonizers to travel to capture Indians and Africans to be excavated a situation that today is still being news in different international media, and the only thing that change is that now it is called human trafficking.

    On the other hand I agree with the press release of UNODC, which states that the largest markets for illicit trade are the largest economies in the world, this can be seen on the zero interest that the world’s economic powers have to unite and take a global agreement to attack head on these transnational crimes that are affecting a large part of the world, especially the underdeveloped countries, but if these flaws were more present in developed countries and economic power, we would be seeing international security policies directed to the prompt solution of these problems, I think that priority should be given to the creation of global agreements that allow monitoring and controlling the economic development of nations where there are no serious policies to attack these crimes, besides creating strategies to neutralize the criminal groups that profit from these crimes.

    1. Thanks, Euclides. Your comparison of human trafficking today to slave trade of yesterday is powerful. The State Dept agrees –

      Distinct but not entirely separate is the industry working to move “refugees” or “economic migrants” – these are not establishing continuing obligations or relationships or ownership, but instead are just “delivery systems” as for any other “contraband” … we’ll look at this in more depth in a future week

    2. I agree with you when you say slavery has just been given a new glorified name, human trafficking. It’s crazy to me how we read about it in our history books and it seems like a thing of the past, when humans are still being treated as commodities in parts of the globe. I think that there needs to be serious international efforts to end human trafficking and more focus on the human rights campaign efforts. It is difficult thought because advocacy work does not generate revenue like illegal trafficking, so it is so hard to truly gain support. At the end of the day, the economy is the driving factor behind much of the world’s conflict.

  6. I enjoyed reading the biographies of both Freidrich von Hayek and John Maynard Keynes. The two debated over topics that are relevant and still being discussed today. All over the country, people debate on how much power the government should have. This is essentially what Keynes was a proponent of. He believed if the government intervened and spent money on projects, it would provide more jobs. This would lead to an increase in supply and demand of goods. Keynesianism focused heavily on the importance of government to help control and direct the public in the right direction, in order to stimulate the economy.
    Hayek, on the other hand, believed the people are responsible to handling the ups and downs of the market. He believed the market cannot be planned and acts based off how the people act. Hayek believed Keyne’s economic plan would lead to inflation, due to central banks having a higher money supply.
    Next, I read the article on World War IV, by Andrew Bacevich. He makes it clear throughout the article, that this conflict we find ourselves in has been going on much longer since 9/11. Bacevich makes it point to point out America’s fascination with its military. I have no opinion on his observation, but I never realized how our culture is “obsessed” with our military superiority. He goes on to say, America uses “protection of freedom” as an excuse to go to war. Bacevich believes in reality, “freedom” is a mask hiding our true goals of warfare. In this case, in the Middle East, it’s oil. It is definitely a different take than anything I have read, regarding the conflict we are in. I have people say before, oil had played a factor in us going to war. An Interesting and challenging perspective by Bacevich on how America see itself in the world.

  7. Bacevich seems to say that we have abandoned Jefferson’s “life, liberty, and pursuit of happiness” for Locke’s original “life, liberty, and property” – where property means Saudi oil. It’s been amazing to watch, for example, the Obama admin tell environmentalists (and people who live in vulnerable areas) “Too bad for you – we’re going to do fracking as much as possible” – you might expect that from Dick Cheney, but from Obama? What economic (or geostrategic) trade-offs can you imagine in those political calculations?

  8. I found it interesting to read about how Hayek’s strongly-held beliefs were influenced by the arguments of scholarly arguments published contemporaneously to his own studies, arguments made by people such as Ludwig von Mises. I would imagine that Hayek’s contributions to the Austrian school of economics would have been markedly different had he not arrived at his thesis “reluctantly,” as his short biography describes.

    I believe that his firsthand experience of economic catastrophes, such as postwar hyperinflation in Austria, and his allowance of these events to influence his thinking, would make his ultimate conclusion that socialism is fundamentally ill-equipped to the constructing of a decent society far more compelling.

    I think that Hayek’s argument, that the price system allowed for a more efficient distribution of resources than the knowledge available to central planners could allow, particularly interesting. I think that, were Hayek publishing his research today, he would have broadened the limitations faced by central planners to include not only a lack of all necessary information, but given an over-abundance of data, also a lack of a mechanism for distinguishing between different sources of information. For example, given the same information, CNN and Fox News would provide different analyses — and decision makers listening to one or the other might likely find themselves incompletely knowledgeable due to the mediums through which they process and respond to information. The price mechanism of the free market allows for all relevant data to be taken into account — including (to continue the above analogy) fringe sources of information such as Infowars or Russia Today.


