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What Is The Relationship Between The State, The Economy And Power? Discuss With Reference To Liberal And Realist Accounts

3159 words - 13 pages

There is no doubt that economics has played a significant role in international politics throughout history. The desire for control over economic resources has been part of struggles among political groups for along time. One can say that economic factors have always been essential to the affairs of nations. The interaction between economic and political factors has been transformed in fundamental ways over the past few centuries and decades. How scholars have come to understand these changes has given rise to different theoretical and 'scientific' perspectives on international relations, and new fields of study being pursued, such as international political economy. I will begin by giving a liberal account of the relationship between the economy, the state and power.Liberal idealism in international politics did not re-emerge, after the devastation of the Second World War, until the 1970s. Rapid advances in technology, the growth of organisations like the European Community, and the impact of events like the 1973 oil crisis pointed towards evidence of growing interdependence between states.At the same time liberal literature made significant inroads into the rigid inside/outside, domestic/international distinctions characteristic of realism, with the emergence of trans-national relations and world society.Modern interdependency theory uses free trade and the removal of barriers to commerce as proof to their claims. "The rise of regional economic integration in Europe was inspired by the belief that the likelihood of conflict between states would be reduced by creating a common interest in trade and economic collaboration amongst members of the same geographical region."European powers, instead of resolving their differences militarily, would cooperate within a commonly agreed economic and political framework for their mutual benefit. Eventually cooperation between states would increase and broaden as mutual advantages could be gained. Membership of the European Union would entail compliance with its rules, which itself would discourage the absolute pursuit of national interests and weaken state sovereignty.Liberal institutionalists such as Rosecrance argued that the "growth of economic interdependency had been matched by a corresponding decline in the value and importance of territorial conquest for states." In the modern world the benefits of trade and cooperation among states greatly exceed that of military competition and territorial control. Traditionally nation states regarded the acquisition of territory and land as the means to increasing national wealth. The state has transformed from being a 'military state' to a 'trading state'.Statesmen increasingly became aware that the accumulation of national wealth and development relied more heavily on macro-economic policies that increased the competitiveness of their economy compared to other states. Higher levels of efficiency, technology intensive modes of production and valuable human...

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