Naeem Inayatullah and David L. Blaney
Heterodox work in Global Political Economy (GPE) finds its motive force in challenging the ontological atomism of International Political Economy (IPE) orthodoxy. Various strains of heterodoxy that have grown out of dependency theory and World-Systems Theory (WST), for example, emphasize the social whole: Individual parts are given form and meaning within social relations of domination produced by a history of violence and colonial conquest. An atomistic approach, they stress, seems designed to ignore this history of violence and relations of domination by making bargaining among independent units the key to explaining the current state of international institutions. For IPE, it is precisely this atomistic approach, largely inspired by the ostensible success of neoclassical economics, which justifies its claims to scientific rigor. International relations can be modeled as a market-like space, in which individual actors, with given preferences and endowments, bargain over the character of international institutional arrangements. Heterodox scholars’ treatment of social processes as indivisible wholes places them beyond the pale of acceptable scientific practice. Heterodoxy appears, then, as the constitutive outside of IPE orthodoxy.
Heterodox GPE perhaps reached its zenith in the 1980s. Just as heterodox work was being cast out from the temple of International Relations (IR), heterodox scholars, building on earlier work, produced magisterial studies that continue to merit our attention. We focus on three texts: K. N. Chaudhuri’s Asia Before Europe (1990), Eric Wolf’s Europe and the People Without History (1982), and L. S. Stavrianos’s Global Rift (1981). We select these texts for their temporal and geographical sweep and their intellectual acuity. While Chaudhuri limits his scope to the Indian Ocean over a millennium, Wolf and Stavrianos attempt an anthropology and a history, respectively, of European expansion, colonialism, and the rise of capitalism in the modern era. Though the authors combine different elements of material, political, and social life, all three illustrate the power of seeing the “social process” as an “indivisible whole,” as Schumpeter discusses in the epigram below. “Economic facts,” the region, or time period they extract for detailed scrutiny are never disconnected from the “great stream” or process of social relations. More specifically, Chaudhuri’s work shows notably that we cannot take for granted the distinct units that comprise a social whole, as does the IPE orthodoxy. Rather, such units must be carefully assembled by the scholar from historical evidence, just as the institutions, practices, and material infrastructure that comprise the unit were and are constructed by people over the longue durée. Wolf starts with a world of interaction, but shows that European expansion and the rise and spread of capitalism intensified cultural encounters, encompassing them all within a global division of labor that conditioned the developmental prospects of each in relation to the others. Stavrianos carries out a systematic and relational history of the First and Third Worlds, in which both appear as structural positions conditioned by a capitalist political economy. By way of conclusion, we suggest that these three works collectively inspire an effort to overcome the reification and dualism of agents and structures that inform IR theory and arrive instead at “flow.”
With the victory of Hugo Chávez in the 1998 presidential elections, Venezuela became the first country in the Latin American “pink tide.” Up to then, mainstream political analysis had considered Venezuela a stable liberal democracy. Little attention had been paid to the country internationally. Former army officer Chávez was met with suspicion by the international left, which knew little about the Venezuelan left and the contemporary history of the country, and the right thought it could persuade him to act in its interests. The process of social transformation launched, named the “Bolivarian Revolution” after Venezuelan independence leader Simón Bolivar, became radicalized rapidly and was soon declared socialist. Internal policies were characterized by popular participation, expropriations, and redistribution of the oil wealth. Internationally, Venezuela took an active role in promoting regional integration and South–South cooperation. Chávez and the social transformation process in Venezuela rapidly gained strong sympathies among social movements and the radical left throughout the Latin American and Caribbean (LAC) region; for the same reasons, Venezuela came to be the number-one enemy of the Latin American right and the United States, which supported several attempts to overthrow the government. After Chávez’s death in 2013, his successor, Nicolás Maduro, faced an increasingly violent opposition, a severe economic crisis, growing hostility from the United States and the European Union (EU), and a regional context in which the rise of right-wing governments reversed the “pink tide.” Since early 2019, the situation has escalated because of sanctions by the U.S. and EU countries; the recognition of a self-proclaimed “interim president” belonging to the opposition, by the United States, most EU countries, and the right-wing governments in Latin America; coup attempts; and the open threat of U.S. military intervention. The unfolding of the Bolivarian Revolution, the forces at play, and the main points of conflict need to be analyzed in their historical context.
