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THE MARXIAN POLITICAL ECONOMY APPROACH TO INTERNATIONAL RELATIONS INTRODUCTION 1.

Political economy is the social science that deals with political

science and economics as a unified subject; the study of the interrelationships between political and economic processes. It is also the study and use of how economic theory and methods influence political ideology. Political economy is therefore the interplay between economics, law and politics, and how institutions develop in different social and economic systems, such as capitalism, socialism and communism. Political economy analyzes how public policy is created and implemented. 2. The subject explores the relationship between individuals and Political

society and between markets and the state, using additional methods drawn from economics, political science, and sociology. economy is thus concerned with how countries are managed, taking into account both political and economic factors. The field encompasses several areas of inquiry, including the politics of economic relations, domestic political and economic issues, the comparative study of political and economic systems and the study of international political economy. 3. The field has also expanded to verify the original rate of change of It analyzes such and institutional

political institutions and the role of culture, even of imperialism in explaining economic outcomes and developments. public policy as monopoly, market 1 protection

corruption. International political economy is an inter-disciplinary field comprising approaches to international trade, finance and state policies such as monetary and fiscal policies affecting international trade. 4. Political economy began with assertions of the "labour theory of

value" and the "quantity theory of money". Three broad traditions of political economy which currently influence political science are identified. These are: a. b. The tradition of classical political economy. The tradition of political economics which uses statistical and

modeling techniques to test hypotheses about the relationship between government and the economy. c. 5. The Marxian tradition.

The purpose of this work is to examine the approach of Marxian

political economy within the global purview of international relations in order to aid the understanding of its relevance and possible applications.

AIM 6. The aim of this paper is to examine the Marxian Political Economy

Approach to International Relations. 2

SCOPE 7. The paper would cover the following: a. b. c. d. Historical Overview of Political Economy. International Political Economy. Perspectives of International Relations. The Realists and Liberalists Political Economy Approaches to

International Relations. e. Marxian Political Economy Approach to International

Relations. f. Future of the Interstate System.

DEFINITIONS OF TERMS 8. International Relations. International relations is the study of organizations, non-governmental international organizations nongovernmental and multinational

relationships between countries including the roles of states, intergovernmental organizations,

corporations. It is both an academic and public policy field, and can be 3

either positive or normative as it both seeks to analyze as well as formulate the foreign policy of particular states. It is often considered a branch of political science.1 9. State. A state is defined as a large social system with a

set of rules that are enforced by a permanent administrative body known as government.2 10. Sovereign . Sovereign is the ultimate power to control people

and events within the area of a state.3 11. Nation. Nation is decribed as a group of individuals who feel

that they have so much in common that they should all become a particular state. Unlike the term state, the term nation refers to the subjective feelings of its people. By this definition almost all the present nations would like to become nation-states, but many nations are actually parts of other states, and many states are not nation-states. On the whole, nation-states can count on much greater loyalty from their citizens than states that contain many nations, and this gives them greater strength in international dealings. As you can see, the term international should really be interstate.4 12. Society . A society is the population controlled by a state or the

population that forms a nation, or both. Some societies are territorially limited to a single geographical area and a single state while others are
1 2

Wikitionary. Concise Oxford Dictionary. 3 Id 4 Encyclopedia Britanica.

not. The term society, unlike the terms state and nation, is not limited to a single definition because societies overlap with different states and nations.5 13. Country. A country is a well-defined geographical area.6

14. Interdependence . Interdependence refers to 2 or more nationstates which are mutually dependent, i.e. national populations become closely linked through international transactions. The notion of independence of any society is totally relative in this century. Not even the core societies are truly independent because their strength depends, in part, on the control of resources that come from peripheral and semi-peripheral areas. HISTORICAL OVERVIEW OF POLITICAL ECONOMY 15. Political economy is an old subject of intellectual inquiry but a

relatively young academic discipline. The analysis of political economy, in terms of the nature of state and market relations both in practical terms and as moral philosophy, has been traced to Greek philosophers such as Plato, Aristotle and other scholars who propounded the natural laws of philosophy. A critical development in the intellectual inquiry of political economy was the prominence of the mercantilist school which called for a strong role of the state in economic regulation.

