States: Markets

STATES
---AND_,,.......,..,
MARKETS
SUSAN STRANGE
PINTER
PUBLISHERS
LOHOOH 1 KIW YORK
Distributed exdusively in the USA and Canada by St Martin's Press

.__,
C·\
Chapter 1
The Conflict of Values and Theories
This is not a convencional textbook. Students are often given books to

read which tell them what they are supposed to know, or else what they
are supposed to think. Thís is not like that. It is going to suggest to you
a way to think about the politics of the world economy, leaving it to you
to choose what to think. It will leave you free to be an arch conservatíve
or a radical Marxist, to think about the world problems from a strictly
nationalist point of view or, more broadly, as a citizen of the world.
You can be a free trader or a protectionist. You can favour monetarist
discipline or Keynesian pump-priming. You can even decide that
technological change is going too fast and needs to be slowed down
because 'small is beautiful', or you can look forward to a brave new
world in which technology can actna!ly help solve some of the endemic
problems that accompany the human éondition. Before you there is not
a set menu, not even an à la carte menu, but the ingredients for yau to
make your own choice of dish and recipe.
This is partly because 1 believe profoundly that the function of higher
education is to open minds, not to close them. The best teachers are not
those who create in their own image a crowd of uncritical acolytes and
followers, obediently parroting whatever they say or write. The best are
those who stimulate and help people with less experience in and
exposure to a subject than themselves to develop their own ideas and to
work them out by means of wider reading, more informed discussion
and more disciplined thinking. ·
At the very start, we must clarify our ideas about the nature of theory
in social science.
Theory insocial science

