international political economy

), European exploration and conquest of new lands led to intellectual debate, starting in France in the 16th century, over which policies would best achieve these ends. Hence, large landowners would solidify their position in a society by reaping the benefits of a captive population of laborers in a system more akin to feudalism than capitalism, but without the internal contradictions that would lead to its transformation. Applied to the substantive domain of global political economy, this approach focuses attention on heteromasculine and cissexist assumptions and biases and the differentialand productiveimpact of processes and policies associated with neoliberal globalization sexualized and gendered subjects, practices, and kinship relations (see article Queer International Relations). This reading both contributes to a reappraisal of the classical tradition and serves as a critique of its contemporary reception in neoclassical economic theory, suggesting a different path for economic studies at large. . [102] According to David Lake,[14][68][121][128], Thomas Oatley has criticized OEP for an overemphasis on domestic political processes and for failing to consider the interplay between processes at the domestic level and macro processes at the global level: in essence, OEP scholarship suffers from omitted variable bias. [41][43][45][46] Factors can be highly immobile, which means that capital-owners and labor who work in a particular sector may have similar interests. Each of these perspectives is often applied to problems at several different levels of analysis that point to complex root causes of conflict traced to human nature (the individual level), national interests (the national level), and the structure of the international system (which lacks a single sovereign to prevent war). The idea had been around for a while. The new trend in the research moves away from this binary orthodoxy (De Graaff, ten Brink, & Parmar, 2020). Review of International Political Economy, Volume 30, Issue 1 (2023) See all volumes and issues. The next section traces the development of the liberal tradition of political economy, including classical political economy, Keynesianism, neoclassical economics, and neoliberalism. Another important Gramscian term is historical bloc, which refers to the dynamic dialectical relationship between the material and productive base and the superstructure of ideas. Copy this link, or click below to email it to a friend. Topics such as the International Monetary Fund, Financial Crises (see Financial crisis of 20072008 and 1997 Asian financial crisis), exchange rates, Foreign Direct Investment, Multinational Corporations receive much attention in IPE. Keohane and Nye (1977, p. 19), in their book on interdependence, took up the issue of regimes as well, referring to them as the sets of governing arrangements that affect relationships of interdependence.. Marx adapted Hegels dialectic to the material world, seeing the contradictions within capitalism driving change, which he expected to lead to revolutionary transformation of society. He was able to add political and cultural conditions to the essentially materialist analyses of longer-term critical history. This class, according to Standing, represents a growing contingent of the global workforce, a verdict corroborated by many empirical studies, especially from a comparative political economy perspective (Agarwala, 2013; Kalleburg, 2018; Mosoetsa, Stillerman, & Till, 2016). Both Gramsci and Polanyi have influenced a cohort of critical IPE scholars, including Robert Cox (1996), Stephen Gill (2003; see also Gill & Mittelman, 1997), Craig Murphy (2005), James Mittelman (2004), and Mark Rupert (2000). Only then should a country trade with others. Consequently, a further contribution of feminist GPE has been to challenge the pervasive association of the study of the global or the totality with a masculine drive to dominance. [42][56][40][57] As a result, the Ricardo-Viner model predicts that class conflict over trade is more likely when factors are highly mobile, but that industry-based conflict is more likely when factors are immobile. Friedrich List, a German scholar and politician who later became a naturalized American citizen, extended Hamiltons argument by emphasizing that states should take advantage of their own human resourcesthat is, the ability of people to produce agricultural and manufactured products through their innovation, hard work, and the natural environment. International economic issues are now 'high politics'. [14], Early modern IPE scholarship employed a diversity of methods and did both grand theory and middle range theory, but over time, the scholarship has become more quantitative and focused on middle-range theories. ", "Globalization and the Decline of the Welfare State in Less-Developed Countries", "Global Markets and National Politics: Collision Course or Virtuous Circle? leaving monetary and banking arrangements to the market would have produced a more satisfactory outcome than was actually achieved through governmental involvement. .] 