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Id Op Cit

16.

The writings of the Scottish economist, Sir James Stuart, whose

inquiry into the Principles of Political Economy in 1767 was considered the first systematic work on economics; and the policies of JeanBaptiste Colbert, Controller-General to Louis XIV of France; epitomized mercantilism in theory and in practice respectively. Political economy emerged as a distinct field of study in the mid-18th century, largely as a reaction to mercantilism, when the Scottish philosophers Adam Smith and David Hume; and the French economist Franois Quesnay began to approach this study in systematic terms. They took a secular approach, ie refusing to explain the distribution of wealth and power in terms of God's will; but instead, appealed to the political, economic, technological and social factors and the complex interactions between them. 17. Smith's landmark work, An Inquiry into the Nature and Causes of the Wealth of Nations, in 1776, which provided the first comprehensive system of political economy, conveys in its title the broad scope of early political economic analysis. Although the field itself was new, some of the ideas and approaches it drew upon were centuries old. It was influenced by the individualist orientation of the English political philosophers Thomas Hobbes and John Locke; the Realpolitik and Italian political theorist Niccol Machiavelli; and the inductive method of scientific reasoning invented by the English philosopher Francis Bacon. 18. Many works by political economists in the 18th century

emphasized the role of individuals over that of the state and generally 6

attacked mercantilism. This is perhaps best illustrated by Smith's famous notion of the invisible hand, in which he argued that state policies often were less effective in advancing social welfare than were the self-interested acts of individuals. Individuals tend to advance only their own welfare, Smith asserted, but in so doing they also advance the interests of society as if they were guided by an invisible hand. Arguments such as these gave credence to individualcentred analysis and policies to counter the state-centred theories of the mercantilists. 19. The 19th century English political economist David Ricardo

further developed Smith's ideas. His work on the concept of comparative advantage, posited that states should produce and export only those goods that they can generate at a lower costs than other nations and import those goods that other countries can produce more efficiently. Smith's notion of individual-centred analysis of political economy did not go unchallenged. The German-American economist Friedrich List developed a more-systematic analysis of mercantilism that contrasted his national system of political economy with what he termed Smith's cosmopolitical system, which treated issues as if national borders and interests did not exist. In the mid19th century, communist historian and economist, Karl Marx proposed a class-based analysis of political economy that culminated into his massive critical treatise known as the Das Kapital. 20. In the second half of the 20th century, as social sciences became increasingly abstract, formal and specialized in both focus and 7

methodology, political economy was revived to provide a broader framework for understanding complex national and international problems and events. The field of political economy today encompasses several areas of study including the politics of economic relations; domestic political and economic issues; the comparative study of political and economic systems; and international political economy. The emergence of international political economy, first within international relations and later as a distinct field of inquiry, marked the return of political economy to its roots as a holistic study of individuals, states, markets and society. INTERNATIONAL POLITICAL ECONOMY 21. or International political economy studies problems that arise from, are affected by, the interaction of international politics,

international economics, and different social systems and societal groups. It explores a set of related questions that arise from issues such as international trade, international finance, relations between wealthier and poorer countries, the role of multinational corporations, and the problems of hegemony along with the consequences of economic globalization. Analytic approaches to international political economy tend to vary with the problem being examined. Issues can be viewed from several different theoretical perspectives, including the mercantilist, liberalists, and structuralists perspectives. 22. Mercantilists are closely related to realists. They focus on