There is a great deal of confusion about the nature of theory concerning
the working of the international system, political and ecanamic. This
has resulted in a lot of 'theoretical' wark which is not really theory at
all, in the sense in which that word should be used and is defined in
dictionaries (i.e: 'a supposition explaining sométhing, especially one
based on principies independent of the phenomenon to be explained',
Concise Oxford Dictionary). ·
J-preface my a~oach to international..Q.olitical economy by making
.fulli..negative __ ;_~\!filpJjp_õ~·~@iJiLYih_<\t ..!~,-11J2Lihf:..OfY.~~rif!~.!~i~~~E?.~i!~f
assumptions about what is the:Q.~Y.·
·--·--' -·~ .. ' - ·-···-~--~·····---· »-·--·~··· •"'·~-
1O The Study o! lnternational Politica/ Economy
The negative assumptions
~~~grf~_ªJ-.4~!-~-~.?-==~~-l- -~~-e-~r~-~~s, ~~~~.~~ .n?_~?f.~ !~ª-~- g_e_sc~iJ?~~~n,

õft:en us1ng new terms anâ worôs to âescr1be Known phenomena, or to
narrate ol<i.sm.rie.s_withou.~-e_~E!il!IL~h.~cii~~~ª~Q5i- Py_tting~
one event after another without explaining the causal con_n~~~ion, if_any, ·
~OtCõüiltas--th"êõry~~SõffietLmes· there·are ·indeeâ ·rheories underlying
th~ . nar;-;-ti-;;~hich are·~º taken for granted that they are not even made
explicit.
~ondly, some~so-called theory in international studies merely
_rearranges and describ_~s .k~~~~~.,~~[~?Iê~.-~_;tl 1!eW,fâXõ-QQfüji:li;·
· This is ,E.QtJ.Q..liJlY:~.tfig..t..ê... fresh_~!.1,~~~ri:i.m.~Y"J1Q,tJi~s:s&smJ.QJ:lie.
elãb'õtation of a ~~~~~~!~.~9{,>;[]~~ th!.._~ª2R1!5?.gI.J..,J?.r. it.~.~-~~-''"d~-:~-~?,t
~ill!:~._.,~lÇ.Rl?)J:ª~~p;u,_a _the~.r&o_.,Ç'{õ_r=s,-..i:i<i>~-qualífy,.~p.er,.""~.~~r!
theor_y.__ The sarne is true of usirig n_ew terms or words to describe k_no_\Vn
j;heíí~men]:_._ ____. ---~·-----~~-----r~----~--- -~-~~---··..
~irdly" ..~iro.pJify.ing".d"v·iGes-<>r...coucepts borrg_;y!<\1Jm.r1L9.thSO!:..~Q.<;IB.l.
sci~fuili!s of knowledge have often had their Rfil<!_gog!c _uses in
~ng, for gef1~ã§E§.IS:~9.~~~!!Pe~ts~~Q_rMr~~ad~f~~-;;i __çei:.tafU___àS~Qf.
_individual socia behãviour. Examples are the story of the prisoners'
dilemffiã,CJradeffiãrld·--·êüfVe, or the graphic representation of the
concept of marginal utility. But nane of these bLt~er:iii<'lv.<;s~exl'.1'1.in the
paradoxes o_E_PEl~~..9JJhg_,Ll).J:.~f!?-J,.!~Ona!~~!_e~.'.-Their current appe"áltô-
some teachers, I suspect, is that they õffer a politically and moral1y
neutral explanation (indeed, an exculpation) for the_ recent failures and
inadequacies of the international organizations dominated by the United
States in which post-war America put so much faith. Their appeal to
students lies in their simplicityj it confirms what their common sense
already tells them, which is that individuais are apno act selfishly. But
they are símplifying <levices, not theories of social behaviour. They do
not help to explain the actions of corporations, of political parties or of
states in a global political economy. They do not even constitute
. evidence that would-be_ .r:elev~nt to a theory - in the way in which a map
of the \Vorld might be relevant evidence for, say, a theory of continental
drift and the existence of Old Gondwanaland. Moreover, those in the
other disciplines who have developed such pedagogic <levices are usually
under no i1lusion as to their usefulness to po1icymakers or the
possibilities of their practical application to real-Iife situations.
~' the development of quantitative techniques applied to
iiiternatiollãIStüêfíéS-hãS--iiõfiêlVáhCed ·theory:-The ·chõtce ofwhat iS-fo _
~hé·'c·ounted- lS~!.?.2--~iJ?ifa~_'!.r.Y~~riA!h~~ª-i.~iil:rihi~~ic?.!i:EI_Wliat~ í'~- causâr a~9 ~
:V-~ª~t ~s_ ~!2.~~.S~!!l!.~~Jj§_JQO~_s_u._b.jgçJiY.~~t9~p~gy_~-~~--~-~~~E~f<TI-~exp1@i~!~.Qri,! ..
For the most part such methods have been used only to substantiate
platitudes and to reinforce conventional wisdorn: concerning historical
patterns of state behaviour in relation to other states.
)
The Conflict ot Values and Theories 1 ·1

J
)
Positive assumptions
)
, 1-:.' The _flrst i? th2-i. aSS!!@.P.tl.<?E__theo!y_ mu§~tl~xplain._$Qgl:~ aspcc_t_ of
:=r::· the international system that is not_~~__s~filfiln~_çl.__~Y. c:_~~?-!!1-'?~ '§fii~_G;·rt
must serve to expla1n a puzzle or a paradox where there is some aspcct
of the behaviour of individuais, groups ar social institutions for \Vhích a )
simple explanation is not apparent. It is not necessary to look for a
theory to explain why people try to leave a burning building. It is )
necessary to find a theory to explain why they patronize shops on one )
side of the street more than the other. International relation~ start.e_d
with the puzzling uestion: why <lid nation-sta es continue to go to v·rar )
e · a eady clear that t e econo ic ains made in war wonlâ
never excee t e economic costs of doing so. Theories resu tcr- )
national political economy today addresses another puzzling question:
·. why do states fail to act to regulate and stahjljze ao jnternational
financial system \Vh1ch 1s known to be vitally necessar to the 'real )
y~_conomy'
\ but whic all the experts 1n an out of government now ªê:.~ )
(:t)~ in dangerous need of more regulation for its own salety? -rheories .-..., -
. result. By contrast, the common use of the term 'tnformatton revolution 1 ./ ')
does not usuaUy_reflect good theory. While it nÓfes rapid technolÕgiCiff' / )

change, it does not postulate a clear causal connectíon, supported by ··
logichor evidence, between that tecfinõl~nge~2s.i.'!L81.~!!.li.f:
- e ange in i ·c 1
econom1c re a · ~1!-92-_'-,!_:g[~Ã[ª~--tQ_J._t::S.~.-t_ip_ !l
)
redístri ution of power...an-dt0r-wea.lth. It does notJ therefore, ad_v-~i.lÇc )
sii!_r understanding or add aJlY!hing t~citf-tõ m·aI<eCãu~t )
c:onnect1ons a d ta ~ee the conseCJüenb~Ll:ff~-~~.:fTi"tiüij:?ll.iüiQITi_Gu~.
econd theor need not necess ºJi.J!sgir:.e tQ.,_..PJJ:~Qi_f.!_ ..QJ...~~~ _p,;r;:s_ç_rib.c. )
ThiS is whcre social science differs from natural science. Natural sciencc
~T;e-t·o-preaiCt""..='-th-Oügli·1r·aoes·~~-t,-~}~;:y~- or--~ecessarily ào so. )
uch science from astronomy to microbiolOgy, enlarges understanding )
çf wh~.:._. a .lOP.:õff~!!J§.~Y_t: .<;.~plaifâiiõ11·$··0.r
wJQlilBPJJ-gls,...$.ocial science can t:!!:YJ'!L_ç_g_®9~~!LEEi~~(Ji~Ç§_ij§_<_:_~_l~.~ )
ir,rational factors involved in human relations are too numerous, and thc )
pefrrratãfiõrlsand combinations of them ãfe eYFrLmõreilurri:er·a·tiS·:·--rhê ·
01íeSõêlãISc1ence tnatflas most õôtãbly ~i~ed to predi~tiS'êé()iiOinics. )
But its record of success is so abysmal that it should rnake ali those that
seek to emulate the econornists and to borrow frorn them try so1nething "fi#.' )
else. _Economists are_ particula.rly bad a~ p. re.diction whep. it C,Qfil~-L?..~~. e/ .;,f \ )
worldeconóm}' because maD}:'..........Q~ t~~ basic theories re_gaxdin_g_J,--P--
irifernational trade ·aaa· ex_ch_ange rates ar_~ "based_un_ass.un1pti011s___ that___ .. J
.n_._o_Io_~ger hold good in:-the present state of_the..integr.at-ed-vl.orkLw-ª-lk~. )
. economy.
·-- As tõ prescription, that is ª. matter of _choice. Whether the tl~~ori~t )
·~ç~es. t_Q~p~õceecr~~Oíii e_xplãrúito_rf theoíy to policy-prescriptiClã i~ -~lp .
to him o_r,:_ h~~He ar she oéêd not necessarily app1y theoiy ·to·_pollcy- J
)
)_
-·---·-·---- j
\'.'
12 The Study of lnternational Political Economy
making, since p~}_iç;y~.1!1.ê.k.i.!Jg_J}~.Ç~§.~;itily ,involx.~-:Y$J.H_~-_L~~~e~1E~P.$§., ,~nd

rislc assessm_ents thar are _exqge_nous to. _theo.ry <J._l)d _that are_ 6etter _ 1Aª-de
;;· , by p~~.ctic_al_ p_aJiCY~rn~~~r-~·.-~h-~IJ.L:by _irreSP.allsihlê:.âé:~deID!f~ili~9i!ifi.
Thirdlx, theory should be scientific only in the sense that the theorist
re;-pects the scientific Vl!!!-!.e.s O~~!i!r aild ÍmPa'!§iii!fâ'.F.Çfie.
to the s stematic formulation of ex@anato- ro ositÍons. The ntle
'social science is on y 1ustifiably used to remin us that} although our
·subject lies closer to our emotions than the origin of rocks or the
composition of molecules, and although it has to do with subjectively
important questions concerning power and wealth, we must nevertheless
still try to preserve a 'scientific' attitude to our studies. Indeed, many of
the problems regarding theory and social science stem ultimately from
the infcriority complex of social scientists towards natural scientists and,
more specifically for us, the inferiority complex of political economists
towards the apparent rigour of econornic 'science'.
The nature of international relations
.Ih.çKprefatg;y _re!Ilarks a~e particularly .necessary · becaust: I ..!l:>!I!k.1he

literature of con~~P..QJ:ary__ international.,pQ\iJi.c;:~l.. ~.r;9n.9mi._hª~-, fir.stly,
been too much dominated by t_he American academiçs and has therefore
1een-p~~~~~~~P.r.. !TI~nY,. :hid~~-~-~:.@p~_·,·~~e,Ii~.·~µ~ç:q_~-~:çiQJi~=y:~u_~-;~\4&~~--
m~.~-~l)_4_.!!..q_fil!1!11?.ilim§.._b.;;i.~.Çg_.Qn .Am~_i;ic.a_:tJ_~2CP,_ÇJ~e_11-S,'r_. 9J.,9Jl....4J!!s;ric<!.I!.
national interes!3 and,_ secondly, because the cont~P}J?,Q.!fil:Y~Jitey.iil!l_%.
~Jtl!..s.::!.~~~~-~"~I-~--~~S~R!-~C?,°!},~;_, fj~S}l~~~i)-~Pf~ª~~~~~I?-ªJ.~~~~9'.~:!.. ~~-J~~--1g_9
narrow a set of quest10~_;.
Let me explain that last point a little, You will find that.!!.!.'!S!.ºÍ !he.
conventional textbooks. ?rid ID()St of_the more _specialized works of an
ª.!!~lr.tic3l n-;;t;;;~ ;;~ di~e~t~djíjiina_rily __at .wha.t is.p.rQPerl}'_c:i_l!~c!.!~e
_ olitics ó7Jii1.e;JiilFóiiã(ec;Of].omic re!atiotf.~.:-.What that meã-ns is that it is
directe at t ase pro e!!l~_~rid iss'ues_ t -~~-.~~v~-~rj~~~-.in... the..rek1._tjg_J!~.
~n...nations,-.as ..repres~m~~~y::f~-~!~--g~~~~ft:l~~t.~:.~Th~gen.Qg._of
to ics for discussion follows closely the agendas of inter-state diplomac
concerning major economic issues. ese wou inc u e issues e the
rules of the game in trade, the terms on which investments are made
across national frontiers, the ways in which currencies adjust to one
another and balance of payments deficits are financed, and the ways in
which credit is made available through international capital markets and
by international banks. These are some of the issues that have
dominated international economic diplomacy over the last twenty years
or so. You could call them the West-West issues. They have engaged
the attention of the affluent industrialized countries of North America,
Western Europe and Japan ·_ roughly speaking the members of the
Organization for Economic Co-operation and Development (OECD).
The Conflict of Values and Theories 13
Since the mid-1970s--·

oi;- a litt1e earlier,
~-~----•, .,,.,,,,, ... --
some writers about the politics
--·-·· ....., -- , T" ...............
of internat10Ilãl'' eConoE2~!!1Ün!.J!~!i;;_ê_c;!sl~.)Yha!.. fQ._\IJ~. ~.e.,j.an.d,_,
often are) called North-South_ issues. These include the an1ount and
'"conditions on wlüêhãid :"'d;.~I~j;mêôt assistance, so-called - in the
form of grants or concessionai loans are made available by rich
countries to poor ones; the means by which volatile cornmodity prices
could be stabilized and possibly raised; the means by which technology
can be acquired by governments and enterprises in poor countries from
governments and enterprises in rich ones; the ways in which ne\v and
insecure states can insulate themselves fron1 the pervasive do1ninance of
Western ideas and values purveyed by wealthy and powerful Western
media - films, television, radio, newspapers and wire services, not to
mention advertising. Even though the South - the poor, developing
countries - has not had much success on any of these issues, they have
been added to the formal agenda of international economic relations.
They have thus been added to the list of things that students of inter-
national political economy are supposed to kno\V about.
Then there are the East-West questions, issues arising out of the
relations between the OECD countries on the one hand and those of rhe
Soviet bloc - ar more widely, members of the organization popularly
known as Comecon (more properly titled the CMEA, or Council for
Mutual Economic Assistance) - led by the Soviet Union. \hough often
separate, these East-West relations could be bracketed with OECD
relations with the other great socialist country, the People's Republic of
China (PRC). These issues are different in that there is still little real
attempt at an East-West dialogue as there has been, however un-
productive, at a North-South dialogue. The policy questions here have
been mainly debated not between the OECD group and the CMEA
group but between the dominant power on each side and its respective
allies.
Logically, the politics of international economic relations should also
complete the circle of combinations by including issues bet\veen the East
and the South, between the major socialist countries and the less
developed countries, ~r LD Cs. But these links are often excluded, chiefly
because there is neither n:;:uch interest in, nor much information on·
them, in the United States.
-- Eyen_a.t~!t.rri.ill?tJ:K~§i.Y~,~U.~çtionaJ.:.~9.L.:az_im~!b_~l'_ªgênd~§,
-.tbat.eici_!\.t are still far_tqg_i:<;§tdçtiite..ancl.~Q do l}Ot rea!IJU.QlL~liiY~-ª'. tb_c/\f'
study of political econolJlY~'Ihdit:er,atur,<--<>n-the..politic>-<Ú_illternational_ ·'
·_eê9g..Q~ic rêlãtiõITT;eflects r e co.n~~rDs of -·~·~pOt peo01e-l~"'
. e...illtçi:em.-9L.1\)e moit i)o,verfill
··s:aenPfiJQTl of the SlJ_biect thils_
c1es--fior-i!!_de·per:1âe-nt-thióker or-·
'e~
... Wh;:-t I am suggesting
economics by means of structural analysis gf the effects ..of states. - or

' rl oLan~_kind _of olitical_ªut)lority pn markets 'and
conVerseb;...o~arket orces oP states., s artrn tanilan as rightly
o"ifserved, it is not enough to say (as I and many others have clone) that
politics takes too little notice of economics or conversely, that
economics takes too little notice of policies (Staniland, 1985). Realizing
that there is a connection between the two is not enough. As Staniland
says, appreciating that in poker there is a connection between a car_d
game and winning money is not the sarne as knowing how to play poker
and win the game! Many people have written of the need to achieve a
synthesis. Few have achieved one.
The main problem in attempting such a synthesis lies in the very
n._atur_e. __QI_~çonorrllCSãllã põlifiê5.'-EéOnOffiiCs=----er- first- ear
tudent is told - ,_ OllttFie-~- ·----·- nlirnited
rces is un amenta
uestton e c1enc e ue ti n is 'What is the most t
<L_ ocatlon o resources?' Supplementary to it are a w ole lot of re ated
quest1ons about how rnarkets behave, which government policies are
best, and how different parts of the economic system function - always
in terms of their efficiency or inefficiency. 1Market failure' of one kind or
another, for examp1e, is the subject of much economic inquiry and
research.
· · s thou h is about rovi er and ubl'c . ln
some universities, indeed, the department o po 1t1cs is actually called the
department of government. Students of politics are expected to know
about conflicting theories of what sort of arder is best, and how it is to
be achieved and maintained. They are usually expected to know a good
<leal about the political institutions of their own country - and of some
others. Some may choose to specialize in the study of world politics. But
here too the ruling questions tend to concern the maintenance of arder
and peace and the provision of minimal public goods, together with the
n1anagement of issues and confl.icts arising between them. The study of
trade relations between states, for example, is frequently justified,
explicitly or implicitly, on the grounds that these may give rise to
con.flicrs of interest, and perhaps to trade wars, and that these may spill
over into núlitary conflicts. There is very scant historícal evidence to
support such an assurnption, but the reason for including such issues in
the study of world politics is revcaling. Almost all the standard texts on
Z~»:..- international politics assume the rnaintenance of arder to be the prime if
~ \ not the only problématique of the study.'
. The canse · th · · ·
"! ·~!:fü~~iii'.~~4!!~~~~~~~!J$t;;:ii~~t;;~~~~~t...
;re not 01n
Çovernment and the panoply of law and the administratiou of justice
are taken for granted. Pohtics. méanwhile, assumes that the economy
,--- <<-lW ~
)
The Conflict of Values and Theories 15' 1
)
reasonabl whether it
an arn1' of )
!e de · n
ru an aximizi . iuri crs
)
o itics in the liberal Western tra ition recognizes a trade-off betwecn )
order and liberty and between security and justice - if you want rn.ore
of the one, you may have to sacrifice some of the othcr. ~!-Pnlxr.rar_ely J
~~e further ~imen~~~~- o~~ç!~g~y_ -:---~~~ _a_bility of tlu~ )
bº
~u..s..~a 101 n.g..eçonomy Kr?Ouc~ tb~4 w~th __~~~:J5!:!"~-~~r__both or-dc_r_~~:-~:
~ If you want ot more wealth aria arder, mllst JUStlce anâ11Derty )
be sacrificed? That problématique is addressed by the radical lefti )
especially has this been true 9f the Latin-American \Vritcrs of what is
called the bureaucratic-authoritarian school who have suggested that )
there is a cowection bet:we.e.n poliri_ca.L.sy.:s_~ms and 2arty ali&,n1nents in
developing countries and the ex2 ansion of ª capitali;·t~rn;:_~IS~r~Q~-k~lt~a )
ecÕilomy and the incarne dG'tributio'~Patte·rns·thatli:·-te~ds to genera!e. 1 )
-But oh the whole rt 1s stürttuê"Jhat most puliEiC.ãlsClejKe.-âSSUlil-êS-a
r~er st"at1c econcimic backcloth to pqJltics_ÇlndJ:hatJb_~--ªY~-~~~iSn~ -so · )
apparent in the real economic world is too _qf!~J]. _ov~rlooked CSti:àíig·c=; )
1970: 304-15). ·-···-·-.-··--···· ... . . . .
That cannot be said of many distinguished writers who have come to )
political economy from outsi<le the main streams of liberal economics
and politics. Robert Cox, for instance, carne from the study of )
industrial, labour-management relations and the comparative study of )
labour movements in differcnt countries. He has followed up son1e
seminal and much-quoted articles with a magisterial work, Production, )
Power and World Order (1987), that secks to analyse thc conncctions )
bernreen the three leveis of the world system, the social and econon1ic
relations resulting from production structures, the political nature of )
power in the State, and, overall, the nature of the prevailing world arder. )
Development economists like Gunnar Myrdal~ Dudley Seers, Gera!d
Helleiner, Arthur Lewis, Walt Rostow, Hans Singer and AI Hirschn1an )
- not to mention Raul Prebisch - have been well av.rare of thc
impossibility of divorcing politics from economics. So have the historical )
sociologists like Michael Mann, Jonathan Hall, Christopher Cbsc· )
Dunn and others, following a mainly French tradition drawing on rhc
work of Francois Perroux and Fernand. Braudel. We also O'\Ve great )
debts to the economic historians who have followed the trails blazcd by )
Max Weber, Joseph Schumpeter, Karl Polanyi, Sin1on Kuznets and
Cario Cipolla. Not least in their contributions to the further .J
development of internacional political economy are the business
historians on the right - Alfred Chandler, John Dunning and Leslie )
Hannah - and the radical historians on the left - lmmanuel J
Wallerstein, Michael Barrett Brown, Ernst Mandei, Fred Block and
Teddy Brett. ------· )
)
J
,.--,
" )
(
allows more pragmatism in prescription; and. secondly, a methoQ _o_f

analysjs that breaks down the diyjding walls between ..the ideõIOgues and
ma !file ~õri"ãríd-even debat_e__b_et_w__eCiLth·-· - .
I e ieve it can e one. We ha.u.,_1;p.,..statt.Jzy...thilú!ll>.'il?.QJ)J.lb.~~b;isic.c
'\ yfilues wh1ch human be111gs §eek ,t,Q..p.r@de...throuW,~~.aJ,...o~garn~J.um,.
i~~~alth, secur1ty, freedom. agd j~We can then recognize that
11 .. d1flerent so~ieti~.J.or the sarne societies at different rimes), while
Pfoducing sorne of each of the four values.~hele.ss..giv.e...a.,,difl~F,SPÍ
,arder of prior1ty to eac_h of Qiem. Ali societies neec!. to praduce fu.od,
shelter and other material oods· but some will ive the production of
\v·ea t in mater1a orm the highest priority. Ali societies will be
oYgãir1zed"to g1ve the individual some greater securiry fron1 the violence
,...and abuSe of others both from others within that socie and others
from outs1 e it. But some will ut arder and security first. Indeed the
o great a vantages of social or anization over i e in individual
isa at1on is t at association with other humans bot incrcases the
ôss1bility of wealth nal securi . Social organization
does, owever ertain choices re ardin freedom or t e
· d1v1 ual's ri din the relative 'ustice of one set
of arrangements over another. An isolated individual ike Robinson
Crusoe has no problems with these two values of freedom and justice;
the only limits on his freedom of choice are set by nat:ure and bis own
capabilíry. His own liberty is not constrained or compromised by
someone else's. Nor does any question of justice arise - except perhaps
between his claims to life or resources and those of plants or animals -
for there is no other human claimant on resources whose claims need to
be arbitrated.
Once you have a society, therefore, you have arrangements made
which provide sOme wealth, some security, some element of freedom of
choice for the members ar groups of them, and some element of justice.
These basic values are like chemical elements of hydrogen, oxygen,
carbon and nitrogen. Combined in different proportions, they will give
quite different chemical compounds. ln the sarne way, a cook can take
flour, eggs, milk and fat and make different kinds of cakes, páncakes,
biscuits or cookies by combining them in different ways and different
proportions.
Societies therefore differ fro
th~y com me t e êttffêrêrit' as1c va ues. 1 at was t e s1mp e ut
1mportant po1iirõetli'inrthêdesert-1sland tales in the prologue. Ideal
societíes, too, will differ, just as real ones do, in the priority given to
particular basic values and in the proportion in which the different basic
values are mixed. Plato and Hobbes wanted more arder; both lived in
troubled and chaotic times. Rousseau and Marx wanted more justice;
both were offended by the inequalities they saw around them. Adam
. Smith, Maynard Keynes and Milton Friedman ali thought - despite
their differences - that it was important to generate more wealth.

Hayek and John Stuart Mill wanted more freedom - th_QJ!gh the trQ!!JJ_le
with freedomjs_that,. _more than the other values, it often involves a
zero-sum ga~ rnore fi:-eeC:fõITl-1õC-me means lesS for ·you;·natíõriil
líbeÍation for one ethnic group may mean enslavement for others.
Thus, whether we are anthropologists studying a society remate in
every way from the one we are familiar with, or whether we are
comparative politica1 economists comparing, 1et us say, socialist
societies and market societies, or whether we are international political
economists studying a world system that is both a single global social
and econonlic system and, coexisting with it, a series of national
.. societies, we can in each case apply the sarne analytical method of
. ffipolitical econoiny. What values, we can ask, do theSe ariangements rate
the highest? And which do they rate the lowest? Secondary to that, there
are the old questions of all political analysis, 'Who gets what out of it?
1 Who benefits, who Iases? Who carries the risks and who is spared from
l
risk? Who gets the opportunities and who is denied an opportunity -
_ whether for goods and services or more fundamentally a share of all the
';{(\ values, not only wealth, but also security, the freedom to choose for
(/! themselves, some measure of justice from the rest of society?'
/"" nition, therefore, that I would · e to the study of inter-
{ national po it1ca econom is that it concerns the social, po 1ttcal nd
1_ ec m arran ements affectin the global s stems oduction,
ii
exchange and distribution, and t e mix of values reflected the in.
ose arrangements are not i · 1ned, nor are they the
fortuitous outcome of blind chance. Rather they are the result of human
f decisions taken in the context of man-made institutions and sets of self-
t set rules and customs.
L~ It follows that the stud of international olitical economy cannot
avoid a close concern with causes. Consequences today ar states, for
corporations, for individuais - imply causes yesterday:..,There is no way
that contemporaiiJntern@onal political economy_canl'.if~U!í'Cl'éístoõêí
-~ithout mak1ng some effort to dig back to its toots, to peer behind the
. . .Curta1n of pass1ng hme into what went·.before. Of course, there 1s no one
'correct' interpretat1on of h1story. No h1stor1an is ~ul impartial, totally
neutral witness, either in the choice of evidence or in its presentation.
But that does not mean that history can be safely ignored. Nor should it
be too narrowly or parochially conceived. There may be just as much
for Europeans and Americans to learn from the political and economic
history of India, China or Japan as from that of Western Europe and
North America. One important lesson that is too often forgotten when
,the history of thought -,-- political thought or economic thought - is
divorced from the political and economic history of events, is that
,perceptions of the past always have a powerful influence on perceptjons
.~:;re::::s.::en::.t~p:.:ro:.:b:.:l:e::m:s:..a::;n:,::d::._:fu::.:;tu::r;:e..:s:.::o:.::1u::;t:::io~n"'s""'"'H~.appily, I think, this acute
)
The Conflict of Values and Theories 19· 1

1
awareness of the historical dimension of international politícal econon1y
has now takeri as strong a hold in American scholarship as it has ahvays ·1
had in Europe. Because Europeans live in places where they are )
surrounded by reminder·s of the past - a past that stretches back, not a
few hundreds of years, as in even the longest white-settled parts of the )
United States, but thousands of years - it is easier for Europeans to
)
remain sensitive to this historical dimension. Now, a generation of
American political economists share that sensitivity. )
Thirdly, besides present arrangements and past causes, international
political economy must be concerned with future possibilities. ln n1y )
opinion, t~ future cann~~edi~ted;__~~~Jt ~~?-~t.be _ignored. Wbat, )
the political econom1st must ask,ãfe the oJ?fiOris that wilJ be open in
· funire to states; to enterprises, to individuals? Can the world be inadc )
wealthier? Safer and more stable and orderly? More just than it uscd to
)
be? These are important and legitimate questions. Such qucstíons
inspire the interest of many people in the subject. Son1e of these peoplc )
will not rest until they think they have found the ans\vers. Others, less
sure, i.vill be content to clarify the issues and the options, knowing that )
their personal opinion of optimal solutions will not necessarily carry the )
day in the real world of politics and markets, but feeling that ncver-
theless they have a moral responsibility to attempt a coai and ration<i l )
nalysis based on reading, listening and thinking. Although final )
: cisions may be taken in the real world___on__thi:; __:f~i~~"Qf--VâTUe
p~efe~en~~s and pow~r r_~f~t~onships. perçwtiml§,..,._~-~ ideas --arS-<:f-plàY
s9me part and these arl_éa_st.cãn Se stiseept:ih-le-..-t.e-rati.àPjJ._,IY.fê~~~-~~n
-7 )
of the costs and risks of alternative options. J~v.J:i, Jhe__d.iff~~i1c4_ -. / )

Eetween the n_or_matix.e.,,...p.t~s_cJiP._tlve _<!QP..f.9J!Ch.. m_iD.!~Illat_i_qn.~lp_qfu!f::al )
e._92nomy and the reflective,_ analytical app~oach is a n1atter of personal
temperament and individualexpêflê"riCe, ..ffáiiiiiig and-·so forth. Thete is )
rrtri'ighr or wrong about It. TBe-study'''of-internatlónal political )
economy, like that of international relations and foreign policy, has
roam for both. )
he way things are managcd, ho\\' they got ~Q_be _mªn.11geçl_jv... tha_t
parbcular way, afid-What ch.q_iceS~thíS-lfaVes realistically open for tEc ')
~f"ST15jêê aspects ·ar j}rõblémdtiiJUeS Õf political ~cononíy_are_.. )
implicit in the semantic orig1ns of the word 'economics,. It derives fro1n
ihe Greek otkonomza, which meant a household - typically in the )
ancient world, not a small nuclear family but rather a patriarchal )
i _; settlement of an extended family and its slaves, living off the crops and
·1·.~ ·"""·- -. . ._ flocks of the surrounding land. The management of the oikono1nia thus )
included the choices made in cropping and in breeding, in the provision
,) of security from attack or robbery, in the customary relations bet\">'CCn
)
I men and women, old and young, the teaching of children and thc )
( administration of justice in disputed matters. In other wor<ls, it vvas
\\ rather more about politics than economics. )
•)
'----....
j
_.____________________________"""""""""'"'- J
'Political economy' as a current term in French, Italian or English only

carne into general use towards the end of the eighteenth century, when it
carne to mean, more narrowly and specifically, that part of political
management that related to the prosperity of the state and the ordering
- as we would say - of its 'econonUC' affairs. lt was, in this more
restricted sense, related to the I).ation-state of modern times, that Adam
Smith, whose Wealth of Nations appeared in 1776, understood the
term. ln fact, qefore Adam Smith, the French had shown a more _gç.ti.Y.,~
interest than tlleEngHShlfipôlltU:áleCõ!!.omyJ'renChfüfêfs and writers
~yperceiVeâ'itre dose connecti~en the wealth of the_
nation and the power of thc state. Like Thomas Jefferson in America,
-11leFiénch phys10cra!s ohlTn:tgfitcé~!:_ntury thought that agriculture.
was the bas1s of natronal wealth and saw the managernent ofagr1culturt;_
':as the -rust·-pYõfJlêmãlíque of political economr:...Adam Smiffi, _on the
--~fSatrâêfeand·íiíd'Us'fíãStlíê1IBsíSõfnatLOnaÍ Wêálf~
m~cantilism as the e ie o stacle to its growt an t 1e p_roblém.~&!!!!_
of PõTíuCarêêõnõITijTãshüWbest to ãctiu:.v.o- tlüSWl11le de±enrnng the
realm and n1anag1ng the currency. History proved Srmth nght and díe
pn~ô1l-g;su1:hat-it"Wll'S"1TIScotland and England that the main
debates of political economy in the next century were conductcd, not in
France.
-~mUU:V.E.._the British too who were mainly responsible for letting
rhe term 'poliilCâl"'éCõnõmy'··faU··iJfto "disiisrfor ·more--than· hàlf ··a
tentúcy~ úriiir àbôiitthe··1960s;·Th·e· subject-hàd 15ecóhle ·so· CéímpJex
ãnd arcanel'liarwherr11·baõl<appeared in 1890 that set out to explain
'vhat went on in ecanomic matters in simple, everyday terms that
anyone could understand, its author, Alfred Marshall, coined a new
. word to distinguish it from political economy. He called his book
Principies of Economics. Only in the 1960s did the study of political
~~l)9l!!Y_ (outside of radiêãl"1êff~Wiiqf CifêlêS)'~õiíté~again-- become· ·bôtfi
popular a·na·1egitiffiãte.-lüía-flien "ltWãSffiõre-bêCaüse~~õJ'"ã,-cqnÇ:effl
"'.""with"'tl1e managernem•·"éjf 'ilie-wórld ''êcõríõrtif'"thân···· wÍth., the
~~~:rc~~e~~~~~:ii~~~*~~~~i-0~~~;;~11~;J~!ief'.~m~f~~1filÍ~t~
Econonitcs of TnféÇ'áepend&êê~1:r~fevel_'õpeêlã"üãégüll1ent in. favour gf..
- riíüitifãte·r-ar···-· ca~,<s-peratíôri;F-especiàllY"~~ br~Inat1srr1a1izecr "~al
-~rriocrâcies ·1ea ·l5ji"'tlí:e--u11ited---Snrrés~--ôfií:hegrcití"rids~ihãt the fü!l
~
benehts of 1nternational economic integration and interdependence in
trade and finance would be lost if there were a failure so to coordinate
national policies as to :find an agreed and efficient way of managing
the world economy 3 .
cf-\ Cooper's .J,oad-w.as__followed--mGte...re.adiJD_y American scholars
jnterc_sted in internationi!.L~ than by his fellow economists.
1iy the ear'.[l~]Os_,__t~~g'1.!U.9_'1;"\<_v,']iy_jt__\\'as_th_'1Uhe apparently _
__St'ãDlê-ãiíO set 'rules of the game' that had _P.!~~~i!~sLJil_in.t~J..D..~JiQgªJ _
-----------~------~-·-----~-----------
i economic relations in the ~_an.cLl.9.60s_seemed._to be less and leE_

