Théories de l'économie politique internationale

Théories de l'économie politique internationale

Données clés

Faculté	Global Studies Institute
Professeur(s)	Christakis Georgiou
Cours	Économie politique internationale

Lectures

• Qu'est-ce que l'économie politique internationale ?
• Une brève histoire du capitalisme international
• Théories de l'économie politique internationale
• Coopération commerciale internationale
• Politique commerciale intérieure
• Politique des accords commerciaux préférentiels
• Les sociétés multinationales et les chaînes de valeur mondiales
• Politique des entreprises multinationales
• Coopération monétaire internationale
• Politique monétaire et de change
• Politique des crises financières internationales
• Les démocraties dans les économies mondialisées

Ce cours porte sur les théories de l'économie politique internationale ou du capitalisme mondial. Nous passerons d'abord en revue les débats historiques sur le capitalisme mondial qui couvriront le mercantilisme et le libéralisme. Ce sont les deux principales visions du monde ou approches générales du capitalisme mondial et de la manière dont les économies individuelles s'y rattachent. Nous le ferons parce que ces deux approches de la mentalité sont toujours pertinentes aujourd'hui, non pas tant en tant que théories au sens analytique du terme, mais en tant qu'approches de la manière dont les politiques sont élaborées. Nous examinerons comment la PEI a émergé théoriquement à partir des débuts de la PEI. Lorsque l'EPI s'est développée en tant que discipline ou sous-discipline universitaire distincte dans les années 1970, elle l'a fait en grande partie à partir des débats sur les relations internationales. À cet égard, nous examinerons comment les débats en RI ont donné naissance à l'EPI. Nous examinerons plus en détail les perspectives de l'EPI américaine contemporaine. La discipline peut être divisée en deux grandes écoles : l'école américaine et l'école britannique. Ce cours se concentre principalement sur l'école américaine. Par conséquent, nous examinerons les perspectives théoriques de l'école américaine au cours des 30 dernières années et les appliquerons tout au long du cours.

Languages

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Débats historiques sur le capitalisme mondial

Le mercantilisme

Pour Oatley, "le mercantilisme est une école traditionnelle d'économie politique datant (au moins) du XVIIe siècle. Elle affirme que le pouvoir et la richesse sont inextricablement liés. En conséquence, elle soutient que les gouvernements structurent leurs transactions économiques internationales de manière à renforcer leur pouvoir par rapport aux autres États et à la société nationale. Le mercantilisme dépeint donc l'économie politique internationale comme intrinsèquement conflictuelle."

En termes purement économiques, le mercantilisme conçoit la manière dont la lutte entre les États se joue sur la scène économique internationale en examinant la balance commerciale. L'indicateur clé de la capacité d'un État à gagner ou si un État est en train de gagner le conflit économique avec d'autres États est s'il exporte plus qu'il n'importe. Par conséquent, c'est un État qui enregistre des excédents commerciaux au lieu de déficits commerciaux. L'aspect connexe est la capacité d'un État à maîtriser les technologies avancées du moment.

Le développement économique de l'humanité étant basé sur un processus continu de développement des capacités technologiques et techniques, le mercantilisme en est venu à supposer qu'un État était puissant s'il se trouvait à la frontière technologique et s'il possédait des industries basées sur les technologies les plus avancées du moment.

Ce point est important, car les premiers mercantilismes des 16e et 17e siècles visaient davantage à contrôler les marchés d'outre-mer par la force et à s'assurer que la richesse qui pouvait être extraite de ce contrôle profitait principalement à la mère patrie. Il ne s'agissait pas tant de maîtriser le processus de développement technologique.

Les origines du mercantilisme

Les origines du mercantilisme mais aussi du libéralisme remontent à l'Angleterre. Dans une large mesure, on peut associer le mercantilisme à la pratique de la Compagnie des Indes orientales qui fut la principale entreprise mercantiliste du XVIIe siècle en Angleterre. Néanmoins, il existait également des compagnies des Indes orientales aux Pays-Bas, en avant et en alcool.

Le mercantilisme est une doctrine développée d'abord en Angleterre, puis elle se diffuse en Europe. Les Pays-Bas, la France, l'Autriche, la Prusse, les principales puissances de l'époque mais surtout les amis et les Pays-Bas sont les principales puissances qui ont des activités maritimes. Cependant, la France était surtout une puissance terrestre, et les Pays-Bas étaient la puissance maritime typique. La France avait également des activités et des capacités maritimes, et elle a donc également développé une politique mercantiliste. L'Autriche et la Prusse étaient des puissances plus enclavées, elles étaient donc moins impliquées dans ce jeu au 17ème siècle. Cependant, plus tard, la Prusse et l'Allemagne au 19ème siècle ont adopté une politique mercantiliste modifiée ou du moins une philosophie pour organiser leur politique économique.

Thèmes

Pour le mercantilisme, il existe un lien apparent entre le pouvoir de l'État et le commerce extérieur. Le mercantilisme et le libéralisme ont deux visions de la relation entre le pouvoir de l'État et l'accumulation privée. Pour le mercantilisme, les deux vont de pair, ils sont liés.

