Globalization and the International Political Economy
Realism, Liberalism, Marxism and the Phenomenon of Global Integration Introduction Various theories and perspectives have been proposed by theorists and international relations observers in explaining International Political Economy (IPE). The most salient among these perspectives are Realism, Liberalism, and Marxism. These paradigms or ways of looking at IPE enables international relations students to study the forces at work in the international realm and analyze how these factors interact to create the state of affairs of the IPE.
Through these perspectives, people can also take a look at how human nature, individuals, society, states, and markets relate to the economy and how they make it work. This paper presents an overview of three significant theories in international relations—Realism, Liberalism and Marxism and how they view the phenomenon of global integration. While Realism is the oldest of the three theories and Marxism is the youngest, Liberalism is the most influential today. Global integration is a phenomenon in international relations that has come to the fore in recent decades.
As such, the three lenses of Marxism, Realism, and Liberalism diverge upon different factors and elements affecting global integration. These three theories therefore give varying thoughts and principles on the areas of development, trade unions, international organizations, multinational corporations, international crime, and the sovereignty of states versus the globalized economic process. In order to better understand how these conceptions of international political economy can explain global integration, it would be necessary to understand each paradigm and how one is different from the rest.
Through this understanding, a student can get a good grasp of what each theory is all about, what are its explanatory strengths and weaknesses, how useful is the theory in explaining phenomena in international political economy and what kinds of developments to look for in the international relations field. Their differences can also be highlighted so as to get a comparative understanding of which theory has better explanatory utility. Realism Realism is perhaps the oldest among the three views in International political economy. It used to be called statism and mercantilism when it was in its early stages of development.
Its rise as a theory coincided with the advent of big powerful sovereign states that in the fifteenth century. During those times, these states protected their own interests in dealing with other states and governments. Protectionism, therefore, was their economic policy. The main intention of these states was increasing wealth, power, and protecting their own national interests. They viewed other states as competitors and downright enemies (Doyle 44). National interest also coincided with political and economic power so as to secure the nation against threats from the outside.
Economic power helped these states secure their territories because it fueled their economies, provided employments and helped them sustain an army that would A national interest where state economic policy must meld with power. Because it is economic power that wins trading wars, defeats blockades, staves off pirates and enables the nation to continue to industrialize and promote employment (Doyle 50). There are a number of theories that fall under the collective category of realism. Yet, these theories share common assumptions and viewpoints in looking at international relations.
The international system has no law enforcement agency or a legal governing body. Hence, it is characterized by anarchy. As such, the states involved in the international realm should arrive at relations and agreements by themselves. No higher authority will make it happen for them. Given the anarchic situation of the international arena, the sovereign states are the main actors and movers. Although there are multinational organizations and non-government corporations operating worldwide, they still could not perform the role of the independent states (Doyle 51).
Each state in the international is motivated by national interest. As such, they are rational actors that are seeking to maximize their interest. Given this, they will only cooperate or ally with others if they perceive that the national interest is at stake. But on the whole, they are distrustful of such alliances. In being “rational actors”, states are always looking out for their national security and gather resources and economic power. Another important factor in the relationships of states is the level of their power as evidenced by military capabilities and level of economic progress.
Lastly, there are really no universal and overarching principles that states can use in order to govern their actions. The only motivation that they may have is a pragmatic approach to international affairs (Doyle 60). Realism has stood a lot of challenges, especially with the advent of globalization and the emergence of groupings of states such as the European Union. With the trends of global integration, Realist theorists are looking for ways to reinterpret their assumptions and their findings so as to become meaningful in a world that has become enamored with integration and cooperation.
The view of realism on global integration will be explored further in a latter section of this paper. Liberalism Liberalism is currently the most influential theory in the field of international political economy. It is not only concerned with political power but also with the way that the world market operates; how they are created and how to better facilitate them. They do this under the presumption that individuals act in rational ways to maximize their interests and that markets prosper when liberalized from government rules and regulations.
Liberalism differs with realism in as far as it allows other forces to determine the actions of states. Realism views states as unitary actors; liberalism views plurality as a part of the behavior of states. Furthermore, the interaction among states is not only dictated by power and politics, economics is also part of the agenda. The decisions of states may be easily influenced by culture, by the types of government or the prevailing economic system. In this regard, cooperation and interaction among states is not impossible, it may also help each state achieve peace and order.
In this state of affairs, the international system becomes less anarchic and becomes an arena of cooperation among states. Some liberal theorists hold that the international system provides avenues for integration even without the need for international organizations. This way, states can find reasons to cooperate together and maximize their national interests. The recent integration of the European Union and the proliferation of free trade agreements seem to bolster this argument. Another branch of liberalism, however, holds that states can only cooperate with the help of international organizations such as the United Nations.
This is somehow related to the way that open markets operated. States will cooperate and trade according to their comparative advantage which is an advantage to produce products more efficiently than other states. This enables countries to focus on what they are better at producing and import products that they are rather inefficient at making. From another perspective, the states are also looking to maximize their own national interests except that they do not necessarily see the other states as enemies. If they maximize their own national interests, they can do it by cooperating with another country.
