ð Why “International Political Economy” is Necessary
In 1970, the British scholar Susan Strange called for greater cooperation between economists and students of international relations, pointing to “the pressures which a fast-growing international economy is exerting on a more rigid international political system.” The old assumptions, emboded in the Bretton Woods agreement and other post- World War II arrangements, that the “high” politics of diplomacy and strategic affairs could and should be separated from the “low” politics of international economic relations, was no longer valid. During the seventies, the demand for reappraisal of the analytic frameworks used in studying international relations became more insistent.
ð Criticisms of International Economics
Some critics of international economic theory argued merely that the intertwining of politics and economies was a novel or ex-aggerated aspect of current international affairs. Critics especially attacked he apolitical character of international trade theory, with its view that mutually and equally beneficial relations arose from every countriy’s pursuit of the “comparative advantage” nature gave it for the productions of particular commodities.
Such theory was used to explain current trading patterns and to support doctrines of free trade. But, argued the critics, the explanations were partial and the doctrine was somewhat disingenuous.Both the original model and the criticisms made of it recall the political critique of liberalism by institutionalists, Keynesians, and “radicals.” The modifications and alternatives proposed were also similar. They involved a recognition “that economic life is as much, if not more, characterized by various form of power and their use as by perfect competition” and an acceptance of the reality of state intervention in international (as well as domestic) affairs.
ð Models of International Political Economy
Several kinds of relationship between the political and the economic. They can perhaps beat be indicated in the form of questions:
- How does the international economy influence the “high politics” of international relations and vice versa?
- How does the international economy influence internal political processes and vice versa?
- How does the international state system influence internal political processes?
- How does the international economy influence domestic economies
Clearly the last two questions are not strictly political economy questions at all : they are exclusively political or economic in conception. Even when not trading under the name of political economy, they represent important alternative perspectives and standpoints from which theories of political economy are criticized.
o The Liberal School
As in domestic development matters, the liberal approach to international relations tends to be economistic. Specifically, while liberal values (notably freedom of the individual) are prominent in discussions of objectives, discussions of means tend to stress the beneficial impact of the free market upon the nominally “political” problems of international conflict.
Liberals are not as unsympathetic to (for example) nationalism as the proceding statement imply. They do, however, distinguish between the specifically political goal of “national development.”
o The Realist and Mercantilist School
The general premise of this school is that of international anarchy tempered by war and diplomacy. It envisages “a world not of markets but of states,” a world in which economic policy is a weapon in the continual struggle for dominance and security between nation-state. “realist” though in some eyes political conservatives and therefore friends of esthabilished business interest, actually argue for the right of the state to regulate economic activity. The benefit of free trade (E.H. Carr, a critic of utopian internasionalism, ance desribed laissez-faire as “the paradise of the economically strong”) claims that “economic interdependence” has made the nation-state bsolete and impotent.
Robert Gilpin, in his study U.S. Power and the Multinational Corporation, adopts a definition of political economy that is interactive, despite his earlier emphasis on the significance of power in international relations. He argued that “the economic motive and economic activities are fundamental to the struggle for power among nation-state” and suggest that this view correspondent to the classical mercantilist view.
o The “Interdependence” School
Robert Keohane, Joseph Nye, and others, it challenges certain central assumptions of realism. According to interdependence theorists, the growtly of multinational or supranational organizations has justified their downgrading of the nation-state as the central actor in international affairs. Interdependence theory thus discounts the brutal simplicities of realism without discounting (as liberal have) the equally brutal reality of power. Keohane and Nye deal with this problem by identifying four models of change, namely: Economic processes, Overall world power structure, The power structure within issue areas, Power capabilities as effected by international organizations.