Les Compagnies des Indes orientales étaient les manifestations typiques de cette politique au 17ème siècle et au 18ème siècle. L'Angleterre, les Pays-Bas et la France en possédaient une. Ces compagnies dominaient l'outre-mer ainsi que le commerce à distance avec l'Inde. Il est important de se rappeler que ces compagnies exercent également un contrôle administratif sur des territoires, contrôle donné par les Etats avec lesquels elles étaient liées aux territoires dans lesquels elles ont développé leurs activités commerciales. Il existe un lien très étroit entre le pouvoir et l'abondance. L'organisation même chargée d'accumuler des richesses à l'étranger est aussi celle qui est chargée de l'administration publique de ces territoires.

Le contexte de l'émergence des Etats-nations centralisés

Le contexte est celui de l'émergence des États-nations centralisés. Le début du XVIIe siècle correspond à l'union entre l'Angleterre et l'Écosse et au développement d'un puissant appareil d'État centralisé au Royaume-Uni. La France est à l'apogée de son pouvoir absolu sous Louis XIV. Les Pays-Bas passent d'un ensemble de provinces vaguement liées à un État international, et ainsi de suite.

L'émergence d'États-nations centralisés s'accompagne d'un processus de concurrence des grandes puissances entre ces États. Parce que ce pouvoir se concentre, il y a une rivalité entre ces centres de pouvoir. Il y a une recherche de nouveaux marchés d'outre-mer et donc, la première vague d'expansion coloniale.

Les visions du monde philosophiques plus larges qui sous-tendent le mercantilisme dans la sphère économique sont la politique réelle machiavélienne et hobbesienne. Ce sont les traditions philosophiques qui informent la tradition du réalisme dans les relations internationales. Le mercantilisme a des liens intellectuels clairs avec l'école réaliste des relations internationales.

Vision du monde des mercantilistes

Dans cette vision du monde, la politique internationale et l'économie internationale sont considérées comme un jeu à somme nulle. Qu'est-ce que cela signifie ? Cela signifie que ce qui compte dans ce jeu, ce sont les gains relatifs et non les gains absolus.

Le calcul d'un État pour un événement ayant une transaction économique avec un autre État n'est pas tant de savoir si cela sera bénéfique pour moi. La question est de savoir si cela sera plus bénéfique pour moi que pour l'autre État. C'est la base sur laquelle les transactions économiques et les relations économiques entre les États sont organisées dans cette vision du monde.

Cela n'a de sens de participer à une transaction que si je vais en tirer plus de bénéfices que mon arrivée. Dans ce cas, on se demande pourquoi il y aurait une transaction économique en premier lieu, car s'il est évident que les gains relatifs sont d'un côté plutôt que de l'autre, il y aura toujours un État qui refusera de s'engager dans des transactions économiques. Il est donc évident que pour les mercantilistes, la politique économique étrangère est davantage l'affaire d'un seul État qui tente d'imposer sa politique à d'autres territoires qu'un processus dans lequel les grands s'engagent mutuellement dans des relations économiques.

Avec cela vient l'idée de l'intérêt national. L'intérêt des appareils d'État centralisés émergents de l'époque prévaut sur les intérêts individuels, d'accord. Il n'existe pas de société civile avec ses propres intérêts et droits distincts qui pourraient être contradictoires et conflictuels et distincts des intérêts de l'État. Il y a l'État, il a son propre intérêt qui est l'intérêt national, et les individus au sein de cet État doivent se comporter d'une manière qui sert l'intérêt national. C'est une vision du monde très libérale, libérale dans le sens où ce n'est pas une vision anti-individualiste.

Principales figures du mercantilisme : Thomas Mun et Jean-Baptiste Colbert

Parmi les principales figures du mercantilisme figure Thomas Mun. Il était un marchand privé et, surtout, l'un des directeurs de la Compagnie des Indes orientales. Il était engagé dans sa pratique et était également l'un des théoriciens de la pratique du mercantilisme. Mun était membre du Standing Committee on trade, une commission royale créée au XVIIe siècle pour conseiller le royaume sur sa politique étrangère. Vers 1630, il a publié England's treasure by foreign trade qui est un traité sur la manière dont la pratique du commerce extérieur doit servir à l'accumulation de richesses au service du royaume.

Dans England's Treasure By Foreign Trade publié en 1664, Mun déclare : "Par conséquent, le moyen ordinaire d'augmenter la richesse et le trésor est le commerce extérieur. Dans lequel nous devons toujours observer cette règle : vendre plus aux étrangers par an que nous consommons de leur valeur."

La règle d'or du mercantiliste est une balance commerciale positive, c'est-à-dire avoir un excédent commercial. Pour Mun, le moyen ordinaire d'accroître la richesse était le commerce extérieur et non le développement technologique.

La pensée mercantiliste primitive n'était pas associée à l'idée qu'un État soit à la frontière technologique et ait des industries basées sur les technologies les plus avancées du moment. Il s'agissait d'une vision du développement économique comme étant exogène à l'économie nationale. La richesse était apportée de l'étranger, et ce n'était pas un processus généré de manière endogène au sein de l'économie nationale.

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  Thomas Mun.

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  Jean-Baptiste Colbert.

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Une autre grande figure est Jean-Baptiste Colbert, qui fut le ministre des finances de Louis XIV. Aujourd'hui en France, au lieu de parler de mercantilisme, on parle de colbertisme pour désigner des politiques économiques contemporaines qui ont une certaine filiation avec les doctrines de mon pays.

