World Views – Part 1 The Filters By Which We View the World Linda Young POLS 400 International Political Economy Wilson Hall – Room 1122 Fall 2005.

World Views – Part 1

The Filters By Which We View the World

Linda YoungPOLS 400International Political EconomyWilson Hall – Room 1122

Fall 2005

Linda Young, POLS 400, International Political Economy

Liberal, Realist, and Historical Structuralist Perspectives

Each have analytical and normative components– Analytical component (how it helps us understand the world)– Normative component (commitment to a value)

Economic Liberalism: based on a commitment to a market economy

Cannot be disproved or proved by empirical research

Realism: commitment to the nation state and the use of the nation state as a unit of analysis– Gilpin is a state-centric realist, using its analytical capability to understand the world, but his normative commitment is liberal in nature

Structuralist: structure determines outcome– Includes Marxism, dependency theory and world systems theory

Linda Young, POLS 400, International Political Economy

State-Centric Realism

Recognizes the central role of the state, security and power in international affairs

Anarchic nature of the international system– Does not mean constant warfare – means that there is no higher authority that the state can appeal to in times of trouble

Primacy of the state in international affairs– Principal actor – No body sovereign over it

Central concerns of the state are military security and political independence – power and power relations are important – but power can be military power, economic power, or political power

Linda Young, POLS 400, International Political Economy

Other Actors

Firms and multilateral organizations

But, “the economic and foreign policies of a society reflect the nation’s interest as determined by the dominant elite of that society”

Linda Young, POLS 400, International Political Economy

How Did This Perspective Develop?

Contributed to the development of the state by emphasizing central state authority vis-a-vis external forces– Power and wealth legitimate goals of the state– Power achieved through the accumulation of gold and silver– Unification of territory through emphasis on the state

Promotion of exports – restriction of imports– Trade as a zero-sum game

Mercantilist Period: Europe 15-18th centuries

Linda Young, POLS 400, International Political Economy

Economic Policies Following Mercantilism

Ideas and Consequences about Gold

But not all countries can run trade surpluses

Trying to can lead to “beggar thy neighbor” policies (critique by Adam Smith) Example is the interwar period Declined in post-WWII (liberalism strong then)

Much evidence in trade negotiations today – free trade theoretically best unilaterally, but counties won’t

Zero-sum world with states concerned with absolute gains and losses

Linda Young, POLS 400, International Political Economy

Economic Nationalism as a Form of Mercantilism

Focused on the development of the domestic economy – key concern the relationship between economic power and political power– State must assist in development– Give subsidies to domestic industries to help

them compete

Examples? Newly industrializing countries (NIEs)?

From Alexander Hamilton to Ross Perot andthe “giant sucking sound”

Alexander Hamilton

RossPerot

Linda Young, POLS 400, International Political Economy

Neo Mercantilism

Government promotion of their industries

The same idea – just new clothing – less visible forms of promoting domestic industry

Lessen dependence on oil imports

Realism had a resurgence in the late 1970s-80s – Disarray due to ending of the cold war

and also the uncertainty in the world economy

Linda Young, POLS 400, International Political Economy

Assumptions of Realism

1. States are the major actors in international affairs

2. States behave as unitary rational agents that act to protect their vital interests

3. International anarchy is the principal force shaping the actions of states

4. States in anarchy are preoccupied with power and security, are predisposed toward conflict, and often fail to cooperate even in the face of common interests

5. International institutions affect the prospect for cooperation only marginally

Linda Young, POLS 400, International Political Economy

Gilpin

Realism is an analytical perspective not a moral commitment to the nation state Realist some regret lack of restraint on the

state and lack of moral commitment Difference between realism and

nationalism: Realists paint a picture of what they see without endorsing it

Robert Gilpin

Linda Young, POLS 400, International Political Economy

USA

Great Britain

Hegemonic Stability Theory

Two hegemons in Western history: Britain (19 century) and United States (post WWII)

Hegemon when there is an extremely unequal division of power

International system most stable when a dominant power is willing to pursue policies to create and maintain a liberal economic order and when it is powerful enough (controls enough resources) to do so

Without a hegemon, more difficult to maintain an open trading regime

Other factors can accountfor an open trading regime

Linda Young, POLS 400, International Political Economy

Consequences of Hegemony

Necessary, sufficient, for an open and stable world order?

