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Classic Perspectives on International Political Economy

Classic Perspectives on International Political Economy. Class 2 – Thursday, 9 September 2010 J A Morrison. John Locke. Adam Smith. Karl Marx. 1. Lec 2: Classic Perspectives. Locke, Smith, & Marx States and Markets Materialism versus Idealism. 2.

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Classic Perspectives on International Political Economy

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  1. Classic Perspectives on International Political Economy Class 2 – Thursday, 9 September 2010 J A Morrison John Locke Adam Smith Karl Marx 1

  2. Lec 2: Classic Perspectives • Locke, Smith, & Marx • States and Markets • Materialism versus Idealism 2

  3. As we saw on Tuesday, there were a number of different ways to define “political economy.”We also saw that the definitions we use can privilege certain understandings of the phenomena involved.

  4. Today, we’ll continue in the same mode, exploring several prominent theorists’ frameworks for understanding political economy.

  5. I. Locke, Smith, & Marx • Who they were • Why we should bother with them 5

  6. “John Locke” ? What gives? 6

  7. No--really... What gives? ? =

  8. John Locke • 1632?-1704 • English philosopher; developed political connections • Helped inspire & justify Glorious Revolution 1688-1689 • Secured adoption of fixed exchange rate in 1696 • On Board of Trade, reformed commercial, fiscal, & migration policy

  9. Adam Smith • 1723-1790 • Part of Scottish Enlightenment • Lectured at Univ of Glasgow (1750s-1760s) • Worked for Charles Townshend (1760s) • Wealth of Nations (1776) • Inspired free trade movement in 1780s

  10. Karl Marx • 1818-1883 • Prussian; father converted from Judaism • Student of Hegel • Revolutionary; frequently exiled • Founder of Communism (brand of Socialism) • Coauthor of Communist Manifesto (1848)

  11. I. Locke, Smith, & Marx • Who they were • Why we should bother with them 11

  12. John Locke, Adam Smith, and Karl Marx have all been dead for decades.Why should we bother with their opaque musings? What relevance could they possibly have?

  13. There are several good reasons to “bother” with these very old, very dead guys...

  14. (1) Historical Importance • Locke, Smith, Marx, & Keynes were among the most influential intellectuals of all time • Each shaped policy in their lifetimes and for decades to come • Impossible to understand the history of the global economy without understanding their roles and their ideas 14

  15. (Of course, their precise ideas and the roles they played are subject to ongoing debate! But few deny their importance.)

  16. (2) Intellectual Importance • These theorists also bore extraordinary influence on subsequent economic thought • Locke was a pivotal foil for Smith • Marx borrowed from Smith and challenged Locke • And Keynes returned to Locke in his attempt to assault the “classical liberals” (including Smith) • We lose much of the conversation today if we neglect these persistent voices 16

  17. (3) Provide Relief • Some of the writing is surprisingly unfamiliar • Primeval terms and formulations for familiar concepts (“vent”) • Nonstandard spellings (“forraign”) and printing • Shocking assumptions about racial, national, & religious characteristics • These differences can sharpen our perspective on our own “discourse” of political economy 17

  18. (4) Offer Alternatives • These “great” writers developed solutions to transcendent (timeless) challenges • These “great” writers were unusual in their attempts to tackle a number of issues in a single framework • We might revisit these proposals in search of additional alternatives 18

  19. Lec 2: Classic Perspectives • Locke, Smith, & Marx • States and Markets • Materialism versus Idealism 19

  20. II. States and Markets • What is the Priority: Politics or Economics? • Whose Property are we Protecting? • Distinguishing “Political” from “Economy” 20

  21. Clearly, states and markets interact. But does politics serve economics? Or does economics serve politics? (Obviously, economists should and do serve political scientists!)

  22. Aristotle’s classic answer set the tone for centuries to follow…

  23. “[T]he city…exist[s] by nature, and…man is by nature a political animal.” (Aristotle, Politics, 1253a2)

  24. “It is clear…that a city is not an association for residence on a common site, or for the sake of preventing mutual injustice and easing exchange… What constitutes a city is an association of households and clans in a good life, for the sake of attaining a perfect and self-sufficing existence.” (Aristotle, Politics, 1280b29)

  25. Aristotle’s Political Economy • State exists naturally • Political life is telos of man’s existence • Market relations exist to facilitate social/political endeavors 25

  26. “In [the state of nature], there is no place for Industry; because the fruit thereof is uncertain: and consequently no Culture of the Earth; no Navigation, nor use of the commodities that may be imported by Sea; no commodious Building; no Instruments of moving, and removing such things as require much force; no Knowledge of the face of the Earth; no account of Time; no Arts; no Letters; no Society; and which is worst of all, continuall feare, and danger of violent death; And the life of man, solitary, poore, nasty, brutish, and short.” (Hobbes, Leviathan, Ch XIII)

  27.  In Leviathan (1651), Hobbes followed largely in Aristotle’s mode: market relations were inconceivable without political society.

