Lecture 20: 19Lecture 20: 19thth Century ReduxCentury Redux

May 12, 2010May 12, 2010

THE CHINESE 21st CENTURY? AN THE CHINESE 21st CENTURY? AN EVENING WITH MARTIN JACQUES:EVENING WITH MARTIN JACQUES:"When China Rules the World: The "When China Rules the World: The Rise of the Middle Kingdom and the Rise of the Middle Kingdom and the End of the Western World"End of the Western World" Thursday, May 13 Thursday, May 13 7:00 - 9:00pm 7:00 - 9:00pm Walker-Ames Room, Kane Hall Walker-Ames Room, Kane Hall University of Washington, University of Washington, SeattleSeattle Free and open to the public Free and open to the public

Peace Dividends from End Peace Dividends from End of Cold Warof Cold War

US defense cutsUS defense cuts Proliferation of democraciesProliferation of democracies End of (some) 3End of (some) 3rdrd world civil wars: world civil wars:

Mozambique, Angola, El Salvador, Mozambique, Angola, El Salvador, NicaraguaNicaragua

End of apartheid in South Africa End of apartheid in South Africa (1994) (1994)

Israeli-Palestinian Peace Process Israeli-Palestinian Peace Process (1993-?)(1993-?)

The 1990s in RetrospectThe 1990s in Retrospect A taste of what might have been without Cold A taste of what might have been without Cold

WarWar Unprecedented growth (US grew 27% 1990-98)Unprecedented growth (US grew 27% 1990-98) Focus on economics, unfocused foreign policyFocus on economics, unfocused foreign policy Dark clouds on the horizon (“rogue states”, civil Dark clouds on the horizon (“rogue states”, civil

wars, AIDS in Africa)wars, AIDS in Africa) Democrats: peace, prosperity, US soft powerDemocrats: peace, prosperity, US soft power Republicans: 1992-2000= “holiday from history”Republicans: 1992-2000= “holiday from history” Future historians: The limbo period sandwiched Future historians: The limbo period sandwiched

between the Cold War and Terror War between the Cold War and Terror War

GlobalizationGlobalization ““Movement of goods, people, and capital across Movement of goods, people, and capital across

national boundaries”national boundaries” End of Communism, rise of free markets End of Communism, rise of free markets Cheaper communication and transportationCheaper communication and transportation

Good Good Comparative advantageComparative advantage ““Rising tide lifts all boats.”Rising tide lifts all boats.”

BadBad Erodes power of governmentsErodes power of governments Bad for labor, environment (“race to the bottom”)Bad for labor, environment (“race to the bottom”) Distributional consequencesDistributional consequences Globalization of crisisGlobalization of crisis

Globalization BacklashGlobalization Backlash

Return to 19Return to 19thth Century Century but with New Players?but with New Players?

European UnionEuropean Union Coal and Steel Community Coal and Steel Community European European

Community Community EU EU Why?Why?

Prevent warPrevent war Economic efficiencyEconomic efficiency Balance against USBalance against US

1992 Maastricht Treaty 1992 Maastricht Treaty Euro Euro Common market, common currency, visa-Common market, common currency, visa-

free travel, harmonized laws, common free travel, harmonized laws, common norms/human rightsnorms/human rights

Expanded 5 times; largest in 2004Expanded 5 times; largest in 2004

European UnionEuropean Union Coal and Steel Community Coal and Steel Community European European

Community Community EU EU Why?Why?

Prevent warPrevent war Economic growth Economic growth Balance USBalance US

Common Market, Visa-free travel, harmonized Common Market, Visa-free travel, harmonized laws, common norms/human rights, social laws, common norms/human rights, social protections, Europrotections, Euro

Expanded 5 times; largest in 2004Expanded 5 times; largest in 2004 ProblemsProblems

Backlash against enlargement…what about Turkey? Backlash against enlargement…what about Turkey? National interests firstNational interests first Punches below its weight internationallyPunches below its weight internationally Solution? Lisbon Treaty (EU “president”, “foreign Solution? Lisbon Treaty (EU “president”, “foreign

minister”)minister”)

““BRIC” CountriesBRIC” Countries

““BRIC”BRIC”

Secrets of the BRIC Secrets of the BRIC CountriesCountries

Liberalization of economyLiberalization of economy Lower trade barriersLower trade barriers Investment in human capitalInvestment in human capital (Relatively) effective government (Relatively) effective government

China Enters the World China Enters the World EconomyEconomy

Mao’s disastrous policiesMao’s disastrous policies Deng Xiaoping’s gradual reformsDeng Xiaoping’s gradual reforms GDP increase 1976-2006: $150 billion GDP increase 1976-2006: $150 billion

$2.2 trillion $2.2 trillion Consumes one-third of world’s iron, Consumes one-third of world’s iron,

steel, coalsteel, coal Foreign exchange reserves: $2.5 Foreign exchange reserves: $2.5

trillion trillion