    What I found most interesting from the YouTube clip from An Uncertain World was how quickly both President Clinton and Speaker Gingrich came to terms with the need for an expansive and unpopular bailout of the Mexican financial system. That United States leadership would be united on such a politically fraught issue illustrates the power of an understanding of international economics that transcends political differences; that such an ingrained belief in the potential of free market capitalism could justify across both parties such aggressive interference in the free market process puts the whole situation into perspective.

    Both President Clinton and Speaker Gingrich were able to weigh the risk inherent in allowing the Mexican economy to collapse with, on the other hand, the moral hazard that would result from interference in the free market (the bailout of individuals and corporate entities largely outside of Mexico that willingly took on risk and, in failure, whose liability the United States would guarantee in full.)

  9. The issue that happened in Mexico 1994, prove what’s going on right now between Mexico and United States of America. Economic environment that sounded at that time caused more people to find jobs in the neighboring countries including US.
    Mexico faced financial crisis and it was about to default on the debt. After the recommendation of a loan of $50 Billion, the government got in to a better shape.
    President Bill Clinton was willing to handle the situation because he knew if he doesn’t there going to be an influx of immigrants and a lot of people on the boarder looking for jobs. Of cause the reputation of America will be in a bad shape, many nations and there people believe America as a leading nation has capacity to help in any crisis if they want.
    With this action Mexico was able to go back to its investment as normally.
    I like to give a comparison to this as what is happening now between America and Mexico on the issue of immigrants. I immigrant should help in the US rather than be expel so that they can have greater future to sustaining their countries. America is using too much resource dealing with immigration issue.

  10. I personally loved the video depicting the United States governments reaction to the near implosion of the Mexican Peso. It was fantastic to see that the United States were so willing to offer up a loan of fifty billion dollars and as former President Bill Clinton stated, he did not want to be thought of as rich country that would not help others in their time of need. It was a win win for the United States government because it somewhat glorified the United States as a helping hand to the world, and at the same time preventing a mass exodus of immigrants from Mexico into the United States. This did however create a dangerous idea to groups around the globe that the United States was adopting what the video referred to as a “bailout” policy. This video also highlighted the fact that technology had progressed so far that now money could be exchanged across boarders, electronically, within seconds. I found it equally interesting that it was referred to as the first major economic crisis of the twenty-first century, which would eventually be followed by the collapse of the housing market only fourteen years later in 2008. The most interesting part of all of this was how unpopular the Mexico bailout plan was at the time, and how much it was needed later in the United States in 2008. All things considered I believe that the bailouts were a very good decision by the United States government and helped out both Mexico’s economy as well as the United States economy as well. It was a very ironic turn in the bailout system to say the least. Luckily we are ten years removed from the economic collapse of 2008 and we have not seen anything near that catastrophe since. However, if it did happen again, it would be very intriguing to see if the United States took a similar bailout approach that they did in 2008.

  11. I think the most striking part of this week’s lesson to me was learning more about the black markets and how they are so successful. In the UNDOC press release, there was a quote that stuck out to me in particular. “The greed of white collar professionals is driving black markets, as much as that of crime syndicates.” The black markets would not be able to sustain themselves without white-collar crimes to hide illegalities. That is one of the reasons that it is so difficult to eliminate corruption internationally. There is also something to be said for the delicate balance of the GPE. There are so many underdeveloped countries who rely on the existence of black markets, even though most of the profits don’t even go back to pirates or smugglers. Instead, they benefit the more wealthy countries that are aiding in cover up schemes. To truly oust economic corruption would be so complex, and could have even more negative effects on the GPE. The social consequences would undoubtedly be for the most part positive, but it is a fact of human existence that money is a necessary commodity, especially in order to thrive and have commercial relationships with foreign countries. On the other hand, in response to transnational threats, nation-states are forced to work together because each nation has economic needs that depend on successes of one another.

    Another section of this lesson I found to be interesting was the categorization of World Wars III & IV. I had always considered the Cold War to be, in a sense, a “World War,” but, perhaps because of the newness of it, I had not previously considered the global war on terror to be WWIV, until I read Bacevich’s analysis. To think that WWIV is essentially the result of economic pursuits of oil in the Middle East seems impossible when looking back at the crises and conflicts it has caused in the past 40 years.

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