Tagged: IPE

Mathis Lohaus

Marginal Costs in Intl. Affairs

Zero Marginal Costs SocietyLast week, Jeremy Rifkin presented his current book here in Berlin. In The Zero Marginal Costs Society, he argues that the marginal costs of production in many sectors are moving (close) to zero, leading to economic shifts on the scale of the industrial revolution. Three forces make this possible according to Rifkin:

  • a truly integrated global internet (communication + logistics + sensors)
  • abundant renewable energy
  • 3D printing as extremely cost-efficient mode of producing physical goods

No matter how you think about the details of Rifkin’s predictions, he makes persuasive points on what very low marginal costs can entail. This is obviously true for the areas he addresses (the economics of production, welfare, labor, automation, consumption).

But in addition,  marginal costs are worth  attention when we think about international relations and and transnational political affairs more generally:

  • If we buy Rifkin’s arguments, IPE scholars and others who care about economic power and growth prospects will put less emphasis on traditional metrics of factor endowments. If the Netherlands are just much better at making use of renewables than Russia, size is a bad predictor of success. How do you model something like the political will to embrace the future?
  • The marginal cost of reaching one more pair of eyes applies to political mobilization. No matter how high your PR budget, you can reach millions of potential recruits if you’re willing to be excessively cruel and upload an execution video. And how does having a single “viral” idea (involving buckets of ice) measure up against having a more traditional structure of supporters?
  • I’ve covered intelligence activities here on the blog, in particular the  large-scale surveillance conducted by the NSA and other agencies. Consider the logic of technology-driven surveillance: The marginal cost of targeting one more person is virtually zero. Keeping that person’s data for one more unit of time is free. And there is no physical or technological limit in sight.
  • Similarly, I suspect that “cyber war” skills probably scale at close to zero marginal costs. Once you managed to infiltrate a crucial bit of IT infrastructure (and still have plausible deniability to mitigate political repercussions), deciding about the amount of damage you want to inflict will not be a matter of costs.

I’m sure there are many more examples. And if you’re willing to bear the cost of adding one more book to your reading list, consider Rifkin’s.

Salvador Santino Jr Regilme

Democratic Consolidation and the Global Political Economy

santino

How do we promote regime stability especially in the Global South? In the current issue of International Studies Perspectives, I argue that the life expectancy (or stability) of nominally electoral democratic regimes in the developing world is highly contingent upon responding to the material needs of its people, and maintain that material distributive issues within those countries are highly dependent upon a given regime’s position within the broader global political economy. The article is highly theoretical, and it is inspired with a critical political economy perspective.

Perhaps one of the principal messages of the article is that regime stability in the Global South necessarily depends (but not sufficiently) upon carefully addressing issues of material distribution within those countries. In praxeological terms, regime distribution is not a task that can be solely done by the national institutions themselves, but perhaps by transforming the over-all structure of the current global political economy. In academic terms, regime stability (and in this case, democratic consolidation) is a subject of scholarly investigation that should bring scholars of comparative politics (who tend to be ‘methodological nationalists’) and international relations into one discussion table. The article explains these theoretical points in much detail, and make some illustrative examples in order to reinforce those arguments.

The article was written in 2010 to 2011 during my Master’s studies in Osnabrück, and it underwent several stages of peer-reviewed revisions since then until its acceptance in International Studies Perspectives in 2013. Indeed, the article is highly pessimistic of the future of the current neoliberal democratic regimes in the Global South, and quite radical in terms of its criticisms of the moral failings of the global political economy (as well as the academic scholarship that underpins it). In retrospect, however, I now tend to reconsider those arguments I’ve made in this article with much caution and intellectual humility.

While my long-term research agenda still focuses on the transnational-domestic linkages that produce local political change in the developing world, I am more predisposed to more empirically driven (but theoretically grounded) research, rather than theoretical musing as exhibited in the current article. Notwithstanding, I invite readers to read the article (contact me by email in case you don’t have online access), and to engage in a productive and critical discussion about the points raised (and not raised) in the article.

Finally, interested readers might also consider other highly recommended works on the topic:

Mathis Lohaus

Links: Big Topics in IR; International Currencies; The Middle Class Is Not What It Used to Be

braumoeller

Phil Arena recommends Bear Braumoeller’s new book Great Powers and the International System. Not just because it’s good, but as a role model for grad students in IR:

[This book] offers a great example of a dissertation (or a project that began its life as one, at any rate) that speaks to questions lying at the center of the field. Yes, you can write Bad Pun: The Thing That’s Happening Now and How None of The Big Names Have Anything to Say About It, 1990–2008. But you could also think a little bigger.

 

Dan Drezner wonders if the recent almost-shutdown of the U.S. government will trigger financial counter-balancing, as IPE realists have been predicting for quite some time:

The question is whether it’s worth being dependent on a growing economy that’s so politically unreliable.  So now we’re gonna see whether incipient U.S. rivals will start making the necessary down payments to act on their increasingly justified complaints.

As Benjamin J. Cohen suggested in a talk here at Freie Universität a couple of months ago, what keeps the dollar strong might be the lack of alternatives (rather than the inherent qualities of the global key currency #1). Drezner says we’ll see soon enough which side is right, but I have the feeling that in the absence of clear predictions or thresholds (how do we know “the end of the dollar” when we see it?), this dicussion will drag on for decades.

 

Speaking of money, and considering that this is a blog written by relatively young people, allow me to point to a non-IR topic: “We’ll never have it so good again.”

Well, in August 2011, [my parents’] former home was placed on the market. The asking price was £2,475,000. So a house that had once been affordable by a young, middle-class couple was now being aimed at buyers who were, by any normal standards, very rich indeed. (…) A similar process of exclusion has taken place in education. (…) So my father went to Eton. I went to Eton. And my son goes to Bishop Luffa Church of England comprehensive.

Of cource, these are still nice problems to have compared to most people, and many aspects of social life are certainly better than a couple of decades ago. Yet the overall trends regarding income and wealth in the rich parts of the world, which I’ve covered here earlier, look worrisome basically for everyone below of the very top of the pyramid.

Mathis Lohaus

“The Euro will never succeed, and it will never fail.”

"Please find me the most generic euro image you can think of!" Source: Wikimedia
“Please find me the most generic euro image you can think of!” Source: Wikimedia

On Friday, Benjamin J. Cohen gave a talk at FU Berlin. Cohen, who is a professor of International Political Economy at UC Santa Barbara, is probably most famous for his work on the Geography of Money. He was invited by the KFG and the International Research Training Group “Between Spaces” to talk about the future of the euro as an international currency.

As the somewhat pessimistic title of the lecture – “The Euro Today: Is There A Tomorrow?” – suggests, this was not meant to be a pep talk for worried Europeans. In fact, Cohen’s short answer to his own question is: No, the euro will not bounce back from its current crisis, but instead face a “long, lingering slide into marginality”.

First, some preliminaries: Cohen was not talking about the future of the currency as such, but specifically about the euro’s role as an international currency: To what extent will it be used by non-members of the eurozone – not as a substitute domestic currency (“dollarization“), but for international purposes? More technically, the question is about the use of a currency as a unit of account, store of value, and/or medium of exchange.

To put it short, the argument here is that the euro is nowhere close to the dollar both in scope (which functions it fulfills) and in domain (where / by whom it is used).

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