Aiacoboaie Ciprian, BA, Year 3, Gr 1

"The Challenge of Global

Capitalism
-by Robert Gilpin
-BOOK REVIEWAbout the author
Robert Gilpin is a scholar of international political economy and the professor emeritus
of Politics and International Affairs at the Woodrow Wilson School of Public and
International Affairs at Princeton University. He holds the Eisenhower professorship.
Gilpin specializes in political economy and international relations, especially the effect of
multinational corporations on state autonomy.
Prof. Gilpin has an excellent reputation in the field of IPE, International Political
Economy, and I bought this book on that recommendation. It gives a good overview of
major developments in the globalization and globalization debate in the 90s, with
political economy analysis and lots of references to economic analysis.
He has written 8 books, from which I chose The Challenge of Global Capitalism to
review, because it is very important to be aware of the fact that we live in a capitalistic
world.

About the book

"The Challenge of Global Capitalism describes the opportunities, the complexities, and
the risks inherent in the globalized economy with the clarity and breadth of analysis
characteristic of Robert Gilpin. It is an authoritative review of the major aspects of
today's world political economy by the world's leading political scientist working on the
subject. It offers a clear description of a whole array of contemporary issues, a
sustained critique of the economist's viewpoint and some genuinely good material for
scholars and students.
As he states in the beginning of the book, "Capitalism is the most successful wealthcreating economic system the world has ever known. But it has its skeptics. One of

Aiacoboaie Ciprian, BA, Year 3, Gr 1

them is Brian Snowdon, which states in his book, Conversations on Growth, Stability
and Trade: An Historical Perspective, that Individual nations and powerful groups
within nations that believe the world economy functions unfairly and to their
disadvantage, or who wish to change the system to benefit themselves to the detriment
of others, are an ever-present threat to the stability of the system, thing that I agree
with.

The task, then, is to ensure its survival through wise leadership that provides fair rules
governing trade, investment, and currency. At a time when the economies of the world
appear more linked than ever, and the tug of even further internationalization feels
irresistible, Gilpin says nothing is inevitable. The whole system must rest on secure
political foundations; foundations that Gilpin argues have weakened since the end of the
cold war. "Growing concern over economic globalization and increased competition
have intensified the movement toward economic regionalism and the appeal of
protectionism," he writes.
He warns that the international capitalist system requires a "strong and wise" leadership
to promote international cooperation and establish and enforce rules regulating
international trade, investment, and monetary affairs. He also emphasizes the need for
that leadership to "ensure at least minimal safeguards for the inevitable losers from
market forces and from the process of creative destruction.", as he states in the book.
The task, then, is to ensure its survival through wise leadership that provides fair rules
governing trade, investment, and currency. At a time when the economies of the world
appear more linked than ever, and the tug of even further internationalization feels
irresistible, Gilpin says nothing is inevitable.

Through the whole book Robert Gilpin speaks about a few subjects, which may or may
not be as stated by him, because a lot of economists have different points of view. For
example, Robert states that "The demise of the Soviet Empire did not bring about the
new World Order. Indeed, 'market economy' and 'democracy' have become buzzwords
for everybody. However, what we see today is increasingly unstable and undergoverned global economy. Robert Gilpin's The Challenge of Global Capitalism explores
what went wrong and convincingly calls for effective international leadership and
strengthened cooperation among the major industrialized powers.", as Toyoo Gyohten,
the President of Institute for International Monetary Affairs, states.

Aiacoboaie Ciprian, BA, Year 3, Gr 1

Another subject from the book that I wish to talk about is the European regional
integration. Gilpin begins this chapter by stating that in European integration economic
goals have been secondary to political concerns. The mid-1980s single-market
initiative resulted primarily from European leaders realization that Western Europe was
losing influence in world affairs. The 1991 Maastricht agreement to establish a single
currency (EMU) was the result of the 1990 reunification of Germany, which caused
West European leaders to transform dramatically the purpose, logic and timetable of
integration, as Gilpin states.

Gilpins interpretation lacks an empirical basis. Nearly all analysts now accept that the
single-market initiative was primarily motivated by commercial concerns, as Andrew
Moravcsik, a professor of the Princeton University, says.

Since Robert Gilpins intelligence and integrity cannot be doubted, I assume that he
does not intend for his volume to be judged on the empirical accuracy of his arguments,
thus having more of a commentary approach.

In conclusion, I want to say that overall it is a good reference book, its very easy to
read, not very complicated. The commentary approach is more appreciated by students,
because it does not imply memorizing a lot of accurate data, which leaves more room to
think on your own.

What do I think about capitalism? Well, I think it has its ups and downs, but overall has
a positive impact on the economy. Although it has a few different forms, each
highlighting varying degrees of dependency on markets, public ownership, and inclusion
of social policies, it promotes competitiveness on the market, which is a very important
key for development.

Aiacoboaie Ciprian, BA, Year 3, Gr 1