Classical and Ne Variants f Liberal Internatinal Thery - Essay Example

Running Head: Liberal Internatinal Thery ical and Ne Variants f Liberal Internatinal Thery f the f the institutin] Classical and Ne Variants f Liberal Internatinal Thery Befre beginning, it seems necessary t define the main term in the discussin - Liberalism. The wrd itself means many things t many peple, but fr the purpses f this essay Liberalism refers t an ecnmic apprach that values market autnmy, meaning the market shuld be allwed t functin freely, withut the interference f the state (in the case f the U.S., the Federal Gvernment). Anther key aspect f Liberalism is the suggestin that a system cmprised f individuals, wrking t meet their wn persnal ends, will result in the betterment f sciety as a whle. In his bk Glbal Ecnmy, Glbal Justice Gerge DeMartin describes the afrementined phenmenn in the fllwing way, "The market is such an extrardinary institutin because it manages t harness this ratinal, self-riented behaviur in service f the cllective gd. The market generates grwth and prsperity fr all, nt because any individual actr intends, r seeks this utcme, but as an unintended cnsequence f each agent's determined effrts t secure his wn happiness. The "invisible hand" f the market place c-rdinates the activities f innumerable self-riented ecnmic actrs, wh may nt care ne whit fr each ther's welfare, in such a way that scial gd is assured." (p.5) Having defined Liberalism, the fcus shall shift back t its histrical backgrund. Adam Smith first frmalized Liberalism as a system int the written wrd thrugh his nw well-knwn bk The Wealth f Natins. Frm Smith's wrk, as well as that f earlier thinkers such as Jhn Lcke, Liberalism emerged as an ecnmic system gverned by "natural law", and that if practiced by natins tgether, and nt simply ne natin by itself, wuld result in what's knwn as a psitive sum game. This term refers t any system where each f the players benefits frm participatin. In this way, Liberalism culd be cntrasted with ther perspectives, such as mercantilism, which emphasizes a zer-sum game - ne natin gains when anther lses. Liberalism began t take hld in the 18th century as Eurpe's grwing merchant class sught t reap the benefits f their wn activity, rather than simply pass their prfits alng t a third party, such as a king. As time wre n, separate factins began t appear within the Liberal camp. These factins still exist tday, and thus merit discussin. The grups came t be knwn as rthdx, interventinist, and institutinal liberals. rthdx liberals are "mainly cncerned with prmting 'negative freedm,' r the freedm f the private sectr and the market t functin with minimal interference frm the state." Althugh this categry did nt exist while he was alive, Adam Smith wuld have belnged t the rthdx schl. The interventinist liberals adhere t the belief that "an exclusive fcus n negative freedm is t narrw because we cannt always be certain that the private sectr and the market will be prgressive and prduce widespread benefits." Because they acknwledge the ptential dwnside t a cmpletely unregulated market, interventinists admit that at times sme state invlvement may becme necessary t maintain a level playing field within the market system. Althugh the practices f the final factin may be well knwn, its name des nt ring many bells. Institutinal liberals are similar t interventinists in that they acknwledge the need fr state invlvement, but they differ in that they "favur the develpment f strng internatinal institutins" t regulate and stabilize the wrld, r internatinal ecnmy. Thus it is the institutinal liberals wh have the mst influence ver the liberal apprach t IPE, fr they are the nly factin t prmte the establishment f internatinal ecnmically driven institutins whse purpse is t ensure adherence t the Liberal ecnmic mdel. Accrding t Thedre Chn, with respect t IPE Liberals believe that, "If existing internatinal relatinships d nt bring abut grwth and efficient allcatin f resurces....the prblem is nt with the internatinal ecnmic system but with the unwillingness f gvernments t pursue ratinal