Colbert a promu la fabrication par l'État : la substitution des importations et la promotion des exportations. L'idée qu'il fallait des politiques pour empêcher les importations et encourager les exportations vers les marchés étrangers. Colbert a également développé l'idée que la France devait avoir une balance commerciale favorable. Il est également le fondateur de la Compagnie française des Indes orientales.

Il est intéressant de noter que, dans le cas de Colbert, il y a les prémices de quelque chose de différent dans la mesure où il a théorisé le processus de fabrication dirigé par l'État. L'État devait intervenir pour développer des capacités productives et technologiques au service de la nation et du royaume. Il y a là quelque chose de différent qui se développera plus tard dans les doctrines du nationalisme économique et du développementalisme national.

Doctrines apparentées ultérieures

Ce ne sont pas des doctrines purement mercantiles, mais qui ont une relation claire avec le mercantilisme et une affiliation claire avec le mercantilisme.

Economic nationalism

Economic nationalism is related to Alexander Hamilton at Freidrich List. The context of economic nationalism is the 19th century and dominance of England and therefore Pax Britannica. It is associated with practice and theory of liberalism. Economic nationalism is responsible for the United States' hegemony in America, particularly after independence and after the North Victory in the Civil War in 1864. In Germany, particularly after the creation of the German customs union up to the German market's closure to foreign input in 1879.

Both of these processes are related to state-building independence. In the case of the United States because well, the colonies became states of their own sovereign state of their own. State-building after the Civil War because after the Civil War there is a process of centralisation of state power within the American Federation. Therefore the United States moves from being a collection of a decentralised collection of sovereign states to a rather centralised federation towards the late 19th century. Typically, in the 19th-century people would refer to the United States in plural. From the late 19th century early turn in the century onwards, it is more typical to talk about the United States in the singular.

In the case of Germany, the customs union in the early 1820s was seen as the premise towards German unification, a process that was inspired by the French Revolution and the doctrines of nationhood that came out of it and that diffused in Germany through the Napoleonic Wars. After the process of German unification in the 1860s that culminated in 1870 in the creation of the German Empire. There is something more than a process of state-building, there is a powerful state emerging on the European continent and displace France has the main power on the continent.

In both cases, and this is the break with early mercantilism, in both the United States and Germany, economic nationalism is seen as a means to promote state-led industrialisation and economic development through public infrastructure, investment and protectionism. In Germany and in the United States, rail networks’ development occurs in the late 19th century based on protectionism.

It has been seen as a way of meeting together with the national economy to enable national economic development. Alexander Hamilton was the first Secretary to the American Treasury. In that capacity, he wrote a report on the subject of manufacturers in 1791 entitled Report on the Subject of Manufactures that was presented to Congress and included all of these ideas.

They were implemented wholeheartedly right away. The North had to win the Civil War before they could be implemented wholeheartedly. Still, they coexisted with South and liberalism and South and freetradism for three-quarters of a century.

National Developmentalism

A related doctrine to economic nationalism in the 20th century is national developmentalism. That is the 20th-century response to American hegemony and the ideologies that accompanied American hegemony after World War II, namely global liberalism, and liberal internationalism.

It is important to note that some version of national developmentalism was applied even by allies of the United States, particularly France, Japan and South Korea. But national developmentalism that was mostly applied in Latin America and India.

The main practice associated with national developmentalism is input substitution industrialisation which is the idea that if you want to develop your own industrial and technological capacity you have to keep out for at least a rather long timeframe industrial inputs from other countries that have already mastered the advanced technologies. Otherwise, you won’t be able to develop industries that master those technologies, and therefore you will be forever doomed to consume the advanced products of other countries.

An associated theory is the theory of national developmentalism is dependency theory mostly associated with the figure of the Argentinian economist Raul Prebisch. Prebisch published in 1950 The Economic Development of Latin America and Its Principal Problems which gave birth to the that the Prebisch–Singer hypothesis which argues that the price of primary commodities declines relative to the price of manufactured goods over the long term, which causes the terms of trade of primary-product-based economies to deteriorate. Prebisch’s work was written as a report to the United Nations, and for a long time between the 1950s and 1970s, the United Nations was driven by the conflict between American liberalism and developing world developmentalism.

Liberalism

According to Oatley, liberalism is "a traditional school of a political economy that emerged in Britain during the 18th century as a challenge to mercantilism liberalism asserts that economic activities aim to enrich individuals and that the state should thus pay to play little role in the economic system. Liberalism gave rise to the theory of comparative advantage. It suggests that international political economies are cooperative rather than conflictual."

On almost every item, the definitions of mercantilism and liberalism stand opposed. Wealth and power are not inextricably related. The state’s role is not to be an active promoter of economic development but a passive promoter because it has to guarantee property rights, basic infrastructure, etc. It has to stay out of foreign trade, out of industrial investment on home and so forth.

Clearly, liberalism is based on the idea that international politics is not a zero-sum game, but it is a positive-sum game. What matters when states enter into economic transactions with each other is how much they will gain out of that, irrespective of how much another the other state will gain out of that. That is the idea of absolute gains as opposed to relative gains for mercantilist theorists. Cooperation becomes much more plausible because after all at the end of the day what matters is how much extra economic welfare do states gain from internationally economic interactions and not how much relative gains they gain out of them.