4162). Whereas the factor model assumes that capital-owners in different sectors have similar trade preferences and that labor across different sector have similar trade preferences, the Ricardo-Viner model holds that in sectors where factors are immobile, labor and capital-owners in one sector may have the same trade preferences. In The Great Transformation, he argued that a double-movement resulted from social forces pushing back against the aspects of a market-driven society. Strange, who could be classified, broadly, as a liberal in her understanding of markets and efficiency, strongly criticized the neoclassical position. These reproductive activities are almost universally associated with feminine characteristics and are not considered by mainstream global political economy analyses. Political economists strive to identify the relevant groups and their interests, and how political institutions affect their impact on policy. Mercantilists are closely related to realists, focusing on competing interests and capabilities of nation-states in a competitive struggle to achieve power and security. . By calibrating the protection properlynot too much, not too littlestates, according to strategic trade theory, can lead to an equilibrium that may be jointly suboptimal, but the protecting country still gains because its firm is able to earn more. Structuralist ideas are rooted in Marxist analysis and focus on how the dominant economic structures of society affect (i.e., exploit) class interests and relations. International political economy This area of study analyses the economic interdependence among various countries, influenced by their political ties. First, he emphasized the alienation of labor as the definitive element in the capitalist system. First, people are gendered, and gender is generally understood hierarchically, with men and activities that are understood as masculine (competing, making money) being valued more highly than women and womens activities. McNally (2020) identifies the source of instability in the contradictions of Sino-capitalism, described as both neoliberal and neostatist and as organized top-down by the state and bottom-up through networks of entrepreneurs. Political economic theory spans the subfields of American politics, comparative politics, and international relations, and therefore complements students' interests in those fields. The French policies then in place of protecting manufacturers from foreign imports and of the government selling the right to tax farming to wealthy citizens thus had a particularly deleterious effect on the economy (Quesnay, n.d.). Milton Friedman similarly argued in favor of letting markets operate without government intervention. Franois Quesnays Economical Table presented a view of economics that placed a strong emphasis on the value of agriculture and the sterility of manufactures (Quesnay, 1968), in contrast to the mercantile emphasis on encouraging manufactures. 536 Pages . Other critical approaches that have emerged in the 20th and 21st centuries include feminist global political economy and postcolonial critiques of liberal and Marxian analyses. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system". [25] National exchange rate policies can be 1. fixed, floating, or a hybrid of the two, and 2. entail a strong or weak currency. During the OPEC oil crisis, the realist-oriented U.S. Secretary of State Henry A. Kissinger found himself unable to understand the issues without the assistance of an economist. Others contest neoliberal institutionalisms empirical validity (Drezner, 2001, among others) and its conceptualization of anarchy (Grieco, 1988). [76][77] Other alternative models to the factor and sector models may explain individual preferences through demographic data (age, class, skills,[78] education,[66] gender[79][80]), as well as ideology[81][82][83][84] and culture. During the Vietnam War, however, a growing decrease in the value of the U.S. dollar and large deficits for the United States in its balance of trade and payments weakened the ability of the United States to conduct and pay for the war, which thereby undermined its relationship to its North Atlantic Treaty Organization allies. The survey aims at a comprehensive picture of the different schools of IPE, both historically and as they have developed in the early 21st century. Indeed, as John Ikenberry (2018) observes, the liberal international order faces grave challenges from resurgent economic nationalisms and social conservatisms. [55], The sectors model of trade, the RicardoViner model (named after David Ricardo and Jacob Viner), challenges the notion that factors are key to understanding trade preferences. This differentiation between the scholars personal beliefs and their analytical stance continues in more recent scholarship. What we were witnessing, they argued, was the development of underdevelopment (Gunder Frank, 1969). He advocated the mechanization of agriculture, industrialization, and technological advance (Prebisch, 1986). (This article omits a full discussion of the development of IPE in the Global South and its engagement with GPE, a topic covered in Deciancio and Quiliconi, 2020). International Political Economy Our Teaching. [. The mercantilist writings of the 17th and 18th centuries, including those of Colbert, Mun, and Hamilton, argued in favor of the state using its powers to increase its wealth. Jacobson and Okensenberg (1990), for example, examined the impact of the participation of China, a developing country with a command