1. Unit Two: Realist Theory and IPE
Dr. Russell Williams

2. Outline: Required Reading: Cohn, Global Political Economy, Ch. 3.
Class Discussion Reading:
Susan Strange, “The Future of the American Empire,” Journal of International Affairs, Fall 1988, Vol. 42 Issue 1, pp
Outline:
Realism – the Basics
Implications of Realism for State Behavior
Realist Approaches to IPE
Modern Realism and IPE - Hegemonic Stability Theory
Conclusion
Further Reading

3. 1) Realism – the Basics:
Dominant approach to the study of IR, but less important in IPE?
States are key actor
E.g. IO’s and MNC’s often only “extensions” of state power
States are:
“Unitary” - Domestic politics and interests less important
“Rational” - States pursue predictable strategies based on calculations of self interest
“Survival”
“Power”
“Sovereignty” - Internal and external
Global politics is a “self help” system – states must look after themselves
-Dominant approach to the study of IR/Less important in IPE????
Text: dominant approach in IR - Less important than Liberalism in IPE. Not so sure about this – longer history suggest realism has dominated both “IPE” and “IR” - its just that IR realists over the last 50 years have distanced themselves from economics.
States are key actor
States are the most important actor (if not the only actor)
IO’s and MNC’s often only “extensions” of state power
States are:
“Unitary” = Domestic politics and interests not important
“Rational” = A well governed state will act in fairly predictable ways. States pursue predictable strategies based on calculations of self interest
States pursue:
“Survival”
“Power”
“Sovereignty”
IR a “self help” system – states must look after selves

4. “Politics” more important than economics
Economics only important topic when it relates to state power
Skepticism about international law, rules, regimes and values
Rules are for the “weak”
Skepticism about cooperation
States only cooperate when then they gain more than others
= little cooperation under normal circumstances?
Realism “parsimonious”
Has few variables and leads to clear predictions

5. Realist Theories of International Relations (IR):
Avoid overgeneralization – not one single theory
i) Classical Realism: (Machiavelli to Morgenthau)
Human nature is bad - hard to trust others
Reject liberal views of human nature
Therefore, other states are an inherent threat
E.g. Hobbes’ “State of nature”
Makes a virtue of pursuit of power
Other theories seen as “idealism” (E.H. Carr)

6. ii) Structural Realism (1970-Present) Waltz, Grieco and Mearsheimer
More scientific - explored where threats came from
Three “images”
Human nature?
Domestic Politics?
International Structure – lack of Government?
= International Structure matters!!!
Global anarchy means states have to be amoral in the pursuit of power
Only two independent variables:
Anarchy
Distribution of power in the interstate system
Large impact on policymakers in US
More role for economics (E.g. Thucydides)
ii) Structural Realism (1970-Present)
Waltz, Grieco and Mearsheimer)
More scientific - explored where threats came from or how we might develop better predictions about how actors will behave in international politics
Three “images”
Human nature?
Domestic Politics?
International Structure – or lack of Government?
= International Structure matters!!!
Global anarchy means states have to be amoral in the pursuit of power
Only two independent variables:
1) Anarchy
2) Distribution of power in the interstate system
State behavior explained by these factors alone – no role for domestic politics in foreign policy
Means that explanations for events and outcomes in international politics should pay attention to the distribution of power
Large impact on policymakers in US
More role for economics (E.g. Thucydides)

7. 2) Implications for State Behavior:
a) The “Security Dilemma”: Security and pursuit of power is a “zero sum” game
Any increase in my security or power means a decrease for others . . .
= Cooperation unlikely
b) “Relative gains” more important then “absolute gains”
States only cooperate to pursue relative advantages over others
=E.g. IO’s seen as tools of powerful states which hurt the interests of weaker states
a) The Security Dilemma
Security and pursuit of power is a “zero sum” game - Any increase in my security or power means a decrease in yours
=Cooperation unlikely
Even when it does occur:
b) Relative gains more important then absolute gains
States only cooperate to pursue relative advantages over others
=E.g. IO’s seen as tools of powerful states which hurt the interests of weaker states

8. Cooperation difficult
c) State policy driven by international structure and position in the global “balance” of power
Powerful states will pursue different strategies from weak – try to ensure the status quo
=E.g. Only economically powerful support free trade
Bottom Line:
Cooperation difficult
States unlikely to expose themselves to interdependence

9. 3) Realist Approaches to IPE
a) Proto-realism and economics:
Most classical realists integrated international economics in their analysis.
Economics seen as a source of conflict and war
E.g. Imperialism
Economy important to state power
E.g. Thucydides and the Athenians
E.g. Machievelli
Proto-realism and economics:
Most classical realists integrated international economics in their analysis = Economics seen as a source of conflict and war
E.g. Imperialism - State had an interest in economic expansion – increase power.
This often seen as a source of conflict and war
Economy important to state power
E.g. Thucydides (Imperial rivalries of the Peloponnesian War – Athenian merchants were changing the distribution of power) - Thucydides develops a materialist explanation for why Athens deserved more power
Modern Realists have placed more emphasis on power and security and have downplayed economics in analysis.

