INTERNATIONAL POLITICAL ECONOMY :
The global economy affect matters is through the impact it has on the items we consume. Because of international trade grocery stores can keep a wide variety of fresh fruits and vegetables in stock throughout the year. When we shop for clothing we find that global production and increased trade in the apparel industry have helped to reduce the prices that american shoppers pay for clothing and footwear. The global economy thus makes the consumers in us better off by reducing the prices of the goods and services we buy and expanding the range of choices we have. Living in a global economy also means that global economic forces play a much larger role in determining many of our career opportunities today than they did a few decades ago. The opportunities to find work in a service industry and in high technology has increased dramatically every year. Medical care, Computer design, Internet-based business, Biotechnology, Finance and High-technology manufacturing industries all have emerged as large growing employers of all over the world. Thus, the opportunities available today are far different today than they w
ere a quarter-century ago. The global economy played a central role in bringing about these changes. International Political Economy (IPE) studies how political shape developments in the global economy and how the global economy shapes polities. It focuses most heavily on the enduring political battle between the winners and the losers form global economic exchange. Although all societies benefit from participation in the global economy, these gains are not distributed evenly among individuals. Global economic exchange raises the income of some people and lowers the income of others. The distributive consequence of global economic exchange generates political competition in national and international arenas. IPE studies how losers from global economic exchange shapes the evolution of the global economy. Historically theories of IPE have been developed in three broad schools of thoughts
(i) Mercantilism
(ii) Liberalism and
(iii) Marxism
(i) Mercantilism:
Mercantilism is rooted is 17th and 18th century theories about the relationship between economic activity and state power. The mercantilism literature is large and varied, yet mercantilists generally do adhere to three central propositions
(a) First, the classical mercantilists argued that national power and wealth are lightly connected. National power in the international state system is derived in large part from wealth.
(b) Secondly, the classical mercantilists argued that trade provided one way for countries to acquire wealth form abroad. Wealth could be acquired through trade, however only if the country ran a positive balance of trade, that is if the country sold more goods to foreigners than it purchased form foreigners.
(c) Third, the classical mercantilists argued that some types of economic activity are more valuable than others.
(ii) Liberalism:
Liberlism emerged in Britain during the 18th century to challenge the dominance of mercantilism in government circles. The liberlism challenged all three central propositions of mercantilism. Liberalism attempted to draw a strong line between politics and economics. Liberalism argued that the purpose of economic activity was to enrich individuals not to enhance the states power.
(iii) Marxism:
Marxism originated in the work of Karl Marx as a critique of Capitalism. Accordingly to Marx, capatilism is characterized by two central conditions: the provide ownership of the means of production (or Capital) and wage labor. Marx argued that the value of manufactured goods was determined by the amount of labour used to produce them.
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