Ideas of Liberalism and Marxism in Global Political Economy

Comparison

International Relations (IR) has traditionally focused on questions of war and peace and conflict and co-operation between states. International Political Economy (IPE) is a conscious shift towards understanding issues of wealth and poverty; of who gets what in the international system. The emergence of the discipline will be examined to establish why the period necessitated a new approach within IR. (Jackson 184) By examining key perspectives of IPE theory, its usefulness and relevance to explaining issues of poverty and wealth and deepening understanding of international relations will then be ascertained.

The very definition of IPE is a contentious issue in itself. Depending on the theoretical perspective subscribed to, different elements of IPE become important. This is why it is important to examine different theoretical perspectives of the field. Whilst some writers perceive IPE as a branch of international relations, others believe that IR should be considered part of political economy. (Keynes 321) Each theoretical approach defines what constitutes 'political' and the 'economic' and thus this affects how they fit into the model of 'political economy'.

The academic discipline of IR arose at the beginning of the twentieth century with the goal of understanding questions of war and peace and making the world a more peaceful place. This focus was maintained as a central aspect of the discipline until the 1960's as it was relevant to the period; the Second World War and Cold War seemingly highlighted the importance of the focus for the study. “International relations asked the question why nation-states continued to go to war when it was already clear that the economic gains made in war would never exceed the economic costs of doing so. (Jackson 181) International political economy today…asks why do states fail to act to regulate and stabilize an international financial system which is known to be vitally necessary to the 'real economy' but which all the experts in and out of government now agree is in dangerous need of more regulation for its own safety?” With America now established as the hegemon, the balance of power has re-established trade rather than warring relations between states. IPE is a response to a fundamental shift in current affairs which have shifted to issues of poverty and wealth.

Gill & Law suggest there are two reasons for the upsurge in interest in the field of IPE during the 1970's. The first of these, in 1971, was the changes to the system in the world economy, essentially due to the collapse of the Bretton Woods System and the oil crisis. The system that politicians had established to ensure global economic growth and trade after World War II had been seriously compromised. “Politically weak and economically poor recently decolonized countries were unhappy with their subordinate position in the international economic system.” Consequently, (Gilpin 37) proposals from the UN during the 1970's called for a 'New International Economic Order' to address the imbalance and disparity of wealth between developed and developing countries and improve the ...