,,obseryeãiiitll.e.-r970~ erosion of what carne t_o be _called - in a
__rathei:-stra.nge--llse_oi_the-w~fd-~iritiFflãtIO~:i~~~gi;;·~~~~~fiiê1~--
1 dominant problématique of internationaLpoliti~cono1ny intlie
United Sta_tes~. As defined by Stephen Krasner in an editect collectiÓn.ÕT.
papers devoted to this theme, regimes 've_re 'sets of _expEcit_ or _implicit
1 pflnciples, norms, rules and d~~:..mãkllg=:próC-edU·~es.~:i'i:Q·ünC{_Wliich
1 actor expectatrons converge, (Krasner, 1983).
1 -~eQçrzjgi17d-=mgY _ ~ _· _,_ ~· ----· . t e Ja ers~_ was that
r~g1mes· were an 1nterven1n _ _ __c:;_ beD.neen structural ov.'e_r__ ?11 ..
1 Ol)tCOIDCS - an arpument mucli, C},.Q.,~f ~tQ gii~c :han to ~llUCh__.~.---:____e
Tu't§sequent Ahíer1can woriC on'tiiCSu6 ect .. _Qf_..4!.fferent !nternatLonal ,--
re 1mes. e atter as o en tcnded to ta e t e way t ings are manage
in t e in!ernational market economy as given, without enquiring too
much into the underlying reasons of why it was certain principies,
norms and rules and not others that prevailed. Or, if rescarch did ask
the 'why' questions, the range of possible explanations was too
narrowly drawn. An influential study by Keohane and Nye of US-
Canadian and US-Australian relations in the 'issne-areas' - another
term drawn from international relations ~ of money and ocean
management called Power and Interdependence listed the change in
states' relative política! power, or in other \.\'ords the political structure,
as a possible explanation for regime change, but 01nitted changes in
economic power and in economic structures, paying attention only to
economic processes, which was a much narrower factor altogether
(Ke hane and Nye, 1977).
~centration on internati()nal organizations and on the politics of
)nt~nãiiQiiãt: e_cfüfà!í:ilê: f~êl~.t.!f>IlS ,_ ha~r tenâed·--·ro· ·ler -inter ~govcttrm--ertt~I-~-
~ .r.~ations overshadow the e™lli-lIDPôfiãflf'tíàOSirátl611at-~[êl'a.ttcrrts,1l1ãf
_is to say.J relations across _national frontiers- between social and pohtLca1
'g(õllps··o:....:,s~mic entergrises on cither_m9~ê[..a.,fil§fTronher, or,.,
,õehve,n, ,\l,I.ly_.cl.J.u~i:..and-the..,gov.ernrn.eut..Ql.,i!Jl.D~tate. ,Cõi'por:
ations, banks, religious leaders, universities and scientific corrimunities
are ali participants in certain important kinds of transnational relations.
And in such transnation?.l relations, the relationship across frontiers _
with some governments will be far more important ín determining the
outcomes in political economy than will relations \Vith other govcrn-
ments. For example, it is a recognized fact in business circles that
decisions taken by the US Supreme Court, and sometin1es by lesser
courts, or by some federal or statc agency of the United States, may be
of crucial importance far bcyond the border of the country. The 'global
reach' of US government is one of thc features of the contemporary
\ internacional political economy that is easily overlooked by too dose
ention to international organizations and so-callcd international
imes. 4
22 The Study of 1nternational Politicàl Economy
If the omission or underrating of transnational relations - especially

economic relations - was one important deficiency of- 'political
economy based on the regimes' problématique, another serious-one-was
that it díd not absolutely require the researcher ar the student to ask
whose power those 'principles, norms, rules and decisionmaking
processes' most reflected._t!ç.r did it i sist nn_aski.11g_~l>2ut the so_urces of
0
such powe~EJS~.b._~!i~.d on S.Q~Il;iY.~_Jorç~,_..QXt~!l~C:e~_s_iji_ t~~ -~~-~~~~ and