10. b) “Mercantilism” (16th to 18th Century) Classical mercantilism:
States’ power dependent on “treasure”
Gold is key to power of emerging sovereign states
States seek to increase their holdings of gold and silver through:
Conquest and colonies
Increase exports, decrease imports
Problems?
Problems?
Economics leads to conflict. Strategies a threat to other nations
Also, Liberals see this as sub-optimal – global economy hurt by “beggar they neighbor” policies.
-No efficiencies from free trade etc.
-Mercantilism eventually supplanted by liberal “free trade”
– However only slowly
However: Mercantilism still around in the form of:

11. c) Economic Nationalism and Neo Mercantilism:
19th and 20th century and beyond . . .
Industrialization seen as key economic goal
Necessary to independence (sovereignty)
Essential to military power (security)
States need industrial development to survive (Friedrich List)
States should:
Adopt high tariffs (protectionism)
Encourage development of national industries
Mercantilism still around in the form of:
Economic Nationalism and Neo Mercantilism:
19th and 20th century and beyond . . .
Industrialization seen as key economic goal
Necessary to independence (sovereignty)
Essential to military might (security)
States need industrial development to survive - Friedrich List – German philosopher
“Free Trade” benefits the strong
Weaker states end up in a subservient position without industry
Reject liberal notions of the benefits of “specialization” and “division of labour” for smaller states
States seeking to challenge the status quo should:
-Adopt high tariffs (protectionism)
-Encourage development of national industries
[Examples] [Sound familiar to anyone?]

12. 4) Modern Realism and IPE:
Post War Period:
Liberal free trade collapsed prior to WWII  “Economic nationalism”
Post War Realists believed economic cooperation had to be enforced by dominant states
Could reduce threats and conflict
Breton Woods system and free trade possible because:
US military and economic dominance
Threat of the Soviet Union = other states had no choice but to cooperate

13. 1970’s - Post War System under stress:
Economic crises = Post War liberal economic order under threat????
US decline?
US economy relatively smaller
Economic success of Germany and Japan
OPEC
Global economic slowdown
Financial instability = end of dollar standard
“Détente” – decline of the cold war
Result: Realists begin to pay more attention to economics
=Declining economic cooperation in north and era of the “new protectionism”

14. “Hegemonic Stability Theory (HST)”:
1980s realists argue, “politics” still dominant over economics
=Economic “cooperation” becoming more difficult because of declining US power
“Hegemony” (in Realism): Leadership, or dominance, of international system by single state
HST assumes:
Like liberalism, free trade and globalization good in theory, but unlikely to occur because states mistrust one another under conditions of anarchy
“Free trade” and economic cooperation seen as “public goods”
Non excludible and non rival
=“Free riders” = collective action problems
“Hegemonic Stability Theory”:
HST argues that “Politics” still dominant over economics - Economic “cooperation” becoming more difficult because of declining US power
HST claim: Economic system will only be “stable” and “open” when there is a hegemonic state.
“Hegemony” (Realism): Leadership, or dominance of international system by single state
Like liberalism, Assumes free trade and globalization good in theory
But unlikely to occur because states mistrust one another under conditions of anarchy
“Free trade” and economic cooperation seen as public goods
Public goods are non excludible (all state have access to them) and non rival (use of the good does not reduce the amount available to others)
=“Free riders” – collective action problems (not normally rational for a state to contribute to creating these good because others will free ride.

15. “Hegemonic Stability Theory (HST)”:
Hegemonic state can either:
Provide public goods itself - So dominant economically that it is in its interest to do so
Force “free riders” to “pay” for public goods
Key claim: Hegemony = Liberal economic order
Problems:
What is hegemony????
Economic or military?
“Soft Power” or ideology?
How do we know when a state is hegemonic, or the world is uni-polar?

16. “Hegemonic Stability Theory (HST)”:
Problems:
1) Risk of tautology
“Reading off the “dependent variable”
2) Empirical record?
If US had declined by 1980s, why globalisation?
Contemporary Realism:
Retreat to “High Politics”?
Post 9/11 return to emphasis on security and military conflict
Economic issues have been “securitized”
1) Risk of tautology
There is risk of tautology here
Argument is
-Hegemony makes possible liberal order
-Evidence of break down suggest end of hegemony
-Stability suggests still hegemonic
We need to be able to measure hegemony or we can’t test the theory
2) Empirical record?
-If US had declined by 1980s, why globalisation?

17. Conclusions : a) Strengths of Realism: “Parsimony’ (?)
Focus on distributional outcomes – who gains what
Rejection of idealistic prescriptions of how the world should be

18. b) Weaknesses of Realism:
Domestic politics?
Under emphasis of importance of wealth and economics?
Empirical problems?
There seems to be a lot more economic cooperation then realists assumed likely
Does HST overcome this problem?
Venal -= mercenary or for sale, connotations of greedy self interested behavior
b) Weaknesses of Realism:
Domestic politics?
Under emphasis of importance of wealth and economics (China focus on getting wealthy right now . . .
“Venal conservatism” replaces idealism
Empirical problems
There seems to be a lot more economic cooperation then realists assumed likely
Does HST overcome this problem?
[China and the US]

19. Further Reading:
Samuel P. Huntington, “The Lonely Superpower,” Foreign Affairs, 78-2 (March/April 1999), pp
Example of realist analysis of contemporary US challenges.
Joseph M. Grieco, “Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism,” International Organization, 42-3 (Summer 1988), pp
John J. Mearsheimer, “The False Promise of International Institutions,” International Security, 19-3 (Winter 1994/95), pp
Examples of realism’s critiques of liberal challengers

20. For Next Time:
Unit Three: Thinking Liberally - Diversity and Hegemony in IPE
Required Reading:
Cohn, Ch. 4.
Class Discussion Reading:
Eric Helleiner, “Economic Liberalism and Its Critics: The Past as Prologue?,” Review of International Political Economy, 10-4 (November 2003), pp