This way, both of their national interests may be maximized. In a manner of speaking, this means that both states win. With liberalism, cooperation is maximized and protectionism is minimized. This is founded on the concept of comparative advantage and market efficiency. The more trade occurs between and among the countries, the more everyone prospers. This way, conflicts are also minimized. With this in mind, liberals tend to minimize the involvement of states in the open markets. This is because they believe that the non-state actors can also help facilitate cooperation and integration.
Protectionism tends to be subscribed to by realists and by Marxists. Marxism Although Marxism was derived from the ideas of Karl Marx, there are now a number of theories that fall under the aegis of Marxism such as structuralism, radicalism, Maoism, Leninism, Stalinism, and dependency theory. The significance of Marxism as a theory became noted by the whole world in the aftermath of World War II and during the Cold War between the United States and the Soviet Union. Before the demise of the Soviet Union in 1991, Marxism was viewed as the major contender to Liberalism.
Marxism deals with the issue of the equitable distribution of wealth and resources, not only among the peoples in a particular country but also in the international arena. For the Marxist theorist, capitalism is the worst international economic system. This is because the wealth of the rich nations is acquired at the expense of poor and developing states. The issue of economic power in international relations is of utmost importance. More than that, wealth should be distributed evenly among the rich states and those that are still developing.
This inequality in the international realm is what Marxists are advocating against. This inequality is also a big source of conflict in international relations. Marxism rejects the points of view of both Realism and Liberalism. The focus instead is on the economic inequalities among states in the world. The concept of class is also highlighted in this paradigm. For the Marxist theorist, the wealthy nations have accumulated their capital through colonization. On the other hand, decolonization enabled them to create an international system of dependence.
Marxism has received widespread acceptance in most of the developing world but not in the developed countries. An offshoot of Marxism called Dependency theory developed in Latin America. This is considered as the most popular Marxist view today. This theory holds that developing states are much too dependent on developed countries for their economic capabilities, infrastructure, and even finished products. This is seized upon by capitalist states by taking away their raw materials, processing them and giving it back to these developing countries in the form of finished products.
As this cycle continues, the dependence of developing countries on developed ones becomes deeper. The developing states will not be able to move away from this relationship of dependence without radical social change. If this radical change were to be accomplished, industries and agriculture should be developed within the countries. Marxists espouse creating the situations for this radical change all over the world. This means that the process of distributing wealth in the international economic system should be changed.
Pure Marxists are no longer very popular in contemporary times because they contend that feudalism will move to capitalism and capitalism will move to socialism in due time. Each move from one economic system to the next, however, would entail radical social conflict. During the Cold War, Marxists believed that the world is moving towards a socialist world order, thanks to the efforts of the Soviet Union and other socialist states. This did not materialize though and what happened instead is the dissolution of the Soviet Union and the move of China towards state capitalism.
In the twentieth century, the world witnessed the increasing integration of countries all over the world. The European Union is the primary example of this. In addition, there arose a number of free trade agreements between and among countries. Furthermore, the United Nations and its instrumentalities and other agencies have been elevated to the fore. As such, states have found themselves on an international arena that seeks greater integration. The twenty-first century also witnessed the global rise of terrorism and the emergence of a new kind of international warfare. Would global integration be good for international relations?
In order to answer these questions and understand the mechanics of the phenomenon of global integration, the three theories of Marxism, Realism, and Liberalism need to be understood as they wrestle with issues development, trade unions, international organizations, international crime, the environment and the sovereignty of states versus the international economic process. Will the state remain as the central player as claimed by Realists, will international organizations and cooperation rule international relations as Liberalists say or will questions of political and economic power as Marxists saw them be the dominant explanatory theory?
These are important questions in order for a serious student to understand emerging trends and issues in international relations. Global Integration Issues The discourse of global integration is being made in the context of globalization where states can no longer exist by themselves. This means that states should be on the look out on how they should cooperate with other states in pursuing their own national interest and goals. One glaring issue in global integration, however, is the development gap. It has also been called the “North versus South” Divide and the “Washington Consensus versus the rest of the world. This gap between rich and poor nations is a perpetual source of difficulty in integration. Economic development is usually measured by income, gross domestic product, or income per capita. Marxism and Liberalism have a better take on this issue than Realism. Although Marxists and Liberals take a look at this divide, they take a look at different things. Liberals would look at the way that the development gap is transitioned, how big it is, and whether it is increasing or decreasing. Poverty, Dependency and the Challenge of Economic Integration
Liberalism lauds the fact that gross domestic product and income has increased over the years and poverty has decreased in developing countries due to increased trade. Liberals state that economies that are open to trade grow faster. “…Openness to international trade is indispensable for rapid economic growth. Indeed, few developing nations have grown rapidly over time without simultaneous increases in both exports and imports, and virtually all developing countries that have grown rapidly have done so under open trade policies or declining trade protection” (Panagariya 20).
What liberals are after therefore is the parallel development of nations and the uplifting of the quality of life of nations. Liberals argue that openness to international trade would help reduce poverty and facilitate the rapid economic growth of countries. If it is any indication, countries in Asia have developed recently and opened to international trade. This can be seen in the experience of Hong Kong, South Korea, Taiwan and Singapore. As a result of their liberal economic viewpoint, they were able to reduce poverty significantly, and now they are one of the most progressive countries in Asia.