liberal-ecnmic plicies." (p.83) Here, the "unwillingness" Chn refers t culd be characterized by a gvernment's ver-spending n scial prgrams r infrastructure, r the slwed privatizatin f industries previusly wned by the state. Chn ges nt t state what he believes t be the Liberal view f the functin f internatinal ecnmic activity as that which realizes, "the ptimum r mst efficient use f the wrld's scarce resurces and the maximizatin f ecnmic grwth and efficiency." (p.83) Liberals seek t accmplish thse gals thrugh the influence f tw key internatinal institutins - the Internatinal Mnetary Fund (IMF) and the Wrld Bank. The IMF was created after WWII in an effrt t help stabilize the ecnmies f struggling natins in the hpes f preventing ecnmic decline int disaster as ccurred fllwing the First Wrld War The IMF fulfills its duty by extending shrt-term lans (the lans usually must be repaid n lnger than tw years after they are issued) t cuntries with an uneven, r negative balance f payments. The Wrld Bank, cntrary t what its name might indicate, des nt give ut lans like its sister the IMF. Rather, the Wrld Bank finances infrastructure imprvements within Less Develped Cuntries (LDCs) such as rads, river dredging, r pwer plant cnstructin. Whether aid is ffered in the frm f dllars frm the IMF, r thrugh cnstructin prjects paid fr by the Wrld Bank, nthing will be dne unless the recipient LDC adheres t a few cnditins. These cnditins are knwn as "structural adjustment prgrams" r SAPs (Chn, p.337). There are several SAPs typically suggested by the IMF/Wrld Bank: the cutting f gvernment spending/subsidies, the sale f gvernment prperty/privatizatin f industry, and the devaluatin f the recipient natin's currency. nce a cuntry shws an effrt t cmply with these cnditins the IMF/Wrld Bank will untie their wn hands t swp in with aid. "Any criticism presuppses the pssibility f a better way f life; t expse smething as illusry r cntradictry is t imply the pssibility and desirability f a life withut thse illusins and cntradictins." (Sayer, p.33) The Liberal apprach t IPE is nt withut its flaws. It is the task f the student f ecnmics t identify, examine, and ffer pssible crrectins t thse flaws. Here t, we shall identify, examine, and ffer alternatives t the flaws in the Liberal apprach t IPE. We begin where we left ff, that is, with the IMF and the Wrld Bank. While the stated gal f these tw rganizatins is t help stabilize and strengthen the ecnmies f LDCs, it wuld seem that the nly element stabilized by either the IMF r the Wrld Bank is the very debt they claim they seek t remedy. Fr instance, the IMF ffers lans t cuntries s that thse cuntries might repay their debts. These lans fail t accmplish their gals fr tw main reasns: the lans are set at rates nly high enugh t repay the interest n the lans themselves, and the timetable fr repayment is t shrt, making timely repayment and SAP cmpliance nearly impssible. The Wrld Bank claims t ffer cuntries needed infrastructure s that they might be able t leave the develping wrld and enter the develped wrld. Hwever, rather than build rads frm city t city, r even within cities, the Wrld Bank mst ften spnsrs rads and facilities that nly serve an utside industry that has taken up residence in an LDC - a mining cmpany fr example. Thrugh their cntinued existence and peratin, the IMF/Wrld Bank ffer little mre than an all-expenses-paid trip t debtr's prisn. Finally, the critical eye turns tward Liberalism itself. Fr that critique we shall peer thrugh the lenses f Barry Clark, "The changing nature f Western scieties pses several challenges t Classical Liberalism's cmmitment t the market as the primary institutin fr rganizing sciety. First, industrializatin and urbanizatin have cntributed t a prliferatin f "externalities" that cause the market t allcate resurces ineffectively. Secnd, the large-scale prductin required t take advantage f ecnmies f scale assciated with mdern technlgy has prven subversive t effective cmpetitin. Withut cmpetitin, the market cntains n mechanism fr guiding self-interest int scially useful channels." (Clark, p.52) Here we