economy, in the International Monetary Fund and the World Bank (it had been a member since 1980) and the likely consequences for the global economic order of its signing the General Agreement on Tariffs and Trade. Three of the articles are especially relevant to the GPE aspects of pandemics and other instances of the spread of infectious disease. The division of labor in an industrializing society meant that workers would have no choice but to sell their labor power as a commodity to survive. In addition to this 21st-century political challenge, the liberal tradition has historically been most broadly and deeply challenged by Marxian theories of global political economy. List also developed the proposition that young economies could not compete with more established, more technologically advanced ones until the younger country had invested in developing its domestic industry. Jean Bodin, for example, wrote in 1568 about how the value of specie would fluctuate with supply and demand and warned that government interference would only worsen the situation. Alexander Hamilton, the first U.S. Secretary of the Treasury, provided a Report on Manufactures to Congress in which he outlined steps that the young country should take to secure its economy, especially in opposition to the economic might of other countries. There will be some choice on the exam. [40], The factor model (which has been called the H-O-S-S model) is shaped by the Heckscher-Ohlin model and the Stolper-Samuelsson theorem. Mercantilism is also characterized as a specific conceptualization of the nature of wealth that stresses the critical nature of inflows. International political economy (IPE) studies how politics shape developments in the global economy and how the global economy shapes politics. While in liberal and realist IPE, hegemony simply refers to a single state having a preponderance of power, Gramsci looked at the complex interconnection between the material and productive base of the social order (the structure) and philosophy, ideas, culture, and relationships (the superstructure). Robert Powell (1991), for example, suggests that both structural realism and neoliberal institutionalism are special cases of a single model of states attempting to pursue their interests under conditions of anarchy and constraints imposed by different capabilities among the actors in the system. Further, they did so under the assumptions that efficiency was good and that they understood mechanisms of economics sufficiently to identify good, efficient policies (Williamson, 1993, p. 1330). Another Muslim scholar of this era, Al-Maqrizi (d. 1442) (1994), analyzed governmental policies, including monetary policy. Giovanni Arrighi (1994) summarizes Gramscis definition of hegemony as, the capability of a state to lead the system of states itself in a desired directionthat is, to set the rules for the system in ways that buttress rather than undermine the world power of the hegemon. There is no common good other than that perceived through the interest-tinted lenses worn by the international actors (p. 35). In 1958, John Foster Dulles, then Secretary of State of the United States, referred specifically to interdependence when he asserted that providing development aid and encouraging trade would combine with military security cooperation to prevent developing countries from falling into the Soviet orbit. It proposes to enrich both the people and the sovereign. Immanuel Kant, in his famous essay on perpetual peace, extended the liberal optimism about the beneficial effects of trade. The growing precarity of the global workforce, the subject of the third new direction of research discussed here, has emerged as a grave side effect of the processes of globalization, a reality acknowledged by all the different schools of IPE. As Dani Rodrik (2006) sardonically recounted: Any well-trained and well-intentioned economist could feel justified in uttering the obvious truths of the profession: get your macro balances in order, take the state out of business, give markets free rein. By delinking from the dependent economic relationships that they have with core countries, developing countries could build their own economies. The New Globalization: SMEs and International Trade - The Supply Chain is as Important as Direct Exports. Neoclassical liberalism can be seen in the Washington Consensus, which has led to deregulation of global and domestic economies, decreases in foreign aid, and further reliance on marketization. England should try to produce as much of what it must consume as possible and import as little as possible for its own consumption. [130] Challengers to the OEP framework include behavioral approaches (which do not necessarily accept that individual interests stem from material incentives), and economic geography approaches. [63][64] Other studies find no support for either model,[65] and argue that the models have limited explanatory value. International Political Economy The Study of the Politics of International Economic Relationships. One variant, bullionism, focuses on the desirability of increasing a countrys supply of gold and silver. Ultimately, his policy failed on both counts: the collective farms were unproductive, Tanzania became more dependent on aid from other countries, and the democratic ideals of the movement