Interdependence theory, at least as formulated by Keohane and Nye, is not and does not claim to be a comprehensive theory of international political economy. Keohane and Nye are in fact, more concerned with developing a framework that will guide policy analysts than with formulating grand theory.
o The Dependency School
The dependency school focused overwhelmingly on conditions in the Thrid World and on North-South relations. Although there are significant differences within the dependency school, its member share a perspective that emphasizes the subjection of Latin American economies to an international system dominated by the advanced capitalist countries of Western Europe and North America. Adopting orthodox Marxist analysis, the Left had concentrated on developing ties with the industrial working class and forming alliances with “progressive” middle-class elements, on the assumption that socialism could only follow unfolding of the “bourgeois mode of productions,” the corresponding formation of an industrial proletariat, and the emergence of a revolutionary mavement within that proletariat.
The revolutionary process would therefore have to start elsewhere¾among the peasants ignored (by liberals and the Left alike) or at the core itself, by confronting capitalism in its lair.
ð Economics and Determinism in Dependency Theory
Such economism can be traced through an entire lineage of radical writers, noteable among them Paul Baran, Paul Sweezy, Andre Gunder Frank, and Immanuel Wallerstein. Thus Baran and Sweezy, in their book Monopoly Capital, declared that “the modes of utilization of surplus constitute the indispensable mechanism linking the economic foundation of society with its political, ideological, and cultural superstructure.”
Andre Gunder Frank, whose Capitalism and Underdevelopment in Latin America made him the best-known dependency writer in English-speaking world, wrote, for example, that “the domestic economic, political and social structure of Chile always was and still remains determined first and foremost by the fact and specific nature of its participation in the world capitalist system.
ð The Meaning of “Dependence”
It just means a need to import and export, then most economies in the world are to some degree dependent, and dependence in indistingualishable from interdependence. Moreover, if it is capitalism that generates the generic form of dependency apparently suffered by Third World countries, then several problems arise. Another problem arising from the association of dependency and underdevelopment with capitalism have in fact achieved a high level of industrialization.
If dependent underdevelopment were a matter of imposition by the core, we would expect to find it limited to the periphery, but it is not. If dependent underdevelopment were imposed by the core, we would not expect to find any development or industrialization in countries influenced by the core, but we do. If dependent underdevelopment were a result of colonial rule, we would expect to find its manifestations limited to ex-colonies, but we do not.
ð Intellectual Weaknesses of Dependency Theory
The theory is offered as a high-level hypothesis without sufficient definition or supporting material to make testing (or even argument) possible.in the other word, the only relevant criticism is to produce another equally general and abstract theory. As Philip O’Brien has noted, the tendency to assert rather than to argue, prove, or persuade has stranded dependency theory on a plateau of banality. According to other Marxist, the shallowness of dependency theory goes deeper, so to speak. It is not actually a substantively new theory bur merely a reversal, a mirror image of the orthodoxy it replaces.
For Marxiasts and non-Marxists, the globalism or holism of the dependency theory has disturbing intellectual implications. As Colin Leys observed, the center-pheriphery metaphor “is seldom if ever replaced by a concrete typology of centres and peripheries.”
ð Left and Liberal Critiques of Dependency Theory
For non-Marxists, the idea of dominance of the whole over the parts has ominous political implications in addition to exhibiting intellectual superficiality. Anthony Smith in particular, has complained that dependency theory exaggerates the power of the international system and demeans the historical individuality and political capacities of Third World countries.
As O’Brien remarks sternly, “the ecieticism of a theory which can straddle petty bourgeois nationalism and socialist revolution should be a concern for reflection.”
ð The Traps of Dependency Theory
Outrage implies the possibility of an alternative, and the alternative mentioned is invariably socialism, with revolution as the means toward it. But on the actual meaning of socialism, how it will enable countries to escape dependency, and how the revolution is to be launched dependency theory has been curiously modest.
This trap is set by overselling dependency, emphasizing the universal, iron grip in which it holds Third Worl countries, and portraying its tentacles as stretching into the culture and the moral fibre of societies.
ð Cardoso and “Dependency Development”
The work of Cardoso is regarded as distinctive on several counts. First, he denies the stagnetionist view of Frank and other. Cardoso argues that “forms of dependency can change.” Second, Cardoso denies the possibility of a dependency theory as such, suggesting that there are situations of dependency. The comparison is meant to illustrate Cardoso’s belief that earlier dependency theory was simplistic and overmechanical. He and Faletto call for a return to the ideal of a comprehensive social science, with politics and economics treated as aspect of a single process.
