International political economy (IPE) focuses on two interrelated fields that are crucial for the state, economy and politics. Researchers identify three major perspective within the discipline: mercantilism, liberalism and structuralism (Wullweber 2014, 80). Gilpin (2001, 52) notes that economy is a dynamic system that evolves and responds to the changing environment and also causes changes. It is possible to note that the three perspectives respond to the three stages of economy development. The three perspectives have some traits in common, but they are also quite different in major points.
First, it is necessary to note that the three perspectives developed during different periods. Mercantilism existed between sixteens and the late eighteenth centuries (Balaam & Dillman 2012, 57). Liberalism replaced this perspective in the 18th century and was primary during the 19th century. However, structuralism came into being in the 19th century and many people utilized this perspective. It is necessary to note that liberalism and structuralism are both quite widely used by different researchers in the contemporary world (Smith, El-Anis & Farrands 2014, 34).
One of major similarities between the perspectives is their focus on such concepts as the state, economy, power, wealth, production, and authority. The three perspectives focus on the relationships between the state and economy as well as the way they affect each other. Another important similarity is that wealth accumulation and associated conflicts are seen as natural. It is also important to add that the idea of the conflict is leading in the three perspectives as it is accepted that there are conflicting forces that try to control production and wealth distribution (be it a state or a person).
It is necessary to note that the three perspectives are characterized by quite different views on wealth accumulation/production and mercantilism stands out against the other two perspectives. At this point, it is necessary to note that mercantilism is seen as “the oldest and psychologically most deeply embedded” perspective, that is based on the ideas of power and wealth accumulation (Balaam & Dillman 2012, 56). In terms of this perspective, people strived to develop a specific balance between trade and production. Thus, it was a norm to bring resources (usually gold and silver as well as other materials) from colonies, produce and sell goods in the state (and, in later periods, to sell products in colonies). The major good for the state was the ability to accumulate more wealth and those who could do that (usually merchants) received unprecedented assistance of the state. Merchants paid significant taxes and rulers provided them with numerous opportunities to continue their activities as well as monopolize entire sectors of economy. Development of industries and creating jobs was never a focus at that period as people concentrated on imports of gold. Development of industries was a by-product of merchants’ and the state rulers’ activities and policies.
The other two perspectives have a different view on the matter, which can be explained by peculiarities of the epochs. First, it is necessary to note that mercantilism flourished during the feudal system and gave a potent impetus for development of industries. However, the perspective was not viable in a highly industrialized world. Liberalism and structuralism are based on the ideas of internal development of the economy (Ike and Eze 2013, 16). In other words, it is believed that the state has to produce goods and distribute them in different markets rather than try to obtain resources and accumulate wealth. In terms of the two perspectives, it was essential to accumulate wealth through extensive production, optimization and technological development. These two perspectives took into account the need to distribute opportunities among people. According to liberalism and structuralism, all people have the right to enjoy resources and benefit from the use of these resources.
As far as other differences are concerned, the three perspectives hold different views on the way the state can, should or has to control wealth distribution. This is one of the most significant differences and they need to be considered in detail. As has been mentioned above, mercantilism is based on the principle of wealth accumulation and state support of people accumulating wealth. Rulers of the state provided administrative support to merchants who filled the treasury (Turner 2013, 153). Therefore, it is possible to note that the state had total control of the wealth accumulation and distribution.
Liberalism, a perspective that replaced mercantilism, opposed strict control of the state. More so, the perspective was based on the idea of liberation for the state control, as it was believed that the more the state is involved the worse for the economy (Balaam & Dillman 2012, 28). Proponents of the perspective stressed that economy should be regulated by natural laws of the market and any interference may break the natural cause of affairs and harm further development of the economy. Supporters of liberalism stress that a person has the right to start a business, to use resources and to accumulate profit without the permission from the state. The perspective is quite widespread these days (Tilzey 2006, 1). Importantly, according to liberalism, individuals have an inherent desire to act for the good of all and, hence, they will share their profits to make the state strong (Petre 2013, 122).
Structuralism also has a specific view on the state control and it opposes both perspectives mentioned above. Proponents of structuralism stress that the market cannot be self-governed, as people tend to strive for wealth accumulation, which can often be achieved at the expense of others (Commons 2012, 158). Structuralism holds it that the lack of the state control will lead to the economy where a small group of people will accumulate a significant amount of wealth while other people will be deprived of resources (Balaam & Dillman 2012, 84). Supporters of structuralism emphasize that the state has to control fair distribution of wealth among all people. This is likely to be quite a strict control, though, it is crucial according to proponents of the perspective.
In conclusion, it is possible to note that mercantilism, liberalism and structuralism are three major perspectives within IPE that concentrate on the relationship between the state and economy. It is possible to note that the three perspectives have certain similarities and differences. As for similarities, they all focus on such concepts as power, wealth, production and distribution. It is also important to note that mercantilism stands out against the other two perspectives. It is based on the idea of wealth accumulation through export of resources. The other two perspectives focus on development of the market, technology, production. The three perspectives are also different in their attitudes towards the state control. Mercantilism and structuralism support the idea while supporters of liberalism are ardent opponents of the control. It is also necessary to add that liberalism and structuralism are still found in the contemporary world and it still quite unclear which of these two perspective is the most efficient.
References
Balaam, David, and Bradford Dillman. (2012). Introduction to International Political Economy. New York, NY: Pearson.
Commons, John Rogers. (2012). Legal Foundations of Capitalism. Clark, NJ: The Lawbook Exchange, Ltd.
Ike, Nnia, and Ukamaka Teresa Eze. (2013). “Liberalism and Realism: A Matrix for Political Economy”. International Journal of Business and Management Review, 1 (4), 15-25.
Gilpin, Robert. (2001). Global Political Economy: Understanding the International Economic Order. Princeton, NJ: Princeton University Press.
Petre, Silviu. (2013). “Politics Versus Political Economy in European Dfeence: A Constructivist Critique of Transnational Liberalism”. The Public Administration and Social Policies Review, 2 (11), 121-139.
Smith, Roy, Imad El-Anis and Christopher Farrands. (2014). International Political Economy in the 21st Century: Contemporary Issues and Analyses. New York, NY: Routledge.
Tilzey, Mark. (2006). “Neo-Liberalism, the WTO and New Modes of Agrienvironmental Governance in the European Union, the USA and Australia”. International Journal of Sociology of Food and Agriculture, 14 (1), 1-28.
Turner, Henry S. (2013). “Corporations: Humanism and Elizabethan Political Economy.” In Mercantilism Reimagined: Political Economy in Early Modern Britain and Its Empire, edited by Phillip J. Stern and Carl Wennerlind, 153-177. New York, NY: Oxford University Press.
Wullweber, Joscha. (2014). “International Competition and Nanotechnology Policies: Discourse, Hegemony, and International Political Economy.” In The Global Politics of Science and Technology, edited by Maximilian Mayer, Mariana Carpes and Ruth Knoblich, 75-91. New York, NY: Springer.