Origins

This theory emerged in the 18th and 19th centuries in England. The first prominent figure of liberalism is Adam Smith, and the other major figure is David Ricardo. They develop a critique of what they called the rent-seeking mercantile system. In Adam Smith’s case, he associates this critique of mercantilism with a critique of colonialism in North America. He was in favour of independence for the American colonies.

Topics

The core of liberalism is the idea of individual interest and rights and the link between that and collective welfare. Collective welfare is promoted not because a state that embodies the collective welfare takes care of that, but because egoistic individuals pursue their own interests. And they have a right to do so, and by interacting with each other in persons of their own interests, they increase the collective welfare, which is the path to the accumulation of collective wealth.

They theorised the idea that there has to be freedom of prices, so freedom of import. Prices are not distorted artificially by artificial means of keeping out some goods from the market to others’ benefit. They also theorised the superiority of markets and competition to organise economic activity and economic development.

The government in Adam Smith is not absent. It has a critical role to play. The state is an organiser of markets and guarantees individual economic freedoms of property rights. The state is there to make sure that markets function correctly, so the state has to break up rent-seeking behaviours, rent-seekers and monopolies and so on. The state has to guarantee property rights so that individual rights are protected, and there is no predatory behaviour on the market because otherwise, market mechanisms are distorted. There is a clear connection between that kind of liberalism and the antitrust tradition that develops later on in the late 19th century in the United States of America. Controversially, in the United States, the antitrust tradition is a populist movement.

Context

The context is the American and French revolutions with the end of absolutism and the beginnings of mass democracy and the rule of law. In the case of the French Revolution, there is a contradiction because, at the same time, French Revolution promoted the idea of nationhood, the idea of national interest, the idea of a national community, it also promotes the ideals of mass democracy and individual freedoms as well as the rule of law.

Worldviews

The Enlightenment's worldviews are liberty and property associated with the English philosopher Lockes from the 17th century and then taken up by the French philosophers and the French-speaking philosophers. With the revolution rationality and Kant, the idea is opposed to the Hobbesian view of the world based on destructive and aggressive instincts that are lodged in every human being. For liberals, human beings are rational individuals. Rational beings can tell that their individual welfare is tied together with others' individual welfare in society and, therefore, tend to cooperate.

For them, international politics is a positive-sum game that is out there to amenable interstate cooperation.

Main figures: Adam Smith, David Ricardo, and Richard Cobden

Adam Smith was first and foremost the main figure of liberalism. He was also an advisor to national politicians and his major work in relation to political economies the 'An Inquiry into the Nature and Causes of the Wealth of Nations published in 1776.

"If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. The general industry of the country will not thereby be diminished, but only left to find out how it can be employed with the greatest advantage."

That prefigures the idea of comparative advantage, although Adam Smith did not have a theory of comparative advantage. For Adam Smith, international trade was based on absolute advantage. It was good for a country to trade if it made something better than another country made. If a state could produce a good more efficiently than another country produced a good. Therefore two countries could specialise in those goods.

National wealth is not associated with trade surplus to accumulate wealth because wealth is produced through the process of exchange. Therefore, it is sufficient that the trade balance is in balance with other countries. It is through the process of exchange that wealth is accumulated.

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  Adam Smith.

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  David Ricardo.

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  Richard Cobden.

David Ricardo is the other prominent figure and theoretician. Ricardo was a banker in London in the city, an economist, and a member of parliament. In 1817 he wrote Principles of political economy and taxation in which he explicitly theorises comparative advantage. He is also a critic of the Corn Laws that were passed in the early 1810s and are tariff on the inputs of grain to protect domestic grain producers. Riccardo also campaigned for free trade in the abolition of tariffs.

The comparative advantage Ricardo developed is different from the absolute advantage. The key idea is that countries should specialise what their best producing within their own economy, not what they are best at producing across the globe. Even if a country is less efficient at producing something that another country produces, it should still produce it if it is more efficient and produces that good rather than another good within the domestic economy.

The third figure is Richard Cobden. Cobden was a Manchester manufacturer and a member of parliament. He was the Manchester School of Liberalism leader and the anti-Corn law league, which succeeded in 1846 at repealing the Corn laws and abolishing the tariff on grain imports. With him was inaugurated the great cycle of free trade.

The idea is that free trade promotes equality because free trade in that context amounted to cheaper food prices for workers in urban centres that were developing fast in the United Kingdom at the time. Therefore it reduced inequality because workers would see by the simple abolition of tariffs their purchasing power goes up, even if their wages stayed the same. They would see their purchasing power go up to the detriment of the landowners because the landowners would no longer be able to sell their produce at the prices they sold before; they would either be wiped out as they were or they would have to sell a lower price. Therefore there was a transfer of welfare of economic value from the landowners to the workers. So that was the idea on which covenants at that free trade promoted equality in the context of the 19th century in England.

Later related doctrine and manifestation

Classical liberalism of the pre-1914 global economy was relatively free trade capital flows in the gold standard. The current stage of globalisation, with the advance of free trade and free capital flows and the associated ideology of Washington consensus theorised in 1990 by John Williamson. He theorised that the essential recipe for economic developments is to liberalise one’s economy, privatise it, and deregulate it.

General consideration

There is a parallel between the mercantilism, nationalism versus liberalism debate in classical political economy and the debate between realism and neoliberalism in international relations and IPE.