Creates international regimes: sets of implicit or explicit principles, norms, rules and decision making procedures for a particular area – US endorsed an open trading system (but not an open financial system, not agriculture nor textiles)

Debate over the importance of declining hegemons to the decline of regimes

Perhaps a world with states of equal power could negotiate better regimes

Linda Young, POLS 400, International Political Economy

Liberalism (liberal/liberty- same Latin root)

Immanuel Wallerstein

US Declaration of Independence Reaction to abuses by the state and the church

US Declaration of Independence

NOT a political perspective as commonly thought with an active role for the state in helping the poor

Liberalism defined by belief in freedom under the law, individual rights and free markets

Wallerstein: liberalism began with the French Revolution with the idea of political change and need for the state to be legitimated by the people – conservatives resisted that – so for minimal state and individual liberty

Long history of condemning the role of the government in the market

Linda Young, POLS 400, International Political Economy

Liberal View of Society

Society and economies constructed so that individual initiative is critical

Positive-sum game – the free market Free market as an essential part of the liberal society

– invisible hand Liberals believe in the importance of the freedom of the

individual – right to be treated as ethical subjects not means or objects

Linda Young, POLS 400, International Political Economy

Liberal View of the Market

Liberals see the outcome of the market as being restrained by competition – so that while an individual acts with self-interest, the outcome is positive

– But market power is restrained in this case

Mercantilists see competition as cut throat with losers – you need power to get what you want

Linda Young, POLS 400, International Political Economy

Liberal View of Politics

John Locke in England

Thomas Jefferson in the US

Citizens have certain positive rights (freedomof speech and freedom of the press)

And negative rights (freedom from state authority-unlawful arrest)

With a conflict, diffused power and the guarantee of certain rights will result in resolution of conflict peacefully

Thomas Jefferson

John Locke

Freedom of

the Press of Speech

Freedom of

Liberal View of Foreign Relations

Cooperation and harmony– Free trade – free commerce makes a nations industry

efficient and maximizes welfare– Economic ties between countries diminish the need for

security Britain’s corn laws – relationship between economic policy

and political representation

John Stuart Mill (1806-1873)– Liberalism as an important destructive force due

to role in revolutions, etc. – weakened central authority

– Wanted more than the accumulation of wealth– Wanted social progress and intervention by the

state – provision of education, etc.

John Stuart Mill

Linda Young, POLS 400, International Political Economy

John Keynes and Keysianism

More active role for the economy

Beliefs shaped by the failure of market economies in the great depression

Because of risk and uncertainty, individuals could act rationally and the result could be destructive

John Keynes

Consequences of thrift – less goods consumed, and thus fewer workers needed – can create an unwanted outcome

State must act in these circumstances – should spend

Linda Young, POLS 400, International Political Economy

Keynes influenced the development of our multilateral institutions – embedded liberalism

IMF to correct lack of demand – state to step into correct failures of the market

State with an important role in the macro economy

Embedded liberalism has a broader meaning

Linda Young, POLS 400, International Political Economy

New Meaning of Liberalism

In the 1960s and 1970s the state had a bigger role Liberal meant an emphasis on the market and it came to

mean an emphasis on state action in many realms– Space exploration, the Vietnam war, civil rights and

regulation of business and the environment– Reaction by Friedrich Hayek and Milton Friedman

Linda Young, POLS 400, International Political Economy

Critiques of Realism

Tend to ignore North-South issues Emphasis on relative gains undermines international

institutions

Too much emphasis on politics – early postwar stress on security a drawback