ECONOMIC STRUCTURALISM
Understanding Critical Theories in International Political Economy (IPE)
Introduction:
Critical theories in International Political Economy (IPE) came about in the 19th century as a
response to liberal ideas. They emerged because people wanted to question the ways things
were organized in society and work towards making big changes in the world.
Overview of Critical Theories:
In the world of International Political Economy (IPE), critical theories take a different approach
compared to traditional ways of thinking. Instead of focusing only on individuals or countries,
they look at other things like social groups and power dynamics. These theories are considered
radical because they challenge the usual ways society operates and aims to bring about
significant transformations.
Variants of Critical Thought:
Marxist Theory:
Marxist theory looks at how society is divided into different classes and talks mainly about the
workers' needs and rights. Unlike what liberals say about everyone having the same interests,
Marxists disagree. They believe there's a constant struggle between the working class and the
capitalists who own the means of production. Marxists think that workers should take control of
society and the economy instead of the capitalists. This means a big change where everyone
shares resources and power equally, leading to a fairer society without exploitation.
Feminist Theory:
Examines gender relations between women and men.
Seeks to uncover how societal ideas about gender shape social organization.
Criticizes male liberal theorists for ignoring women's role and interests.
Environmentalist Theory:
Highlights the environment and the planet as key objects of concern.
Explores how people shape and are shaped by the environment.
Neo-Gramscian Theory:
Stresses the role of transnational classes and ideology in understanding the global economy.
Evolved from Italian Marxism.
Focus on Marxism:
Marxism is the oldest critical theory in IPE. It's about how different classes in society struggle
against each other, especially focusing on workers. Unlike what liberals believe about everyone
getting along, Marxists say there's a constant fight between workers and rich capitalists who
own everything. They think workers should have more power. Instead of everyone's interests
aligning, they say workers need to take control to make things fairer. They want a big change
where everyone shares power and resources equally. This idea challenges the way things are
now and aims for a more just society.
Key Concepts and Perspectives:
Critical theories focus on the idea that societies have systems of oppression, where certain
groups are unfairly treated or kept down. They also highlight the ongoing fight for fairness and
justice to make things right for everyone.
Frank's study, "ReOrient: Global Economy in the Asian Age," goes against what traditional
Marxists believe. Instead of saying that capitalism started in Europe and was the most important
part of history, Frank's study says that Europe got rich by taking advantage of resources from
other places, like Asia. This challenges the usual Marxist idea and gives a different perspective
on how the world's economy developed.
KEY ACTORS:
Marxist Focus on Class in the Global Political Economy:
Marxist writers view class as the primary actor shaping the dynamics of the global political
economy. They prioritize the role of class over individual agency, diverging from liberal
theories which emphasize the importance of individuals. Instead, Marxists argue that
understanding society through the lens of class struggle provides a more accurate depiction of
power relations and economic systems.
Rejection of Liberal Individualism and Embrace of Collectivism
Marxist writers reject the individualistic perspective promoted by liberal theory. Instead, they
advocate for a collectivist approach, aligning themselves with economic nationalist views. This
collectivist stance emphasizes the importance of considering collective interests and societal
structures rather than focusing solely on individual actions and freedoms.
Emphasis on Class over State Dependency:
In contrast to some other perspectives, Marxist writers do not rely on the state as a solution to
societal issues. Instead, they prioritize the significance of class dynamics in shaping social and
economic relations. This emphasis on class arises from Marx's analysis of capitalism, which
highlights the prevalence of exploitation within the system.
Marxist Understanding of Class Dynamics in Capitalism:
Marxist writers interpret and critique the concept of class in various ways. At its core, Marxism
defines class based on one's position within the production system. According to Marx, society
is divided into two main classes: the bourgeoisie, who own the means of production, and the
proletariat, who sell their labor to the bourgeoisie. This understanding of class dynamics forms
the foundation of Marxist analysis of capitalism and its inherent inequalities.
Companies as Tools of Exploitation
Marxist writers view companies, particularly multinational corporations (TNCs), as instruments
used to exploit and oppress the working class. They argue that these corporations play a
significant role in perpetuating exploitation by extracting surplus value from workers and
maintaining oppressive labor practices.
Role of Multinational Corporations in Exploitation:
According to Marxist theory, multinational corporations (TNCs) play a pivotal role in the
exploitation of the working class. These corporations concentrate capital and wield significant
economic power, allowing them to exploit labor and resources in both developed and
developing countries.
Capital Concentration and Imperialism:
The concentration of capital within multinational corporations is seen as a key aspect of
imperialism by Marxist writers. This concentration of economic power enables powerful
countries to exert control over the global economy and exploit resources and labor in less
developed regions.
State Representation of Class Interests:
Marxist theory challenges the notion that the state represents the interests of all individuals
equally. Instead, Marxist writers argue that the state primarily serves the interests of certain
classes, particularly the wealthy bourgeoisie. From this perspective, the state functions to
uphold the capitalist system and protect the interests of the ruling class, rather than promoting
the welfare of society as a whole.