Both mercantilism, nationalism and liberalism are schools of thought that provide powerful doctrines and worldviews that are still forming economic policy. For instance, in France today, when it comes to discussing industrial policy, everyone talks about Colbert and thinks inspiration in the way Colbert promoted industry in the 17th and 18th centuries in France.

These schools of thought are less useful as analytical frameworks. They are much more normative in orientation and positive. They seek to fathom the world based on a certain number of preconceptions of how societies organise and function. As analytical frameworks, they are not very useful.

Modern IPE has attempted to develop a more positive and analytically oriented approach to understanding and analysing how the global economy and global capitalism work. The main benefit of this is that it allows for analysis that understands why it is possible to have mercantilist and liberal elements coexisting one next to each other in the same system.

That means that modern IPE is based on identifying the political and economic building blocks or variables on which global capitalism is based and functions. It also attempts to identify the way those variables interact with each other. The three main categories are variables that IPE uses are:

• interests, whether the economic actors that make up the system and what kind of interests they have. It rejects the idea that something called a national interest is overarching and so forth. It also rejects the idea that all individuals have the same basic interests that are at the basis of the liberal notion of homo economicus was that is the basis of new classifications.
• institutions: institutions have an independent influence on how economic interaction between states in global capitalism is organised.
• Ideas that have an independent influence on the way foreign economic policies are made and how states interact with each other in the international political economy.

Theoretical evolution

The first theory, mercantilism dates back to 1620s, liberalism to the 1770s, economic nationalism attributed to Alexander Hamilton to the end of the 1790s and beginning early 1800s. With Marxism and neoclassical economics, it leads up to the 1870s. In a way, Marxism sees itself as the continuation of classical political economy, whereas in neoclassical economics sees itself as a bifurcation inspired by the positive sciences.

Then there is a new version of all those theories coming up. From the early 1900s, IR liberalism and idealism spring up. The high point of IR liberalism and idealism is in the 1920s and the League of Nations. Since the 1930s realism and new realism began to develop and developed as a critique of idealism and a critique of the League of Nations' failure. The major work The Twenty Years' Crisis: 1919–1939: An Introduction to the Study of International Relations written by E. H. Carr. The critic is that with the League of Nations, the war did not stop between the main powers between 1919 and 1939. Politics Among Nations: The Struggle for Power and Peace written by Hans Morgenthau published in 1948 is another major work which introduces the concept of political realism, presenting a realist view of power politics.

Since the 1970s and this is closely associated with IPE development, neoliberal institutionalism has developed. Neoliberal institutionalism to a large extent informs how IPE tries to analyse global capitalism and the functioning of the international community.

It is important to be able to locate in time when such a theory emerges and become dominant and declines.

Neorealism

From early IR to IPE, how did we move from a situation in which realism was the main way international relations were studied to the detailed IPE development in the 1970s and the 1990s?

Neorealism was the dominant IR paradigm of the 1930s and the 1970s. It is important to put that in perspective with real-world developments. Because that intellectual hegemony coincides with the interwar breakdown of global capitalism and the rise of economic nationalism, national developmentalism and the primacy given to domestic policy autonomy over external stability that characterised the period between the early 1930s and the early 1970s. Both one part of the interwar collapse and embedded liberalism. Although it was a compromise between domestic policy autonomy and external stability, it gave primacy to domestic policy.

What were the main theoretical aspects of realism and neorealism?

The basic premise is that being some national system is anarchic. What does that mean? It means that there is no world government, there is no world rule of law, and therefore there is no mechanism to impose cooperation among sovereign states. Interaction between sovereign states is not based on the rule of law. It is not based on norms on rules and whatever it is based on raw power. The way states interact with each other is extremely different from how individuals interact or groups of individuals interact within a given state. The basic concept here is external sovereignty.

Therefore the basic variable that determines how the international system and by extension of the international particular economy works is the distribution of power among states.

If the basic way in which state interacts, how they relate to each other in power returns, and how power is distributed among them is the main determinant of how they interact. There is also the theory about what is the distribution of power that is most likely to lead to stability: unipolar, bipolar, multipolar, etc. Realists don’t agree with each other, but the basic terms of the debate are the same.

Along with this external sovereignty is also the idea that states are unitary actors with national interest. That national interest determines their behaviour. This is an extension of the idea of sovereignty. There is one sovereign state, and the realists take that to mean that the state is a single actor with a single way of perceiving things of understanding things and defining its own interest. For most realists, the national interest is first and foremost the preservation of state sovereignty. Then hinges on the accumulation of power and so the national interest is about accumulating power within the international system. Here and this is not the case with neoliberalism, states are not driven by contradictions and different bureaucracies within the state apparatus. All work towards the same goal. There is no contradiction between state managers, they don’t pursue different goals, and civil society interests do not permeate the states. They are not amenable to be influenced by the interest group.

Relative gains and international relations are a zero-sum game. International relations are basically conflictual. Neorealism is in line with the basic tenets of mercantilism and economic nationalist stock. If economic power is the main variable, then it is important to master the day’s advanced technologies. What matters is having a share as big as possible of global production and global trade as a state can. Those are indicators of power for realists as they are former mercantilists and economic nationals. There is also a focus for realists on high versus low politics. High politics is anything it has to do with war, security and diplomacy, whereas low politics is politics has to do with economic aspects of international life.

