International political economy (IPE) is very much in vogue. Over the past few years we have seen a deluge of literatureâtheory, general analyses, issue analyses, reports and recommendationsâon, or purporting to be on, the subject. Joan Speroâs popular introductory textbook which uses a very narrow conception of IPE contains a bibliography stretching over twenty-five closely printed pages (Spero, 1977). Those who wish to understand the issues and problems of IPE, or even find out what it is all about, are confronted with a galaxy of writings, each of which views IPE from a particular perspective and each of which embodies a particular interpretation of how the world âworksâ. As each one of us reading this literature also views the world from our own perspective, how can we make sense of it all and take advantage of the insights IPE offers without falling foul of its many pitfalls? This chapter provides a âconsumersâ guideâ to the literature through a focus on its basic perspectives and central theory.
Every guide, however, contains its own assumptions about how the field of knowledge has developed and how it is currently organised. In the nature of the social production of knowledge this chapter cannot be any different. But it will, it is hoped, provide a set of explicit criteria by which one should be able to identify and utilise the IPE literature and perspectives that are relevant to the questions we are asking.
âAn Area of Investigationâ
In a contemporary sense the focus is initially defined by the areas, issues, and problems under investigation. In general, we are concerned with that area formed by the merger of the previously separated areas of âinternationalâ economics, âinternationar politics, domestic (that is, national) economics and domestic politics.3 Specifically this produces a concern with problems and issues such as international trade, international monetary relations, NorthâSouth relationships, transnational corporations, global economic problems, the foreign economic policies of states and a whole host of other specific topics (R.J.B.Jones, 1981). The general domain created constitutes the focus of IPE, where economics and politics at international and domestic levels are integrated and cannot be understood independently of each other (Gilpin, 1975a; Bergsten et al., 1975).
However, the extent to which each of these conventionally separate areas is, in fact, separate, and can be understood as such, is a moot point, and forms part of the intellectual and political debate within IPE at the moment. Much of the international politics literature focuses solely on questions of international security and military affairs, and relegates both domestic and international issues and concerns to the ânon-political and unimportant.4 And economics too has conventionally, and conveniently, ignored E.H.Carrâs warning that The science of economics presupposes a given political order and cannot be profitably studied in isolation to itâ (Carr, 1942), and has developed a whole literature which is sadly deficient when the âgiven political orderâ, whether it is international or national, undergoes change. So the very use of the term âinternational political economyâ or âpolitical economyâ, and the adoption of an IPE focus, is a mark of dissatisfaction with the conventional definition of the issues and boundaries of international relations, political science and economics (Strange, 1975). This dissatisfaction comes from a growing realisation that many of the worldâs problemsâpoverty, inflation, the nuclear arms raceâand conflictsâover trade and services, in international money, in industrial bargaining and within conventional governmentsâcannot be understood within the conventional framework of knowledge whereby historically defined academic disciplines each have their own exclusive area of inquiry. We need better intellectual tools not only to cope with more complex questions, but to direct us towards different questions.
The definition of a subject area of inquiryâwhat is considered legitimate within a field of study and how it is best studiedâis never fortuitous. The boundaries and methodology of a subject are set by the wider assumptions that form the social and political context of that subject area. Hence Marxist scholars have always used the term âpolitical economyâ in line with their perspective and latterly to differentiate their understanding from âconventional economicsâ, which early on separated out the politics from âpolitical economyâ. Perhaps the important question is, therefore, how and why economics and politics became separated in the first place and how, in a similar process, the field of international relations came to be defined in a particular way.
One way we can move towards an answer to this question lies in our understanding of the nature of the social production of knowledge.5 Knowledge, in the form of theory (here simply a set of propositions which explains the world), is never free from value. As Robert Cox puts it: Theory is always for someone and for some purpose. All theories have a perspective ⌠There is ⌠no such thing as theory in itself, divorced from a standpoint in time and spaceâ (Cox, 1981, p. 128; emphasis in original). A statement such as this, however, goes against the mainstream conventional interpretation of social science theory. In this, theory is supposed to be objective and value-free, and could therefore give an explanation of situations drawn from widely different historical and social contexts. The perspective values inherent in theory were âdefined outâ in the attempt by social scientists, most evident in economics, to emulate the âvalue-freeâ and âobjectiveâ status of theory in the physical sciences. A value-free social science is, in our conception, neither ultimately attainable nor, in fact, desirable, because it cloaks the necessary value content of theory in an âobjectiveâ disguise. The principal function of âobjectivityâ is precisely that it denies the historical context and ideological nature of theory in its claim to a universal validity.