Cardoso and Faletto therefore set out to discover “ how internal and external processes of political domination relate to one another” and “ external factors are interwoven with internal ones,” as well as “ to determine the links between social group that in their behaviour actually tie togethet the economic and political spheres.
o Theory and Evidence
For instance, Cardoso and Faletto declare that “a system is dependent when the accumulation and expansion of capital cannot find its essential dynamic component inside the system.” These and other cases of disjuncture between theory and empirical evidence seem to stem from the outhors commitment to structural analysis.
o Economics and Politics
Cardoso and Faletto emphasize the potentiality of “organization, will and ideology” for directing and obstructing economic forces. Cardoso and Faletto thus use a distinction between the political and the economic which is very helpful in explaining different paths of development and especially in accounting for changes that seem irrational from a narrowly economistic point of view. Often such economism appears in close proximity to assertions of the primay of politics.
Using the Marxian formula, Cardoso and Faletto inevitably run up against the question of the relative autonomy of the state that has troubled Marxist analysis of politics. It apparentely became such a tool after the exhaustion of populism. Cardoso and Faletto do not, however, seriously pursue the possibility of the state standing above the classe.
o Escaping from Dependence
Cardoso and Faletto differ from other dependency theorists in believing that development is possible. Yet, given the supposed starkness of the choise facing Latin America, Cardoso and Faletto’s vision of the desirable alternative is rather foggy. They claim that some countries have broken out of dependency and have kept “a reasonable degree of autonomy.”
ð World-Systems Theory
Immanuel Wallerstein’s writing on world-systems theory adopt the basic premises of dependency theory concerning the relationship between core and periphery. Wallerstein distinguishes between “world system” and “world empires.” A world system is a unit with a single division of labor and multiple cultural systems. A world empires is such a unit converted into a single political stricture. In Wallerstein’s view, the peculiar features of the period since the Renaissance have been the dynamism of capitalist expantion and the failure on any single state to seize control and create a new world empire.
In the following sections, Wallerstein’s historical analysis is examined under broadly the same headings used to evaluate Cardoso and Faletto.
o Theory : The Dominance of the Whole
Wallerstein is much more concerned than Cardoso and Faletto with exploring particular situations, and he provides extensive documentation for some very detailed case-studies. This view embodies both the organic tradition in which, as a sociologist, Wallerstein is heir to Durkheim, and the Marxist tendency to adopt a method of totally emphasizing the domination of the whole over the parts.
More important than its intellectual lineage are the remarkable denials to which this attitude leads. The only kind of social system is a worls system.
o Economics and Politics: Strong and Weak States
Wallerstein’s theoretical positions is highly deterministic, not to say dogmatic, and it has a constricting impact on the author’s historical analysis and his ideas of political strategy. The strength or weakness of states is interpreted economistically. Stregth is a function of surplus appropriated and taxable capacity, weakness a functions of lack of either. The problem is, as the same Marxists and others have pointed out, that the neat identification of strong states with the capitalist core and of weak states with the periphery does not work, even for the period in which Wallerstein is mainly interested.
In terms of his treatment of the relations between politics and economics, then, Wallerstein is both exceptionally holistic and unusually economistic.
o Escaping from Dependence
Wallerstein’s holism also ominates his view of how the capitalist world economy can be overturned. Wallerstein and his disciples are, indeed, quite blunt and consistent on this point. Autarky and nationalization are not enough. Wallerstein is involved in a double paradox. To explain the survival of an exploitative worls system, he fall back on the nation-state, the significance of which he otherwise dismisses.
The situation of international political economy resembles the plight of a man trying to swallow the sea to save himself from drowning. The criticisms made here of international political economy should therefore be set against the extreme difficulty of the task confronting scholars in this field. By virtue of being ambitious, global theories are more vulnerable than theories of more modest application. There may, in other words, be relationships in which the elements of domination and inequality stressed by realism and dependency theory are more evident.
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