Neoliberalism and its critics in the 1970s

The main dimensions of neoliberalism were criticised heavily in the 1960s and the 1970s. Notably, IR is basically conflictual in line with mercantilism and economic nationalism and focuses on high versus low politics.

The main breach in academia’s intellectual hegemony began in the 1950s and the 1960s with many cooperation cases and not rivalry in international relations. The main one was the détente which is the process of thawing of relations between the USSR and the USA and by extension between the USSR block and the American-dominated block. That included the SALT agreements inter alia. There were also many other instances of integration among states through trade cooperation within the GATT and the Comecon in the Soviet bloc. There is also the European integration which is very important because just a few years after Germany has occupied France, there was an agreement between those two states to begin to build a European federation. As the process of European integration developed after the Treaty of Rome in 1957 and throughout the 1960s successfully, there was this idea that international politics does not have to be conflictual and cases of deep cooperation amongst states can take place. This challenge the idea that international relations are basically conflictual.

The idea that neorealism is in line with the basic tenets of mercantilism and economic nationalism thoughts were challenged by the gradual opening of national economy throughout the 1960s and the 1970s. That provided the basis for the takeover of the fourth stage in the history of global capitalism, namely the second globalisation from the 1970s onwards.

It is the case that despite the fact that and better liberalism was to a large extent dominated by economic nationalism closure and so on, it also so very rapid rates of growth in international trade international investment and from the late 1960s onwards international capital flows.

These developments challenged the notion that the future of global capitalism’s future would be inextricably linked to the practice of economic nationalism that prevailed in the 1930s. That challenges the idea of the alignment between neorealism and economic nationalism.

High politics’ primacy over low politics came on the challenge because low politics became much more salient throughout the 1960s. First, because of the end of the Bretton Woods system. In the 1970s the group of 77 developing nations within the United Nations in the 1970s demanded the setup of a new international economic order which is the idea that international economic relations should be organised differently from the blueprint that was set down by the United States in the late 1940s. Finally, after the Bretton Woods system’s collapse, the high salience of European monetary cooperation and integration issues came to play a significant role.

The combination of these factors from the mid-1960s to the early 1980s showed that low politics issues could be very important in the way states interact with each other in the international system.

These three challenges created the first breach in the academic hegemony of realism within international relations. But neorealism was not dethroned overnight. The development of IPE in the 1970s was very much influenced by the debates over the pattern of neoliberalism. The first major questions and major theoretical perspectives that were thrown out by the development of IPE had clear links to the main questions asked by neorealists in their attempt to understand the international system.

The first one was the challenge to the idea that international relations were conflictual. One of the main debates was whether states cooperate. Still, in other cases, they do compete what determines when it is that states compete and when it is that states cooperate.

In the 1970s IPE focused on the interstate level. To typical IR questions such as how does the distribution of power affect international relations, there are the associated IPE questions that dominated the seventies in the eighties. To the question of how the distribution of power affects international relations, the associated question became what determines international economic stability or crises and what determines economic openness or closure. To the question is cooperation possible under anarchy, the modified IPE questions were just to external imbalances to ensure stability, who makes sure that there is a cooperative outcome that ensures there is stability in the system and who sets for an economic policy.

As neorealism hegemony was challenged, the challenge brought and in the 1980s other aspects of the neorealist paradigm came under attack. Another dimension was introduced to IPE in the 1980s. It is a fundamental dimension because this is the main focus of American IPE with foreign economic policy's domestic sources. That was based on the challenge to the idea of States as unitary actors and behave according to the national interest. That is not self-contradictory.

To typical IR questions such as what is the national interest, the modified IPE question would be who sets for an economic policy. The assumption being that different groups of actors may have different interests. So there may be a conflict over who sets for an economic policy whereas for their realists, and that is not even a question, state managers who are imbued with state rationality and whom all push in the same direction set for an economic policy. A second typical IR question is openness and closure in line with the national interest that became who benefits from openness and closure. Openness and closure do not necessarily align with the national interests with which all domestic groups align, but can be to the benefit some groups into the detriment of others. Therefore, there is a conflict over whether a state should open its economy up or barricade itself behind protective barriers.

This is how theoretically IPE emerged based on a challenge to the hegemony of realism and neorealism within international relations discipline.

Power and hegemonic stability

The theoretical perspectives

We are now going to look at these different theoretical perspectives within American IPE. We will look first at the theoretical perspectives that have to do with the systemic level, which is the level of interaction between states. The second part will be about the domestic sources of foreign economic policy. Finally, we will present an overview of the main theoretical perspectives in American IPE such as it has developed since the 1970s.

The link between power and hegemonic stability

The first debate that clearly had to do with the systemic level was the foundational debate on the international political economy. It was the debate about the link between power and hegemonic stability and what became known as a hegemonic stability theory with both its liberal and realist variants.

This debate was launched by the publication of Charles Kindleburger’s book World in Depression, 1929-1939 published in 1973. Kindleberger a liberal reading of economic stability theory. Kindleberger was very much a new dealer who was involved with the administration of the Marshall Plan in Europe in the late 1940s. He was imbued with the liberal internationalist spirit that informed American foreign policy from the 1940s onward.