have identified and examined the flaws in the Liberal apprach t IPE, and pssible slutins will nw be ffered (as many as can be within the scpe f the present analysis). Debt relief fr LDCs wuld slve much f the current ecnmic crisis facing the wrld tday, withut undermining the Liberal market system. Allwing the debts wed by LDCs t remain intact serves n clear purpse, as it is bvius t even the least infrmed bserver that these cuntries will never have the capacity t repay the debts in full under the current system f lans. Anther, less ppular alternative is the allwance f natinalizatin f industries by LDCs. Liberal critics decry such a slutin, claiming that state wnership will hurt the market by putting an end t the "lack f gvernment interventin" plicies. While the latter half f their criticism may be true, they fail t acknwledge the fact that state wned industries must still sell the gds they prduce, and thus cmpete with ther privately wned industries. If anything, natinalizatin n a mdest scale wuld increase cmpetitin - ne f the tenets f Liberalism. It shuld be nted that the afrementined slutins are but sketches f a brader plan t extensive and cmplicated t be detailed in this essay. An ecnmist, Karl Planyi ne said "markets make wnderful servants but terrible masters." We must be careful s that we d nt frget this fact and cnfuse ne fr the ther - the market as ur master, and we as its servants. The Prgressive Era - Liberal r Cnservative During the latter part f the nineteenth century, presumably arund the 1890's, it became knwn as the Prgressive Era, a time f change, refrm, and adaptatin. As Vernn L. Parrigntn put it, it was a "demcratic renaissance" (Vernn L. Parringtn in The Prgressive Mvement: Liberal r Cnservative). S what was Prgressivism Well, its main gals were t curb crprate pwer, t end business mnplies, and t wipe ut plitical crruptin. They als wanted t demcratize electral prcedures, prtect wrking peple, and bridge the gap between scial classes. They called fr refrms such as the referendum, initiative, and the recall. They wanted the Americanizatin f the immigrant and the regulatin f child and wman labur. But many histrians argue what the main idea was behind the Prgressive Mvement; whether it was t help demcratize the natin, r was just a cver up fr a grup f well-t-d-middle-class peple wh wanted t climb back up the scial ladder and reassert its declining psitin f leadership. Althugh it had its many failures, and there were many reasns t believe it as a cnservative mvement, the Prgressive Mvement was in fact a liberal mvement. The term liberal is used t describe smene r smething that is nt strict, that has a lse interpretatin f things, and is nt limited t r by established, traditinal, rthdx, r authritarian attitudes r views. Peple wh are liberal favur prpsals fr refrm, are pen t new ideas fr prgress and are tlerant f the ideas and behaviur f thers (Dictinary.cm: Liberal). S with that being said, the questin is was the Prgressive Mvement liberal. Accrding t many histrians such as Vernn L. Parringtn and Jhn D. Hicks believe it was. The Prgressive Mvement was "a mvement f the masses against a 'plutcracy' that had been crrupting the very fabric f American sciety since the Civil War" (The Prgressive Mvement: Liberal r Cnservative). In ther wrds, ever since the Civil War, America had been becming mre and mre crrupt, and the prgressives wanted t restre the natin back t hw it was befre the Civil War. Hicks believed that althugh the Ppulists ultimately failed, they were victrius in the lng run, fr it was they that set the stage fr future mvements such as the Prgressive Mvement (Jhn D. Hicks in The Prgressive Mvement: Liberal r Cnservative). David P. Thelen wuld definitely be ne histrian t classify the Prgressive mvement as liberal. In his qute, "All grups culd unite n the urgent necessity fr tax refrm and the need t cntrl 'crprate arrgance'...'When the prgressive characteristically spke f refrm as a fight f the peple r the public interest against selfish interests, he was speaking quite literally f his plitical calitin because the imprtant fact abut