The Politics of International Economic Relations The purpose of the essay is to draw out the conceptual differences of Liberalism, Realism and Marxism. Each author stands for different approach among the three readings. Deundey and Ikenberry are liberals, Gilpin researches for Realism, David Harvey is a typical scholar of Marxism. The perspectives of three authors overlap on three issues but have different view on them. The first issue is what are the main actors involved in economic relations according to liberals, realists and Marxists approaches.
The second one is how do three approaches define the nature of hegemony in the articles differently. Finally, what do liberals, realists and Marxists think about the role of state power. At the end of the essay, there will be a conclusion. What are the main actors involved in economic relations according to liberals, realists and Marxists approaches? Liberalism is a kind of ideology, philosophy, with freedom thought. The characteristics of liberalism which are pursuit of development, believe that human good nature, and support personal autonomy, in addition also claims to relax and exempt from dictatorship to individual control (Will, 2012).
For the liberal economic relations, Deundey and Ikenberry thought the most important factors are hegemonic powers and free trade. Due to realists think hegemonic powers help to set and improve rules, lots of states and companies get rich interests from absorb exports, wield incentives and exchange currency, these states and companies more likely to keep opening their domestic market (Deundey & Ikenberry, 1999). Liberal states use free trade to change or keep their favourable cooperative partners politically and strategically.
Furthermore, liberalism use government power to protect individual freedom thought of social and legal restrictions, ensuring the concept of free trade, encourage developing private firms, transparent political system to guarantee the rights of every citizen (Will, 2012). Robert Gilpin pointed out main actors of neo-liberalism including leadership, international cooperation and ideological consensus, which are regime theory (Gilpin, 2001). For instance, the prevailed as the norm for market transition in former communist countries, and established regional rade agreements increasingly, such as EU, NAFTA and APEC. International relations realism is a kind of theory and practice, it pays attention to the balance of political power and economy force in the national state (Gilpin, 2001). Markets and the policies of nation states determine the realism economic relations. For example, China is one of the largest markets for consumption in the world. Lots of international firms attempt to develop Chinese market. However, these firms need to consider about Chinese government, because the government set rules the firms have to follow.
Therefore, the economic relations are influenced by states, anarchy, multinational corporations, NGOs, international firms try to make affect on the nature of regimes. Marxism is a critical analyse of international political economy, it focuses on class and class struggle, and the nature of capitalism, a typical example of historical materialism. For the Marxism economic relations, The New Imperialism showed that both the territorial and capitalist logics of power, the inner and outer relations of capitalist state are the main actors in economic relations (Harvey, 2003).
Actually it is an intersection of economic and geopolitical competition. How do three approaches define the nature of hegemony in the articles differently? Hegemony refers to a state with its great advantages of political, military and economic in the world or the individual area control foreign sovereignty to seek for dominant powers (Deundey & Ikenberry, 1999). Liberal theorists emphasis on the transnational relations when a liberal state is hegemonic. Due to the openness of liberal state and the transnational relations could build a long-term and stable political system if within the hegemonic system.
A realist named Eichengreen’s point is that hegemony with coercion and unfair of other states. However, Eichengreen thought hegemony aims to encourage international cooperation in different kinds of international affairs (Gilpin, 2001). Such as US focuses on promoting a breadth, open and interdependent international economy, such international public merchandise as free trade and monetary stability needs a strong leadership and dominant power (Gilpin, 2001).
Therefore, realists define the nature of hegemony that could be a positive factor to strength the liberal international economy. The nature of hegemony in the Marxism could be defined as over neo-liberalism result in Imperialism, and it built commodity and capital markets (Harvey, 2003). After then the hegemony was born. A typical example of hegemony is US, which is based on high technology, strong economy and military power to maximize its safety and profits on a global scale (Harvey, 2003).
US through such diplomatic negotiation, economic sanctions and military intervention to achieve goals. Bring together,US hegemony is form of international monopoly capitalism under the condition of economic globalization, it reflects the relations of the sum of capitalist production. What do liberals, realists and Marxists think about the role of state power? In the readings, states play different roles and have different functions. Liberal openings of countries do not based on political liberalism, but the key powers still retained by the state.
After World War 2, Germany and Japan, the two of the typical states of western system have transformed into semi-sovereign and partial great powers. The features of the two states are strong self-imposed constitutional constraints and the integration of German and Japan in wider political, security and economic institutions (Deundey & Ikenberry, 1999). They through sufficient capacity kept from war to secure themselves but also to impact on other smaller states next to them and to make an influence on whole system.
Such like they got the recognitions from Western system, and play more and more important roles in the international affairs. Whereas, realists think that state power could get the trustable and dependable from markets and companies, because the stability of markets is affected by active role of states and states co-operation. For example, individual states want to decrease the reliant on other states, they will use a term of trade protection policy and industrial policies to achieve their goals, even through right of complaint to the World Trade Organization (WTO)(Gilpin, 2001).
If an individual state want to increase the dependence of others, the individual state could apply on such policies as foreign aid and trade concession (Gilpin, 2001). At the same time, states could provide legitimacy for markets and companies in different kinds international governance. Lastly the international law also has been established by states. To protect states’ own values and interests, states will manipulate market forces to increase their power and compete with other states or to favour friendly states through different terms of political instruments.
Harvey’s basic point is that the capitalist system in order to ensure that its expansion and shrinks space. Capitalists prefer to make investment in which can produce the most profit, to maximum self-interest. However, the kind of profit maximization would lead to geographical expansion. Geographic expansion refers to seek out new markets. Harvey points out capital are naturally going to the place, which is high profit and low cost. In the real world, developed states’ capital has went to underdeveloped area and developing states, because underdeveloped area and developing states are huge market (Harvey, 2003).
After then globalization has become the best excuse to develop new market. Therefore, states play the important role to expanse the new market geographically. Strong states have forced underdeveloped area and developing states to open their market through international strategic cooperative and sectarian warfare. Conclusion Generally speaking, the main actors involved in economic relations according to liberals are leadership, international cooperation and ideological consensus.
Realists think markets and the policies of nation states will influence the economic relations. However marxists point out that both the territorial and capitalist logics of power, the inner and outer relations of capitalist state are the main actors to affect economic relations. After then for the nature of hegemony, liberalists think openness of state and their transnational relations is the nature of hegemony. Whereas, realists note that hegemony is a positive factor to strength the liberal international economy.
In the contrast, hegemony is regarded as a form of international monopoly capitalism under the condition of economic globalization. Finally, liberals found states power that help German and Japan to keep strong self-imposed constitutional constraints, get involved in wider political, security and economic institutions. Realists analyse role of states power that could provide legitimacy for markets and companies in different kinds international governance. Marxism think states power play an important role to expanse the new market geographically.
Reference List Gilpin, R. (2001) Global Political Economy Princeton NJ: Princeton University Press, pp. 15-24, 77-102 & 196-233. Harvey, D. (2003) The New Imperialism Oxford: Oxford University, pp. 187-215. Deundey, D. & Ikenberry, J. (1999) ‘The Nature and Source of Liberal International Order,’ Review of International Studies, 25(2), pp179-196. Will, G. (2012) ‘Liberalism, as we know it,’ The Washington Post http://www. washingtonpost. com/opinions/george-f-will-liberalism-as-we-know-it/2012/08/31/bd002fd4-f38a-11e1-adc6-87dfa8eff430_story. html, accessed in 29th November, 2012