Kindleberger studied why the Great Depression happened in the 1930s, and he attributed it to what IPE scholars refer to as a hegemonic transition. This is the idea that Pax Britannica was on the decline and had almost disappeared in the 1930s, but Pax Americana was not yet there. In the vacuum between the two conditions were created for the break-up of the fragmentation of global capitalism and that contributed to the Great Depression. For Kindleberger, it was a way of indicating what he did when he was in the Treasury Department in the 1940s because the policy he pursued as a US state official was liberal internationalism. He was in marked contrast to the isolationist policies of the 1930s.

Stephen Krasner published in 1976 State Power and the Structure of International Trade which is an article about the determinants of free trade openness. Krasner attempts to find a correlation between the rise and decline of precision American hegemony and the trend towards open and closure in the world economy. Krasner being realist, he associates openness with the rise and stability over hegemonic power.

In both versions of the theory, the basic idea is that international economic stability and openness and an open international economy both require action by one hegemonic power: Pax Britannica before the First World War Pax Americana since the Second World War.

Theoretically, the assumption that there had to be one hegemonic power came under attack in the 1980s. Some people said that theoretically, it is possible to have a bipolar world that is still stable because both of these powers provide the public goods that underpin the global system’s stability. That’s very much a theoretical debate that doesn’t have a historical application. Therefore, it is not that important in the development of a demonic stability theory.

Very quickly the debate about the conditions of stability mutated into a debate about the conditions of stability of the contemporary international political economy because along with the dollar crisis of the 1970s a debate about the decline over American hegemony has emerged. In the 1970s 1980s, most scholars were convinced that American hegemony was on the decline. Some predicted the collapse of the dollar standard and so on, in particular realists. A major book by historian Paul Kennedy published in 1988 titled The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000. Kennedy attempts to show how America was on the verge of a breakdown of hegemonic positions within the international system just as Britain, the Netherlands, France and so on before it had gone through the same process. It should be noted that this book was published two years before the collapse of the Soviet bloc. It is a major thesis rejected now. There is a debate about the state of American power today within IR, but the consensual position is an American hegemony is still very much alive.

The key thing about the development of American IPE is the debate on the decline of the US hegemony throughout the debate about the conditions that couldn’t ensure continued stability despite the fact that there was no longer one hegemonic power willing to provide that stability and to bear the cost of providing that stability.

That debate is best captured by the book by Robert Keohane titled After Hegemony: Cooperation and Discord in the World Political Economy. That is a key statement of neoliberal institutionalism. The basic argument is that the sets of relations and institutions established by hegemon to ensure stability will live on after the decline of that hegemon’s power because for the other states in the system the maintenance costs of that regime are lower than the costs that a breakup of that regime would entail. This is a kind of inertia that characterises the institutions set up by the hegemon. That will ensure that stability will prevail even though the hegemon is still not around to enforce those relations and those institutions.

International Institutions

This table is a summary of how neoliberal institutionalism theoretically developed.

Neo-liberal institutionalism is about international institutions and how international institutions can be designed to advance cooperation between states. There are five ways in which institutions can be designed to ensure that those aspects of cooperative behaviour are guaranteed.

The first one is the payoff structure. The payoff structure basically is a fancy way of saying the list of preferences in descending order that states have about how international economic relations should be organised. The payoff structure has to match. This is very much based on game theory. A lot of neoliberal institutions are based on game theory.

The idea is that preferences among states have to match. If they don’t spontaneously match, there has to be a process through which they can be broad closer together with a way through which states can agree to forgo their first preferences in favour of other preferences but can enable the international system to work based on cooperation. Institutions do that by facilitating issue linkage. Linkage is a major feature of the theory of interstate bargaining. Institutions are meant to make sure that when states sit down at the bargaining table, they sit down to talk about both good exchanges and financial services, and so on. So states can make concessions to each other across a spectrum of items that make up the bargaining agenda.

The next issue on which cooperation depends is transaction costs. Transaction cost is a concept that comes from economics. It is the idea that for market transactions to be beneficial, there are costs associated with realising a market transaction, and the costs have to be lowered for the transaction to be worth it. A key transaction cost obviously is distance. There are other types of transaction costs that have to do with the information. International institutions are there to set standards and ensure that parties in international economic transactions can have confidence that the goods and services they exchange leave up to a minimum set of standards.

Institutions also provide a forum for negotiations. They make it easier for states to come to the bargaining table. In contrast, without international institutions and fora for negotiations, it might prove difficult for states to find their way to the bargaining table.

Appropriate strategies are the fact that states need to know that if they make a concession they will get a concession back and anticipate the reaction by another state to a decision that they will take. That is the issue of reciprocity. If we look at the feature the principles of the WTO, reciprocity is one of them. If you give something to a state, you expect the same thing back which facilitates the exchange of concessions.

Information problems, from economics, is mostly information imperfection. It is when parties to a transaction are not fully aware of the transaction’s different aspects. What institutions do is to monitor and gather information to make it available to all parties involved. They can bring down information asymmetries and information imperfections. So they are producers and distributors of information regarding international economic transactions.

Finally, what scholars in IR refer to as the shadow of the future is the idea that a state will interact with another party differently if it knows that down the road the sate will have to repeat the interaction and it will have to transact with that party again. Institutions do that by raising defection costs and tie countries together. Defection costs are the reputation costs that are associated with the WTO, for example, making known to the world that the American or Chinese government has broken the rules.

Unpacking the ‘National Interest’

We will open up the black box of the state and the national interest and understand and identify foreign domestic sources of foreign economic policy.