In this conception of theory the separation of economics and politics can be traced to the particular historical period which produced a conceptual separation between the state (or political society) and civil society: the eighteenth and early nineteenth centuries. The separation broadly corresponds to two distinct spheres of human activity, âto an emergent society of individuals based on contract and market relations which replaced a status based society, on the one hand, and a state with functions limited to maintaining internal peace, external defence and the requisite conditions for markets, on the otherâ (Cox, 1981, p. 126). This conception reflects a particular historical distribution of power, as did the notions of mercantilism before it,6 in which the interests of an emergent middle class are served by the separation and legitimation of an economics free from political (state) intervention. The interests of this group are further served by the institutionalisation of the separation, in the form of a dominant ideology (liberalism), as well as in state political processes and norms of behaviour.7 Liberalism became the defining perspective, the mainstream of Anglo-Saxon society, that shaped our conceptions, to the extent of setting the parameters for the establishment, maintenance and understanding of the postwar international economic order (Gardner, 1956; Ruggie, 1982). The incorporation of a particular notion of economics and politics into a prevailing ideology subsumes this notion as a given or fixed aspect of the social definition of reality. In this way it becomes the only legitimate way to define the field.
In a similar process the content and âproperâ concern of international relations also reflected the distinction between state and civil society. As political society is defined by the state, then âpoliticsâ is state action, particularly to ensure internal peace and the maintenance of the ârequisite conditions for marketsâ. Only one major political outcome, the achievement of security from external attack, required the state to engage in foreign intercourse, and depended on how successfully it did so. Hence a special mode of thinking was developed in order to understand the processes and outcomes of the âanarchicâ international society. Given the presumption of separability from politics, the resultant study of international relations developed a separate set of theories, requiring particular knowledge, which explained and clarified the outcomes of state external action, principally in the context of war.
However, much like the separation of economics and politics, the separation of international relations from politics only makes sense within the context of this distinction. If conditions change or if we can demonstrate that the original presumption of separability is historically and ideologically determined (as we have seen it is), then it becomes much harder to argue that the study of international relations is separate from the study of politics and that each can be pursued independently of the other. And if international relations is not in general separate from politics, then the area of inquiry of international political economy must necessarily include domestic politics and economics.
This theoretical conclusion is easily supported by our experience of international reality. Here the âboundary-crossing character of political processes challenges the assumptions of the autonomy of political processes within their own sphere of competenceâ (Leurdijk, 1974). The permeability of state authority is clear. Whether we understand this as âthe domestication of international politicsâ (Hanrieder, 1978) or the internationalisation of domestic politics, as implied by Katzenstein (1977), is for the moment secondary to its theoretical impact. If we have, as it seems, âpenetrated systems whose boundaries do not conform to the divisions between national and international systemsâ (Leurdijk, 1974), the study of international relations in general, and international political economy in particular, must encompass this reality. Moreover, as Hans Schmitt points out in one of the few analyses of this problem, The boundaries of the modern nation-state reflect the interaction of three separately bounded phenomena: the nation, the state, and the economyâ (Schmitt, 1972). Any change in the nature and extent of these phenomena or in the nature of their interaction will affect the area of inquiry.
The original definition of international relations produced an emphasis on international politics with war and the diplomacy of war (its avoidance and/or successful conclusion) as the principal processes and issue, and the state as the key political entity. Later characterised by Robert Keohane and Joseph Nye as âstate-centric realismâ (Keohane and Nye, 1977), the core assumptions of this definition successfully resisted the intellectual attacks of Marxism, from the late nineteenth century onwards, idealism in the 1920s and, in a different sense, behaviouralism in the 1960s (Lenin, 1939; Carr, 1942; Vasquez, 1982). But even though â...