ABSTRACT
International Political Economy (IPE) is a relatively new field of inquiry, albeit one with an old pedigree. It emerged in the late 1960s and early 1970s, partly as a result of the inadequacy of the discipline of International Relations (IR) in dealing with global economic changes in that era, but its antecedents can be traced back to the classical political economy of Adam Smith (1723-1790), David Ricardo (1772-1823) and Karl Marx (1818-1883). These great figures considered themselves to be political economists, although the analysis of Smith and Ricardo about the nature of an economy as a ‘self-regulating market’ led, ironically, to the separation of political economy into two distinct disciplines – political science and economics (Caporaso and Levine 1992: 3). The retreat of economics from politics was formalized by Alfred Marshall’s late-nineteenth-century study The Principles of Economics (1890). During the twentieth century, economics and political science were consolidated as autonomous areas in the academy, and each expressed little interest in the subject matter of the other. This process had a negative impact on the utility of both disciplines, and the division extended into the international realm. The IR, which emerged as an academic discipline after World War I, pejoratively referred to foreign economic policy concerns as ‘low’ politics. In a seminal article in the 1970s entitled ‘International Economics and International Relations: A Case of Mutual Neglect’, Strange (1970: 307) argued that ‘[i]nstead of developing as a modern study of international political economy, [IR] is allowing the gulf between international economics and international politics to grow yearly wider and deeper and more unbridgeable than ever’ (for a mid-1990s reassessment see Strange 1995a). Undoubtedly, IPE has had a far greater impact on those who study politics and IR than it has on those studying economics. This is not surprising given the nature of economics as a discipline and its more rigid methodologies. This chapter outlines some of the main ways that political and economic factors and
forces in both the domestic and the global domains interact, and the way that IPE attempts to understand the complexities and outcomes of these interactions. My central argument is that IPE should retain its propensity to utilize the insights of a wide range of disciplines within the social sciences. In particular, it should retain its focus on the interaction of political and economic variables and resist colonization by economics in terms of subject matter and methodology. Attempts to delineate ‘appropriate’ topic areas or impose particular methodologies will lead to the same problems that developed over the twentieth century with the distinct separation of political science and economics and the separation of IR into ‘high’ and ‘low’ politics. In recent years, the possibility of economism has been reinforced by the dominance of constructions of economic globalization. The process of
globalization and the way it is commonly understood provides a significant challenge to the IPE agenda. Arguments about the ‘limits of politics’ and the ‘decline of the state’ pose the possibility that political factors will once again be downgraded in the discussion of ‘economic’ developments and analyses of the ‘economy’. The chapter contends, therefore, that a focus on the state as the mediator between the domestic and the world political economies should remain an essential, but not exclusive, component of IPE. Indeed, this is because of, not despite, contentions about a new era of globalization. The chapter also maintains that analytical distinctions between politics and economics, and between the global and the domestic, remain essential to understanding the world, despite pleas to remove dualisms or dichotomies in IPE and the assertion that such distinctions are now meaningless in light of globalization. I argue that the task of international political economy remains the investigation of these complex interrelationships and to maintain a focus on the significance of political action.
