The Nature and Role of the State in the Global Political Economy - Literature review Example

The Nature and Role of the in the Global Political Economy The political economy of reproduction is one of theaspects, which display an understanding of how the state is responsible for the stabilization of the global political economy. When one attempts to make a study of how the state is involved in the economy, it is often inevitable that one will end up making a direct study of economic imperialism. The political backing of economic reproduction, according to a number of scholars, is a circumstance that has a permanent place in the world mainly because of the global interdependence in all matters concerning trade (Dick 2003, p.525). As a result of the modern trade interdependence, the have emerged many theories to explain this occurrence. Liberal scholars, for example, are of the opinion that global trade interdependence has brought along with it plenty of benefits for all of the people in the world who are willing to take advantage of it. Marxist scholars, however, look upon global trade interdependence from a different perspective, and this is based on the belief that such interdependence is harmful (Siegman, 2004, p.709). Regardless of these dissimilar views concerning the political economy of reproduction, all of the theories that have been propagated agree that it is among the most dominant factors in the world today, with the capacity of having an influence on individuals and governments, at a global scale. The Marxist approach focuses on two aspects of capitalism, which are directly involved in state involvement in economic activities. According to the Marxist approach to social reproduction, the capitalist system is based on a system of economic appropriation and when this fails, the state normally steps in so that by means of coercion and at times the use of the military, it is able to ensure that an environment conducive for the further development of the capitalist system is developed (Siegman 2004, p.709). Thus, whenever there is an economic opportunity for the elite of a powerful country, such as the United States, the power of political coercion it never far away and it is normally used to secure any economic interests in weaker countries (Steans and Tepe 2008, p.133). It is therefore important to stress that a country’s economic interests are normally often intertwined with its political interests, and that, in fact, the political interests are normally developed mainly because of the economy. In the modern circumstances, it is normal for political coercion to be employed so that the rule of free market can be imposed, and this does not normally consider the plight of the masses who are often the main losers whenever liberal economic policies are adopted (Tooze and Murphy 1992, p.27). The liberal approach to reproduction is among the most commonly used when discussing matters concerning the global political economy and it tends to consider its benefits more than its shortcomings (Ünay 2013, p.77). The liberal view supports the lessening of government control over the economy because of the belief that it is a natural development of free trade. This approach holds the belief that in all aspects of life, including that of economics, only the strongest and most competitive can survive, hence the need for increased competition in global trade. In fact, this approach considers the developments and fast growth of free trade without state interference as a necessary part of human maturity (Dick 2003, p.525). It is argued that the mutually dependent nature that has come about through the development of free trade has made sure that all the countries in the world cannot exist in a vacuum, hence the faster circulation of goods and services. According to this approach, free trade with less state control has become indispensable in amicable trade, since because of the interconnectedness between the various states in the world, the possibility of economic disagreements has become minimized (Siegman 2004, p.709). In place of such disagreements, more dialogue between trade partners has come into existence to ensure the creation of a favourable trade environment at a global scale. It is argued that the lessening of state control over the economy is unstoppable and will ensure that the lives of all the people affected by it improve (Luxton 2006, p.22). The liberal approach views state involvement in the economy as being detrimental to it and recommends a lessening of restrictions to encourage free trade. Capitalism has grown to such an extent that the most powerful countries in the world have the power to ensure that their economic interests are secured at the expense of poorer ones. This is mainly because of their ability to issue threats and embark on military action against any state that does not comply with their demands. The ability of these countries to enforce their will over others, according to the Marxist view, has ensured that social inequalities have continued to increase in a massive scale (Ünay 2013, p.80). As a result of the development of social reproduction, the capitalist state of today tends to enter into agreements, which are meant to secure their economic interests, and these are done through multilateral negotiations. These negotiations are methods of ensuring that the sphere of economic exchange is continuously expanded. The result of such expansions is the development of rules and regulations to ensure that there is a favouring of the interests of transnational capital, the main basis of international capitalism (Tooze and Murphy 1992, p.27). However, when there is either resistance to multilateral negotiations or a threat to the economic gains made from such negotiations, capitalist states do not hesitate to use military force or sanctions in order to bring the rebellious states back into the fold of the capitalist system. A case of such assertiveness in achieving its capitalist goals is the United States, which using its military power as well as its propaganda machine has worked and continues to work towards bringing what are termed as rogue states into the influence of the capitalist system (Jenson 2004, p.179). The Marxist approach to social reproduction supports the notion that the globalization of economies with the full backing of capitalist governments has the aim and objective of maintaining the power and position of the elite, since even in the worldwide trade setting; it is the elite who have control over the means of production (Jenson 2004, p.181). Despite its support of a globalised economy, the Marxist perspective is that it should not be dominated by capitalism as it is in the current world. The Marxist approach considers globalisation to be a furtherance of the capitalist system, where those who own the means of production dominate the masses (Laurie, Andolina and Radcliffe 2003, p.464). Thus, when the powerful capitalist states impose their will over less powerful states, they are doing so at the instigation of their elites, who seek to amass more wealth outside the borders of their countries. Globalization is used as a tool by capitalist states to ensure that the masses lose their freedoms and this works towards the further propagation of capitalism, since the masses and workers will be completely dependent on it. The result of this is their further exploitation by the large multinational corporations, which take advantage of them to acquire cheap labour and a ready market for their products (Ünay 2013, p.85). In addition, through the influence of state power, poorer countries have set aside their development objectives and have instead come to focus more on the production of raw materials that end up supplying the industries of more developed countries. As a result, while the producers of raw materials for industries gain little for their efforts, the individuals who run the industries make many times over the money they invested. The fierce protection of economic interests by states has raised the fear that the masses will eventually end up losing their freewill. The strength of character of the masses might sooner or later be acquiescent to those of the multinational corporations that will have absolute control over the globalised earth. According to the Marxist approach, the supremacy of private enterprise has had a massive effect on the autonomy of those states which have come to completely rely on the globalised free trade for economic endurance (Tooze and Murphy 1992, p.41). The economic interests of individuals within the state have largely come to influence the way that it relates with other states. As a result, because of its massive influence on the state, capitalism can be considered to be a factor whose very presence is aimed at undermining state autonomy because those resolutions that administrations, in the entire globe, make have to put into contemplation their effects on economic interests (Bezanson and Luxton 2006, p.9). Instances of such situations are oil-exporting countries, such as oil exporting countries in the Middle East, which profoundly depend on the earnings from oil to finance their public accounts. If these states were to conduct themselves in a manner which is incompatible with the aims of the businesses or the home countries of the said businesses, there would be dire consequences on their economies and perhaps even the state itself (Laurie, Andolina and Radcliffe 2003, p.466). An example of a similar situation is that of Iraq under the rule of Saddam Hussein who, because of his contrary stance on many issues with the United States ended up seeing his oil-rich country invaded and a more friendly government put in place. With the dawn of a global consumerist dominated world, most states have financially viable interests in others, and in order to safeguard these interests, it has become essential for the more dominant of these countries to interfere in the political affairs of others. If the Marxist approach on social reproduction is taken as it is, one would state that capitalism has not only made the some countries to lose their autonomy, but it has also egged on their overreliance on more advanced capitalist states for sustenance in almost every sector of their economies (Laurie, Andolina and Radcliffe 2003, p.472). In most of the third world cases, capitalism and the ascendancy of the capitalist elite over the state has made it possible for economic control to be unreasonably balanced and this has led to the elite of these societies seize most of the wealth while the rest have dreadfully little or live in wretched paucity (Waylen 2006, p.147). This is in accord with the Marxist approach, because the bulk of the wealth in the society is owned by incredibly few individuals and, in the process, it has made the break between the affluent and the underprivileged to broaden even further, creating a possibility for social instability. In such states, the affluent become more affluent while the underprivileged become more deprived as the cost of living goes up while their wages remains the same. Thus, the authority of the state is used by the elite to increase their wealth through manipulating the formulation of those policies that help in the promotion of their interests. The liberal view is that state involvement in the protection of the capitalist system has led to a level of economic prosperity that has never been known in human history. According the liberal approach, state participation in the safeguarding of economic security is a favourable characteristic of the modern world because it not only enables people from assorted backgrounds to work together towards making a profit, but it also provides them with equivalent chances of becoming prosperous. The fact that the entrepreneurial system has spread all over the world is for the most part beneficial because it enables the further economic maturity of the world through incorporation. This school of thought is of the opinion that capitalism leads to integration of diverse economic interests and this creates a situation where it is easier to conduct business all over the globe. The involvement of the state in the economy is a desirable phenomenon because it helps in the reduction of conflict based on different economic interests and ensured that a common interest is developed (Steans and Tepe 