competing interests and capabilities of nation-states in a competitive 8

struggle to achieve power and security. Liberalists are usually optimistic about the ability of humans and states to construct peaceful relations and world order. Economic liberalists, in particular, limit the role of the state in the economy in order to let market forces decide political and social outcomes. Structuralists ideas are rooted in Marxist analysis and focus on how the dominant economic structures of society affect class interests and relations. Each of these perspectives are often applied to problems at several different levels of analysis that point to complex root causes of conflict traced to human nature, national interests and the structure of the international system. For example, analysis of U.S. policy regarding migrants from Mexico must take into consideration patterns of trade and investment between the 2 countries and the domestic interests on both sides of the border. Similarly, domestic and international interests are linked by trade, finance and other factors in the case of financial crises in developing countries such as Nigeria. The distinction between foreign and domestic becomes as uncertain as the distinction between economics and politics in a world where foreign economic crises affect domestic political and economic interests through trade and financial linkages or through changes in security arrangements or migrant flows. 23. Contemporary international political economy appeared as a

subfield of the study of international relations during the era of Cold War rivalry between the Soviet Union and the United States from 1945 - 1991. Analyses initially focused largely on international security but later came to include economic security and the role of market 9

actors, including multinational corporations, international banks, cartels like OPEC, and international organizations like IMF, in national and international security strategies. International political economy grew in importance as a result of various dramatic international economic events, such as the collapse of the Bretton Woods International Monetary System in 1971 and the Oil Crisis of 197374. Examples of other contributors to the increase in the importance of International Political Economy are the recent Global Economic Meltdown and the Nigerian Merger/Acquisition and Financial Bail-out of Banks. 24. Following the end of the Cold War, international political

economy became focused on issues raised by economic globalization, including the viability of the state in an increasingly globalized international economy. The role of multinational corporations in generating conflict as well as growth in the new global economy, and various problems related to equity, justice, and fairness became issues amongst analysts. In the 1950s and 1960s, American economist W.W. Rostow, and other experts on Western economic development, made popular the argument that after a period of tension, disorder and even chaos within a developing country that had been exposed to the West, that the country would eventually transform; and development would occur. In the late 1960s up to the 1990s, many development experts, from a structuralists point of view, posited a variety of explanations as to why many developing countries did not seem to develop or change much. That is why the German-born economist Andre Gunder Frank made popular the idea 10

that, when developing countries connect to the West, they become under-developed. 25. Social theorist and economist Immanuel Wallerstein, whose works have made a lasting impact on the study of the historical development of the world capitalist system, argued that development occurs only for a small number of semi-peripheral states and not for those peripheral states that remain the providers of natural resources and raw materials to the developed industrial core states. Such themes were evident in the 1990s and the early 21st century when a number of politically and economically powerful multinational corporations were accused of exploiting women and children in unsanitary and unsafe working conditions in their factories in developing countries. These cases and others like them were seen by some structuralists as evidence of a race to the bottom in which, in order to attract investment by international businesses, many developing countries relaxed or eliminated worker-protection laws and environmental standards.

PERSPECTIVES OF INTERNATIONAL RELATIONS 26. The history of international relations based on nation-states is Prior to this, the European medieval

often traced to the Peace of Westphalia of 1648, where the modern state system was developed. organization of political authority was based on a hierarchical religious order. Westphalia instituted the legal concept of sovereignty that did not 11

exist in classical and medieval times, which essentially meant that rulers, or the legitimate sovereigns, had no internal equals within a defined territory and no external superiors as the ultimate authority within the territory's sovereign borders. 27. Westphalia encouraged the rise of the independent nation-states

and the institutionalization of diplomacy and armies. This particular European system was exported to the Americas, Africa and Asia via colonialism and has been viewed as the "standards of civilization". The contemporary international system was finally established through decolonization during the Cold War. The ability of contemporary international relations discourse to explain the relations of these different types of states is open to varying discourse. Many scholars have viewed International Relations to include the individual level, the domestic nation-state as a unit, the international level of transnational and intergovernmental affairs, and the global level. 28. International Relations theory has a long tradition of drawing on Many cite Sun Tzu's The Art of

the works of other social sciences.

