Page 17 - Global Political Economy_Understanding The International Economic Order

CHA PTER O NE
at that time, much more needs to be said, especially in light of subse-
quent developments.
In the mid-1980s, a revolution in international economic affairs
occurred as multinational firms (MNCs) and foreign direct invest-
ment (FDI) began to have a profound impact on almost every aspect
of the world economy. In the 1960s and 1970s, increased interna-
tional trade transformed international economic affairs. Subse-
quently, in the 1980s, the overseas expansion of multinational firms
integrated national economies more and more completely. Moreover,
whereas the term “multinational” had been synonymous with the
expansion of American firms, in the 1980s firms of other nationalities
joined the ranks of multinationals. Most importantly, MNCs led the
way in internationalization of both services and manufacturing.
My discussion of economic development in the 1987 book has be-
come totally outdated; scholarship at that time gave serious attention
to quasi-Marxist dependency theory and the deep division between
the less developed and the developed world. Today, the debate over
economic development centers on the appropriate role for state and
market in the development process. In the conclusion to the 1987
book, I referred to economic regionalism as the wave of the future.
Today, economic regionalism has reached flood tide and is having a
significant impact on the international economy. Financial develop-
ments since the mid-1980s have greatly increased the integration of
the world economy and, therefore, deserve attention. This book also
addresses the question of whether or not the increased importance of
the market in the organization and functioning of the global economy
means the end of the nation-state and of international political econ-
omy as that term is defined in this book. Those familiar with my past
work will not be surprised to learn that I think not.
The principal purpose of this book is to draw upon these real-
world and recent theoretical developments in order to formulate
a more comprehensive understandingof international political
economy than in my earlier publications. The eclectic 1987 book pre-
sented what I considered to be the three major perspectives on inter-
national political economy (IPE)—liberalism, Marxism, and national-
ism; this book takes a consciously realist or state-centric approach to
analysis of the international economy. Differingfrom many contem-
porary writings on the global economy, I believe that the nation-state
remains the dominant actor in both domestic and international eco-
nomic affairs. Believingthat both economic and political analyses are
necessary for an understandingof the workings of the international
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