2010, p.807). An instance of this is when a powerful state coerces another to adopt liberal economic policies, which ensure easier movement of goods and services between them. The Marxist perspective is at odds with such a stance stating that the further spread of state sponsorship of capitalism means that more individuals will end up disadvantaged than before. The propagation of the capitalist system by the state, through either diplomacy, coercion, or military force creates more disadvantages for the society especially considering how it affects the world order (Davies and Ryner 2006, p.33). It is the power of the state that is the driving force behind the continued maintenance of the global power status quo, where the most developed countries in the world are at the helm. The Marxist approach to social reproduction is of the opinion that the economic elite use the state as a means of ensuring that their interests are preserved (Tooze and Murphy 1992, p.52). This is done using state resources to push their economic agenda, so that there can be easier acquisition of raw materials, cheap labour, and markets for manufactured products. State power is used to dominate the economies of those countries, most of which can be considered to be either middle income or underdeveloped, that have the needed resources. The liberal approach, on the other hand, espouses that the involvement of the state in the easing of trade is of great benefit to the global society as a whole, and that it is a necessary aspect of the world. It opposes the notion that the wealthiest and most powerful forces, both political and economic, will remain dominant (Davies and Ryner 2006, p.40). The liberal stance is that while universal economic equality has yet to be achieved, it will be achieved in future since all of the people who participate in the economic life have an equal opportunity to gain from it. The liberal view is that in the current world, there is no organized class of capitalists who dominate the world’s political economy to the detriment of state power. This is opposed to the Marxist perspective which perceives evidence of an increase in the cooperation of capitalists across national borders (Davies and Ryner 2006, p.59). However, because of the existence of the state, the interests of the capitalist class based in different states are often different and are at times a cause of conflict between them. The capitalist system has led to the development of institutions based on global state governance and are gaining the upper hand over the state level decision making process. However, the state players involved often influence the process of decision making under global state governance and local elite in turn influence these. The latter in most cases favour the preservation of local economic interests to the greatest extent that they can (Becker 2010, p.253). While this may be the case, there are often limits on their propagation of local economic interests and these limits are set by the prevailing market forces, as well as pressure brought to bear on a state from those governments that are more powerful than it. According to the liberal point of view, it is the local elite who are the major obstacle to the absolute liberalization of national economies and this is believed to be because of their considerable influence on their governments (Tooze and Murphy 1992, p.41). Because of their need to look after their own economic welfare, the local elite often use the state to further their cause. This is the reason why there are no truly transnational firms since all of the corporations that exist today tend to be associated with particular countries, where they have their headquarters (Laurie, Andolina and Radcliffe 2003, p.473). The main reason for the lack of transnational corporations in the world is because the interests of corporations are often intimately tied to the nation state and it is normally the case that the country of origin of a corporation is one of the factors that determine its success globally. The Marxist approach suggests that in most states, the economic policies tend to be left in the hands of politicians who are intimately related to the economic elite (Braedley 2006, p.217). It is these individuals who end up creating liberal policies that, while ushering in and strengthening free trade have a detrimental effect on the masses, who are often not beneficiaries of such policies. The capitalist elite tend, while espousing taking steps to improve the lives of their people through economic reforms tend to have absolute control over the prevailing economic system, an example being China (Tooze and Murphy 1992, p.33). This country is rich not only in resources but also has an abundance of cheap labour and this has been a major advantage to it because it has attracted a large number of multinational corporations. Despite the fact that it is the presence of these corporations that has fuelled the swift economic growth of China, the Chinese people have ended up receiving little benefit because these firms, in collusion with the elite, have increased the instances of exploitation (Davies and Ryner 2006, p.64). The corrupting influence of capitalism, according to the Marxist perspective, is the reason behind the adoption, by governments, of those economic policies, which ensure the further increase of the wealth of the elite while the masses are subjected to ever-increasing instances of poverty (Siegman 2004, p.709). The political elite often pursue economic policies, which are detrimental to the equal development of its entire people as these policies are aimed at securing the status quo. There is a rising potential of class conflicts in such states especially when one considers that the economic policies propagated by the liberal approach do not seem to benefit the masses, which consist of a majority of the population. The predominantly global economic system has developed because of the need to propagate capitalism accompanied by the free movement and consumption of products. This has resulted in the need for there to be efficiency in the production and manufacturing of goods. The capitalist system, according to the Marxist