Which risks are social and which are private? How much of their GDP do states spend on social welfare? Who exactly is entitled to which benefits? Is it still possible to finance an encompassing welfare state in times of deindustrialization, technological and demographic change, and globalization? And why do the answers to these questions differ so much across countries? These and similar questions—all central to social cohesion in capitalist democracies—ensure that the analysis of welfare politics is one of the theoretically as well as methodologically most dynamic and richest research areas within comparative political economy and political science more generally. Besides outlining the comparative development and the difficulty of measuring social policy, the focus of this contribution lies in a critical review of the most important past and current theoretical debates in the field of welfare state research, as a subfield of comparative political economy. These debates include party- and power-resource-centered approaches and their critiques, institutional explanations of welfare state retrenchment and restructuring, and the importance of multidimensional distributional effects for the analysis of social policy. The article concludes with a review of three more recent debates: the importance of public opinion and individual preferences for the development of the welfare state, the interaction of social policy and the changes of party systems, and the increasing relevance of social investment policies. The political and scientific need for innovative political science research will continue for the foreseeable future: Theory building and methodological possibilities are developing quickly, and the welfare states as research subject are constantly being challenged.
Michael J. Lee
Since the 1970s, financial crises have been a consistent feature of the international economy, warranting study by economists and political scientists alike. Economists have made great strides in their understanding of the dynamics of crises, with two potentially overlapping stories rising to the fore. Global crises appear to occur highly amid global imbalances—when some countries run large current account deficits and others, large surpluses. A second story emphasizes credit booms—financial institutions greatly extend access to credit, potentially leading to bubbles and subsequent crashes.
Global imbalances are, in part, the product of politically contested processes. Imbalances would be impossible if states did not choose to liberalize (or not to liberalize) their capital accounts. Global political structures—whether international institutions seeking to govern financial flows, or hierarchies reflecting an economic power structure among states—also influence the ability of the global system to resolve global imbalances. Indeed, economists themselves are increasingly finding evidence that the international economy is not a flat system, but a network where some states play larger roles than others.
Credit booms, too, and the regulatory structures that produce them, result from active choices by states. The expansion of the financial sector since the 1970s, however, took place amid a crucible of fire. Financial deregulation was the product of interest group knife-fights, states’ vying for position or adapting to technological change, and policy entrepreneurs’ seeking to enact their ideas.
The IPE (international political economy) literature, too, must pay attention to post-2008 developments in economic thought. As financial integration pushes countries to adopt the monetary policies of the money center, the much-discussed monetary trilemma increasingly resembles a dilemma. Whereas economists once thought of expanded access to credit as “financial development,” they increasingly lament the preponderance of “financialized” economies. While the experimentalist turn in political science heralded a great search for cute natural experiments, economists are increasingly turning to the distant past to understand phenomena that have not been seen for some time. Political scientists might benefit from returning to the same grand theory questions, this time armed with more rigorous empirical techniques, and extensive data collected by economic historians.
Jens Ladefoged Mortensen
In a time of trade wars, free trade skepticism, tech rivalry, and multipolar disorder, the European Union (EU) cannot evade its responsibilities the last defender of the World Trade Organization (WTO). Yet, it raises the question of whether the EU has power to defend the WTO. The EU is a multilateralist-oriented power of global magnitude. Unlike the United States, the EU is openly defending the WTO in the current crisis created by continued refusal to appointment WTO Appellate Body members. Like the United States, the EU is concerned with the illegitimate trade practices of China. Yet, the EU uses diplomatic pressure on China within the rules of the WTO. The EU is actively trying to rescue the rule-based trade system. Yet, it cannot do so alone. It needs support, not just form other WTO members but also from within Europe itself. The current crisis is in part rooted in the inability of the WTO members to update the WTO rulebook. The focus will be on the potential clash between a more assertive EU on sustainability and the absence of updated WTO rules on sustainable trade issues. This may force the EU to confront a deep-rooted policy dilemma. The question is whether the EU should continue to refrain from using its market power to promote sustainable trade in respect of the WTO. As the EU is about to ratify several bilateral trade agreements of commercial, geo-economic, and indeed geo-political importance, such as the EU–Mercosur or EU–Vietnam agreements, the rule-orientation of the EU faces growing domestic opposition as well as external contestation. Furthermore, the EU is modernizing its trade defense weaponry, the antidumping instrument, and has recently declared its intent to impose unilateral climate-related trade policy measures, the carbon-adjustment tariff, in the future. Thus, an incident such as the burning of the Amazon forest may force the EU to take a tougher stance on sustainability at the risk of bringing the EU on a collision course with the WTO itself, its rules, process, and member states. Consequently, the complex setup of the EU as a trade power could make it difficult to ratify WTO-compatible trade agreements in the future.