deteriorated (Prashad, 2008, pp. Guy Standing (2016) has introduced and popularized the concept of the precariat, which he regards as a new stratum of the working class marked by an extreme lack of job security and basic benefits like healthcare and paid time off. [111][112], Economic liberals tend to oppose government intervention in the market when it inhibits free trade and open competition, but support government intervention to protect property rights and resolve market failures. The study of the relationship between economic activities and state interests originated long before the term political economy was coined. It focuses on the interaction between states, markets and societies. In Haass description, international regimes were collective arrangements among nations designed to create or more effectively use scientific and technological capabilities and that would minimize the undesired consequences associated with the creation and exploitation of such capabilities (Haas, 1975b, p. 147; see also Haas, 1975a). Another key contribution of postcolonial theory to political economy has been its critique of Eurocentric epistemologies and its attention to the knowledge traditions and economic formations of the non-West (Agathangelou & Ling, 2003; Blaney & Inayatullah, 2010; Ling, 2000; Shilliam, 2012a, 2020). Feudalisms limits lead to changes that find landowners failing to control their charges, and peasants taking up a new position in the economy. The penultimate section briefly discusses some trends of scholarship in the 21st century, especially moving into the 2020s. Light revision throughout, added discussions of postcoloniality and Covid-19. Rebecca J. Hester and Owain D. Williams (2020) ground their exploration of the political economy of the somatic-security industrial complex, upon influenza and its movement around the world. Wallerstein (2004) understands a world-economy as, A large geographic zone within which there is a division of labor and hence significant internal exchange of basic or essential goods as well as flows of capital and labor. Students of international affairs have followed suit with a revival of academic interest in the complex relationship between the economic and the political in the international arena: hence the resurgence of international political economy. IPE is a field that thrives on the process that Joseph Schumpeter called "creative destruction." Following the end of the Cold War, international political economy became focused on issues raised by economic globalization, including the viability of the state in an increasingly globalized international economy, the role of multinational corporations in generating conflict as well as growth in the new global economy, and various problems related to equity, justice, and fairness (e.g., low wage rates in developing countries and the dependency of these countries on markets in wealthier countries). For example, in 1931, T. E. Gregory criticized economic nationalism, but explained that such policies continued to be implemented because citizens and governments were reacting to six factors. GPE was (and is) often used more or less synonymously with IPE, though IPE approaches usually emphasize the individual nation-state as the basic unit of analysis, while GPE approaches tend to be more holistic, placing states and other kinds of actors within larger structures or the global system. [1][2][3] More precisely, IPE/GPE focuses on global economic governance, through studies of macroeconomic phenomena such as globalization, international trade, the monetary and financial system, international inequality, and development, and how these are shaped by, amongst others, international organizations, multinational corporations, and sovereign states. In Europe, the period of slavery is followed by feudalism, where direct ownership of individuals ends, but peasants are nonetheless tied to the land, which itself can be owned. They are the natural basis for international organizations: and the task is to bring that map, which is a functioning reality, under joint international government, at least in its essential lines. Other scholars have explored how Chinas trade policy is both influenced by and promoted by transnational networks that Chinese elites have entered (de Graaff, 2020; Huo & Parmar, 2020). In this work, Ricardo outlined the theory of comparative costs (comparative advantage), a cornerstone of trade theory to the present day. International political economy majors, like all students within the Edmund A. Walsh School of Foreign Service, develop acute analytical and critical thinking skills. Furthermore, imperialism was the natural result, as finance capital moved to expropriate the raw materials of the colonies. Many, however, see flaws in the theoretical edifice of neoliberal institutionalism. Discusses some trends of scholarship in the Great Transformation, he emphasized the alienation of labor as definitive... 1994 ), analyzed governmental policies, including monetary policy the scholars personal beliefs and their interests, technological! Analyses the economic interdependence among various countries, influenced by their political ties have with core countries, countries... Underdevelopment ( Gunder Frank, 1969 ) click below to email it to friend. 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