Lecture 3: Post-1945 World Political Economy

This week
• Some more on war and political economy
• Security structure and political economy
• The Cold War – a divided world political economy (1948-89)
• The post-Cold War – an increasingly unified world political economy (1990-)
• Some general post-1945 developments in the world political economy
• More on security structure and political economy

More on war and political economy

• Was World War II at least in part a product of political economy
issues/developments?
• post-WWI settlement?
• world recession and the Great Depression?
• Influence of World War II on political economy issues/developments
• change in the balance of global economic power (USA strengthened in
relation to Europe)
• establishment of welfare states; greater concern with wealth redistribution
• shift in relative power between European states and their colonies
• Was the Cold War at least in part a product of political economy
issues/developments?
• competing political-economic ideologies or systems (capitalism vs.
socialism)?

Security and political economy

• Security structure (definition)
• ‘the overarching framework of material, institutional and ideational resources
in response to perceptions of threat’ (O’Brien & Williams, p.346)
• Cold War security structure (1948-89)
• bipolar international system (US and USSR)
• state-centric and military-oriented understanding of security
• Influence of the Cold War on political economy issues/developments
• military spending -> economic impact
• military-industrial complex
• permanent war eonomies?
• divided world political economy...

Post-1945 world political economy

• Divided into two Cold War systems
• A ‘Western’ capitalist or liberal system centred on the USA
• An ‘Eastern’ socialist or centrally-planned system centred on the USSR
• A decolonised ‘Third World’ located in between or caught up in the Cold War
• A Cold War simplification, but...

The ‘Western’ system

• Established and dominated by the USA
• Key features
• capitalism, liberalism (embedded), legalism, and multilateralism
• Institutional framework
 • International Monetary Fund (IMF)
• International Bank for Reconstruction and Development (IBRD; World Bank)
• General Agreement on Tariffs and Trade (GATT)
• Organisation for Economic Cooperation and Development (OECD) [ex-
OEEC]
• European Economic Community (EEC)

The ‘Eastern’ system

• Established and dominated by the USSR
• Key features
• socialism, central planning, collectivisation of agriculture, and separation
between domestic economy and external economic influences
• Institutions
• Council for Mutual Economic Assistance (CMEA)
• International Bank for Economic Cooperation
• International Investment Bank

‘The Third World’

• Decolonisation
• post-1945 weakness of imperial states
• rise of nationalist anti-colonial movements
• Cold War
• East and West compete for their allegiance
• attempts to develop a more independent position (the non-aligned movement)
• Development
• capitalism vs. socialism (West vs. East)
• attempts to change the institutional framework of the world political economy
• establishment of the United Nations Conference on Trade and
Development, UNCTAD (1964)
• calls for a New International Economic Order (NIEO) in the 1970s
• different development experiences

The post-Cold War world political economy

• Did the Cold War end partly because of political economy issues/developments?
• failure of socialism; success of liberal capitalism?
• desire to harvest a ‘peace dividend’?
• Did the end of the Cold War signal ‘the end of history’ (Fukuyama)?
• at the level of ideas, there can be nothing better that ‘liberal democracy’ +
‘capitalist market economy’
• ‘there is no alternative’ (Thatcher)
• Universalisation of the western liberal political-economic system?

The western liberal political-economic system

• External challenges to the ‘western’ system
• Third World challenge disappeared in the 1980s (?)
• Eastern socialist challenge disappeared with the end of the Cold War (?)
• increasingly opposed by civil society groups and social movements, but...
• is there a new challenge from China/Asia, or the so-called BRICS?
• Internal changes to the ‘western’ system
• management problems (late-1960s-)
 • divisions among advanced industrial states (1970s-)
• shift from ‘embedded liberalism’ to neo-liberalism (1980s-)
• external challenges transformed into internal challenges (1989-)?
• Current crisis in the world political economy (2008-)
• financial -> economic -> ideological crisis?
• end of (neo)liberalism and/or capitalism?
• possible alternatives?

Other developments...
• Varieties of capitalism and transformation of the role of the state
• from ‘welfare state’ to ‘competition state’ to ...?
• developmental states and state/authoritarian capitalism
• Revolution in information and communications technology
• social, political, economic and military impact?
• Growth of international organisations in managing inter-national or global economic
affairs
• the UN-system
• international ‘economic’ organisations
• IMF, IBRD, WTO, OECD, G-system, regional IOs, etc.
• transnational corporate and civic associations

Yet other developments…

• Trade
• Production
• Finance
• Labour

More on security structure and political economy

• Post-Cold War security structure
• unipolar or multipolar international system?
• less state-centric and military-oriented understanding of security
• Civil wars
• connections to globalised world political economy
• Terrorism
• economic impact
• financing (cf. ‘war on terror’)
• socio-economic sources or enabling conditions