midterm exam

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A/ We have discussed Liberalism, Mercantilism/Nationalism, Marxism and Christian Social Thoughts are theoretical schools of IPE . Explain the evolution of either GATT or International Monetary Regimes for each theoretical school by identifying:
1. For each theoretical school, what are the most important actors and what are interests/ preferences/ goals of the actors?
In the discipline of International Political Economy, there are four main schools of thoughts that are often at odd with each other. While Liberalism identifies individuals or private firms as the most important actors and maximizing individual wealth as a main interest, Mercantilism identifies the states as the main actors in the economy and maximizing the state’s power through self-sufficiency as the main goal. On the other hand, Marxism rejects the view of both Liberalism and Mercantilism. Marxism identifies the capitalist class as the most important actors with the goals of maximizing class interests. The Christian Social Thought rejects the views of Liberalism, Mercantilism and Marxism. Christian Social Thought focus on the religious institutions as the most important actors while identifies the promotions of common good as the main economic goals.
Liberalism views actors as independent, atomistic, and individualistic entity. Actors are assumed to have interests and pursue those interests rationally. Furthermore, in Liberalism, actors are assumed to be equal with equal opportunity. There is an assumption that resources are limited. These assumptions about the actors in the market set the foundation for actors’ behaviours in the market. In Liberalism, property rights are the essential. Liberalism identifies individuals as the most important actors in economic ac...

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...igher than property law. In the argument of Christian social thoughts, the workers and the capitalist have rights and duties to each other. The Christian argue that just wage and just price is the center of the economy. Thus, the goals of the actors are not to maximize benefits but to promote common good of the society. It also condemns the thirst for power in the mercantilist theory. The Christian social thought rejects the idea that market can adjust itself because market is a human institution which is less than perfect. Since the state’s role is to promote the common good, it is important for the state to intervene in the market. However, the most important actor in the economy is the church because the church provides moral guidance for individuals who are active member of the market. Thus, the most important boundaries in the market are one set by the church.

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