  28. Locke wrote the Two Treatises just a few decades after Hobbes published Leviathan.According to Locke, what was the end (purpose) of political society?

  29. 29 29

  30. “The great and chief end therefore, of Mens uniting into Commonwealths, and putting themselves under Government, is the Preservation of their Property.” (Second Treatise, § 124.)

  31. What does this imply about the capacity of market relations to exist beyond the realm of political society? (see §108)For Locke, did the market serve the state? Or did the state serve the market?

  32. John Locke was among the first to challenge Aristotle’s prioritization of the state over the market.

  33. II. States and Markets • What is the Priority: Politics or Economics? • Whose Property are we Protecting? • Distinguishing “Political” from “Economy” 33

  34. But this raises a question: whose economic interests are to be served by the state?

  35. Meaning of “Preservation of their Property” • Narrow Interpretation: Protect specific possessions, our (negative) liberties, and our bodies • Protect propertied from unpropertied • Broad Interpretation: Protect the health and welfare of our economy from foreign competition and invasion • Protect public/common interest 35

  36. So, which view did Locke hold? “And all this to be directed to no other end, but the peace, safety, and public good of the people.” (§131; See also §§ 97, 120)

  37. What did Smith suggest was the original end of political society?

  38. “Laws and government may be considered in…every case as a combination of the rich to oppress the poor, and preserve to themselvesthe inequality of the goods which would otherwise be soon destroyed by the attacks of the poor, who if not hindered by the government would soon reduce the others to an equality with themselves by open violence.”(Smith, Lectures on Jurisprudence, 208)

  39. Locke versus Smith

  40. II. States and Markets • What is the Priority: Politics or Economics? • Whose Property are we Protecting? • Distinguishing “Political” from “Economy” 40

  41. Let’s back up. We’ve been talking about “states” and “markets” as if it were obvious what the differences between the two are.What are the differences?

  42. Distinguishing States & Markets • Nature of decision-making: centralized versus decentralized • Breadth of interests considered: public good versus private good • Locus of Accountability: owners/shareholders versus electors • Amount of competition: monopoly versus competitive • Power: market power versus political power 42

  43. Lec 2: Classic Perspectives • Locke, Smith, & Marx • States and Markets • Materialism versus Idealism 43

  44. III. Materialism versus Idealism • Smith’s Historical Materialism • Marx’s Historical Materialism • The Question of Revolution & Policy Change • What about Ideas? 44

  45. In his historical analyses, Smith generally held that the evolution of material factors—interests & institutions—powered social, political, and economic development.

  46. Smith’s (Infamous) Four Stages • 1st – Age of Hunting & Gathering • 2nd – Age of Shepherds • 3rd – Age of Agriculture • 4th – Age of Trade and Commerce (LJ(A)i.27) 46

  47. “Base” and “Superstructure” (Marx’s Terms) • Each stage brings with it a different set of values and allegiances • Politics are organized in each “age” according to the interests of the ruling class • Agriculture  Feudalism (rule of landed elites) • Commerce  Mercantilism (rule of “merchants & manufacturers”) • As the economy develops, the burgeoning class overthrows the old guard 47

  48. So, where did Smith think history would end?(See the end of the Wealth of Nations.) It’s not clear. He certainly doesn’t seem to have been as optimistic as Marx.

  49. III. Materialism versus Idealism • Smith’s Historical Materialism • Marx’s Historical Materialism • The Question of Revolution & Policy Change • What about Ideas? 49

  50. “The Premises of the Materialist Method” • “Life is not determined by consciousness, but consciousness by life. In the first method of approach the starting-point is consciousness taken as the living individual; in the second method, which conforms to real life, it is the real living individuals themselves, and consciousness is considered solely as their consciousness.” (GI, 181; Preface 425) 50

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