INTERNATIONAL

POLITICAL ECONOMY
CLASSICAL THEORIES

PRESENTED BY
 MEHAR ANGAIZ
 WASIF RAUF
 HAMMAD IQBAL WAINSE
 HAMAD SAMAD
INTERNATIONAL POLITICAL ECONOMY(IPE)

• Also called Global Political Economy (GPE)

• is the study of interactions between the economy on a global level
and political and economic actors, systems and institutions
•  More precisely, IPE/GPE focuses on global economic governance,
through studies of macroeconomic phenomena such as globalization, 
international trade, the monetary and financial system, 
international inequality, and development, and how these are shaped
by, amongst others, international organizations, 
multinational corporations, and sovereign states.
• International political economy studies problems that arise from or
are affected by the interaction of international politics, international 
economics, and different social systems (e.g., capitalism and
socialism) and societal groups (e.g., farmers at the local level,
different ethnic groups in a country, immigrants in a region such as
the European Union, and the poor who exist transnationally in all
countries).
• IPE examines how politics can be used to achieve economic goals and
how economics is utilized for political interests
Historical background
• The emergence of international political economy can be traced to
the late 1960s and early 1970s, when deepening 
economic interdependence prompted by the growth of post-war
economic institutions such as the International Monetary Fund, 
World Bank, and General Agreement on Tariffs and Trade.
• The need for a more comprehensive understanding oF global
economic governance within political science circles became
increasingly apparent through the crises of the 1970s; with the end
of the gold standard, the 1973 oil crisis, 1973-1975 recession and calls
for greater trade protection.
•  Influential figures in the emergence of the discipline were
international relations scholars Robert Keohane, Joseph Nye and 
Robert Gilpin in the United States, as well as Susan Strange in the
United Kingdom.

IPE THEORIES

Marxism
Economic liberalism
Marxism
 Karl Marx May 5, 1818-
March 14, 1883

Karl Heinrich Marx was a German philosopher, economist, historian,

sociologist. Marx's critical theories about society, economics, and
politics are collectively understood as Marxism.

By: Mehar Angaiz

What is Marxism
• Marxism is a social, economic and political philosophy that analyses
the impact of the ruling class on the labours, leading to uneven
distribution of wealth and privileges in the society. It stimulates the
workers to protest the injustice.
• Marxism is an economic and political philosophy that examines the
flaws inherent in capitalism.
Historical Background
1. Primitive communism: All means of production are equally divided.

2. Slave society: Means of productions are controlled by particular

group. Master and slave concept existed.
Historical Background
• Feudalism: The system of Lord and serf existed. Where Lord control
means of production.

• Capitalism: Economic and political system in which a country’s trade

and industries are owned by private owners for profit.
Prediction of Future by Marx
The communism: classless society and no class struggle.
Capitalism will destroy itself because of alienation and exploitation.
Key points of Marxism
• There are two obvious divisions in the Capitalist society – the
Bourgeoisie(Capitalists) and the Proletariats(Working Class).
• The Bourgeoisie enjoyed the power to control the toiling masses’
wages and work.
• The labour left the workforce with a feeling of alienation from the
task.
Example of Marxism
• The work scenario where the labour earn in peanuts whereas the
owner of the same organization takes the profit without investing
much of his manual efforts is an example of theories dealt in Marxism
definition.
Neo Marxism
• Neo Marxism is an economical theory which says that current world
economic structure has been systematically implemented by use of
global class division with developing countries being exploited by the
industrialized nations.
Factors behind Neo Marxism
1. Underdevelopment
2. Dependency
3. World system
Thank you

Source:
https://economictimes.indiatimes.com/definition/Ma
rxism
https://en.wikipedia.org/wiki/Neo-Marxism
https://revisesociology.com/2019/08/05/neo-marxist-
media
 ECONOMIC LIBERALISM
• Economic liberalism concept is Based on the principles
of personal liberty private property and limited
government interference.
• Economic liberalism emerged as a critique of the
comprehensive political control and regulation of the
economic affair that dominated European state
building in the sixteenth centuries i.e mercantilism
 ADAM SMITH
• Adam Smith considered one of the primary initial writers on
economic liberalism and know as the father of economic liberalism
• Smith also add some elements of his own to liberal thinking.
• The key notation that the economic marketplace is the main source of
1. Progress
2. Cooperation
3. Prosperity
Liberal economics has been called a doctrine and a set of principal for
organizing and managing economic growth and individual welfare
• Liberal economics has been called a doctrine and a set of principal for
organizing and managing economic growth and individual welfare
• According to economic liberals the economy works without any state
interference but works according to laws.
• For example Comparative advantage theory by David Ricardo. David
Ricardo put forward his theory called “comparative advantage theory”
whether or not one of two regions is absolutely more efficient in the
production of every good is than is the other if each specializes in the
product in which it has a comparative advantage trade will be mutually
profitable to both regions.
MERCANTALISM