The Second Image Reversed: the International Sources of Domestic Politics

M Cox, K Booth, T Dunne V. Curzon
2001 Transnational Relations and World Politics, special issue of International Organization   unpublished
Introduction If one may for a moment commit the error of anthropomorphizing a scholarly discipline which is diverse and fragmented, International Political Economy (IPE) has often had trouble making up its mind whether it is a sub-field of International Relations, or whether it is something broader and more inclusive: sub-field versus inter-discipline? Should it focus on the special nature of the system of states, along the lines of more traditional international relations, 2 or should it
more » ... or should it develop its roots in the intellectual movements which emerged as classical/radical political economy, in turn developing branches across a broad range of social science traditions? This schizoid nature of the discipline is not surprising. This problem is similar to those which face scholars of the emerging discipline of economic sociology -the need: a) to establish theoretical and methodological orientation and, b) to define their relationship to related fields of economics, sociology, and political science. Over time, IPE scholars have hailed from a wide variety of backgrounds. While many have emerged as dissenters (to a greater or lesser degree) to traditional, state-and security-centric international relations, 3 this is not necessarily the dominant background of scholars in the field. Many who have contributed to the emergence of IPE have come from comparative politics or political economy, recognising that as the global system became more integrated and interdependence increasingly a feature of relations among states, national systems could not longer be considered on their own. 4 Still others hailed from economics, including the pioneering and much missed Susan Strange, recognising the need for insights from both international relations/political science and 1 This article is a condensed version of one of the same title which appeared in 3 international economics to be brought together in a social science synthesis, 5 or from economic history, such as Charles Kindleberger. 6 Still others emerged from the world of international organisations, turning practical insight to innovative theoretical contributions. 7 In addition, IPE scholars have covered an extraordinary range of subjects in the global system, from regional or country focus to north-south issues, from particular policy issues/sectors to specific social groups. What holds the field together amidst such diversity is a few shared conceptual assumptions: i) that the political and economic domains cannot be separated in any real sense, and even doing so for analytical purposes has its perils; ii). political interaction is one of the principal means through which the economic structures of the market are established and in turn transformed; and iii). that there is an intimate connection between the domestic and international levels of analysis, and that the two cannot meaningfully be separated off from one another. 8 This leaves room for considerable disciplinary ecumenism and an innovative willingness to draw insights from fields as diverse as the scholarly backgrounds of the IPE pioneers themselves. This article will argue that this diversity of origin and of analytical approach militates strongly towards interpreting IPE not as an off-shoot of traditional International Relations, but as rooted in the broad tradition of political economy which emerged in the European enlightenment. The field has outgrown IR and should not feel constrained by the debates which have framed state-and security-centric IR scholarship in the post-war period. In time, IR will come to IPE as a more comprehensive approach to understanding world order, not the other way around, especially as IR itself is forced to come to terms with the world post-Cold War. 9 The article will begin by summarising the emergence of IPE in its contemporary context, demonstrating in the process that IPE has emerged in a far from coherent fashion, though this diversity and ecumenism is not to be deplored. The second section will go on to briefly discuss the 'state-of-the art' of the field, and then to argue that the core conceptual issue in IPE remains the nature of the state-market relationship, and that further conceptual work is required. The way we view this relationship has a considerable impact on how one understands prospects for change in the structures -the normative and material underpinnings -of world order. IPE remains based on the premise that the dynamics of state and market are interdependent, intertwined. The article argues that most IPE scholars, despite their protestations, still see the state and the market as separate and indeed antagonistic dynamics, the dynamics of state versus market. Scholars need to take a final a decisive step in accepting that, in empirical and conceptual terms, the state and the market are part of the same, integrated system of governance: a state-market condominium. This state-market condominium operates simultaneously through the competitive pressures of the market and the political processes which shape the boundaries and structures within which that competition (or lack thereof) takes place. The beginning was a revival. During the 1960s, a range of scholars in IR and foreign policy analysis (not to exclude other branches of political science) began to consider the observable fact of interdependence and what it meant for our understanding of the world around us. Increasingly, foreign affairs would not be understood on their own, but in relation to the tensions between domestic considerations and relations with other states and their own domestic dynamics. The otherwise rigid division between the international domain, international politics as politics among states, gave way to a blurring of the levels of analysis distinction in the work of a range of scholars. To this end, James Rosenau produced Linkage Politics, having examined in his earlier work the various domestic influences on the formulation of American foreign policy. 10 This merged into a debate about 'transnational relations,' wherein international was placed in opposition to the more sophisticated concept of transnational relationships. While international was taken to denote relations of state to state, transnational politics involved relationships which cut across the domestic-international divide but need not necessarily involve states, but would include their activities as well. Interdependence among states and their societies 11 was central to this debate, and transnational relations involved a wider range of actors than feature in traditional IR: both non-state and sub-state actors, including private actors and official institutions of more less formal nature. The bag was open -such concepts represented a serious challenge to the traditional contention that world politics was about what states-as-units did, and greatly expanded the empirical terrain on which the nascent IPE would operate. One should note an important point, however. There was always division on how far one should go in this direction, especially as established disciplines did not always welcome scholars hailing the newness of IPE. Were 'interdependence' and 'transnational relations' primarily about what states did, with the influence of a few sub-and non-state (but nonetheless essentially official) actors like international organisations thrown in, or was it about a more radical conceptual departure from traditional IR scholarship, to include a wider range of issues and actors, including those with nothing to do with formal government? The difference is well represented by two special issues of prominent journals on transnational relations: the 1971 issue of International Organization edited by Keohane and Nye, and the issue of International Affairs edited by Susan Strange in 1976. 