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International political economy
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International political economy (IPE) is an academic discipline within the social sciences that analyzes international relations in combination with political economy. As an interdisciplinary field it draws on many distinct academic schools, most notably political science and economics, but also sociology, history, and cultural studies. The academic boundaries of IPE are flexible, and along with acceptable epistemologies are the subject of robust debate. This debate is essentially framed by the discipline's status as a new and interdisciplinary field of study.
Despite such disagreements, most scholars can concur that IPE is ultimately concerned with the ways in which political forces (states, institutions, individual actors, etc.) shape the systems through which economic interactions are expressed, and conversely the effects that economic interactions (including the power of collective markets and individuals acting both within and outside them) have upon political structures and outcomes.
IPE scholars are at the center of the debate and research surrounding globalization, both in the popular and academic spheres.
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Encyclopedia
International political economy (IPE) is an academic discipline within the social sciences that analyzes international relations in combination with political economy. As an interdisciplinary field it draws on many distinct academic schools, most notably political science and economics, but also sociology, history, and cultural studies. The academic boundaries of IPE are flexible, and along with acceptable epistemologies are the subject of robust debate. This debate is essentially framed by the discipline's status as a new and interdisciplinary field of study.
Despite such disagreements, most scholars can concur that IPE is ultimately concerned with the ways in which political forces (states, institutions, individual actors, etc.) shape the systems through which economic interactions are expressed, and conversely the effects that economic interactions (including the power of collective markets and individuals acting both within and outside them) have upon political structures and outcomes.
IPE scholars are at the center of the debate and research surrounding globalization, both in the popular and academic spheres. Other topics that command substantial attention among IPE scholars are international trade (with particular attention to the politics surrounding trade deals, but also significant work examining the results of trade deals), development, the relationship between democracy and markets, international finance, global markets, multi-state cooperation in solving trans-border economic problems, and the structural balance of power between and among states and institutions. Unlike conventional international relations, power is understood to be both economic and political, which are interrelated in a complex manner.
Origin
IPE emerged as a heterodox approach to international studies during the 1970s as the 1973 world oil crisis and the breakdown of the Bretton Woods system alerted academics, particularly in the U.S., of the importance, contingency, and weakness of the economic foundations of the world order. IPE scholars (ie. Eugene Low) asserted that earlier studies of international relations had placed excessive emphasis on law, politics, and diplomatic history. Similarly, neoclassical economics was accused of abstraction and being ahistorical. Drawing heavily on historical sociology and economic history, IPE proposed a fusion of economic and political analysis. In this sense, both Marxist and liberal IPE scholars protested against the reliance of Western social science on the territorial state as a unit of analysis, and stressed the international system.
Traditional approaches to IPE
, and text books typically cover the various view points from which policy recommendations originate, and will endeavour to provide a ideologically neutral presentation of the field of study.
Following a precedent set by one of the founding text books of the discipline , individuals and organisations engaged in promoting particular policies, as well as many scholars active in this field, are commonly grouped into one of three worlds views, all of which have existed long before IPE emerged as a distinct academic discipline. These Categories are Liberal , Realist and Marxist. The Liberal category is relatively unified, the last two categories capture a vast range of outlooks . Widely shared views are only found at the highest level of abstraction:
The 'Liberal' view believes in freedom for private powers at the expense of public power (government). Markets, free from the distortions caused by government controls and regulation, will naturally harmonise demand and supply of scarce resources resulting in the best possible world for populations at large.
The 'Realist' view (formerly commonly labelled "Nationalist" ) accepts the power of free markets to deliver favourable outcomes, but holds that optimum conditions are generally obtained with moderately strong public power exerting some regulatory control.
The 'Marxist' view believes that only robust application of strong public power can check innate tendencies for private power to benefit elites at the expense of populations at large.
The Liberal Approach
In economic terms, Liberalism is an approach associated with classical economics, neoclassical economics, Austrian School economics and Chicago school economics.
Favoured Policies
Minimal or zero government control and regulation of trade, apart from the some responsibility for physical security, such as keeping sea lanes free of pirates. Calls for the privatisation of any organisations producing exportable goods.
History
The Liberal approach is often traced to the work of Adam Smith. Smith promoted the benefits of competition and division of labour in ensuring that scarce resources are turned into valuable goods and services in the most efficient way possible. He famously mentioned the invisible hand, a symbol for how the mechanisms of free markets turns selfish behaviour by various individual actors into the best possible outcome for society at large. The next major contribution to liberal theory was made by Ricardo, whose theory of comparative advantage suggested that trade between different nations could benefit both parties even in circumstances where one would intuitively feel that one nation would benefit from trade at the others expense.