ónwêãíth, or on the adherence of others to an ideology, a bel_ief sys1:em
6r some set ofidêãS-?-~------.-·-----~-·--··--·-··--···-··-----.
· Bjr Ilot requir.ing these basic structural questions about power to be
addressed 1 and by failing to insist that the values given predominant
errfphasis in any international 'regime' should always be explicitly
idêntified, the presumption has often gone unchallenged that any regime
is better than nane. It is...to.o-~n assumed that the e_rosion or collapse
of a set of n_orms or r;;ies is alw~;--; .b~~I-fi'ífig~-tõ-be ~~g~!!Jtcd, and if
pÜsSible rev~rsed. Such "an assumptio;takeS-tlie-stãtUs quo_ ante the
ef_oslõiltobe preferable to the ex post S:Íf?l<!!_~BUt~~~&~ãSSUmptíon
unêonsc1õusly overwe1ghts the value of ·arder ailcr stability over the
other values, and espec1ally the orcrerailcf-StãOiltty_õf-iri_!~~Ilational
arrangements for the world economy designat::ãru:l-pa·niãl!Timposed in
t~C period aher _!2i5. lt 1s easy enough to see why. These post-war
'regimes' were set in place by the United States taking a lead where no
other state could do so. It was natural for American scholars to assume
that these arrangements were admirable and well-designed, without
questioning too closely the kind of power they reflected or the mix of
1
1
values they inferred as desirable - not only for the United States but for
. ali right-thinking people the world over. .
P1'!,y contrast, the approach that I am proposing, by concentrating on
fi the authority-market and the market-authority nexus, and by directing
[ ~ attention to the four basic values of security, wealth, freedom and
- ~ ~ justicel ought to succeed in highlighting the non-regimes as much as the
; regimes, the non-decisions and the failures to take a decision, which, no
less than active policy-making have affected - and still affect - the
:"~- ,outcomcs of the international poütical economy.
It is also more likely to reveal the 1hidden agenda 1 of issues that are of
little interest to governments, where there is no international agreement,
no organization, no secretariat to publicise the question and not
necessarily any accepted norms or principies around which actor
perceptions converge. The failure to do this - which also reveals the
bias in favour of the s.tatus quo - is one of the major weaknesses of the
regimes approach. For, among the many different ways in which power
may be excrcised in the international political economy - a question to
, which we now turn in the next chapter - the power to keep an issue off
(1. the agenda of discussion ar to see that, if discussed, nothing effective is
.1 dane about it, is not the least important.
', ~
"-----
)
)
i Chapter 2
1
)
1
Power in The World Economy )
1 -------------
)
1
)
lt_~lmpossible to study political economy and esp_ecial_ly_ intern<ltir_):·!::i; )
1 ~olitiCã:l·-econõITIY-Witlí:õiit-giv:ing·ciose-ãrtellfio1i~to rhe rol_e __ of powe~· jn
~õillíclífe.TachSyStem-·0t -póTíticar-·eco;;~-~y- ·=_,:.
t1le · 1;~ü~-i~•11 - )
iFÓmy óf"tlíe United States comparcCfWith-tfiãtüfthc Sovict Union)
1 the-political economy of the states of VVestern Europe in the eightct:rnh )
i
century compareci \vith the highly integrated political econon1y of th.:.. )
1 world today - differs, as I have tried to exP-lain. in the i;_çlativc__gri._o_i;j_çy_.
.~t gives to each of the four basic values of__socien:,__Each reflccts a )
different mix in the _proportional \Veight given to wealth, arder) ju~:tict': )
and freedom. What decides the nature of the mix is> Íundainentaiiy, a
question of power.. ----------· )
'°'-::rt-is=eo~at:_de.tex_mineD~-~latiçinsh~p_h_e!~n a11thori.hy:_ 3.~!~·-,
market. Markets cannot play a dominant role in the v.·ay in \-Vhicl.1_ a
)
political economy functions unlcss ailo,ved to do so by whocv~r v..'icid;; )
power and possesses authority. The difference benveen a pri;-arc-
enterprise, market-based econ~my and a state-run, commanci-b::is(;d )
economy lies not only in the amount of freedom given by authr:riry to )
the market operators, but also in the context within which the rnarKet
functions. And the context, too, reflects a certain distribution of po\ver. )
Whether it is a secure or an insecure context, whether it is stablc or
unstable, boorning or depressed, reflects a series of decisions takcn by
)
those with authority. Thus jt is not only the 4iE.~s~_p_q_~~~_.9f_J!;~LthDLit~ )
over markets that mattérs; it is also the-ii1ãírffieffecfOfaüílloríty O})..,t_hç_
'cont t ar surrOunding condrtiOilSWith1n whíChtfiê'ffiãrket f l ctions... )
n t 1e stu y o po itrca econamy_i!_l!>_IJ.at ~()~g .. J_jlicr§!?re!. tO·_·~_sk )
where
·------------------·----K--.-::-1-"·-- ----··wlry
autfiority lies - .who has nower. It is i!,1].RQ};Jª[lt-···~·to. - .ask --- ·- _,_tl1çy,. )
have it :=:J~lu!!_i.s..th~..§.Q.lJ.f.~_Qfp~q:y~. Is it command oi caercive force?
1Sit the passession of great wealth? Is it moral authority, po'll'Cr ch·;ived )
from the proclamation of pawerful ideas that have \vide appcal: are
accepted as valid and gíve legitimacy to the proclaimers, \vhetbcr )
politicians, religious leaders ar philosophers? J_n___n1a,ny_p_cdj_t_Lç..~_I
-~-C_?~1an_!i~:~_,__!~o~e who exercisc authoricy, who decide how big ª_!_':-1)~-·
)
shali_Ji~_g!y~g}~fü_ã:rKets_;- a_nd -the··rules üiider:·wn:1clit~e-m-arkeff Y•Q r\·: . __ )
wiH derive power frOffia1Ithieé-·sources-=-frO-n1--füfCe;·frõíü-~;ealth :l.nd
_frP.m_-iifü_ãs..-_--in--·óthers~- · diffé:ren't- ·grOiips·· Will ··dei-íve different sorts cf )
power from different sources. They will have rather differenl pov1cr- )
bases and will be acting upon the political economy at thc sarne rirnc bnt
possibly in opposed directians. j
)
)
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _..,...,.....,....,... =--~~".W.;:'"" /
i The point is only that it_js impossible to arrive at the end resultr t~
ultimate goal of study and analysis in international political eco~
l
. _-W_1thout gizin~:e.-xp:liçi:r-or implicit answers to these fundamental
, qn~s~_i911_~-. a.~9L1L_J:i~Q...';:Y.._Q..OWer has been used to shape the politic!l
1 econorhy and__ ~-~~-.Y:~Y...~r..YJJü:.hjt distributes CQSJs and benefits, risks and _~
·oppõCtüiiTtíêS to ~ocial gE,.9.RPJ!,Jtll.Jçrp,rises,Jl11d, o.r.gfilti.li1iwJi~~!iliü1.t.fit
5YSfem:N1âTIY""WrlfêCS--on political economy wiil avoid making their
~~Ú1sweiS explicit, either because they do not see how important it is to
their conclusions, and especially policy reco1nmendations, or because
they assume that readers sharc their implicit assumptions about who has
power and why, and how it is used. But if, like me, you are trying to
\Vrite about political economy in a way that will be useful to people who
have very different value preferences, and who do not necessarily agree
about what kinds of power are really important and decisive, then it is
particularly itnportant to try to clarify the assumptions about power
that underlie a particular view, such as mine, of the nature of the
0
internacional political economy and how it works. That is what I shall

try to do in this chapter. I shall try to draw a kind of sketch-map of the
landscape as I see it, explaining in the process why it is that I have given
particular attention in the rest of the book to what I see as the most
outstanding features of the landscape, borh those of the first order (as in
Part II, Chapters, 3, 4, 5 and 6), and those of a still important but
secondary arder (as in Part III, Chapters, 7, 8, 9, 10 and 11). Whether
the reader is trying just to understand why the international political
economy results in the particular \Vho-gets-what, the particular mix of
basic values that we can observe around us, or whether hç or she is
f seeking solutions and policy descriptions to change the system does not
matter. Both have to start with an examination of power.
'""--=>
Structural and relational power
The argument in this book is that there ind~=

eXercise in I tca economy - structural ower and. r.elational
~- but t at in t e competlt1ve games now being played out in t e..
Wõrtã"systen1 between states and between economic enterprises,~
increasin l tructural ower that counts far more than relatiOiial
gower. Relationa power, as coriveirt1ona y escn êõõy reaíí'St writer;
oftextbooks on international relations, is the power of A to get ~2.JJ..!Q...
do somcthing the~ would not otherwíse do. ln 1940 German relational
power made Swe en allo\.V German troops to pass through her 'neutral'
territory. US relationai power over Panama dictated the terins for the
Panama Canal. Struct ral ower, on the other hand, is. the power to
sha e and determine t e structures o t e g o a -pn· 1tfêa · economy
Within-w TC -oy s a ~_s, -t re ·-·-pn It1Cã instltuttons, t e1r econom1c
Power in The World Economy 25
enter rises and (not least) their scientists and other professional p~q_ple-~
have to op~~ is structuêã ~p·õwer;as s ~ ex~ a1h"1t, rrlê"áiú.:. k r .
incre than t e o r to et t e enda of d_s uss ~~
mericail acadeirJjc language) the- "ifiWrnatio_pal regimes pf pile~- __ and
customs that are su osed to overn inte · · 10Ds:
That is one aspect o structural power, but not all of it. US structural
power over the way in which whcat ar corn (maize to the J?ritish) is
traded allows buyers and sellers to hedge by dealing in 'futures'j even
the Soviet Union, when it buys grain, accepts this way of doing things.
Lloyds of London is an authority in the international market for
insurance; it allows big risks to be 'sold' by small insurers ar under-
writers to big reinsurance operators, thus. centralizing the system in
those countries and with those operators large enough to accept and
manage the big_ risks. ~yone w~needs 'insurance h~_!~. ~9--~_l<?~-~-:Vith
tjiis way of d2.tE_~s. Structural power ln sliori. confers tfie_ l(Ower
1
tp decide how thin s sfiãll be d -the .• ewor-.tQ.s.h.a e frameworks