KEY DYNAMICS:
Marxist Analysis of Dominance and Exploitation:
Marxist theories of International Political Economy (IPE) are centered around the concepts of
dominance and exploitation, both within and among societies. Unlike liberal perspectives,
Marxists perceive market relations as inherently exploitative, particularly under capitalism.
They argue that workers are systematically underpaid for their labor, contributing to the
accumulation of wealth by capitalists.
Tendencies of Capitalism and Their Implications:
Marxists identify three key tendencies of capitalism that contribute to instability and conflict in
international economic relations. Firstly, there's a tendency for the rate of profit to fall, which
leads to fierce competition among capitalists and drives down workers' wages. Secondly,
capitalism results in uneven development, where certain centers grow wealthy at the expense of
others, fostering conflict between countries. Lastly, capitalism leads to overproduction or
underconsumption, causing fluctuations in the business cycle and undermining social stability.
Dependency Theory and Persisting Poverty:
A revision of Marxist thought known as 'dependency theory' provides insights into the
persistent poverty of many states. This theory suggests that poor countries face barriers to
development due to economic exploitation by developed states. Dependency theorists argue that
underdevelopment in some parts of the world is a result of development in others. This
perspective influenced attempts by developing countries to create a New International
Economic Order (NIEO) in the 1970s, although it was undermined by the adoption of liberal
economic policies in the 1980s.
Radical Opposition to Globalization:
Radical theorists, drawing on Marxist principles, oppose globalization for various reasons. They
argue that globalization serves to maintain and increase exploitative relations, rather than
promoting genuine development. Some view globalization as a form of imperialism in modern
guise, designed to further the interests of capitalist powers, particularly the US. They assert that
discussions of globalization may obscure underlying power relations and serve to reinforce
dominant ideologies.
Revival of Marxist IPE in the 1980s and 90s:
In the 1980s and 90s, Marxist IPE experienced a resurgence, influenced by scholars like
Antonio Gramsci. These scholars, such as Robert Cox and Timothy Sinclair, focused on the role
of social forces and ideology in promoting neoliberal globalization. They argued that neoliberal
policies were advanced through ideological dominance, which secured the consent of the
governed despite perpetuating inequality and injustice.
CONFLICT AND COOPERATION:
Critical Perception of International Economic Relations:
Critical writers perceive international economic relations as a zero-sum game, where gains for
one party result in losses for another. They view the structure of global capitalism as inherently
conflictual, with two primary forms of conflict prevailing.
Conflict Within States: Class Struggle:
Within states, conflict arises between capitalists and workers, reflecting the fundamental clash
of interests between these two groups. According to Marxists, this conflict is objective and
driven by the dynamics of capital accumulation. The state serves as the battleground for this
class struggle, as workers and the bourgeoisie vie for control and influence.
Conflict in the International Arena: Imperialism:
In the international arena, conflict between workers and capitalists is often obscured by
nationalism and state intervention. Through mechanisms of imperialism, dominant states
oppress weaker ones, setting the stage for an international struggle between imperialist powers
and their victims.
Marxist Theories of Imperialism and Conflict:
Marxist theories, particularly Lenin's theory of imperialism, provide explanations for the
tendency of capitalist states to engage in conflict and war. Lenin's theory combines explanations
of underconsumption in domestic markets and the growth of finance capital, arguing that
conflict and war are inevitable outcomes of capitalist competition for profit.
Global Conflict in the 21st Century:
In the 21st century, conflict between social forces extends to a global scale. Elites pushing for
neoliberal principles encounter opposition from social movements advocating for
environmental regulation, labor standards, gender equity, and economic justice. Critical analysts
depict this global conflict as occurring within, above, and across states.
CRITICAL THEORY TODAY
Evolution of Marxism Post-Soviet Union:
Following the end of the Soviet Union and the decline of communism, countries that followed
Marxist ideas no longer exist. But the critical way of thinking that Marxists brought continues
in different areas. Even though places like Russia and China turned to capitalism, the problems
that Marxism talked about are still around.
Renewed Interest in Marxist Critiques:
Since the financial crisis in 2008 and the ongoing money problems, more people are interested
in what Marx had to say about capitalism. One book, "The Enigma of Capital" by Harvey, talks
about how big financial companies have gained a lot during the crisis, while regular people
have suffered from things like budget cuts.
Critique of Power Imbalances and Inequality:
Some groups speak up against the unfairness and inequality in the world's economy. They use
ideas similar to Marxism. Some groups focus on making trade rules fairer for poorer countries.
Others fight for better opportunities for girls to go to school and get jobs. Environmentalists
also criticize the harm that comes from too much focus on making money, putting the health of
the planet first.
Visual Representation of Critical IPE Theory:
A visual representation often used to illustrate critical IPE theory is the layer cake model. This
model depicts various groups stacked in layers across the global political economy, with some
classes, genders, races, or species positioned on top and others at the bottom. This
representation underscores the hierarchical nature of power relations and social inequalities
within the global economy.