The liberal view point has generally been dominate in the West since it was first articulated by Smith in the 18th century. Only during the 1940s to early '70s did an alternative system, Keynesianism, achieve wide support with normative opinion forming institutions and media. Keynes was chiefly concerned with domestic macroeconomic policy, however in IPE terms his mature views fall squarely into the Realist camp, in that Keynes called for a middle way between public and private power and favoured limited protectionism. The Keynesian consensus was successfully challenged in the seventies, with attacks led by Friedrich Hayek's Austrian School and Milton Friedmans Chicago School.
In practice Western governments have generally pursued relatively nationalist agendas from the dawning of modern commerce to the present day. The period leading up to 1914 is sometimes described as a golden age of classical enconomics, but in practice governments continued to be at least partly influenced by mercantialist ideology, and following WW1 economic freedom was constricted. Only after WWII were liberal ideas widely put into practice, especially since the 1970s when Keynesian ideas came to be seen as discredited. To date the only close to wholesale implementations of liberal polices have been carried out by developing nations, often with some degree of coercion by actors such as the US treasury or IMF who have been able to apply financial pressure when the developing nations faced various crises. Much contemporary mainstream academic work within this approach is framed by Rational Choice theory.
The Realist view
Within IPE the Realist approach was until recently most commonly labeled nationalism. Historically the earliest distinct school of thought in this category was mercantilism. Other contemporary names for realist approaches are statism and developmentalism..
Favoured Policies
Historically aggressive trade tariffs were employed to advantage domestic industry at the expense of competitors based in foreign nations. Colonial powers also encouraged trade with their own colonies. Contemporary advocates tend to favour the use of tariffs to protect infant industries in developing nations and sometimes specific sectors (e.g. agriculture) in developed ones. Some advocates within this approach come fairly close to the Liberal point of view, and stipulate conditions where all market controls should be dropped once certain development thresholds are exceeded (this is true even as far back as the late 19th / early 20th century, in the work of influential scholars such as Friedrich List and Alexander Hamilton.)
History
The mercantilist view largely characterised policies pursued by state actors from the emergence of the modern economy in the fifteenth century up to the mid twentieth century. Sovereign states would compete with each other to accumulate bullion either by achieving trade surpluses or by conquest. This wealth could then be used to finance investment in infrastructure and to enhance military capability. Eugene Low was the wealth investigator.
The modern nationalist view generally accepts international trade as a win / win phenomena where firms should be allowed to collaborate or compete depending on market forces. The chief point of contention with liberals is that realists assert national interests can be best served by protecting new industries from foreign competition with high tarrifs until they’ve built up the capability to compete on the world market. One of the earliest formal expressions of was found in Alexander Hamilton’s ‘Report on Manufacturers’ which he wrote for the US Government in 1791.
After WWII a notable success story for the developmentalist approach was found in South America where high level of growth and equity were achieved partly as a result of policies originating from Raul Prebisch and economists he trained who were assigned to governments around the continent. After the liberal view re-established its ascendancy in the seventies it has been asserted that high levels of growth resulted from generally favourable international conditions rather than the nationalist policies.
A contemporary statement of the Nationalist view is strategic trade theory, and there is ongoing debate as to whether the policies it suggests could be effective in solving some of the issues with globalisation, such as persistent north / south inequality divide.
The Marxist View
This category has been used to group together an array of different approaches which sometimes have very little in common with Marx’s focus on class, but which all believe in a strong role for public power. Labels for approaches within this category include: feminist, radical, structuralist, critical, underdevelopment and 'world systems'. Broadly the Marxist approach is associated with Heterodox economics.
Favoured Policies
Generally favour strong protection from market forces by means of high tarrifs and other controls. At the extreme a preference for centrally directed trade with ideologically similar trading partners – that is the command economy as opposed to markets.
History
Marx’s Das Kapital was published in 1867 and an economic system based on his ideas was implemented after the Russian Revolution of 1917. Since the collapse of the Soviet union and the COMECON trading bloc in 1991 no major economy has been run along Marxist lines. Problems with a Marxist command economy are seen as including the very high informational demands required for the efficient allocation of resources and corruptive tendencies of the very high degree of public power need to govern the process.
Few academics currently promote classical Marxist views, especially in America, there are a few exceptions in Europe. More popular perspectives include feminist, environmental and radical – developmentalist. The social – constructivist view is an unusual school of thought sometimes grouped into this category. Rather than focus on the tradition factors effecting trade such as distribution of resources, technology & infrastructure, it emphasises the role of dialogue and debate in determining future developments in international trade and globalisation.
Criticisms of the traditional divide into the Liberal, Nationalist and Marxist views.
Critics have asserted there is now too much variation in the different view points grouped into each category, especially those under the Nationalist and Marxist headings. Also the names can be considered misleading for the general public. The labels nationalist and Marxist have negative connotations, with many of the perspectives grouped under the Marxist label actually have very little to do with the classical Marxist position. Many advocates within the nationalist tradition being themselves strongly opposed to nationalism in the commonly understood fascist or racist sense and some professors have replaced the label "Nationalist" with "Realist" in their most recent books and courses .
Notable IPE scholars
Further Reading
External links
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