This chapter examines the onset of the so-called stagflation and the problems that beset détente during the period 1973–6. In the aftermath of Israel’s victories in the Six Day War, a situation of ‘no peace, no war’ prevailed in the Middle East. Attempts in 1970 and 1971 by the United Nations and the United States to make progress on a peace settlement proved futile. The chapter first considers the Middle East War of October 1973, which sparked a confrontation between the US and the Soviet Union, before discussing the impact of stagflation, especially on the Bretton Woods system. It then explores political problems in Europe and how European détente reached a high point in the Helsinki conference of 1975. It concludes with an analysis of détente and crises in less developed countries such as Chile, South Vietnam, Cambodia, and Angola.
This chapter provides an overview of the field of Global Political Economy (GPE), also known as International Political Economy (IPE). It begins with a discussion of how GPE/IPE has developed as a major focus of study within the broader field of global politics over the last four decades. It then considers the rise of mercantilism as a theory of GPE, along with its relationship to nationalism and colonialism. It also examines the emergence of liberal political economy, Marxism and critical IPE, and the international economic order after World War II. In particular, it looks at the Bretton Woods system, which emerged after the war as a compromise between liberalism and nationalism. The chapter concludes with an analysis of international political, economic, and social problems associated with the North–South gap, globalization and regionalization in the post-Cold War period, and financial crises that rocked the global economic system.
Eric Helleiner and Melsen Babe
This chapter explores the international monetary and financial system, which plays a central role in the global political economy (GPE). Since the late nineteenth century, the nature of this system has undergone several pivotal transformations in response to changing political and economic conditions at both domestic and international levels. The first was the collapse of the integrated pre-1914 international monetary and financial regime during the interwar years. The second transformation took place after the Second World War, when the Bretton Woods order was put in place. Since the early 1970s, various features of the Bretton Woods order have unravelled with the globalization of finance, the collapse of the gold exchange standard, and the breakdown of the adjustable peg exchange rate regime. These changes have important political consequences for the key issue of who gets what, when, and how in the GPE.