approach, has led to the specialization by individual workers to certain aspects of production, resulting in their lack of knowledge concerning other aspects (Ayres 2005, p.812). In such cases, there are some instances where people get laid off their work simply because their positions are no longer needed by their employers. This is largely due to the introduction of machinery to do work which people previously did. These individuals only have knowledge concerning their specific line of work, and in order to get new employment, they have to study another line of work, something that is extremely difficult to do. As a result, it has led to the widening of the differences between the classes in society, as those individuals who are responsible for production end up living in poverty because it is often difficult for them to get into another line of work (Jenson 2004, p.182). The reasons behind the replacement of individuals by technology are not developing a consequence of fate but it is because of the deliberate actions by the elite whose aim was to increase their profits by reducing production costs. This corresponds with the liberal approach of the global economy where states sponsor the development of free trade, which in turn translates to the need for there to be either a reduction of the labour force or the acquisition of cheap labour. The main aim of the liberal approach is not to gratify the workers, but to ensure that there is a reduction of costs so that there is a maximization of profits acquired from free trade (Braedley 2006, p.219). Driven by the prevailing economic conditions, states from the 19th century onwards attempted to impose their will over others, either turning them into vassals or into colonies. The main purpose for the creation of colonies was to ensure that there was a constant source of raw materials to the mother country as well as a ready market for manufactured products (Tooze and Murphy 1992, p.41). The colonies were a basic part of a well-organized system of exploitation where the colonizer extracted as much as it could while the colony got almost nothing in return. This system has remained dominant even in the modern age, where the colonies have evolved into sovereign states. These states exist in a system of structure inequality, which has become the basis of the current political economy, where the more powerful states hold massive sway over the economic affairs of the former colonies. The policies towards these states are always made by policy makers who represent the dominant class interests of their respective nations (Braedley 2006, p.224). The aim of these policies is often to enforce the will of the elites of more powerful countries over the economies of weaker countries, with the intention of ensuring that they remain economically weak and subservient. These policies have ensured that these states develop export-oriented economies whose main objective is to earn as much foreign exchange as possible to meet their international debt obligations, and this often proves to be detrimental to their development. It is because of the immense debt obligations that are imposed on poorer countries that ensure that they lack the capacity to focus on their domestic needs as well as balanced growth (Ünay 2013, p.86). This situation is highly beneficial to the prevailing economic order since it helps in the maintenance of the economic status quo. Thus, what was achieved through the direct appropriation of land and labour in the colonial period is now achieved through the weakening of the development possibilities of poor countries by the richer ones. The implementation of cutbacks in the disbursement of funds for health, education and other essentail social services in the less advantaged countries internationally has come about due to the structural modification policies permitted by the major global monetary institutions as requisites for loans and repayment (Dick 2003, p.526). The globalised capitalist political economy has led to the proliferation of the biased requirement the governments of developing countries have to embrace free trade and this results in the unfair competition with enterprises from more powerful and developed nations. In order to bring in direct foreign investment, most third world countries have ensured that they provide lower standards, cheap labour and reasonably priced resources to corporations from more developed countries (Ünay 2011, p.178). This, according to the Marxist social reproduction perspective, has increased economic inequality between all of the economies in the globe with the bigger ones growing further while the smaller ones remain stagnant. This system is the basis upon which free trade is founded and as a result, it maintains the historic unequal rules of trade between states. In conclusion, the state plays an immense role in the global political economy and this has led to the development of inequality in matters of global trade. Thus, the stronger states have a bigger say concerning global economic outcomes while the weaker ones have to remain subservient to the former because their economies are often held hostage. State power play a significant role in the definition of the rules of trade that exist in the world today, and according to the Marxist perspective, as seen above, this is what has brought about the rise in global inequality. While the liberal approach supports the continuation of the current economic system, it is important to state that the liberal policies, which have been adopted in recent decades, have not produced the desired results. Instead, it has led to the dominance of a few state actors over the majority, meaning that the status quo has been maintained to the detriment of global economic development. References Ayres, J. 2005, "Turbulence and New Directions in Global Political Economy", Canadian Journal of Political Science, vol. 38, no. 3, pp. 812. Becker, D. 2010, "The neoliberal moment: Communicative interaction and a discursive analysis of the global political economy", International Politics, vol. 47, no. 2, pp. 251-268. Bezanson, K. and Luxton M. 2006. 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