War, Thucydides' History of the Peloponnesian War and Chanakya's Arthashastra as the inspiration for realist theory. Hobbes' Leviathan and Machiavelli's The Prince further elaborates on this theory. Similarly, liberalism draws upon the works of Kant and Rousseau, with the work of the former often being cited as the first elaboration of democratic peace theory. In the twentieth century, in addition to contemporary theories of liberal internationalism, Marxism has been a foundation of international relations. 12

REALIST AND LIBERALIST POLITICAL ECONOMIC APPROACHES TO INTERNATIONAL RELATIONS 29. There have been many approaches in the study of international

relations. Some of these approaches are Institutionalism, Constructivism, Idealism, Realism, Neo-realism, liberalism, neo-liberalism, Marxism and others. Prominent among them are realism and liberalism. The term realism comes from the German word realpolitik. Realpolitik is a combination of two words: the Spanish "real" (meaning "royal") and the German "politik" (meaning "politics"). Thus, realpolitik means "royal politics", or the balance of power among monarchs. Bismarck coined the term after following Metternich's lead in finding ways to balance the power of European empires. Balancing power meant keeping the peace; and careful realism practioners tried to avoid arms races. However, during the early-20th Century, arms races and alliances occurred leading to World War I. REALIST APPROACH TO INTERNATIONAL RELATIONS 30. The Realists approach to International Relations believe that

nations act only out of self-interest and that their major goal is to advance their own positions of power in the world. The ideas of realism came from the writings of such historical figures as Sun Tzu of ancient China, Thucydides of ancient Greece, and Italys Niccol Machiavelli. All of these thinkers argued that the leaders of nations use their power to advance the interests of their own nations with little regard for morality 13

or friendship. In order to survive, realists believe leaders must build their power and avoid feelings of friendship or morality that might make them vulnerable to more ruthless adversaries. They believed that conflict and war are inevitable. For one nation to gain something, another must lose. This means alliances with other nations cannot be counted upon and cooperation between nations cannot last. Realists believe that nations should always be heavily armed and ready for war. Friendships, religions, ideologies, cultures and economic systems matter little. 31. Nations act selfishly and do not answer to any higher authority.

Realists argue that the actions of individual nations have the biggest influence on international relations. They contend that nations act rationally, not impulsively, and that they weigh the benefits and drawbacks of all their options before choosing a course of action. Furthermore, it is believed that nations are not driven by psychological or cultural influences. Instead, they act with the knowledge that they live in a world where there is no central government for all nations that any nation can appeal to for justice or protection. Without that higher authority, nations must protect themselves and look after their own interests. Realists claim that these characteristics have applied to all nations throughout history. As a result, realists presume that international relations are primarily influenced by international security and military power. They consider military force as the most important characteristic of any nation. Other characteristics such as population, moral beliefs or wealth matter primarily because they affect military strength. They see international trade as a potential source of national power, because nations can accumulate wealth by controlling trade. 14

They believe a nations relative power compared to other nations is more important than the well-being of its citizens. In a world with an ever-present possibility of war, winning matters above all things. 32. The realist approach has been criticized for being too simplistic

and for failing to capture the complexities of international relations. Since a nations power typically is very difficult to measure, realists have been criticized for their belief that nations strive only to accumulate power. Critics also argue that a nations actions result from the conflicting pulls of various interest groups, constituencies, agencies, and individuals. They maintain that the national interest of any nation may be impossible to define because so many different constituencies exist, and a nations pursuit of its interests may be far from rational. One glaring example was World War I which seemed irrational because almost all participants lost more than they gained. 33. Realism, thus, makes several key assumptions. It assumes that the

international system is anarchic, in the sense that there is no authority above states capable of regulating their interactions. States must arrive at relations with other states on their own, rather than it being dictated to them by some higher controlling entity, that is, no true authoritative world government exists. It also assumes that sovereign states, rather than international institutions, non-governmental organizations or multinational corporations are the primary actors in international affairs. According to realism, each state is a rational actor that always acts towards its own self-interest, and the primary goal of each state is to

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ensure its own security. For Realists, States are inherently aggressive and that territorial expansion is only constrained by opposing power. 34. There are two sub-schools of realism, Maximal Realism and

