The global political economy
The global political economy is a fieldset handle force of interaction of both economic and political. With this study, I have been able to understand a lot about the world economy and improve my understanding of political science. The main focus has been a center of human welfare and the relation with corporate interest and state behavior in a different part of the world. From my understanding is that there major ways in this area that have focused on the perspective of the international system. States being the pivot of international policy, they have been able to intensify relations with the corporate, which are multinational and agreement being strengthened with global organizations. The changes globally have brought to rethinking individual position and understand as participants in the global economy. My understanding is that both terms international political economy and global political economy represent a wider political economy scope that goes beyond state relationships.
There are many approaches to the global political economy that goes beyond the spectrum of political and most cases overlap the perspective covered in the third and fourth chapter. Still, they are formulated differently to have factors of the economy. These range from state-centered approaches to the approach of Marxists that claims that international capitalism will bring the end to a state as a result of capitalism’s inherent flaws. The liberal approach has handed individual actors analysis of center stage. It is making a liberal approach to be a bedrock as it offers tangible means to bring global economics complex issues to a start in a manner that is relatable.
Liberal approaches
Liberal political economist has been wide as they can comprise of uncontrolled markets with the strong state intervention of market supporters. This is a reflection of contradictions discovered by Karl Polanyi (1957) in a historical display of liberal ideas in the aftermath of industrial revolt in the nineteenth century. The reasoning of Karl Polanyi brings an insight into the world economy of the 21st century. In his understanding is that markets are not just abstract constructs that have a demand to settle and goods supply through a certain price, as an economist will convince the people to believe. The market is much more and is a social phenomenon embedded in the wider community connected directly with the state’s deliberate forms of action. As a result, the economic, social, and political life are always linked. In particular, the wider advantage of the process of self- regulating market carries with it a contradiction as it leads unavoidably to a severe disruption of the social fabric in different states. Disruption can happen due to income inequality levels rising, companies being taken over by foreigners, or fundamental contract on what needs to be accomplished during the economic recession to avoid social decay.
Polanyi observed two processes interrelated that elaborate changes in the international system. Initially, the free-market principle lead and the winner from liberal economic policies exert impact for further change in politics. With time the political pressure established will unavoidably general a counter-movement that refuses the form of opposed direction. Other social groups in the society will articulate their concern, bringing the speed of modernization slow and demanding a different form of economic policy and management. From my understanding, the global political economy of the 21st century is an effort to embed the world market in transnational social relations- which is the same as what was observed in the past in terms of economic and social development at the level of the nation-state.
Adam Smith and David Ricardo were seen as heroes of the liberal approach. Smith’s argument was in favor of government market superiority and non- interference market exchanges guided by the invisible hand of the price mechanism. The approach was based on consumers seeking the best quality for the lowest price, and this at the same time, helped the producers find the method of production, which is the lowest cost. Ricardo explicitly added the derived gains from a free trade system build around the principle of proportional advantage. Accordingly, under the free commerce system, each state naturally devotes its labor and capital to such employment as are most valuable to each. This individual advantage pursuit is admirably linked with global good seen as a mechanism that is useful allocating labor to its productive uses allowing, in turn, a much greater consumption of goods than that which would not be there due to such system.
For smith, working pattern specialization and division labor also brought new chances for employees to get personal growth and professional careers. For example, ten people employed to make pins could perform better overall if they work as one, as they divide the task and perform each task better than as they worked separately. Karl Marx noted repetitive exploitation and work pattern; each liberal political economy found skills, natural propensity, and self-love. Taking this perspective into this century, if states across the world de-regulate the activity of economy, reduces taxes for the rich, contracted, and privatized out traditional states services, then-unprecedented level of economic growth would follow.
By allowing capital movement to be free, many people will be advantaged of the direct investment even if employees become more tied and less mobile to a certain workplace. In the modern liberal globe, mostly called neoliberalism, states are supposed to be active promoters and globalization supporters. The only liberal left-leaning, by contrast, identifies the increasing world labor division as responsible for inequality level rising.
The unifying factor of liberal thinking in terms of the global economy is inclusion analytical of a variety of state and non-state actors that create relationships of mutual dependence. The historical focus of one state being reliant on another because of surplus in vital commodity, for example, gas or oil, has rapidly given way to a more complex understanding. This does not imply that the classic interaction between countries has turned to be obsolete, rather than it’s improved by explicitly and including recognizing a number often increasing of another international actor, for example, those talked about in chapter five, six, and seven. Policies of an organization that could be regional or international may rely on strategies of another. This has been the issue with the international monetary fund and European Union in the management of the 2008 crisis of financially globally as they take a new move of having a joint programmer to help states, for example, Ireland.
Another instance is the implementation of the global environment’s policy by the united nation that profited significantly from Greenpeace collaboration, an international organization that is non- governmental. In the literature, it is a corporation of multinationals that have got the most attention in the search for independent relationships within the borders. Like elsewhere, an account of liberals does not reveal its wide remit, leaving room for evaluation, which is a positive and critical evaluation. Several liberal praises the general profit from competition for global investment played out on the rivalry back between the multinational and state corporation. Others, by contrast, emphasize the disadvantage comparative and limited success of less- well funded civil community actors whole trying to alter corporate behavior on a global scale.
