Introduction: The Significance of ipe for Globalized International Relations

'International political economy' (IPE) is both an area of study—a range of issues and problems—and a way of thinking about world politics and eco­nomics. It is particularly appropriate in the context of this book that we should now consider the arena of international political economy in a globalized world as the international economy is widely regarded as the principal focus of the forces of globalization and the main way in which global­ization is 'transmitted' throughout the world. In other words, what happens in the international economy (as a result of a variety of factors, influ­ences, and forces, but crucially including what is produced and how, the nature and extent of tech­nology, advances in the speed, reliability, and cost of transport and communications) is a reflection of the changes brought about by globalization. These changes are wide-ranging but include changes in the nature and extent of production and trade, the growth of very large worldwide corporations, the internationalization of finance, and the linking of people and businesses through world communica­tion networks. However, what happens in the inter­national economy also, and at the same time, has the potential to cause and deepen globalization and therefore has a significant actual and potential impact upon the nature of world politics. Hence, if we do now live in a globalized world, then the nature and structure of international economic relations will immediately show this because of the fact that it is these relations that first change in response to the new forms of production, invest­ment, finance, and trade that are key elements of the condition of globalization. And any changes in these relations will have a very significant effect upon national governments (and their interna­tional relations), firms, and us as individuals, because of the extent to which national politics and national economics are changed and influenced by what happens in the international political economy.

This chapter will concentrate on the ideas, con­cepts, and assumptions behind the argument on 'globalization' and builds upon the centrality of IPE in a globalizing world. We consider the nature and problems of IPE, how it is defined and interpreted, and what principal difficulties this presents for our understanding of the contemporary world. The chapter then considers 'how' we begin to under­stand and evaluate these problems, arguing that the way we use words and ideas to describe and argue and hence construct an understanding of the world is itself part of the political process and must be taken into consideration in trying to understand IPE. In the section on 'Thinking about IPE, IR, and Globalization' the fundamental issue for IPE is identified and discussed—the problem of an inter-national political system based on territorial states increasingly overlaid by an economic system based on world markets and production, and the basic constituents of an 'international economy' and a 'global political economy' are laid out. On the basis of this we can identify the broad contours of 'What Kind of World have we Made?' and conclude that it is a complex one which not only includes the issues arising from challenges to state power and legiti­macy, but also includes deeper analysis of the changes taking place at global levels and the links between global and local levels. The Conclusion to the chapter argues that there are no neat and easily accessible solutions to the problems of global gov­ernance and that these problems will intensify over the next ten years.