12 These two special issues laid out an important division in the discipline which still remains. The dispute has yet to be settled: are we studying the ways in which economic and political factors in the international system affect each other in an ongoing fashion, or are we seeking to explain the ways in which underlying social structures and relationships, among a range of actors and institutions, generate the patterns of institutionalised and other aspects of political authority in a transnational world? As Strange 5 might have put it, 'politics of international economic relations,' or 'transnational political economy'? There were also disputes about basic assumptions of agency and method. One trend was the application of methodologically individualist rational choice to IPE. 13 These more formal and quantitative rational choice contributions under the 'positive political economy' label represent a growing direct overlap of neo-classical economics and IPE. 14 Meanwhile, the world economy was undergoing rapid change from the early 1960s, leaving room for other research methodologies. International trade was developing rapidly, and (in particular US) corporations were spreading throughout the world. The rise of the Euro-markets signalled a transformation of the financial system, and the 1970s proved to be a decade of economic turmoil, of oil politics, and of developing country challenges to the structures of the global political economy. This process of economic transformation had a clear international politics dimension to it -trade policies had always been highly charged politically, both within and among states in the system, and the emerging strains in the international monetary system likewise proved politically controversial. This was fertile ground for a series of major and interdisciplinary research projects on the political economy of trade and monetary relationships among states and their societies. 15 Further contributions to the debate on interdependence came from comparative political economists 16 as European and other regional integration projects accelerated. 17 It was increasingly difficult to remain a country specialist without absorbing the impact of structural changes in the global economy -the debates about corporatism and the role of organised interests were forced to 'go global.' 18 IPE and comparative political economy needed each other as much as ever, though this was not of course universally accepted. So far I have entirely neglected the radical tradition in international political economy, the better to deal with it now. The Marxist tradition of political economy has never undergone the bifurcation of 'orthodox' political science and economics. In other words, radical political economy has provided some of the most fruitful ground for advancing the cause of IPE. Indeed, over time the radical and the 'orthodox' have moved closer together -we are all 'marxian' (small 'm') in one way or another as we argue about the impact of economic structure and problems of inequality in this period of global economic integration. Perhaps the most obvious of the long-standing radical contributions to IPE is the contribution of dependency theorists, in the sense that north-south relationships are by definition global in scope. Dependency theory was critical of Marxist work while drawing heavily upon it, emphasising the uneven development and inequalities of capitalist system. Dependency 13 Robert Axelrod, The Evolution of Co-operation (New York: Basic Books, 1984); Robert O. Keohane, After Hegemony: cooperation and discord in the world political economy (Princeton, NJ: Princeton University Press, 1984); M. 6 theories were often genuinely systemic in their approach, lending themselves to international relations though seldom finding favour with the mainstream discipline. The insights of dependency theorists concerning uneven development and inequality have been difficult to ignore, and despite ongoing discomfort the mainstream has increasingly accepted some of the basic observations of dependency theorists. Some radical political economists have found their way closer to the mainstream discipline. Fred Block's analysis of post-war international monetary relations remains as useful today as when originally written in the turbulent 1970s. 19 More recently, Robert Cox was the author of an important innovation with an approach which bridged international relations/international political economy and the domestic level of analysis in important respects. His 'neo-Gramscian' approach, 20 resolutely post-structuralist in its theory, has been embraced in whole or in part by a sizeable proportion of IPE specialists. It provides a flexible set of intellectual devices which help one grasp the relationship between economic structures and political interaction, at the heart of the market-authority relationship to which Susan Strange constantly drew attention. Cox also served to remind one of the importance of linking IPE to its historical roots as he drew heavily on Marx, Gramsci and Karl Polanyi (as had others), and other disciplines, particularly history as represented by Fernand Braudel. While Cox (like dependency theorists) focused more on inequalities and class in the global system, his conceptual devices cross levels of analysis and admit the relevance of a wide range of public and private actors and, crucially, the relationships among them in a pattern of global governance. The emphasis on the transnationalisation of class and (related) corporate power was also developed by Kees van der Pijl and the 'Amsterdam School,' 21 as well as scholars such as Stephen Gill at York University in Canada. 22 Similar to wider developments in the social sciences, 'new' issues have made their way onto the IPE agenda. Of particular note is the rise of feminist scholarship and work on the environment -heralding feminist and 'green' approaches to IPE. 23 As with many questions in IPE, the normative content of these debates is important, indeed central. Different perspectives and scholars emphasise different aspects of the normative agenda, and much of the underlying debate is ultimately about values, not simply analysis and research tools. 24 To summarise the previous section, the more the state-market relationship was explored, the more the traditional analytical assumptions of orthodox economics and political science/international relations could be questioned. The empirical examination of social and economic interdependence across political boundaries threw into question the levels of analysis assumptions of comparative politics and international relations. What is the respective role of international versus domestic constraints, and how are they linked as the world becomes more transnational in nature? What role for structure versus agency in this process of transformation? In other words, emergence of IPE was a re-awakening and re-linking of the study of 'things international' with the broad tradition of social science scholarship from the French Physiocrats onwards, via Smith, Marx, Keynes, Polanyi, and the pioneers of the contemporary period. It came into its own as a diverse, open, and contentious subject field well-rooted in the broader concerns of social science and drawing on a considerable range of disciplines and conceptual devices/traditions. The ecumenism of IPE is welcome and will aid, rather than hinder, successful understanding of the complex world around us, as it has always done in pursuits of the human mind. Over time the field has become characterised by a concern with how the pieces of the global puzzle fit together: the social, the normative, the formal and institutionalised, the public and the private, the local and the global. This leaves considerable room for specialised research and investigation (one might say, requires it), but requires a broad understanding of the nature of political authority in a variety of settings.