Ipe and the issues of ir

There are many who think and write about IPE who argue that what we know as 'international relations'—that is political and (now) economic relations between states—are ultimately part of a larger set of relations and structures, and this larger set is what is described by the term 'international polit­ical economy' (Rupert 1995; Strange 1994): i.e. tra­ditional political relations between states can only be understood and explained as part of IPE. At the || other end of the spectrum many see the term 'IPE' as indicating a subset of relations within the total­ity made up of international relations. This second view means that IPE considers a number of issues, such as money, finance, trade, and investment, that are not looked at by other parts of the discipline of International Relations (IR). For example, Joshua Goldstein sees IR as made up of two main sub-fields—international security studies and IPE, where IPE studies trade, monetary relations, and multinational corporations, the economic integra­tion of Europe, the international politics of the global environment, the economic gap between North and South, and the issues of development (Goldstein 1994). The book this chapter is in, because it starts with the system of states as the basis for international relations, identifies IPE as a key part of the structure and process of contemporary international politics. This allows for other non-state actors to have significance and meaning, whilst retaining an initial focus on the state and the inter-state system. Hence IPE is both a core element of the structure of international politics and a set of international issues within the context of a global­izing international relations.

Key Points

• The international economy is both a reflection and a transmitter of globalization and is there-tore central to the analysis of and debate on globalization and its impact on international relations.

• The international economy has always been political and hence the most appropriate label is 'the international political economy'.

• 'International political economy' as an area of study refers to the issues created when the boundaries between 'economics' and 'polities', and 'international' and 'national' are broken down and become blurred.

• Different perspectives view each of the four domains as being the principal force for change, but the dominant view of 'neo-liberalism' seeks to construct the international economy on the same basis as the 'free market' domestic economy with a minimum of political regulation.

Words and Politics

Part of the problem of thinking about and under­standing politics and particularly the phenomena of globalization is that words matter. By this I mean that politics (or political economy) does not exist as 'something out there', ready formed and waiting for us to discover and analyse (like, perhaps, coal in the ground that we discover and mine). This is so because we, as human beings, are not separate from politics. Our actions are part of politics and because our words both frame and give meaning and pur­pose to those actions they are thus part of politics itself—the contest of words and ideas. The words we use both reflect and construct our reality in gen­eral and politics in particular. Moreover, we share our reality through our language and shared mean­ings. Our reality is also an intersubjective reality. This is an important statement, because it means that we see words and ideas not as reflecting politics or commentating on politics, but as an integral part of politics itself.

The way in which we see the world derives largely from our historical experience of the world (Cox 1992). This knowledge is codified into theory— everyone has a theory of the world, a 'world view', but for most people and most of the time this is hid­den or not acknowledged. Often, our world view presents itself as 'common sense' and because of this we do not question the assumptions built into our 'common sense', but it is important to under­stand that what we take as 'common sense' is both variable through time and society and is con­structed politically, that is it brings benefits to a par­ticular group. World views are very durable and form a way of us connecting to our past, present, and future. Theory (derived from history) forms the context of what we think we can do, what we can­not do, and what we are required to do. Theory, in the form of a world view, gives us meaning and pur­pose. Because we act on the basis of our world views, our theories, we translate our understanding of the world into our reality—what we think (what is subjective in understanding) becomes real (objec­tive) through our actions (see Case Study 2, Box 11.3).

Box 11.3. Case Study 2: Words and Reality: The State and International Economy

'What is subjective in understanding becomes objec­tive through action. This is the only way, for instance, in which we can understand the state as an objective reality. The state has no physical existence, like a building or a lamp-post; but it is nevertheless a real entity. It is a real entity because everyone acts as though it were; because we know that real people with guns and batons will enforce decisions attributed to this non-physical reality.'

(emphasis added; Cox 1992: 133)

This argument about the connection between words and politics has two main consequences for this chapter and for the study of IPE. The first is that the words (labels) we use to describe the world (e.g. 'international political economy', 'international politics', etc.) carry with them a specific view of what the world is—what are the basic units (states, companies, cities, etc.) and how they interact (war, trade, production, etc.), and what kind of order (structure) is constituted by these units and rela­tionships. So the choice of the label is very import­ant because it is shorthand for a whole way of describing the world—'international politics' describes a world that is very different from 'inter­national political economy'. And the world described by 'international political economy' is different from the world described by 'global polit­ical economy'.

The second consequence, equally important, is that the words people use to describe the world are part of the political process of constructing politics. Therefore we need to look very carefully at what is said by whom, as this is itself part of politics and not only sets up the framework for discussion in which some ideas are accepted as legitimate and some are not, but also forms the content of our intersubjec­tive reality (see Box 11.3). Hence, some views of the way world politics 'works' and how it is constructed become more acceptable than others—the legiti­macy of different views of the world is an important part of political struggle. And what is legitimate then becomes the view that defines what the world actually is. This is particularly important when we try to reach an understanding of the impact of globalization on the issues of IPE. The process of 'globalization' (however defined—see Ch. 1) and the changes it brings about tend to serve particular interests—favouring basically those with capital or access to capital via credit above those who depend upon selling their labour, and historically those with some form of technological training or general advanced education above those that have none (Reich 1991; Kanter 1995). This does not mean that others have not benefited and do not benefit now, but that some groups in society benefit more. As a result some favour the changes brought about by globalization and act accordingly to bring about further globalization—both in words and deeds.

If we took at face value the clamour of debate and discussion by those involved in state and inter-state politics and the descriptions and claims of those involved in the transnational political economy we could be forgiven for thinking that we and govern­ments already live in a fully globalized society (Hirst and Thompson 1996; Hutton 1995). Most OECD member governments already seem to be basing their policy discussions and formulating their policies on the assumption of a 'globalized' political economy. On the most basic of political levels, if policy-makers believe we are existing within a global political economy they will con­struct political programmes appropriate to the real­ity of a global political economy, rather than any other version of international political economic reality, and this will favour some groups in society more than others. 'Who benefits?' is thus a key question for IPE to ask of any situation, idea, or pol­icy proposal.