Minimal Realism. The theory of Maximal Realism holds that, the most desirable position to be in, is that of the hegemony which is the most powerful entity in the world. Smaller entities will align themselves with the hegemony out of political self-interests. They argue that nonhegemonic states will ally against the hegemony in order to prevent their own interests from being subsumed by the hegemonys interests. Under the Minimal-Realism theory, it is possible to have two equally powerful co-hegemonies with whom any smaller entity may ally, depending on which hegemony better fits with the smaller entity's policies at the moment. LIBERALIST APPROACH TO INTERNATIONAL RELATIONS 35. Liberalism, on the other hand, holds that state preferences, rather

than state capabilities, are the primary determinant of state behaviours. Preferences will vary from state to state, depending on their culture, economic system or type of government. Different strands of liberalism like commercial liberalism, liberal institutionalism, idealism and regime theory have emerged. Over time, liberalism has evolved into neoliberalism. According to Andrew Moravcsik7, the liberal approach focuses on variations in socially-determined state preferences, distinguishing liberal theory from other theoretical approaches like realism. In explaining patterns of war, for example, liberals do not look to inter7

Andrew Moravcsik, "The New Liberalism," in Christian Reus-Smit and Duncan Snidal, eds

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state imbalances of power; bargaining failure due to private information or uncertainty; or particular non-rational beliefs or propensities of individual leaders, societies or organizations. Instead, they look to conflicting state preferences derived from hostile nationalist or political ideologies; disputes over economic resources; or exploitation of unrepresented political constituencies. For liberals, a necessary condition for war is that social pressures lead one or more "aggressor" states to possess "revisionist" preferences so extreme or risk-acceptant that other states are unwilling to submit. 36. In domestic politics, liberals have opposed feudal restraints that

prevent the individuals from rising out of low social status like barriers such as censorship that limit free expression of opinion; and arbitrary power exercised over the individuals by the state. In international politics, liberals have opposed the domination of foreign policy by militarists and the exploitation of native colonial people. Rather, they have sought to substitute with a cosmopolitan policy of international cooperation. In economics, liberals have attacked monopolies and mercantilist state policies that subject the economy to state control. In religion, liberals have fought against church interference in the affairs of the state and attempts by religious pressure groups to influence public opinion. A case in point is the recent visit of the Pope to Poland where citizens protested against the use of public funds for lavish receptions for the Pope. 37. A distinction is sometimes made between negative liberalism and

positive liberalism. Between the mid-17th and the mid-19th centuries, 17

liberals fought chiefly against oppression, arbitrariness and misuse of power and emphasized the needs of the free individual. About the middle of the 19th century many liberals developed a more positive program stressing the constructive social activity of the state and advocating state action in the interests of the individual. The presentday defenders of the older liberal policies deplore this departure and argue that positive liberalism is merely authoritarianism in disguise. The defenders of positive liberalism argue that state and church are not the only obstructors of freedom, but that poverty may deprive the individual of the possibility of making significant choices and must therefore be controlled by constituted authority. An example is the proposition for non-interest banking system seen to have the potentials to help the poor masses devoid of religious sentiments. MARXIAN POLITICAL ECONOMIC APPROACH TO INTERNATIONAL RELATIONS 38. Marxism is amongst the theories of international relations.

Proponents of Marxist political economic approach to international relations were Karl Marx and Friedrich Engels. According to Marxists, both realism and liberalism are ideologies introduced by the economic elites to defend and justify global inequality. Marxists argue that class is the fundamental unit of analysis of international relations; and that the international system has been constructed by the upper classes and the wealthiest nations in order to protect and defend their interests. Two of the most important Marxist-derived bodies of theory in international

