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Critical Review of Theoretical Approaches to Global Political Economy This paper will outline the different theoretical approaches to GPE, by critically reviewing three articles on international political economy, globalisation and strategic interests. The articles chosen for the study are as follows: 1. Greenwold, Stephen (1999). ‘Strategic Interests and International Political Economy’, New Political Economy, 4 (1), 97-112. . Krugman, Paul (1994). ‘Competitiveness: A Dangerous Obsession’, Foreign Affairs, 73 (2), 28-44. 3. Sassoon, Anne Showstack (2001), ‘Globalisation, Hegemony and Passive Revolution’, New Political Economy. 6 (1), 5-17. According to Sassoon (2001) the importance of politics in shaping the existence of global political economy and its future trends has been highly discussed and challenged within the realm of globalisation.
This debate of the role of politics in the development of globalisation has been highly controversial due to the shifting attitudes of theorists and anyone concerned with globalisation on the one hand the positive advantages offered and on the other the negative harmful consequences to any economy. Sassoon highlights the benefits of Gramsci’s concepts in today’s understanding of globalisation by extending our research beyond the political changes taking into consideration social and economic changes.
However Sassoon goes on to criticise the works of Cox and Gill in the ‘Gramscian turn’ in international relations suggesting that “…Gramsci’s ideas are obscured and that they are transferred on to inappropriate objects. ” (Sassoon, 2001. pg. 7. ) Despite these criticisms, Gramscian analysis has a number of important strengths, taking for example the idea of hegemony; realist and liberals define hegemony in state-centric terms and therefore can only identify a small amount of examples of when there was a hegemonic state, therefore their attempts to examine the effects of hegemony on IPE is restrictive. Cohn, 2002, p. 137) Whereas Gramscian theorists, refer to the term hegemony in a cultural sense to signify the difficulty faced by social group to assert their legality and authority and in their concept of hegemony they include non-state actors such as multinational corporations and international banks as well as nation states. (Cohn, 2002, p. 138) Sassoon emphasizes that Gramsci’s concepts have been used to explain globalisation as well as power struggles and political strategies. (papers4you, 2006).
Sassoon draws attention to how significant it is that Gramsci’s ‘old’ ideas on power politics and state relations are moulded in to new forms which includes all aspects of globalisation and national contexts suggesting a ‘passive revolution’. (Sassoon, 2001, p. 10). On a totally different note Krugman (1994) debated the impact of competitiveness and unemployment by looking into the European Union model. His hypothesis is based on the idea that nation states could be looked at upon as multinational companies; where they strive to increase their opportunity in competing with each other for market share.
He then goes on in explaining why this hypothesis of competitiveness is unfounded, however argues its advantages to world leaders on relying on the term competitiveness as a useful “…political device. ” (Krugman, 1994, p. 40). He points out the dangers of using the concept of competiveness too frequently, suggesting the outcomes to be either wasteful spending of government money, bad policy filtering through to all important issues or protectionism and trade wars. (Krugman, 1994. p. 41).
Greenwold (1999) on the other hand analyses international economic policies by looking into the most highly regarded schools of thought in IPE, the realist, liberal and Marxist to show the connection between the pursuit of power and the pursuit of wealth, thus taking an undoubtedly realist approach in his writings. Greenwold’s stance throughout the article is presenting a theoretical approach and then criticising it using almost always justifications by looking into the realist perspective; however for the purpose of this review, a critique of the realist perspective is influential in understanding other approaches and their stance in IPE.
Liberals and marxists or structuralists are often criticised by realists for placing a greater importance on economics and bypassing the importance of politics; to counter-attack this position they adopt a totally different extremism by stressing the significance of states and politics in relation to economics. An example of this can be seen during the post-war period in the workings of U. S. realists with security issues (Cohn, 2002, p. 86). Another central riticism of the realist approach is their deniability of non governmental actors’ role in shaping foreign policy, which is getting harder and harder to ignore with the increase in interdependence and globalisation; thus constraining them in analysing important economic issues (Cohn, 2002, p. 86). The realist obsession with state survival and security manifests itself in the emphasis placed upon relative gains (each state tries to improve its position while not neglect other states’ gains or losses) this was witnessed in the interstate relationship between the U. S. nd the Soviet Union during the Cold War. However, where states cooperate and there is no threat of the use of force, absolute gains are viewed as primary in interdependent relationships; thus restricting them in accepting the influences of international institutions (Cohn, 2002, p. 87). It is apparent that all three theoretical approaches have different perspectives on the workings of the global political economy and their differing views on issues such as globalisation and the importance of the state suggest that there is a failure to develop a theory that fits all when it comes to GPE.
However academics such as Cohn (2002) suggest that these contradicting standpoints give us a better more wholesome understanding. To relate back to two of the three articles studied above Sassoon (2001) and Krugman (1994) brush shoulders in their analysis of the role of political economy in the development of globalisation. In Sassoon’s view both the positive and negative aspects of globalisation exists and that they should be taken into account equally while Krugman explains in the context of competitiveness that globalisation would manifest itself only in detrimental consequences.
All three articles are based on varying sets of beliefs and values consequently making it impossible for them to work compatibly along each other, however with the changing structure of world order and the advancement of technology it is reckless to think of only one factor having influence on global political economy, any advancement on new or existing theories should reflect our times and the world structure of that particular time; at the same time we should not dismiss past experiences as they may be helpful in future situations. Word Count: 1047 words References:
Cohn, Theodore H. (2002). Global political Economy: Theory and Practice, Longman:New York, London Greenwold, Stephen (1999). ‘Strategic Interests and International Political Economy’, New Political Economy, 4 (1), 97-112. Krugman, Paul (1994). ‘Competitiveness: A Dangerous Obsession’, Foreign Affairs, 73 (2), 28-44. Papers For You (2006), “C/P/45, Theoretical Approaches to GPE” Available from http://www. papers4you. com, retrieved on 6th Nov, 2008. Sassoon, Anne Showstack (2001), ‘Globalisation, Hegemony and Passive Revolution’, New Political Economy. 6 (1), 5-17.