y.rit in w ich states relate to each other relate to eople, or relate to
cor orate enter rises. The relative 10 are atiõnshi
is more or -less one ar 1 r n·1n t e surrouri
Structure of t e re ati~ns ip. ------·-·-- --·· -
· It seems to me tha~l'írs is_ ..ª,_.mitch_mnr.e._11~~.fµJ__cjj_~t!n.ç!iQQ..JQI. Jh!!__
understandil1g and an_'!!r..ili".:::oLplIWerjn.R9.li~ifªL'.SQ1!9!l'UE~'L.t~e.
._q_1_s_~!nç.tiQ_n.._J?§lli'.'ee.,n....~C:~,D_Q@S:. pqy.!_ç_~---ªn.c.t P.9}l~E!L.L_E2:-Y~S, .We__-!!!~Y __ s~ Y
·.tl;ig_s9_meone.has..economic-power-if-they-have.a-lot..oi.money.J:..Q.§J>Cnd: ...
-~h!!Y ..h.§:Y§ .. py_r.:çhasing _pow;er,...They may also have econo;!tl~_P<.?~~e-~ ___if
~li.eY h-ªye somet!tiJlg __t9..__S.\'.ll w~ich o1JíE'J'.'9l'l(.b.:f9JY-E.;i!!t:.. Such
economic power will be all the greater if they are the only ones able to
seB it, if, in short, they have monopoly or oligopoly power. They may
~1~.Q..!iªJ~ _r;_<;:C?.!.1.9@Ç ..P~º-W.J:E._if l~Y. ..C2?JJ._pro.vid.e.. the finan~~--g.rJí1YêSfiüÇ1~t
'capi_tal _tO enable_ others to .. P.roduce o_r to __ Sell a_ ~ervic~ .. B-a·nI<:s, by
colltfoilin.g · credit; hàVe 'econOITUC'·p6Wer. E{iually, we can say that_
people have political power if th_t;y~_control the_ machinery_ of._sJat~--Qr.anr- .
QtfiêrTnSfifimOnãíidc:ãn·userr. to_,~ô~iif~J?~S--H~rif.i_QLç.onfQ.i;mitr.-~tº--·
theiL y.rishes and _erefe~E.S~~..fr.Ç.ill~-.Q!.h..~!~-~- The trouble with tlú.t_
distinction, however, is that when it comes to Earticular sjtuatiq,,__91..~
p;;ticularly in the international politicaÍ ecôõ""omy - it is very diffi.ç..Yl.L
{as some later examples will show) to draw a clear distinction berweeq
/ political and economic power. It is impossible to have political power
, without the power to purchase, to command production, to mobilize
/ cãpital. And it _is impossible to have economic power without the
/ sanction of political authorit}r, without the legal and physical security
that can only be supplied by political authority. Those with most
\ economic power are no longer - or only very rarely - single
' individuais. They are corporations or state cnterprises that have set up
\ their own hierarchies of authority and chains of command in which
'';!>:.--! 1
'-- L i,~~\>:-:ç(~~-: '. C(;

decisions are taken that are essentially political more than economic. I
do as the company president or the managing director says, not because
I shall g'.l_in_econornically, but because he has the ~uthority to command
n1e a middle manager ar a shopfloor worker. Mrne not to reason why
- just as if he were the general and I am a private soldier.
The next part of the argument is that_~~r_u::~ra~, P-~.yr~_r is_ to be found
not in a single_~.~-~L!~.~~~~--RY~~Ü:tiQ\lf_J~.çRaf~Je:d_i$JJQgg!~h~ÇJ_e__ ~~t ~~lated.
'Stf'i.iCfüie·s:·· Th'is-_yiev,r _d_iffers from the_ Marxist or neo-lvlarxrst v1ew of
,_§!r~~-t-~~_ál · p~~ver ..;hic_h · l~Ys__ -__&~e_~t- _s~~s~ on_ ol)ly_ -qne _o_f ·JTIY four
st~Uêtilles __:_·-tfie-·sriüCiUre- of production. It differs from Robert Cox's
interprebifi'On of structural power which also attaches prime importance
to tbe structure of production (Co~, 1987); Cox sees production as the
basis Of social and political power- in the sociecy. The state, therefore, is
the embodiment in political terms of the authority of the class or classes
in control of the prodqction s_tructure. States, however, live in an
anarchical world order. The image, or model, in that interpretation is a
ch~b sandwích, or a layer cake, in which production is the bottom layer
and world arder the top layer, with the state in between both,
responding to change both in the world arder and in the production
structure on which it is based. My image is rather of a four-faceted
triangular pyramid or tetrahedron (i.e. a figure made up of four planes
or triangular faces). Each touches the other three and is held in place by
them. Each facet represents one of the four structures through which
power is exercised on particular relationships. If the model could be
made of transparent glass or plastic, you could represent particula'r
' relationships being played out, as on a stage, within the four walls of the
i.
four-sided pyramid. No one facet is always ar necessarily more
important than the other three. Each is supported, joined to and held up
by the other three.
Thes~.f~.?r, ~nteracting St;!,~t;:D;IJ~ª-~re_ po_~ pe~~lia~ _ tp t~e.worl_d sys.tem,
'lj; orwglobaTpoliiicalecõiio_my, as you may prefer to call it. The sources
Üf. S_uperiór stfuCaj_,~~(.p_Q_i!~r .are.. the._s'àmé..in_'y~ery _sp:i~ll_ human groups,.
JU~~~ -a Jaffii~J.:§i~~ F_e_~C?te vil.~~-g~~-º~~ll!l.i_tyt,,,aeJJley are in the ~~-r~~
0
)~_!"g~·--~ Ihe ~9~ corres o · _g to. the four sides of _tlJ.((

ti:a · rent ra~ , ar~rôl~ s;E::{}ty;-co~t~õ};Ç:Yti~~~c.i~~~f?j"',
~ ~ver creâíf;ãiícl contrôr ~ T<nowlem=-- -a.ri~~~
us, structura power lies with those in a position to exercise contrai
( aver (Le. to threaten or to preserve) people's security, especially from
~.:! violence. It lies also with those able to decide and contrai the manner ar
mode of production of goods and services for survivaL Thirdly, it lies -
at least in all advanced econonúes, \Vhether state-capitaüst, private-
capitafist ar a mix of both - with those able to control the supply and
distribution of credit. Such contrai of credit iS important because,
through it, purchasing power can be acquired without either working
for it or trading for it, but it is acquired in the last resort on the basis of
15'Xl'./9 !_ ;') '.'.: :L ~·~ ~ )
Power in The World Econon-1y 2·1

1
)
security }
A~----+----~ B
}
)
s
~ )
)
)
o~----+----- e )
producrion
)
Or, in three dimensions )
}
1
1 )
1 knowledge
securiry I )
1
__,_1 )
~
- ,)
~
~ B
~
e
A )
finance
production )
D
)
But since each srructure affects rhe other chrce, but nonc necessarity dorninatts:
)
A )
)
)
B e
)
)
)
D )
)
Here, ACD represents the production structure; ABD rhe securiry structure; ABC
the finance structurc; and BCD che knowledge structure. )
J
Figure 2.1 Four structures around the state-markct see~'s-aw·--··-··-" . ., ,,,_c,,":';'1: )
\ u,_,1,,_,::-~t«::i..~:.,.._,
\ )
~
··~·-··---·-
28 The Study ai lnternational Political Economy
~ reputation on the borrower's side and confidence on the lender's.
~
Fourthly and Iastly, structural power can also be exercised by those who
possess knowledge, who can wholly or partially limit or decide the terms
of access to it. This structural power in particular does not easily fit into
the layer-cake, club-sandwich model because it may very easily lie in
part beyond the range and scope of the state or any other 'political'
authority. Yet its importance in political economy, though not easy to
define or describe, is not to be underrated.
/" I.h.$!... bottom.Jí.n~.-~9!"..,f~~cl~~~-g,_J~f-t~is approach to th~~stiog_ of _
!
~ ·(
p_o,wer in the internationãl-political .economy seems tô me to_ ~hrow
se!Tõl.TS··---do-ub-ij_iL_ãr1~JffiP'.Çü~Iã~f-~SSüffiiJti9IlOf-müêJ:i~coiltempõt;try ··-
v.rr:1t1ng o_n_ Tn_tt;_r!l~_ti~n_al _politicai ·~êOnoffiy~ - e·specrany·--i~-"the··unfred-
\ ··!~~:r~~9~z'~írf!~9t~it~t~hYfiY~~Sk::i~i'â;~:~!~fhJ!é~~~fF
~conomy IS i,r: susfl_<! ~tate.2.f.~~M.-Ltr,,,_...,uncertainty__and eyen aisorder
\1 that econoIIUêTorecasts are unreliable, if not impossible; it is why there
f· is such widespread gloom and even despair over the prospects of solving
l contemporary problems of international economic relations. But, to me._
/ ~f!&__t,l.1~~---!.flºd.ç;l~,9!._~,~-1:.1~~-yti~a_I __fra_~ew~~~~ .t.h~ __ cqn~cJu_sion__ seems
// inevitable that the United "Stâ'fêf ·gove~Il~§!_~Ds!.~!h~,".SQ!P.Q!'...fl!ÜlIJS ..
depeiláeilt_upoOífliã'.Ve not in_Iaéf1õS~f structural 22wer in ançlover the.
sxsiem'.~ThêX."iii~iJ1~yfÇ~n,~e'fflíeJ!:.~-º-~h9Ei=~hP.w .!9.~ii:It . :~I,t !ho/
. have not Iost it. Nor, taking tfie fàur structures of power together, are
they Tike!ftodõ so in the foreseeable future. Not ali readers will agree
with this conclusion of mine. But even if they do not, I would still
contend that their assessment .of power in the international political
economy will be more realistic if they adopt a structural approach such
as, or similar to, the one outlined above and developed later in the book
than if they stay with conventional notions of relational power - still
less if, with the theoretical economists, they try to ignore power
\ altogether.
\, The rest of this book is an attempt to explore and develop each of
these aspects or sources of structural power in the world political
economy. It is essentialiy an attempt to break right away from the
politics of international econonúc relations approach which I find biased
and constricting. It tries to develop an alternative approach based on the
four fundamental sources of structural power. Once these are under-
st~_Qçbjt_gn~hown that certain subjects of diséüSSíãrlTn inteffi"ãbõnaf
gOlitical economy, such as trade, alcÇ..êílefgy or internatíoflãftransport
S:Ystems, a?e actually secondary ~ru~tures. lhey..are not __as!Iiey are by
accident but are shapecriJy-t e our basic structures of securitzt-.-
production, finance -and knowledge. If I wanted to write a long,
éXFiaustIYe-;;;~-rwoiif(f llavé aaded a further section dealing with some
of the different sectors of the international economy, for example
cereais, fish, ti~ber, minerais, cars, arms, computers, textiles, toys, films,
advertising, insurance or databank services. But since the whole purpose

of the book is not, like most texts, to instruct rcaders in what I think
they should know about international political economy but to
demonstrate by example the sort of questions I think they should
address in studying it, I did not think an exhaustive series of sectoral
studies was either necessary ar (íf the book were to be kept manageably
short) desírable.
Four sources of structural power
Before proceeding to illustrate with examples this notion of four-sided

structural power, it may be helpful to elaborate a little the four sources
just listed from which it is derived. They are no more than a statement
of common sense. But common sense has often been curecLhL
abstruse academic discussion a out e nature ~-91-hY_E_~nitiqD~·
o"f 'po\ver' so abstract, or so narrowly based on the experience of one
Place, one soc1ery, one penact·õt lluman eXpêru;nce;-·thaiiJ:~-Stâ't~m:en_t: ·
olJ1iilairlj, hvians.-seems neces.s.ru:y. (Readers conhcÍent of their-·o\Vn
0
common sense can easily skip the ne'xt few paragraphs.)

