Production and Distribution of Wealth - Essay Example

? International Relations: Production and Distribution of Wealth Institute of affiliate International Relations Production and Distribution of Wealth Human welfare depends entirely on incomes that they generate. These incomes maybe fixed by contracts, but in the real sense they are controlled by natural law. Profits, wages, and interests play different functions in this theory. The theory of production and distribution traces these incomes to their sources. Whether a producer gets the amount that he creates is one question, and whether the amount created is large enough to sustain him is another. Global economies among many nations are not distinct from one another; therefore, it is necessary to re-arrange the economic theory of these nations. This report will give an in-depth insight on why it is important to understand the production and distribution of wealth in regard to international relations. Several international political economy theorists categorically reject the idea of a state-centric international system and consider the state to be only one actor among many. According to Steve Smith, it is evident that the social, economic and political structures affect systems of production, trade and distribution. He defines international relations as the international economic system that is constituted of economic, social and political “arrangements” of production, trade and distribution. It is not the result of market dynamics or chance, but rather of human decisions, rules, customs and authorities. Smith tries to pinpoint the central authorities whose decisions determine the course of events and power relations at the international level (Smith, Dunne, & Kurki, 2010). There are few elements that influence power relations at the international level, which later affects the decisions of production and distribution of wealth. One of them being Relational Power: this creates a type of obligation where a major power obliges a smaller power to behave a certain way. Another one is Structural Power: this is the international political economy’s power of indirect influence to the framework in which wealth and resources are distributed. In addition, structural capabilities of a nation also determine the production and distribution of wealth. This is a parent material to which security structures fall into. The security structures are factors, which have historically been dominant, particularly during the bipolar period. The second is production structures: it constitutes the essential power of the IPE. Production structures respond to the question “Who produces what?" Through this power alliances are formed; businesses are developed and become autonomous from states and eventually become transnational. The growing influence of transnational society disrupts the effectiveness of national political economics. Thus, the state's authority dwindles to the point where it becomes powerless and loses influence over its own territory as well as its territory-based economy (Baylis, Smith, & Owens, 2008). It is important to understand the production and distribution of wealth since it involves representations invoked by the actors of world politics. A nation will find it simple to lay out procedures used in this process. After acquiring this information, it will be easy to investigate the practices that constitute entities called ‘actors’ capable of representation. This includes the cultural, economic, social, and political practices that produce particular actors e.g. states non-government organizations etc. it also includes the role of theorist and theories in representing some actors as more significant than others. This reorientation, which evolves from structuralism status as an approach to criticism rather than critical theory per se, is no less practical in its implications. The main question is, for both theorist and practitioners of international relations, why does analytic approaches privilege certain understandings of global politics and marginalizes others? The different modes of production and distribution, by which producers under the shield of equal security, might accomplish this project, is by enjoying the whole of the products of their own labor. Capital is required in order to make their labor productive. This is where the political system will give a helping hand so as to facilitate production. After production, the fruits of labor should be enjoyed fully by those who provided the labor force while the system should only get the surplus of what remains. During the production of wealth in a given state, the dominant transformative theory that emphasizes material factors takes its cue from Marxism. Marxism identifies the relations of production as the fundamental root of the world system. It argues that the manner in which humans have organized the way in which they use capital, technology, raw materials and labor power to produce economic value forms the foundation of society and international relations. In the modem world, the dominant manner of creating economic value is the capitalist mode of production (Smith, Booth, & Zalewski, 1996). This mode of production is fundamentally unjust. Marxists have argued that because it concentrates wealth in the hands of the owners of the means of production (called ‘capitalists’) while the rest of the economically active population has no other means to stay alive than to sell its labor power to these owners. The reality is, however, that many of the poorer countries of the world, for historical reasons rely very heavily on the export of a single raw material or agricultural product, but have to import a wide range of consumer and luxury goods. Because the price of raw materials, some agricultural goods tend to decline over time while the price of manufactured consumer goods rises. Single-commodity exporters get worse, and they have to borrow so as to stay afloat. In this way, inequality in the world economy is reproduced and perpetuated. The international flows of investment capital (Direct Foreign investment- DIF) also reproduce inequality. According to economic theory, the poorer countries should benefit from the relatively free flow of investment capital, which searches for the best returns on investment. Because labor and infrastructural costs on average are lower in developing countries than in developed countries, opportunities for higher returns exist in the so-called emerging markets of the world economy. Because they are poor, by definition, capital is scarce in Less Developed Countries (LDCs) and therefore, capital (according to supply and demand theory) should earn a better return in LDCs than in rich, capital-abundant countries. To enable one appreciate the reasons for production and distribution of wealth in international affairs, it is crucial to understand fundamental aspects of economics, domestic as well as foreign-the two spheres being thoroughly intertwined and interdependent. In that connection, there is a need to distinguish between; The comparatively free, open market, free enterprise economies of the West, based essentially on accumulation and use of privately owned and controlled finance capital and private property generally. The closed economies of socialist (communist) states, such as the Soviet Union, where all basic means of production and distribution of wealth including finance capital, land, and other resources, are state owned, and their uses planned, directed and controlled by the state bureaucratic and political leadership. The mixed