There are also states that remained closed to international trade during the 1960s and 1970s. These countries failed to develop their economies and they remained mired in poverty (Panagariya 22). For liberals therefore, economic progress is clearly an important factor for global integration. Recently, the World Bank has conducted a study comparing two groupings of developing countries. On the one hand are the “globalizers” composed of states that decided to open their economies to international trade. According to the World Bank study, these countries were able to increase their GDP in the last two decades.
This has been through the sharp cuts on the tariffs on their imports. On the other hand, the non-globalizers have continued to uphold a policy of protectionism and anti-globalization. As a result of this, their trade-to-GDP ratio has declined in the past two decades. If states would consider their options in the international realm, therefore, it would seem that their best option would be to open up their economies for greater integration in the world economy (Bernanke 4). Marxism, however, has another perspective in this. Marxists contend that development gap is widening and poor nations are becoming poorer still.
If the economies of Africa, Bolivia and other Latin American countries were to be considered alongside that of the United States and European nations, then the wide gap would be noticed right away. In this regard, Marxists make their case concerning the evils of dependence and why global wealth redistribution would be the answer to this economic disparity. A number of economies are controlled by ethnic minorities, who hold wealth and power in developing countries. Because of this, the wealth inequality within the nations is exacerbated and the situation reflects the global relationship of states.
This inequality is due to capitalism. This also contributes to the development of powerful forces that are at work in the world today such as democracy, markets and ethnic hatred. The members of the rich elite in developing nations also tend to come from the descendants of colonizers in these countries. This might also represent a challenge to global integration (Chua 4). Ironically, the greater majority has lesser power than the rich and powerful minority. Yet, this domination of minorities undermines the free-market economics of a democracy.
War, Terrorism and Realism Another challenge of global integration is the existence of war, intense conflict and global terrorism. Anti-American sentiments seem to be a growing problem in Asia and other parts of the world. One of the causes of this is the diffusion of democracy and free markets. Conservative cultures and religion cringe as they perceive American goods and values as invading their cultural mores and their countries. In addition to this, the wealth and dominance of the United States are looked upon with derision (Chua 5).
Ironically, democracy has empowered peoples’ groups and movements in expressing their discontent and their concerns in their situation in life. As such, they can freely express their own sentiments and views against their governments and the dominant states of the world (Chua 4). These anti-American, anti-West sentiments were taken to extreme acts by religious extremist groups. For liberals, however, the answer to these challenges is for more markets to be open up to global integration and for democracy to spread more (Chua 5). Marxists and the Apparent Demise of Capitalism
The spread of free markets and democracy may be looked upon by Marxists as bringing about the own demise of capitalism. This is because in most cases, free market economies usually reinforce the gap between the rich and the poor within a given territory. Yet, with democracy, they can more easily express their discontent and organize for various purposes. If this situation remains unchecked, it may escalate such that violence may be instigated by marginalized groups (Chua 5). In the international realm, this is also a cause of Marxists.
The inequality of the states may also precipitate such kind of situation on a global scale because of the perceived inequalities. Developing countries, however, can do no more than stage feeble military attacks because of their lack of capabilities. Yet, attack they will because the United States represents the hegemony in the world international stage. By attacking America, the marginalized countries of the world are in fact attaching the very idea of how the international realm should be run (Finnegan 2). Marxists also deride the concept of free trade, which has become the trump card of liberals in international relations.
Free trade is not really free but is just one of the tools of the dominant countries to subjugate developing countries and perpetuate power relations in the international realm. The practice of free trade is in fact selective. Most of the time, it follows the will of the developed nations. As such, the maximum benefits of free trade are enjoyed by the developed countries and dependency is further exacerbated and the poor countries cannot have dominance in the international arena (Finnegan 3). Conclusion Global integration is being made possible by the increasing number of free trade agreements all over the world.
The North American Free Trade Agreement, the European Union, and the ASEAN Free Trade Agreement among others are all examples of this. These are important offshoot of liberal thinking that greater cooperation and removal of protectionist regimes will be the road that states will take. The world, however, saw the failure of the multi-lateral free trade agreement under the World Trade Organization. Although liberalism principles were the bases of these free trade agreements, Realist theorists seem to have won the issue on global integration. With the collapse of the World Trade Agreement, the states are now acting on their own again.
They are maximizing their national interests and they are overtaken with mistrust and unwillingness to cooperate with others. Yet, on the other hand, Marxists will also point out to the influence of disgruntled farmers and protesters in the South Korean rounds of WTO negotiations. Realists are right in saying that states are always on the lookout for their own interests. However, the influence of multinational organizations and other non-state actors cannot be undermined in the international arena. What happens in the realm of international relations, therefore is more of what the Liberals have perceived.
However, state actors still act based on an understanding of their own national interest. Yet, the influence of non-state actors is still felt in different areas of state-to-state relations. With the developments in international relations, the centrality of the state will still be felt.
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