Page 94 - Global Political Economy_Understanding The International Economic Order

INT ERNAT IONAL POLIT ICAL E CONOM Y
society. In time, if unchecked, the integration of an economy into the
world economy, the intensifying pressures of foreign competition,
and the necessity to be efficient in order to survive economically could
undermine the independence of a society and force it to adopt new
values and forms of social organization. Fear that economic global-
ization and the integration of national markets are destroying or
could destroy the political, economic, and cultural autonomy of na-
tional societies has become widespread.
The clash between the evolving economic and technical interdepen-
dence of national societies and the continuing compartmentalization
of the world political system into sovereign independent states is one
of the dominant motifs of contemporary writings on IPE. Whereas
powerful market forces (trade, finance, and investment)jump political
boundaries and integrate societies, governments frequently restrict
and channel their economic activities to serve the interests of their
own societies and of powerful groups within those societies. Whereas
the logic of the market is to locate economic activities wherever they
will be most efficient and profitable, the logic of the state is to capture
and control the process of economic growth and capital accumulation
in order to increase the power and economic welfare of the nation.
The inevitable clash between the logic of the market and the logic of
the state is central to the study of international political economy.
Most economists and many political economists believe that the
international economy has a positive impact on international political
affairs. The international economy, many argue, creates webs of mu-
tual interdependence and common interests that moderate the self-
centered behavior of states. Underlying this benign interpretation is
a particular definition of economic interdependence as dependence.
However, as Albert Hirschman pointed out in National Power and
the Structure of Foreign Trade (1969), while economic interdepen-
dence may be characterized by mutual dependence, dependence is fre-
8
quently not symmetrical. Trade, investment, and markets establish
dependencies among national societies that can be and are exploited.
Integration of national markets creates power relations among states
where, as Hirschman notes, economic power arises from the capacity
9
to interrupt economic relations. Economic ties among states almost
always involve power relations.
Robert Keohane and Joseph Nye (1977)extended this analysis of
economic power and the political aspects of economic interdepen-
8
Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berke-
ley: University of California Press, 1969).
9
Ibid., 16.
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