First1 so long a_s the possibility of violen~-~<?nªic~ ~~~~~~~~~--p~_r_s_?_:i_al_
curity, he wfio offefS UdiétS protectton aga1nst tltãt tlue:at:::ts-~-l5l'ff7.tô _
~~~~~~~~~n~-s~e~c~u~n~~
::;:
sE . 1-tlorLuil.ood
is rat1on o 1ustice. T e grcater t e perce1ve31:hfeattõ'
secur1ty, e ig er pr1ce w1 -e willingly paid and the greater risk
accepted that the sarne defence force that gives protectíon will itself offcr
another kind of threat to those it claims to protect. Within states, it has
e that felt themselves most insecure that · t'rce1Ved-themselVêS'-~·
as revolutionar states . e a en in e acce tea ot:der...-·ãnâ·.:..thé
preva11ng ú:leo o ·r eir tlme or re ion that have been most re ar~d
to o
li<:,!;,.
at roduced b whom, b what mcans and
with what com matíon ollawl. laboqi, & -· -'- l_og[,füi'd:Jm:\\'
each shall be rewara~d is as fundamental a question in. ~1-L.
~nom as wh de ides t1íe "'iieans of ·aifêfiCê a ainst insª~curi . As
Cox an a great many radica an e -w1ng writers have dernonstratedl
the mede of productiQ.D-is tbe basiuiLciaSS-.P-Ofil.f..2.Y..<:L od;er cl?-li-~~~"-~
The class in a position to decide or to change the mode of production
can use its structural power over production to consolidate and defend
. its social and political power, establishing constitutions, setting np
political institutions and laying <lown legal arid administrative processes
and precedents that make it hard for others to challenge or upset. No\v
that an ever-growing proportion of goods and services produced
throughout the world are produced in response, in one way or another,
ower and whoever is able to

ot ers rto a-It1hdmof
er can confroltiiC~
C anne W e '! 'S a iven accesS to lt, Wl
exerc1se a ve~-Spycial lfiad qf jtructuEal "'ºw;~n past t1mes Pfies··s-ãni
sages iftvfe o ~n exercised such dominance over kings and generais. It is

a structural power less easy to keep control over, more subtle and more
elusive. For that reason priesthoods in every religion have hedged their
power even rriore jealously than military castes and ranks of nobility.
range· o opt1ons open o t e ot ers will be extended by giving them

opportunities they would not otherwise have had. And it inay be
' )
restricted by imposing costs or risks upon them larger than rhey would ' )
otherwise have faced, thus making ít less easy to make some choices )
while_making ir more easy to make others. When Mother or Father says,
'If you're a good boy and study hard, we>ll give you a bicycle for your )
birthday', the boy is still free to chose between studying hard and going )
out to play with fríends. But the choice is weighted more heavily in
favour of studying by the parents' structural power over the family )
buâget. To take another example from international political economy, )
the big oil companies had the power to look for oil and sell it. The oil
states in the 1950s and 1960s could offer them concessions. But the )
· royalties the companies could offer on production in return gave them
strucrural power over the governments. The governments could choose )
to forego the extra revenue. But it was so large in reiation to any other )
possible source of incarne that the range of choice, the weighting of
options, was substantially changed by the structural power ovcr oil )
production and oil marketing. It was only wlien the oil-producing state.s )
gained access to knowledge about the oil business, and when they had
used the royalties from the companies to consolidate their financial )
power, that they could offer a partial challenge to the companies'
structural power over production. Until ~hen, as the examples of Iran in
)
1951 and Indonesia later indicated, the cost of expelling th-~ companjes )
\ ~as, for most, unacceptably high.
Another point about my four-faceted plastic pyranlid in1age is that ir )
. is signíficant that e01;h façet tm1Chei !M.~lW~•JJ1-J:J.'~.'!,~,tJ,Y:i\E« )
t):ie others. It sh..oJJ.kL_also be represent~q_ ..~s~~!~,.,I}.~i,~~ .?.i::. on~ .5:~ -~1-~s
points, rather than resti'!lg on a single base. There is a· sense irl which .)
.e.i!ch.fam=::~,,i;iritr,.!lrnd.11.=.n,Jliliillce.iii.'ê1J9:Lo;wlêi:!ge:151Jis:líêlief:Ll>.
)
ba_~lç_ fqr JJ:_ç,0 g!h_~t.~~~11J;,,,t.9~prgsent the others _as ;;.~r!in9_,g~~~~-~~
"'o~ an_y_,gJJ,~..,.@.9~~than on the ot ers suqgests t~at one is.~~.min_~~-~,·.1~}~, J
IS not~s a wa s so. -·--,.~ ·---·-·-·----.-.-
~ example, the realist s hool of thought in international l.~J,g~.i_9Q§, )
_)
)
,has h;;ld,!h,:ijjn !/:.0ast res2rt mili~JX.QOWer.;!lliL!he fililliD'-!2 use

coercive force to compcithe co_mP.liance pf gthero must always pre'jã}I7
ln the last re_sort, th_is.is undeniably_true . .But in the real world. ngt eyerv _
relationship is .nut under such preSsure. Not evcry decision is pushed ..t~
such extremes. There are many times and places where decisions are
taken in which coercive force, though it plays some part in the choices
made, does not play the whole, and is not the only significant source of
power.
Some examples
Let me suggest a few illustrations of the way in which structural power

can be derived simultaneously from more than one source, from more
~
des than one of the plastic pyramid, ln 1948, the United Stat:e~.. had
nly recently demonstrated in Europe its superior!!r~~i;!._S2!!.Y~.1:1.!.ional
1 , fõfce over an other Euro ean ower exce t tlie 5..Qvie_t_Union•. )igçl at
]J-Iiroshima and Nagasa i jr had demoostrated that jrs,..unconventional
power was su erior to the Soviet Union and all_çther$_J.htQYg-!°1 _its
(~emporary) monopo y o ato mie weapons b~~~~..s§.ttµ~ÇÍQ~~".-~lJ.t. t~at
kifül o! strateg1c Eowgyas_not._e_UQ!!gh y 1tself to set the wheels of
ecõiiômiclirefurning again in Western EUfoif<:,--WiJI1o-Ü!_ t~~Jiiq_quciive
p_Ç!__Wer to supply f 0 od and capital ggods for the reconstry_ç_tj_9n of
European industry, and without the financiª1,_p.o..we.r:.J:Q_Qffer_q:~Q.içs in
unjy~lly acceptable dollars, the United States could not have
~xerciseatlle power o ver tlie recip1ents ol MarshalCií:ia:!h§lCdíi[ Nor
was AIIler1can structural power bM!:.d oií]~nULJiil~.roE.the..security
structure,
""'-..,.
the production structure anã the--:---. financial structure.
-~-- -- Its
a utfior1ty was re1nforce e ief outside AmenCãtliat the l!ni..ted
tates u y 1ntended tQ_J).Se.i.ts p,pweLlQ create a better post:wa.r.world
ft)r others as well as for its own people.RillúiPVêJf'fià~d:Pi.S0.!:i.~~<:_~d "i:he
Four Freedoms as America's war aims, had invited the United Nations
-i:o San Francisco as an· aSsürance that the ·united States -woUTanof·again1
0 s in 1920, change 1ts mind, President Tríiman liad followed up !ii.'his
~
\ inaugural address to ~he Con ress w!th:!fie -~r.1:11 pro~~; of Affi.~i~~. ·an
I les aorr;a;)d a lietter matenatlfk_]Çioral
, mer1c~o.wer.full:y-.re1nf0reed
~~rces of structural_power.
A very different example of the power der1ved in part from the force
of ideas would be that exercised within and beyond Iran afrer the fall of
the Shah by Ayatollah Khomeini and his followers. The idea that the 1
Shah, out of greed and lust for power, had fallen captive not only to a
foreign country but to a culture and a materialistic belief system· alien
and inimical to traditional Islamic values had contributcd powerfully to ·I
the collapse of his government and his own exile. But the power of the i
ayatollahs in defending and promoting Islamic virtues would have been

constrained if they had not also gained control over the statc and the
armed forces sufficient to confirm their authority both within the
country and beyond. Undoubtedly, the power of ideas was indispensible
but it could only be used to affect outcomes in conjunction \Vith military
capability and economic resources.
Structural powcr, derived in part from ideas, in part fro1n coercive
force and in part from wealth, is not confined to states and those who
Seize the power of government. For example, the Mafia has used the
threat of violence- and violence itself -.to fnsure obedience \Vithin its
ranks. It has extracted a kind of tax from those it claimed to protect. But
its strength over a surprisingly long period also owed much to beliefs
rooted in an older, simpler and harder society - beliefs in the impor-
tance of loyalty to the family and to the capo, and of honour in personal
relations. Its durability as a force in the international political economy
should not be underrated. Although great secrecy shrouds the details of
Mafia operarions, enoughIS-krrõWfi-~itITQrrP.f.C:tiÕii-\Vith----rne·
iWrnational trade in narco~rrri$ and,_ ir!.. fi_i:i.~nfe__ .tQ_:_:ffiã_~·~.Jt~~ti
importance source of non-state authority. Yet it would not be so if ~liei;:.~~-
had not been weaknesses m the state-baseâSfi'UcfureTofthecõlltrol of
~ arms deals or the regulation of financial iransacti.QD:§ãêr~~
frontiers .
."Theweaknesses of the basic structures as well as their strengths
influence power relations between states and between other organiz-
ations. Take, for ~xample, the remilitarization of the Rhineland by
Hitler in 1936. This had been declared a demilitarized zone by the
Treaty ofVersailles after World War I. It was supposed to act as a kind,
of cushion or shock-absorber in the security structure for Europe,
making it more difficult'for Germany to sta_rt a second European war.
When Hitler marched troops into the zone, he was aware that mere
denunciation of the 'unequal' treaty was not enough. He had dane that
many times before. The show of force was necessary to demonstrate the
weakness of the structure and to add to it. The fact that the troops met
with ·no opposition was not because France was lacking in military
might. Indeed, at that moment French forces were probably superior to
Germany's in men and in aircraft. It was wcak because France and
Britain were divided in the realm of ideas and specifically on the
question of the wisdom of the Versailles settlement. Britain still hoped
that direct negotiation with Germany and diplomatic manoeuvring with
Italy to outflank her would combine to avoid war. Differences in the
perception of the problem and in beliefs about what to do about it
robbed former allies of structural power in matters of security. Their
inaction in 1936 enhanced Hitler's perception of their lack of will to
resist and allowed him far more important rnilitary victories in Austria
and Czechoslovakia at relatively low cost. Perceptions, not only of
r 34 The Study of lnternational Political Economy
relational power, but of the solidity or otherwise of structures are often

crucial to outcomes.
A different kind of example, this time of the use of coercive structural
power in relation to the rnarket, would be the use of Anglo-American
naval power i:n World War I and again in World War II to interfere w.ith
the conduct of trade by neutral countries. The targets were innocent,
peaceful traders, who wanted to sell their goods to the enemies of
Britain ·and the United States. Their ships were stopped by the naval
patrols of the two allies and if their masters could not produce a valid
'navicert' - a document guaranreeing that the voyage and the cargoes
had been autho:rized by British or American authorities at th:eir port of
origin and that they were Ilot destined for the enemy - they were
subjected to forcible seizure of both ship and cargo. The relational
power of Allied warships over neutral merchant ships was the basis ar
necessary condition for the setting of a highly partial security structure
within which trade could be carried on. It was accepted and traders
conformed to the rules laid down by the two great naval powers, so that
it carne briefly to resemble a regime or power structure. And the regime
was dis1nantled, not when Britain qnd American structural power at sea
declined but when, after hostilities ceased, the allies decided that they no
longer needed to use their power in the security structure to distort and
interfere with the market.
Limits of social science
It would not be difficult to find plenty more examples from the política!
and écononuc hiscory o! the world to sfiõW"l:he 1~pQ,!"_tap.ce ..91. âiffe_rent
K_~f tructural po\ve 1n a1lect1ng outCom~s~.ath ia distribu!f<in~l
terms and in terms of the mix of values in the system, to show how
relational power can be translated into s~õ:-c"l!.mt.líô"'1.hard
iÍ: IS in practice to distinguish between political power and economic
power. lt only seems I1ece:smrry-'roclevefop some neWWãy-uf 10õking at
political economy, and to illustrate it with a few -examples, because so
much writing in the social sciences today has failed to adjust mentally to
the 'globa1ization', to use a popular term, of economic, political and
social affairs. My attempt may not be the best, and probably can be
improved upon by others. But ~Jimitations .oL the__ major .sc>cial
scienc~Jhat,lgrt!_çl~l>J!>.9..W-1n.t.e1.p.i;1:tJh.e_p.Q1iliçs,oüh!:..w.\lLlg,!;c.on.omi.
e.E,e_ ,,.~,--~e_r ia u~.....th a,,t.,,...tJl~Y-~i!!§i~rtntly,._ call,, ·rfq,;r., neJY~~PSf~QecttY.~~- __ -ªD ~
~~~YJ!caT frameworks«-
tiUt;.h;rt:""th;;;;der mar ask, ::re these limitations and why have th~y_
so constr~1ned tfl""êêievêiop1nent of international political economy?
""TEese are two fárge' 'qüêStiôílS:- -w1rlíoút gotng into a Very· fargé
digression, I can only offer a rather brief answer to each of them.
~~- - .·--·---·---···----------·-·
Power in The World Econorny 3~1 - '
)
Mainly, the limitations arise out of the past histqry of t_hree important
social sciences econom1cs, political s~ -an_d·"·l~ri"ii!!fC:n.~J-~ )
relatrons. Both of the first two developed earlier jn 1-hjs centw:.).~_Q,:r1_i;_[i_ç.;:_
assumption thaL.nati...ooal frontiers diyidcd dilf~ru____p_gJJ!ical _and l
ecoTiomic syStems so they could be stn<lie<l and analyse<l for auP~~~ú9I )
purposes 1n isolari9n fram eaçh ot~,_ru:..dse comparatívely, as if they
· were distinct species of animal, or breeds of dog or horse. The third, )
lnternational relations, wa~!2...fu_cuse9._C!.~--<~~EJ!.~?.~fém~~~.2f~~@E ..g_~_cl )
peace rn wh1ct1 the m'.:lin 'actq~'.-or protagonists WE~1-~~<;~~-~l.ig_t_
~Cfífficulty handling any other guestion than that q_( woiTd arder - )
as shown by the titles of even quite recent textbooks in internacional 1,
politics. By the time world events caused students tO-ª.&.k.JJ.rg.e_ut _qllcs-
tions ab~bl.ems of tbe willid.êconoÜiy ,.acadenÜG-.Specializa_ ti,on )
<iriâ ,..ifítéêd~narrJ.~?:12!!~i~?~1!.~~-- _rai~~9. such .9arriers _heJ.\"Ltttt.J:h1;
t~r~_e__ s_o.Ciã] ·:sci~J!G~~ __thª.t _w_h_çp._sJudents~tried~tO~ sti;u:i}!:_s.ü:nultane.o us ly __ )
·.s-orne. _e_c_on q_mj e_~, _spme....p.oliticaLs.c_ience, _some,.interna:ti.QD.i!lf~.§1._.!:_~~1}_}_~, )
·! th!L"-ft"gJQJJD_cLlLm_rd to (it t~_\.Qgi;ther. They complained, with-
. justifi.cation, that the jigsaw did not make a whole picture. )
One important reason for this, of course, was the exclu§i,Qn.,,oJ )
cons1derat1ons of power fmnrrhe stuêJf of ecollQill.iç_s_., By this means 1
tlíeory coulã~l:J'e""devêlOpeêltfiãf wãS'parsimonious', 'rigorous', 'elegant' )
- ali words of praise much used by contemporary economists. This
deliberate myopia caused· K. W. Rothschild some years ago to observe:
)
)
s in other important social fields, we should expect that individuais should
ruggle for position; that power \Vill be used to improve one's position in the
)
onomic game; and that attempts will be made to derive power and influcnce from )
ononlic strongholds. Power should therefore be a recurrent thcmc in cconotnic
--·/.
l
studies of a theoretical or applied nature. Yet íf \VC look at the main run of (
)
economlc theory ovcr the past hundred years, we find that it is charactcrizcd by a
strangc lack of power considerations. [Rothschild1 1971:7} )
)
that u sets or oe
)
)
)
)
sêern r 1narv persQIL )
·~me economist~ it is true, __have tr1ed to break ciut of th1s unreal
)
.s!~~-~gli~_acket_ by cgnt~i_lf"m!r..&~ the develõpmellt~of·-tüDllê~.:cnõiC§
theo in which actors trr___to rn~xü!Uze their gains and minimiZe ·t11eir' )
costs. But the insi hts ga1nc ...
so -1~·~se - . ~_,_m »·-:--ã_-f"FO"ffi.;ú-::·
c.onstrained b t1 Q JQ,Qmrc an;í::y..5iS.::fü~·t--E_i~°tT~""- )
- ~-$'"-
_)
)
the che
~~~~~i~~~~~e~te~ t of al r. rm-ru1;-rr~üf"a
plty that app 1e or descriptive economics has been so badly out of
favour in the profession for nearly fifty years. For the above strictures
apply far less to those economists who have worked in development
economícs or in any specialized branch - agricultural economics or
transport economics, for example - that requires attention to the real
world and to the political factors or the historical experience that
actually influences outcomes. It is impossible for development
economists to see markets for exportable commodities, for instance,
without noting the political forces at work on and in them. To quote
~ development ec9~mist.:_
