Page 26 - Global Political Economy_Understanding The International Economic Order

THE NEW GL OBAL E CONOM IC ORD ER
national concerns, the discipline of economics itself has become in-
creasingly remote from the realities of public affairs. Over decades
the increasingemphasis of the economics profession on abstract mod-
els and mathematical theories made economics less and less relevant
to public discourse and inaccessible not only to the larger public but
also to academic colleagues. This is especially unfortunate because
economics, despite its frequently esoteric nature, is or at least should
be at the heart of public discourse. The problem is particularly trou-
blingbecause the intellectual vacuum left by economists is too fre-
quently filled by individuals who misunderstand economics or delib-
erately misuse the findings of economics in their promotion of one
panacea or another to solve the problems of both domestic and inter-
national economies.

Intellectual Perspectives

In 1987, I identified three ideologies or perspectives regarding the
nature and functioningof the international economy: liberalism,
Marxism, and nationalism. Since the mid-1980s, the relevance of
these perspectives has changed dramatically. With the end of both
communism and the “import-substitution” strategies of many less de-
veloped countries (LDCs), the relevance of Marxism greatly declined,
and liberalism, at least for the moment, has experienced a consider-
able growth in influence. Around the world, more and more countries
are acceptingliberal principles as they open their economies to im-
ports and foreign investment, scale down the role of the state in the
economy, and shift to export-led growth strategies. Marxism as a
doctrine of how to manage an economy has been thoroughly discred-
ited, so that only a few impoverished countries such as Fidel Castro’s
Cuba and Kim JongIl’s North Korea cling to this once strongfaith.
Yet, Marxism survives as an analytic tool and a critique of capitalism,
and it will continue to survive as longas those flaws of the capitalist
system emphasized by Marx and his followers remain: the “boom
and bust” cycle of capitalist evolution, widespread poverty side by
side with great wealth, and the intense rivalries of capitalist econo-
mies over market share. Whether under the guise of Marxism itself
or some other label, concerns over these problems will surface in dis-
cussions of the world economy. 6

6
An example is William Greider, One World, Ready or Not: The Manic Logic of
Global Capitalism (New York: Simon and Schuster, 1997). Although Greider is not a
Marxist, his book raises the specter of what Marxists call the “underconsumption” or
“glut” theory of capitalist crisis; that is, the contradiction between the capacity of
capitalism to produce goods and the inability of workers to purchase these goods.
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