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relations are the World-Systems theory, led by Immanuel Wallerstein and the Dependency theory led by Andre Gunder Frank. 39. The basic tenet of Marxism is that the world is divided not into

politically determined nations but into economically determined classes. Consequently, politics does not supersede economics, but rather economics supersedes politics. The various Marxist theories of international relations agree that the international state system was constructed by capitalists and therefore serves the interests of wealthy states and corporations, which seek to protect and expand their wealth. The most successful International Relations theory derived directly from Marxism is Immanuel Wallersten's World Systems Theory. According to Wallerstein, the "First World" and "Third World" are merely components of a larger world system which originated in 16th-century European colonialism. They make up the "core" and the "periphery" of the world systems respectively ie the central wealthy states which own and chiefly benefit from the mechanisms of production; and the impoverished "developing" countries which supply most of the human labour and natural resources exploited by the rich. States which do not fit either class, but lie somewhere in the middle of the model, are referred to as "semi-peripheral." 40. The core-periphery thesis of world-systems theory is based upon

another body of work known as the Dependency Theory. It argues that the basis of international politics is the transfer of natural resources from peripheral developing countries to core wealthy states, mostly the Western industrialized democracies. The poor countries of the world are 19

said to provide inexpensive human and natural capital, while the foreign policies of wealthy countries are devoted to creating and maintaining this system of inequality. International economic law and other such systems are seen as means by which this is done. To combat these systems of inequality, traditional Marxists and dependency theorists have argued that poor countries should adopt economic control policies that can break them out of the prison of international economic controls such as import substitution rather than the export-based models usually favoured by international economic organizations such as the World Bank and International Monetary Fund. 41. The Nigerian oil sector goes against this Marxian theory by its

constant export of crude oil. Infact, it is a known assumption that Nigerian elites try hard to ensure that the Nigerias refineries do not work. This is to guarantee the favour of international economic organisations which in turn continues to enrich them. FUTURE OF THE INTER- STATE SYSTEM AND INTERNATIONAL POLITICAL ECONOMY 42. Today, many of the foundations of the interstate system are being

challenged by changes in technology and international norms. The idea of territorial integrity and a nations sovereignty, that is, its absolute authority over its own internal matters, are being undermined. Neither ballistic missiles nor television signals respect borders. Television, the mass media, telephones and the Internet are erasing the boundaries between nations, blending once distinct cultures together and expanding 20

transnational

connections.

Mass

communication

is

also

drawing

worldwide attention to domestic issues that in the past were of little concern to other nations, such as human rights, the status of women, environmental practices and democracy. In addition, the territories of nations are changing. Some nations are becoming integrated into larger entities, for example, the European Union. Others are fragmenting into smaller units like the Soviet Union. 43. These changes have led to a debate among scholars about

whether the interstate system will survive in its current form or evolve into another system that does not yet exist. Some scholars believe that nations, with their different cultural identities, boundaries and governments, are becoming obsolete. They believe economics is becoming the driving force in international relations, encouraging increased cooperation among nations. They believe that cooperation, along with technological changes, will continue to blur the distinction between nations and the importance of national borders. Other scholars think that the interstate system will endure because nations have military forces; and military forces still determine what happens in the world and always will. The interstate system of nations remains intact, but it is increasingly overlaid with new forces and realities that respect neither the idea of sovereignty nor borders.

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CONCLUSION 44. The international political economy faces a number of challenges

in the coming decades. The largest challenge is addressing the dislocation caused by rapid economic change. While the theory of comparative advantage asserts that all nations benefit from free trade, the benefits are not distributed equally. The increased economic interdependence of rich and poor nations has resulted in a global backlash, with many poor nations viewing their poverty as a direct consequence of trade and open participation in the global economy. 45. The growing gap between developed and developing nations has

produced significant global backlash, ranging from anti-Western Islamic movements in the Middle East; violence against immigrants in Germany; to regular demonstrations at the annual meetings of the WTO and other international financial institutions. The deep economic depression in the former Soviet Union and socio-economic deterioration in Africa also threaten the stability of an interdependent global economy. 46. It is an undeniable fact that we live in a globalising world. Theories

propounded by great philosophers do not give hard and fast rules on how to tackle political and economic challenges being faced by nations states. All theories as may have been understood during the course of this presentation are deficient in one aspect or the other. As such, adopting a particular theory hook, line and sinker may not necessary be the solutions to these problems. It is therefore the resolve of this Syndicate, that every nation should have a good understanding of the 22

uniqueness of their nations problems viz-a-viz the world international systems. Accordingly, a blend of these theories, with a good sense of judgement, should then be adopted.

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