Gconomic _reasoning often ascribes to markets a spontaneity of origin ~:'-~~!·~-·

\ ~iiúsm 1n õp"enrtions-tha-t-er:igiaate-·from-ecõnomJC necess1ty ... -Yet if
:4\ ITiarkets are viewed as creatures of social and poht1calsysteiüS, then their
) iJ
1 . operations, given certain economic parameters and technical constraints, can be
understood as being induced or suppressed through political· decisions and
. 5 stitutiona_I mechanisms, both at ·the national and international levei. [Vaitsos,

76,114]
"-----
Vaitsos rightly pointed out that markets for different sorts of things,
being the creation of decisions and institutions that vary from sector to
sector and from time to time, will not easily conform to an analysis that
excludes political power and interest.
tvforeover, the adage 'once bitten, twice~_popular _wi~dom
accepts as a powerful character1stic of lluman behaviouf,_çan11ot be
fifted 1nto econom1c!fieory 1 bere are some-~~ lags between cau~e
afid ettect - líke the famous -cu a.t-dela.)'§ 1fü;·-benelits of
dêVãllla o earer imports are g_uick]y fetf _: which
economic theory__has tried (not too ~fÇ~ª_§._._!!Y.LJç .gr!J:_sp and explàin.
Bútthe var1ant effects of recent e:XPeriénce on econo~iCDeliâviottr is
something that eludes the profession. Perceptions of future risks - as
insurers know - are governed in part by past experience, good ar bad,
and weighed alongside the expected costs. E~f
future possibilities - for a better life. for example - will be sharpened
b hardshi so that o ortunities will be more ea errr_::_se-G:m:_by !he
poor and hun r than by the rich and comforta !e. ·. -
Political scientists, meanwhile, have ten e to as ume that power is
exercised within a given social and economic structure, even subject to
certain constitutional limitations and institutional influences. Even the
best work in comparative politics tends to focus on the similarities and
differences - more often, the differences - between individual states or
national ·systems of decision-making than on tlll:_ common factors
~mari.a.tiug_.fr?m the world ecanamy - such as !he greater m~_~ilrry of
capital, of technical know-how, of diseasc and of ideas. The model used

tà such effect by Dahl (1961) m analysmg dillerent kínds of decisíon-
making power in the government of New Haven, Connecticut, had its
límitatíons when applied by Cox and Jacobson (1974) to decisíon-
making in international organizatians. For, even though these have
formal statutes Ür constit.utions, the freedom of states to opt out, to veto
ar withhold consent {or money}, makes for a much n1ore fluid and less
structured exercise of power than is to be found in local government.
National legal systems will therefore tend to be taken as given, even
though political scientists in reflecting on the differences benveen states
will see that law can institutionalize and legitirnize both power derived
from coercive force and/or power deriv_ed from unequal wealth, or for
that matter power derived from a general consensus about national
aspirations, ideais and values.
While the ecoi:omists ha:c i nor~d power and th~ P?litica~0~1tis~;
have more 1ntcrested 1n how 1t was exerc1seâinsrr:festate~_m..a.Jl'!l
scholars in internacional relauons havc shown too narrÕW;·.02.IKi;:.rJl
{ l1lÍLh relat1onal power of one state over another. 1oo õffen, they have
iinored or refused to contemplate structural power, ar the power to
êl.efine the structure, to choose the game as well as to set the rules under
which it is to be played. It is as if you said, 'This man has power in
relation to this woman because he can knock her down', ignoring the
fact of structural power in a masculine-dominated social structure that
gives the man social status, legal rights and contrai 6Ver the family
money that makes it unnecessary even to threaten to knock her down
unless she does as she is told. Secondly, thcy narrowed their concern
with power to power exercised between states, to the exclusion of other
groups or organizations. It consequently tcnded to reify and to treat as
one homogeneous unit the states that were its subject matter.
Thirdly, it narrowed its field of vision of the resourccs that conferrc ...\
power to those that could be used and were relevant to inter-state )
relatíons. The classíc example of this was a book called The War
Potential o( States by Klaus Knorr. This listed territory, population} raw
materials, weapons, financial reserves, and so forth - but had to _V.
conclude that it was difficult to add thtia ali up to see who had most ~
power or to foretell the combination of assets that in international
conflicts would be most effective. 2
.Not all schools of thought concerned~'?l.ÜP. international relations-;
naturall } have been guilty on all three counts. The Marx1sts--aruf:ttiê
~ en enc se o m 1r ___ ruiil e~ ·-~dali Lat1n_A1n~Jhl,
aware o t e f...s l p0wer, .~o:hex.
!)__of _ít.Jl) tbe tt:rll~l
ro ter 4 . The pluralísts look;;!_ bcy'Í,,nd.,
sta e sta te i i . - .tatu_ç,t .fo1.Uig_,ns--
~nau9,r,pprations and international organizations. But t ~y
tended to ask only whether these supernumerary players were likely to

help or to hinder State A against State B. What role, they ask&_d,_djg,_
non-state actors play in the _fore~E-R9licy__ gª-!Il.-~.?. They only___fª.J~ly
looked beyoffêliifter:.srate refàtiOrlS tQ)lfi.k~.w.hat_athe1:Jcinds..0Lstcuctural
"-POWertln:nõ~::State}:_s§:nllghE,ia v~êi_Qi~!.L~d.i:?p_~1Jhe Nye and
Keoh-ahé fr~áiii.eWD.fK only takes structural power in at secondhand as it
were, by looking at the rank ordering of states in internacional regimes
ar organizations. This will often mirrar the relative importance of states
in the world economy. Eiut it only reflects the strucJyr.al.power of..states,
not of other entities; andlrgpsrfrerlbeã'f'ather distorting mirrar, ai;
· _wh·~e states are exclude ~ffiãilõCgãlliz!l!t9n ·12!:.Jii~tQ!i~B.l or
Rº i · reasons or when voting systems reflect a power_ distribution of
th?irasrrather than the present, ___.....-..--~--· -u . . ·-· · -·
These various astigmatisms ln the vision of the three major social
sciences concerned with the international political economy have
undoubtedly hindered its proper development. They have been
handicaps for research and for teaching. As a result, some of the
more useful contributions to the development of the subject have come
from outside the three disciplines, from lawyers, historians and
sociologists - especially in recent years the sociologists, who, when
they discarded the search for some simple general theory applicable to
all hnman societies, began to look to the histories of society, not only in
Europe but also in Asia and the Middle East for clues to the common
problem of who has power in society, what are the sources of such
power and to what ends is it used. 3
States showed themselves sharply aware of the intangible, un-
q~Iltlfiàbie7êSou!cCs~Of-sõCi'àrCõlie5íõri.. arid ~ã··:;;tr·ong ·Cívíl sOciety that
could mOre·tn·an·-mãireup~fõr-~t-st~:ç[éfiCie:nae·-~~~:Li:~~?-IZ~<j_f_~!.~~~-. ~!"~
.J?..~ople o~:ven ~~.~~E.:. .s>~( J?g~!-~.9:'--.~E~~~7.Il~:, Iheir vision of resources
~s ~-~..9JJJ&tt:i:ne_§_,_~9.!t...S.®-].~he11gy~- beigg___r_eac!Y~tg__ . .~11çlµde__ ~~
state's degree of self-sufficiençy_in food or in energy..,,.gf the security of its
_TõéijãsQf.'áCCêsSt~~~hese....and tq raw materiª-k._.S.9,me_w..Q.uld~
inc,lude contrai ov_er .commu~ications system_s or sea 3:nd _air. transport,
. y11ê··~;;;;;,;r;a~9I~t~ci'ti:ii~i\CiRilIWi'i::'2.0Jié::x.~P.~~t··~nil'~sy.m.pat[JC9I
~á t,iqü?l~ .fr~_q_~l:s;,,i;___~~-~~~ :- fo·~ -~xample, .t~~-~!~JJ~!,.<;_q_!:1,!1~~E!~~~-·n~1:1_P_P.C!:t_,
for Cuba or Switzerland's reputat1on for stabilicy. a11Q.j~artiali~ ··
an~-k~~~!:e~~p~?J~r~~;·a1r~:~~;p~;:~~~~~~~~~~~t:~pr:~·;~~ diri~r~?
0
.between s~~.P~ifu.!!!l'::J!?:fü•í!JllL®.w::.tlammrcJ1mú'thejy2:If.{systeiiíl~
and vulnerabilil:J:'. (susceptibility _1i:,ali~_:~_J',l' _th~ .. -'!Pifül'...."?. lii:Ut tfíe_
Q_arnage) .is usefuliydêvelopedto enTarge the analysis of comparative
_power of states ~n the systerq. But the viewfinder is still only takingjn_
the susceptibility or
<v"ulnerahd1ry af states. And among the four factors listed as determining
outcornes in the systcm, political power is treated as a structure (the
Power 1n The World Econo1ny
'
'overall power structure in the world') derived (p.21) from 'tbc ~
distribution of power resources among statcs', and sometimes modified 1
by the two other fqi<:tors - the power of states within issuc areas, and )
the power of states as modifi.ed by international organization. But these
autliors refer only to economic process or, to put it plainly, ho\v things )
worked out for states in the trading system or under the rules agreed in
an international regime, e anal sis for ractical ur oses \Vas 1nore or l
less blind to the distr1 ution o o .ur. .s r. u s 04.: )
1n erna tona political economy ..
)
)
A network gf bai:ga~
i )
1
S_tarting with structures, though, is only half the battle. The n<':xt
i "~Pôrtãilr cíuestiõiiiSWllêrê'tOgõ""1rõffi"'""fl1ére;-hõwroprocêê'd \vith thc
)
1 analysis of a particular siluation so as to discern in more detail whcrc a )
1
government, a political movement or a corporate enterprise has a range
1
of feasible choices, and what possible scenarios might follov.r, clepcnding )
on which choices are made. _My proposah._gased on soID:::, expericncft.ef )
1 trying to write monetary and fi ·1 h1stor in a wosfcl context and tô
1
re ~"ª.tt ervices also on _ª-·~l. )
1
oo or t e ~-=:-nar ains in an sit ation and )
an w 1c robabl no e liahl~~:t_;;
ices fur all or some gf those ..ÇQJ1Cern~J·.~ )
0r-fi · it one that bctv. •een
aut or1ty and the market. ne o t e simplest and earliest exa1np eS""""
)
would De the tac1t agreement between kings and princes in 1nedieval )
Europe and the participants in the great trade fairs, or in local to\vn
markets given a special licence or charter by the king in return for a )
payment of tax. The rules gave access and iri some cases guaranteed the )
maintenance of minimum public arder; the buyers and sellers profite.d
from the trade. Non-state authorities can make such basic bargains too. )
At Wimbledon, the British Lawn Tennis Association sets the priccs of
entry for spectators, lays down the 'fules for the selection of players and )
reserves some seats for its own members and those of affiliated tcnnis )
clubs. If it reserved all the seats, or too many of them, the bargain \vith
the market - the general public - might break down. If its rules )
excluded too many good players, again, the market 1night shrink anci )
undermine the bargain. The Olympic Gan1es network of bargains is
even more complex because governments become involved in deciding )
on political grounds whether athletes n1ay compete and in financing
)
their participation.
Even in a command econom ere i d the veil of bureaucratic )
control,_ a__kms! ol barg-ain hetween aut ority_ 10 t e fÕr1n ·of sfu,;-f'~.
rhinistries, and rrtarket in die form of consumers and prodl!_~el;s~·-~1'0 J
1.
1-
'"!'\
maintain thc authori_!y ofJ.h_~ s~ª-~-.a _Q'ª-.i;g.<!.~~~-.ha_~~!?-_J~.~--~-g_l!.ç:~,-w_i.tliJh_e __ _

pi::o.duc.eçs_ ::-. ~-~-!1:~&~~-~ .':l.~-~--1!!_?~·.k!:~s, :-::- !_o .. ~~~Y~Es!.sliem~illfficie!l_dy. and
to give effective enough incentives for the1n to"' produce ~he _goo4s__~<glg_._
Serv1c_e_s_ that _w_il! sell _~o consumers. Some wasteOfUiís'õTdgoods, unused
~e-SOUêêêS·--;;;n"be"~tôICfated-=·ã;,-r; different ways) it can in a private
enterprise system~~.Q._o ~~h .~-ª~~-~--~:'}~~-P.~~-,~--~~-'_li,~ _9~~--~h~.,~A~K~Ü1
with_thç__ ç.Qn~__umers_. \Vhen there 1s discontent w1th the way the barga1ns
~ working o~ -ort·rnepartoI7JOfh pro~dUCer·s· ànd cOilsú_~ei_s, às there
was in Poland in 1973 · and again in the early 12.?ili,..authoricy,j,1..io..
·frOllble. ·Ma!tiál-liiW 'áfid Côêicive·Jarce-·may have to be used to backup
the unsatisfactory bargain. ln that particular case, two of the weak links
in the network of bargains were, firstly, the inability of Solidarity,
having brought the workers out on strike, to get them back to work
again andl secon<lly, the inability of the government to produce thc
necessary food and consumer goods to back up any deal on wages and
the workers' purchasing power. It was, unfortunately, a situation made
worsc by the intervention of the United States. Imposing sanctions and
taking no-action to restore the flow of Western bank credit only further
weakened the strength of both partners in the two key bargains.
One set of bargains - inevitably in a system in which political
authority is so concentrated in the hands of many states - ís that made
between the governments of states. But rhose bargains, as countless-
specialized srudies have dcmonstrated again and again, depend heavily
on the durability of some internai) dornestic bargains, especially in the
most structurally powerful states. Sometin1es these will be between
political parries. Sometimcs they will be between the government and
the local representatives of sectoral interests or the leaders of organized
labour. They can also (though less often) be with organized groups of
consumers or cnvironmenral conservationists. I.Q_entifying whose
S?P ort, olitical, financial or moral, is indis ensible to the .E!Egiers
ii: the key bargains is often an essentia srage ín analysis of a· dyg_<;imic
~i-_tuation. It was the static nature of a great <leal of \Vorlc.....on the
bureaucranc pohtics model, incidentally, that was its _grea.Lw:.eakness.
Tfie US Treasury or the Department of State may ~~-.PQ~erful
bureaucracy in the . pohcy-making under one Secretary and one
~resident. Ir d1d not always fotlow th, · deat~·reSignattOri or
t~c next e ectlon. ~---~~---.... ..
--würKtilatllãs been dane by political scientists on the subjeciõf neo-
corporatism is particularly instructive in this conrext.~gq-c~rporatism
is the practice..in..democcp_tiç_stat~$.....WitQin.J:J1e w_orld__market eoo.uo.m.y-_of
~amrw_gng _81!!..EL.Srfl.?t~K~L-~argain regarding rhe managemi:_n~.-o~_ the
~narTui~ e~,E.2ill:Y-. ,Qen:v!!.en,_ rhe·~·.~:·.~_-S,_}_~--~.r-· õ-verrrru:e.ô:t.::1§§-rep&_ey~g:~
tanves o mana ement in iTiil92t~Y. bankin ,_ ~gf~~ul!_l:li;e .<tl'ld ~ffil!~J a.n4
!.!:._!;.l?~~»t~1J1Y~~r.Jg:~8EI2.n~. Jj-1_ .So~ses, --· . L~t~Jt;fiãg,~;
Jn_@t fully j,ifr!ç;J«l_~:_.am]=kL_s-.pi:Qved most succeJsfuLl!J..J!i"Jrn~.Ui;r...
ingredient is common cons t g1.yen to t e sur~1"1Va of the~tÍon:;t~k""::~

ê. 1st1nct ent1ty, as autonon1ous as .2,0ssible in its in er ~iJ,tiQP..'l.J...,p.9litica_L.
and econonuc reÍat1ons and tfle c'bn uct _ ·~don1.!'.!aP.Jfaj.~-~
c;Qnsent, and fhe W1l11ng · ce short-tcrm_s.pecia.l--tnte-,re.sts-to.
the long-term collective nacional interest, seems to be Jess ncccssarz in
Iàfger. Cõuntrfes, and espec1atly in those wrth a large dornestiC-TiUrket. as
<i)fãse for 1ndustt y. l'n"fffilsiêsL.nec.ess.ar_y_~~~~-_fefh~Qs íljQ~e
difficult - in the larger mernbers of the European Con1munitv ·fike
ÉrÍtain, France, Germany ar even Ital for nt to-·Seek -neo-
corporat1st so ut1ons. o state and market appear to offcr that Inuch
m9re status to the state bureaucracy, more op.p.G.r.tunity to tfic maµager~
of industry and more securi to labour. Even n1ore clearly~ thii_the
United States, imitated in practice by those of other consumer countries.

lt__allowed the companies effective freedom from the demands of _tlle
iÕternal revenue for tax provided they continued to apply ilieir large
profits to 1nvcstmentJ.D explõrartuti. thas 1ais1ng the cfíance.Sõflúfther
cl'i es of ne · 1 . Assuring a continued _ffow•. of- ctY..çle
petroleum adequate to meet the needs o a ast-growing world economy
\~·as a vital link 1 the networK of bar a1nS. i-aern.1füa in
thc mar et and the unex ected resoJution o t e dissatísfied . . h.ost-..~t.a!~s
.
fOun t t e weak links in the net\vork.
~ The great advantage of pa}ring attention tQJ?~J:g1.l.ffi$,it~se:eJ!lJi....UL!!le.,..i,§
that it 1sffioieíikêly to fesu1fifr"leas~bie presçrü7.tion for_policy-makerL
~men~!!tcr:~!!i~..:m!ik~P~~Im~ .,
Mak111g pretty bluepr1ntSfITTtlie reÍÕrm of international orgânizations
n1ay be a beguiling pastime. It seldom cuts much ice with the relevant
governments. The last years of the League of Nations were spent in
drawing blueprints; only a few years after, it looked in retrospect like
fiddling while Rome burnt. Equally irrelevant in the real world is the
elaboration of abstract economic theory, when it is based on unrealistic
assumptions, such as 'Let us assurne infinitely living households with
perfect inforn1ation on market conditions,. Jn r al life durable
conditions in olitical econom cannot be create

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STATES

Distributed exdusively in the USA and Canada by St Martin's Press

This is not a convencional textbook. Students are often given books to

Theory insocial science

The negative assumptions

