Unit Two: Realist Theory and IPE

1. Unit Two: Realist Theory and IPE Dr. Russell Williams

2. Outline: Required Reading: • Cohn, Global Political Economy, Ch. 3. Class Discussion Reading: • Susan Strange, “The Future of the American Empire,”Journal of International Affairs, Fall 1988, Vol. 42 Issue 1, pp. 1-17. • Realism – the Basics • Implications of Realism for State Behavior • Realist Approaches to IPE • Modern Realism and IPE - Hegemonic Stability Theory • Conclusion • Further Reading

3. 1) Realism – the Basics: • Dominant approach to the study of IR, but less important in IPE? • States are key actor • E.g. IO’s and MNC’s often only “extensions” of state power • States are: • “Unitary” - Domestic politics and interests less important • “Rational” - States pursue predictable strategies based on calculations of self interest • “Survival” • “Power” • “Sovereignty” - Internal and external • Global politics is a “self help” system – states must look after themselves

4. “Politics” more important than economics • Economics only important topic when it relates to state power • Skepticism about international law, rules, regimes and values • Rules are for the “weak”. . . . • Skepticism about cooperation • States only cooperate when then they gain more than others = little cooperation under normal circumstances? • Realism “parsimonious” • Has few variables and leads to clear predictions

5. Realist Theories of International Relations (IR): • Avoid overgeneralization – not one single theory i) Classical Realism: (Machiavelli to Morgenthau) • Human nature is bad - hard to trust others • Reject liberal views of human nature • Therefore, other states are an inherent threat • E.g. Hobbes’“State of nature” • Makes a virtue of pursuit of power • Other theories seen as “idealism” (E.H. Carr)

6. ii) Structural Realism (1970-Present) • Waltz, Grieco and Mearsheimer • More scientific - explored where threats came from • Three “images” • Human nature? • Domestic Politics? • International Structure – lack of Government? = International Structure matters!!! • Global anarchy means states have to be amoral in the pursuit of power • Only two independent variables: • Anarchy • Distribution of power in the interstate system • Large impact on policymakers in US • More role for economics . . . (E.g. Thucydides)

7. 2) Implications for State Behavior: a) The “Security Dilemma”: Security and pursuit of power is a “zero sum” game • Any increase in my security or power means a decrease for others . . . = Cooperation unlikely b) “Relative gains” more important then “absolute gains” • States only cooperate to pursue relative advantages over others =E.g. IO’s seen as tools of powerful states which hurt the interests of weaker states

8. c) State policy driven by international structure and position in the global “balance” of power • Powerful states will pursue different strategies from weak – try to ensure the status quo =E.g. Only economically powerful support free trade Bottom Line: • Cooperation difficult • States unlikely to expose themselves to interdependence

9. 3) Realist Approaches to IPE a) Proto-realism and economics: • Most classical realists integrated international economics in their analysis. • Economics seen as a source of conflict and war • E.g. Imperialism • Economy important to state power • E.g. Thucydides and the Athenians • E.g. Machievelli

10. b) “Mercantilism” (16th to 18th Century) Classical mercantilism: • States’ power dependent on treasure • Gold is key to power of emerging sovereign states • States seek to increase their holdings of gold and silver through: • Conquest and colonies • Increase exports, decrease imports • Problems?

11. c) Economic Nationalism and Neo Mercantilism: • 19th and 20th century and beyond . . . • Industrialization seen as key economic goal • Necessary to independence (sovereignty) • Essential to military might (security) • States need industrial development to survive (Friedrich List) • States should: • Adopt high tariffs (protectionism) • Encourage development of national industries

12. 4) Modern Realism and IPE: Post War Period: • Liberal free trade collapsed prior to WWII  “Economic nationalism” • Post War Realists believed economic cooperation had to be enforced by dominant states • Could reduce threats and conflict • Breton Woods system and free trade possible because: • US military and economic dominance • Threat of the Soviet Union = other states had no choice but to cooperate

13. 1970’s - Post War System under stress: • Economic crises = Post War liberal economic order under threat???? • US decline? • US economy relatively smaller • Economic success of Germany and Japan • OPEC • Global economic slowdown • Financial instability = end of dollar standard • “Détente” – decline of the cold war • Result: Realists begin to pay more attention to economics =Declining economic cooperation in north and era of the “new protectionism”

14. “Hegemonic Stability Theory (HST)”: • 1980s realists argue, “politics” still dominant over economics =Economic “cooperation” becoming more difficult because of declining US power • “Hegemony” (Realism): Leadership, or dominance, of international system by single state HST assumes: • Like liberalism, free trade and globalization good in theory, but unlikely to occur because states mistrust one another under conditions of anarchy • “Free trade” and economic cooperation seen as “public goods” • Non excludible and non rival =“Free riders” – collective action problems

15. “Hegemonic Stability Theory (HST)”: • Hegemonic state can either: • Provide public goods itself - So dominant economically that it is in its interest to do so . . . . • Force “free riders” to “pay” for public goods • Key claim: Hegemony = Liberal economic order • Problems: • What is hegemony???? • Economic or military? • “Soft Power” or ideology? • How do we know when a state is hegemonic, or the world is uni-polar?

16. “Hegemonic Stability Theory (HST)”: • Problems: 1) Risk of tautology • “Reading off the “dependent variable” 2) Empirical record? • If US had declined by 1980s, why globalisation? Contemporary Realism: • Retreat to “High Politics”? • Post 9/11 return to emphasis on security and military conflict • Economic issues have been “securitized”

17. Conclusions : a) Strengths of Realism: • Parsimony • Focus on distributional outcomes – who gains what . . . . • Rejection of idealistic prescriptions of how the world should be

18. b) Weaknesses of Realism: • Domestic politics? • Under emphasis of importance of wealth and economics? • Empirical problems? • There seems to be a lot more economic cooperation then realists assumed likely . . . . • Does HST overcome this problem?

19. Further Reading: • Samuel P. Huntington, “The Lonely Superpower,”Foreign Affairs, 78-2 (March/April 1999), pp. 35-49. • Example of realist analysis of contemporary US challenges. • Joseph M. Grieco, “Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism,”International Organization, 42-3 (Summer 1988), pp. 485-507. • John J. Mearsheimer, “The False Promise of International Institutions,”International Security, 19-3 (Winter 1994/95), pp. 5-49. • Examples of realism’s critiques of liberal challengers

20. For Next Time: Unit Three: Thinking Liberally - Diversity and Hegemony in IPE • Required Reading: • Cohn, Ch. 4. • Class Discussion Reading: • Eric Helleiner, “Economic Liberalism and Its Critics: The Past as Prologue?,”Review of International Political Economy, 10-4 (November 2003), pp. 685-696.