One aspect of that is identifying the actors that collectively act to influence the definition of foreign economic policy. One way of looking at that is by classes or production factors in some cases, capital labour and landowners. Another is by broad sectors of economic activity. That can be export-oriented sectors of the economy, input competing sectors of the economic sectors that compete with inputs from abroad, non-tradable sectors that do not engage in international trade, the financial sector, the capital intensive industrial sector and so on.

Sectors are a finer grain characterisation of the way economic actors grouped together than classes. Classes are the more macro level, sectors are the more massive level. There are also firms, which is the very individual level, the micro-level. There are distinctions between large transnational corporations, small-medium enterprises (SMEs). Cooperation is also operated through supply chains and others are. Within the same branch of activity, there may have conflicting interests.

Another aspect of this is how our preferences are aggregated. It is not because actress exists that they have the same capacity to come to an agreement about what their collective interest is and also to pursue that interest with state managers. That refers to collective action theory and the concept of organisational capacity. The idea is that the larger the group’s size, the more difficult it is to find a consensual position and pursue collective activity, advance that collective interest and the asymmetry between different groups, and so on.

Small groups of very large actors have greater organisation capacity than big groups of very small actors. Typically the distinction is between monopolistic corporations, on the one hand, and consumers that are each individual in the economy. Therefore they have very little collective organisational capacity.

Another aspect that determines how preferences are aggregated is domestic institutions. The basic distinctions are the distinction between democratic and authoritarian regimes but also within democratic regimes the distinction between majoritarian versus proportional electoral institutions, but also within democratic regimes the way in which bargaining institutions allow for coordination or competition in which setting systems.

Explaining US foreign economic policy

We will take a look at explaining the US foreign economic policy in the twenties, thirties and the seventies.

The first article illustrating this example is Sectoral Conflict and Foreign Economic Policy, 1914-1940 written by Frieden on the US interwar policy. Frieden explained the conflict between isolationism and liberal internationalism in US foreign policy in general. Frieden says this is not about schools of thought within the American state apparatus or within the American party system. This was first and for most about a split within the US’s business community. In particular between the internationalised interests within the American capitalist class and the domestically oriented interests within the American capitalist class. He shows that throughout the twenties and the thirties there was a conflict between those two. Gradually the internationalised segment of the American capitalist class won the day because it gradually became more important in terms of the overall domestic economy. There was a crisis that crystallised the conflict between the two. Therefore throughout the second part of the thirties, the liberal internationalists gradually managed to take over the United States’ foreign policy.

Helen Milner published in 1988 Resisting protectionism: Global industries and the politics of international trade which is a study on protectionism versus free trade both in the interwar period and in the 1970s. She shows that the conflict between protectionism and free trade had to do with the extent to which American cooperations in different sectors of the economy had become internationalised or not. Milner shows that first between the twenties and the seventies, the American economy's overall exposure to the international economy had gone up and explains why in the seventies protectionism did not prevail as opposed to the twenties overall. Then she shows that even within periods, the same distinction applies. Even in the twenties in that minority of sectors in which cooperation have already become transnational internationalised, free trade prevailed over protectionism. It is a very similar argument that Frieden puts forward that applied to trade policy, whereas Frieden has a broader scope.

Other aspects of domestic politics

Another aspect of domestic politics that obviously has been studied and affects how global capitalism functions is institutions. Scholars distinguish between authoritarian and democratic regimes and then within regimes between majoritarian and proportional systems. The basic idea is those authoritarian and majoritarian systems (majoritarian systems are for example the House of Representatives in the United States, the House of Commons in the United Kingdom, the National Assembly in France as opposed to proportional systems like the German federal parliament).

The main assumption and idea is that authoritarian majoritarian regime are more amenable to be captured by special interests and therefore they are more likely to pursue protectionism. Whereas proportional single constituency electoral systems like the American presidency for example, are most sensitive to pressure by non-concentrated groups like consumers, they are more likely to pursue openness because openness is the policy that benefits consumers the most it lowers prices.

Another aspect is so-called to level games. The idea that there is an interaction in the way the interstate system functions and the way the domestic system functions. Executives’ governments that find themselves between those two levels, the domestic and the interstate level, can both benefit. They can argue to their domestic constituents that the interest system constrains them in a way that means that they have to the policies that are not necessarily popular with domestic electors. Still, they can do the same at the interstate level where they can argue in bargaining processes that they are willing to make concessions. Still, they won’t have a majority to ratify those concessions domestically because they are not popular. Therefore they can use that as a bargaining chip in interstate negotiations.

Political factors theorised in American IPE

That is a list of the main factors that have been theorised and continue to a large extent to be theorised in American IPE. We can see that there is a blend of ideas coming from realism and from and from neoliberalism, particularly neoliberal institutions. Clearly, the idea that the distribution of power within the international system affects the way the international political economy works is still very much around. Scholars still debate to a lesser extent than what they did in the 1970s, but they still debate that aspect of the problem.

B is the way international institutions affect the way the international political economy works. The basic question is how can international institutions be made to promote cooperation and therefore openness.

C is the way strategic behaviour between states can lead to cooperation or conflict.

D is how domestic interests influence the way foreign economic policies made and how states interact with each other.

E is a sub-theme of d, which is the organisational capacity of domestic interests and how it affects the way domestic interests can influence an economic policy and have domestic institutions.