~~~grf~_ªJ-.4~!-~-~.?-==~~-l- -~~-e-~r~-~~s, ~~~~.~~ .n?_~?f.~ !~ª-~- g_e_sc~iJ?~~~n,

The Conflict ot Values and Theories 1 ·1

does not usuaUy_reflect good theory. While it nÓfes rapid technolÕgiCiff' / )

12 The Study of lnternational Political Economy

making, since p~}_iç;y~.1!1.ê.k.i.!Jg_J}~.Ç~§.~;itily ,involx.~-:Y$J.H_~-_L~~~e~1E~P.$§., ,~nd

The nature of international relations

.Ih.çKprefatg;y _re!Ilarks a~e particularly .necessary · becaust: I ..!l:>!I!k.1he

Since the mid-1970s--·

economics by means of structural analysis gf the effects ..of states. - or

allows more pragmatism in prescription; and. secondly, a methoQ _o_f

their differences - that it was important to generate more wealth.

The Conflict of Values and Theories 19· 1

of the costs and risks of alternative options. J~v.J:i, Jhe__d.iff~~i1c4_ -. / )

'Political economy' as a current term in French, Italian or English only

i economic relations in the ~_an.cLl.9.60s_seemed._to be less and leE_

If the omission or underrating of transnational relations - especially

such powe~EJS~.b._~!i~.d on S.Q~Il;iY.~_Jorç~,_..QXt~!l~C:e~_s_iji_ t~~ -~~-~~~~ and

internacional political economy and how it works. That is what I shall

Structural and relational power

The argument in this book is that there ind~=

tp decide how thin s sfiãll be d -the .• ewor-.tQ.s.h.a e frameworks

'-- L i,~~\>:-:ç(~~-: '. C(;

)~_!"g~·--~ Ihe ~9~ corres o · _g to. the four sides of _tlJ.((

Power in The World Econon-1y 2·1

~ reputation on the borrower's side and confidence on the lender's.

advertising, insurance or databank services. But since the whole purpose

Four sources of structural power

Before proceeding to illustrate with examples this notion of four-sided

common sense can easily skip the ne'xt few paragraphs.)

ower and whoever is able to

sages iftvfe o ~n exercised such dominance over kings and generais. It is

range· o opt1ons open o t e ot ers will be extended by giving them

,has h;;ld,!h,:ijjn !/:.0ast res2rt mili~JX.QOWer.;!lliL!he fililliD'-!2 use

Let me suggest a few illustrations of the way in which structural power

ayatollahs in defending and promoting Islamic virtues would have been

relational power, but of the solidity or otherwise of structures are often

Limits of social science

Gconomic _reasoning often ascribes to markets a spontaneity of origin ~:'-~~!·~-·

. 5 stitutiona_I mechanisms, both at ·the national and international levei. [Vaitsos,

capital, of technical know-how, of diseasc and of ideas. The model used

tended to ask only whether these supernumerary players were likely to

maintain thc authori_!y ofJ.h_~ s~ª-~-.a _Q'ª-.i;g.<!.~~~-.ha_~~!?-_J~.~--~-g_l!.ç:~,-w_i.tliJh_e __ _

ingredient is common cons t g1.yen to t e sur~1"1Va of the~tÍon:;t~k""::~

United States, imitated in practice by those of other consumer countries.

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~~~grf~_ªJ-.4~!-~-~.?-==-l- --e-~r~-s, . .n?_~?f.~ !~ª-~- g_e_sc~iJ?~~~n,

such powe~EJS~.b._~!i~.d on S.Q~Il;iY.~_Jorç~,_..QXt~!l~C:e~_s_iji_ t --~~~~ and

'-- L i,\>:-:ç(-: '. C(;

maintain thc authori_!y ofJ.h_~ s~ª-~-.a _Q'ª-.i;g.<!.~-.ha_!?-_J~.~--~-g_l!.ç:~,-w_i.tliJh_e __ _