prgressivism...was the degree f cperatin between previusly discrete scial grups nw united under the banner f the public interest'" ne can see that Thelen easily supprted the ntin that it was a refrm and therefre liberal mvement. Tw mre prime examples f histrians wh believed that the Prgressive Mvement was a liberal ne wuld be that f Richard L. McCrmick, and Daniel T. Rdgers. As Rdgers said, "prgressivism can nly be understd in terms f dynamic and changing scial and plitical structures" (The Prgressive Mvement: Liberal r Cnservative). Therefre it meant they wanted t change sciety which means that it was a liberal mvement. Richard McCrmick said that "the regulatry authrity f gvernment at this time increased in precisely the same perid that vter turnut declined, ticket-splitting increased, and rganized pressure grups gained pwer at the expense f party. In discvering that business crrupted plitics during this era Americans created a demand fr the regulatry and administrative state, thus facilitating the activities f rganizatinally minded individuals frm business and the prfessins determined t cmplete a plitical transfrmatin" (The Prgressive Mvement: Liberal r Cnservative). It is clear here that he supprted that the Prgressive Mvement was liberal. The term cnservative is used t describe smene r smething that favurs traditinal views and values, and tends t ppse change (Dictinary.cm: Cnservative). Unlike the histrians like Hicks and Parringtn, thers, such as Jhn Chamberlain and Richard Hfstadter believed that the Prgressive Mvement was that f a cnservative ne. Instead f seeing prgressivism as a mvement t crrect American sciety, Jhn Chamberlain saw it as a cmplete and abysmal failure, nthing but a bunch f peple wh "were mtivated by an escapist desire t return t a glden past where hnesty and virtue had dminated ver egism and evil" (The Prgressive Mvement: Liberal r Cnservative). If the Prgressive Mvement is lked at as a cnservative mvement, ne can cncur that it was just a cver up fr a mral crusade. During the latter part f the nineteenth century peple f high status such as lawyers, prfessrs, and clergymen were being usted ut f pwer. In respnse, these peple went n a mral crusade t restre individualistic values based n the idea that nly men f character shuld rule. (Richard Hfstadter in The Prgressive Mvement: Liberal r Cnservative). Accrding t Gerge E. Mwry, prgressivism was nthing but a "mvement by a particular class aimed at reasserting its declining psitin f leadership" (Gerge E. Mwry in The Prgressive Mvement: Liberal r Cnservative). Luis Hartz felt that America never experienced the struggles between liberals and cnservatives that characterized the histry f the Eurpean cuntries. Therefre t interpret prgressivism as a struggle between the peple and special interests is incrrect. He felt that America never had a cnservative traditin in the Eurpean sense f the term, because "American liberalism, by virtue f its cntinuity, was a cnservative traditin" (Luis Hartz in The Prgressive Mvement: Liberal r Cnservative). Peple like Samuel P. Hays saw the Prgressive Mvement as a "mvement f scientists and planners interested in 'ratinal planning t prmte efficient develpment and use f all natural resurces' and that 'supprt fr refrm in municipal gvernment came frm business and prfessinal grups'" (Samuel P. Hays in The Prgressive Mvement: Liberal r Cnservative). Rbert H. Wiebe referred t the Prgressive Era as an "age f rganizatin." What he meant by that, was that in the nineteenth century America was nthing but many autnmus and semiautnmus "island cmmunities" as he put it, but during the 1880's because f technlgy and ecnmic frces, it caused "dislcatin and bewilderment" which led t a "search fr rder" (Rbert H. Weibe in The Prgressive Mvement: Liberal r Cnservative). Gabriel Klk felt the mvement was anything but a refrm mvement. "Bth majr plitical parties shared a cmmn idelgy and set f values. This idelgy - what Klk called plitical capitalism - sught the eliminatin f a grwing cmpetitin in the ecnmy" (The Prgressive Mvement: Liberal r Cnservative). Samuel P. Hays is ne f