The modern globalized world can be regarded from different perspectives, but it is evident that countries interact and evolve. Realism is still a popular theoretical paradigm to address concepts and issues related to the global economy and the global political economy. This theoretical framework is deeply rooted in the ideas of Thucydides, Machiavelli, Hobbes, and List (Frieden & Lake, 2003).
Realists emphasize that the world economy is anarchic and the nation-states struggle for survival. Frieden and Lake (2003) note that realism is based on the idea that nation-states are major actors while other theories focus on the individual (Liberal paradigm) or classes (Marxist approach). According to realists, the global economy is a zero-sum game as some countries gain more wealth and power while periphery states continue experiencing losses. Many researchers have criticized the realists’ claims for their pessimistic perspectives, but it is necessary to note that the approach provides insights into the way the modern world economy develops. It is possible to consider major realists’ claims to understand whether the global economy is a zero-sum game.
Financial Arena
The distribution of power can be regarded as one of the central claims of realists who stress that nation-state struggle for dominance and these efforts lead to a zero-sum game. This claim is sound as the struggle for power and dominance is apparent in various areas. One of these areas is the financial market where investment has become an important tool to acquire more power. Keohane (2009) states that China’s entry into the global market (as well as the financial sphere) can be illustrated with a metaphor of an “elephant jumping into a small pond” (p. 41).
The effects of this entry are considerable as China (the nation-state as well as individuals) invests in various projects across the globe. These investments increase the country’s weight in the economic and political arenas. China is becoming one of the key actors in the international arena through its financial potential as well as its political efforts. This country is a member-state of major international institutions that are favorable platforms for the spread of its influence.
International Organizations
The struggle for power and dominance as the key driver of international relations is also obvious. Realists claim that states’ survival is at stake, and they try to gain more power to affect the way international relations develop. For instance, the voice in the international arena is regarded as one of the most potent tools to gain or retain power. Vestergaard and Wade (2013) argue that western states try to retain their power through dominance in numerous international organizations.
The researchers note that the World Bank is one of the battlefields where western countries manage to have the strongest voices. The distribution of votes reflects the way power is distributed in other organizations as well as the global political and economic arenas. Western countries have had more resources and, hence, they now have the most votes and can (and do) shape the organization’s agenda.
Such international organizations as the World Bank can also be an illustration of the way the zero-sum game is the basis of the global economy as seen by realism proponents. For instance, China is becoming one of the key players in such international entities as the country has more funds to obtain more votes (Vestergaard & Wade, 2013). It is clear that the more votes China gets, the fewer votes other countries (both developed and developing) can gain. In other words, China receives gains and accumulates power while other countries (usually developing) lose certain points and the opportunity to influence the decision-making process.
The International Monetary Fund (IMF) is another organization where western countries (especially the USA, the UK, Germany, and so on) have the last word and lead the decision-making process (Woods, 2007). The organization is aimed at becoming a restraining force that could ensure equal opportunities for all states. It was aimed at restricting the influence of developed countries. Nonetheless, developed countries still make major decisions that often result in the zero-sum game outcomes where some countries gain at the expense of other states. For instance, the organization provides funds to developing countries that are in a particular developed country’s sphere of influence, which often means that other countries lose opportunities.
International Relations
Notably, the way nation-states act in the international arena is of specific interest as it is another illustration of the soundness of the realist perspective. The World Trade Organization (WTO) can be seen as another example of the zero-sum game. The Doha Round negotiations reveal the essence of countries’ policies and inclinations to gain as much power as possible. Gallagher (2008) notes that developed countries try to retain their power through various initiatives introduced in the international arena. The negotiations on agricultural issues unveil these attempts as the proposals would benefit developed countries.
At the same time, the costs (or rather losses) of developing countries were significantly higher than potential benefits. Seeing that, developing countries were against such agricultural incentives. These negotiations illustrate the realists’ views on the constant struggle for power. Thus, wealthy states try to retain power and dominance while less well-off countries try to gain more power to survive and keep their sovereignty.
Some researchers criticize realism for its pessimism and inability to explain the nature of international relations especially when it comes to close collaboration and international institutions. For example, Walter and Sen (2008) argue that realists are too concerned about “economic conflict and protectionism” and fail to interpret “cooperation is driven by mutual self-interest” (p. 10). Nonetheless, the realism paradigm manages to explain these phenomena and trends as the so-called self-interest is what realism proponents call the struggle for power. International organizations mainly serve the interests of the countries that created them (Woods, 2007).
The distribution of power within the organization is similar to the one in the world political and economic spheres as the richer and more developed a country is the more power it can gain. It has also become quite clear that the incentives of international organizations (WTO, IMF, and so on) lead to benefits for developed countries and losses for developing states, which is a conventional illustration of the zero-sum game. Wood (2007) states that there are some attempts to implement changes in various international organizations, but these efforts are insufficient and are unlikely to create a more favorable atmosphere for periphery nation-states.
Personal Opinion
In my opinion, realists’ perspective is sound and well-grounded as it is possible to find illustrations of their major claims. Thus, the major driving force of the global economy and politics is the struggle for power and dominance. States try to gain the power to make sure that their interests are met in the international arena. At present, all (or almost all) the countries are involved in the global trade that can be regarded as an opportunity to accumulate resources (money, technology, labor force, and so on) and develop.
Developed countries have considerable resources and can often affect the decisions made in the international arena. At the same time, developing countries are trying to resist developed states’ attempts to restrict their sovereignty. I do not believe countries cooperate to achieve a certain equilibrium that will be beneficial for all. Countries compromise and sometimes share their power, but it often turns out that richer countries always gain more and reach their long-term goals.
Conclusion
To sum up, it is possible to note that realists’ perspective manages to explain the processes that take place in the economic and political arenas. Nation-states are major actors that try to gain or retain power. Developed countries try to retain their dominance, which is already quite a difficult task as such emerging economies as China are becoming influential players. At the same time, it is also clear that the more power a country gains, the less power other countries have.
Thus, resources are allocated to favor developed countries and states within their sphere of influence. International organizations that are often designed to ensure equal opportunities for countries and fair practices fail to meet these goals. Developed states often have the strongest voices in such international entities and periphery countries often have to follow the rules created by and in favor of well-off countries.
References
Gallagher, K. (2008). Understanding developing country resistance to the Doha Round. Review of International Political Economy, 15(1), 62-85.
Frieden, J.A., & Lake, D.A. (2003). International political economy: Perspectives on global power and wealth. New York, NY: Routledge.
Keohane, R.O. (2009). The old IPE and the new, Review of International Political Economy,16(1), 34-46.
Vestergaard, J., & Wade, R. (2013). Protecting power: How western states retain the dominant voice in the world bank’s governance. World Development, 46, 153-164.
Walter, A., & Sen, G. (2008). Analyzing the global political economy. Princeton, NJ: Princeton University Press.
Woods, N. (2007). Global governance after the financial crisis: A new multilateralism or the last grasp of the great powers? Global Policy, 1(1), 51-63.