Individual actors
A way to have individual actors in the global economy is to look at them as economically dependent workers rather than citizens’ proficiency in bringing about changes in society. Globalization of the economy has modified this view to some length, with greater recognition of diverse interaction but based nationally, workforce into a pattern of production that can span several sovereign areas and world regions. Technological alterations have made it easier to make transnational production process and bring people from different areas to add value to a certain good or service. Engaging in these enterprise practices brings transformative business into a thriving worldwide function on different levels of wage and different skills in the workforce. This naturally brings the question of organizational changes in the influence of capitalism on people’s lives. For instance, if an individual produces one section of a good, such as silicon for a computer, what is the mode to determine their payment? Most recently, the crisis of global finance has brought light on the non-elite actors at the failure end in the banking cooperation and the behavior of the financial. From the mortgage holders, white-collar workers, owners of small businesses, house buyers, farmers, shareholders, self-employed people, civil servants, and students had to endure hardness with the consequence of rescue efforts happening simultaneously in several of the major industrialized states. Government intervention aftermath and measures of bailing out, many businesses had to restructure and streamline their operation to help cut costs and competitiveness maintained. People in their capacity as voters were asked to back up far-reaching packages reform, austerity policies, and new strategies of government for the creation of jobs and employability. Non- elites have also helped in the alliance promotion among several individual actors with more charitable aims, for example, redistribution of income and equality in mind. Many economists have placed their trust in transnational solidarity and larger society movement unified under an alter-globalization banner, which states itself as an alternation to forms of neoliberalism of globalization.
Historical structuralism theory is divided into two that is Marxism and Dependency. They are placed under structuralism because they both look at the international division of labor brought about by capitalism. These two divisions look at the division of labor as unfair because they create classes of rich and poor people and also rich and poor states. Karl Marx seeks to abolish capitalism while dependency seeks to reform it. Karl Marx, together with his colleague Friedrich Engels investigated two capitalist nations, that is, Prussia and England. These two nations were in the midst of an industrial revolution, which means the manufacturing industry was booming, people were laboring in factories, and urbanization was beginning. The classes include the workers who do the work and have no money, owners who owned everything and had all the money and power. Marx hypothesized that one day the poor would realize they were being exploited by the rich, and they will rise to overthrow the rich in the society. The government will be overthrown, too, because they allowed the rich to exploit the poor. After this revolution, Marx and Engel predicted Communism, where a society shall have no private property as all property will be owned and shared between everyone. No exploitation of workers and capitalist ideas will be abolished.
Dependency states that the rich nations exploit the poor nations, not because capitalism is evil, but because it needs to be reformed so that it will be juster. The only problematic issue is that poor nations continue depending on the rich nations. It states that even after independence, the poor nations continued depending on the economy and technology of wealthy nations. The theorists of dependency see the world as divided into two categories of nations with the division of labor; Economically Developed Countries (EDCs) and Less Developed Countries (LDCs). The economically developed countries include North America, Western Europe, and North-East Asia. They produce cars, machine tools, planes, and electronics. The jobs created in these countries are those that require high skills and have a high wage. The less developed countries are found in Asia except for North-East Asia, Middle East, Africa, and Latin America. These countries produce primary products like minerals. The jobs created here are low skilled jobs and have a low wage. The problem is that the LDCs produce cheap products. Farm products and minerals make the farm owners rich, but not those who work the land or the states that rely on the farm produce for their wealth. The LDCs buy expensive products from the EDCs while EDCs buy inexpensive products from the LDCs. The outcome is that LDCs go into debt while the EDCs make more money. Thus the rich get richer while the poor get poorer. The dependency theory gives some solutions which include; massively aiding the developing countries, forgiving debts of less developed countries, and international laws that raise the commodity prices for coffee, oil, timber, and copper. However, the only solution that was accepted by EDCs is forgiving debts, although it does not solve the problem because new debts accumulate when the old ones are forgiven.
In my own opinion, chapters highlight the diverse political and social change processes that are in the global market unregulated necessarily. The analytical turn from international to global in the first chapter alerts us to the fact that changes happen through trajectory measurement. This is hard because of the fragmented array of genders and actors at the global level. Liberal approaches emphasize the inevitable of economic globalization and place some hoped in the responsiveness of certain global actors when the activities are made liable. The market mechanism has matched demand, which is growing for enabling ordinary reform for people to share more and not be exploited by the system. Democratic processes, such as elections, are tied to domestic politics, the global market system created around the principle of liberal, continues to have a serious challenge. If for our benefit, there should exist an element to regulate the process, then international and regional organizations with the power to implement global rules and devise are the natural ones to venture. Without other factors being denied, for example, philanthropic acts which are the best solutions in the absence of successfully coordinated global economic policy.