many histrians wh believe that the Prgressive Mvement was that f a liberal ne. Why des he believe this ne might ask Well the mst ntable reasn fr why sme histrians believe the Prgressive Mvement t be that f a cnservative ne is because they feel, as Gerge E Mwry said, the Prgressive Mvement was nthing but a mvement by a particular class, presumably the middle-class wrking men, aimed at reasserting its declining psitin f leadership. In ther wrds, in rder fr the middle class t gain pwer. Well ne f Hays' strngest arguments was that the Prgressive Mvement was in fact nt a mvement fr middle class wrkers t gain pwer. ne f the reasns he felt this way was that "fr the mst part their interest in refrm stemmed frm the inherent dynamics f their prfessins rather than frm their class cnnectins...They were nt lder prfessinal men, seeking t preserve the past against change; they were in the vanguard f prfessinal life, actively seeking t apply expertise mre widely t public affairs" (Samuel P. Hays). Anther pint that Hays brings t the case, is that peple like Hfstadter say that the men f high status, educated men like lawyers, ministers, teachers, and editrs wanted t gain back pwer. Hays n the ther hand, says that Hfstadter fails t determine wh within thse prfessins, became refrmers and wh didn't. bviusly if nly a small percentage f thse peple became refrmers, ne can easily reject the idea the Prgressive Mvement was a mvement fr peple t regain their declining psitin f pwer. Refrmers, therefre, wished nt t simply replace bad men with gd; they prpsed t change the ccupatinal and class rigins f decisin-makers. Tward this end they sught innvatins in the frmal machinery f gvernment which wuld cncentrate plitical pwer by sharply centralizing the prcesses f decisin-making rather than distribute it thrugh mre ppular participatin in public affairs. Accrding t the liberal view f the Prgressive Era, the majr plitical innvatins f refrm invlved the equalizatin f pwer thrugh the primary, the direct electin f public fficials, in the initiative, referendum, and recall. Frm this qute by Samuel P. Hays, it is mst evident why Hays wuld be classified as a histrian wh sees the Prgressive Mvement as a liberal ne. Peple wh are liberal, favur prpsals fr refrm, are pen t new ideas fr prgress and are tlerant f the ideas and behaviur f thers. bviusly frm that qute by Hays, it is evident that the main purpse behind the Prgressive Mvement was t make refrm and change the way the gvernment was, t get rid f crrupt practices and curb special interests. There is nt enugh evidence t prtray the mvement as a mral crusade fr a grup f peple wh wanted t regain a lst psitin f pwer. In cnclusin, the Prgressive Mvement was in fact a liberal mvement. Because prgressives wanted t make refrm and did indeed make refrm, that is why they are classified as liberal. They wanted t regulate wmen and child labur. They passed the initiative, the referendum, and the recall, all f which were refrm plicies. Hwever, t sme degree, the Prgressive Mvement was a cnservative ne. ne can say that the real reasn behind it was nt t make refrm and curb special interest. Therefre it wuld nt be liberal. ne can say that t sme degree it was just a mvement where sme peple culd regain the pwer that they nce had, that it wasn't t curb special interests and make refrm that it wasn't fr the general gd, but fr persnal gain. Whichever it was, whether the Prgressive Mvement was liberal r cnservative, n ne will ever knw. There's always ging t be reasns that supprt bth. All ne can cnclude frm this is that during the Prgressive Era, many refrms were made that helped this natin get t where it is tday. Yes, maybe the reasns behind thse refrms were immral nes, but still they did indeed help this natin. References Clark, Barry Plitical Ecnmy: A Cmparative Apprach. Westprt: Praeger Publishers, 1998 Chn, Thedre H. Glbal Plitical Ecnmy: Thery And Practice. New Yrk: Addisn Wesley Lngman, Inc, 2000 DeMartin, Gerge F. Glbal Ecnmy, Glbal Justice. New Yrk: Rutledge, 2000 Sayer, Andrew Radical Plitical Ecnmy. Cambridge: Blackwell Publishers Inc., 1995 Read More