socialist-capitalist, highly experimental economies of the less developed, newly independent countries of the Third and Fourth worlds. Global economies constitute the substance from which states are fashioned and without which they would not be states but mere assemblages of helpless human beings, easy prey to anyone with a design on their territory, their property, or their lives. Economic forces largely determine whether a state is to be taken seriously as a power factor on the international scene or whether it must resign itself to be a mere onlooker or victim. Economies produce the revenue (including taxes) which makes government and administration possible and which enables the latter to provide certain public services, which people expect routinely, such as health, welfare, education, police, and armed forces. Economies provide opportunities for gainful employment, which in turn produces the goods and services needed to keep the economy going and which the people expect and need to maintain, or if possible improve, their standard of living. The same processes provide the surpluses required to pay for research and development - to secure the future - for expansion of the armed forces at times of crisis or in preparation for war, to build up reserves of the means of payment for goods and services from abroad (foreign exchange reserves) (Connell, and Smith, 2003). Responsible governments are constantly under pressure to maximize their country's economic potential because standing still invites disaster in the face of rising birthrates and inflation. Coincident is ever-rising expectations of better or more consumer goods and more as well as improved public service. Then there are the pressures generated by mounting debt services - paying interests on domestic and foreign loans - expanding social service obligations, and for a growing number of rich and poor countries, ever more complex and sophisticated, hence costly, defense establishments. According to Linklater, he draws attention to dialogue as the key factor to achieving equitable distribution of wealth and resources. He outlines that an inquiry into specific dialogic community would connect with critiques of asymmetries of wealth and power. The transformation of political community comes fitted with the ethics of redistribution taking into account the creation of socioeconomic conditions for the effective involvement of all communicating members of any universal community (Linklater, Burchill, & Devetak, 2005). There are many approaches in the application of the international relations theory (IR) in achieving equitable wealth production and distribution: Offensive realism is one of the approaches. This theory involves perpetually seeking ways to gain power over rivals, towards the ultimate goal of hegemony. This will henceforth determine the distribution and production of wealth of that particular nation. Ontology: This is the philosophical study of the nature (reality) of the world and its components. Methodological divisions and debates in IR often reflect differing and even contradictory ontology, e.g. whether a nation should implement means and ways of production and distribution of wealth, or not. The alternative claim that international relations consist of shared human understandings expressed via dialogue, ideas, and concepts are associated with International Society. Pluralism: Along with solidarism, one of two International Society approaches to the potential conflict between state sovereignty and respect for equality among citizens. A pluralist view of the state system emphasizes the primacy of state sovereignty: a policy of non-intervention must be maintained even when another state is experiencing disagreement within its borders. Civil rights (within states) take precedence over rights of the citizens (between states). Positivism: A methodology in IR discipline that employs most of the attitudes and assumptions of behavioralism but does so in a more sophisticated way. Positivism is a fundamentally scientific approach. Its advocates and adherents believe that there can be objective knowledge of the social and political dimensions of the world and that this knowledge is obtainable through the careful development and testing of empirical propositions. Post-colonialism: This approach adopts a post-structural attitude in order to understand the situation in areas that were conquered by colonist, example in Africa, Asia, and Latin America. When Western scholars talk about ‘traditional,’ and ‘underdeveloped’ ‘Third World’ countries they are really constructing certain images of these areas, which reflect how the powerful dominate and organize the ways in which states in the South, are perceived and discussed. Any real liberation of the South thus needs to expose such images; only in that way can the road be paved for really democracy and equity in the production and distribution of wealth. Postmodern status: Are states with high levels of cross- border integration. The economy is globalized rather than ‘national’. Multi-level governance at the supranational, national, and sub-national level characterizes the policy. Collective loyalties are increasingly projected away from the state. Hence, it is most likely that the locals experience equal production and distribution of wealth. Postmodernism: this is a post-positivist approach to IR that rejects the modern, enlightenment idea that ever-expanding human knowledge will lead to an improved understanding and mastery of the international system. A distinctive feature of postmodernist discourse in IR is an inclination toward skepticism, debunking, and deconstruction of ‘universal truths‘— such as those advanced by Kant or Marx or Waltz— that are supposed to be valid for all times and places. Post-positivism: A methodology developed largely in reaction to positivist claims. Post-positivism presupposes methods that acknowledge the distinctiveness of human beings as such, i.e., Leaders must work with the locals in bringing and sharing the wealth with them. Post-positivist methodology rests on the proposition that people construct, and constitute the worlds in which they live, including the international world, which is an entirely human arrangement and nothing else. Social science is a different methodology from that of natural science. Post-positivist approaches: Are united by dissatisfaction with the established theoretical traditions in the discipline. They argue against positivist methodology with its focus on observable facts and measurable data. Post-positivists emphasize that IR theorists are an integrated part of the world they study. In that sense, theorists are insiders, not outsiders. They make certain assumptions and create certain images of reality; the understanding of a nation’s state of wealth and its distribution are not and cannot be neutral. There are competing claims about how the world hangs together and what makes it tick (Crawford and Jarvis, 2001). Conclusion Theorizing International Relations concerning the production and distribution of wealth is crucial in establishing the natural selection decisions of a nation. These natural selection decisions are mostly pioneered by the political system that is present. Power has decidedly shifted from states to markets, but not in all aspects or to the same degree across all issue areas and certainly not absolutely (in other words, states still have considerable autonomy in some policy spheres). In reaction, states have reshaped themselves. Some policy sectors and ministries spearheading the state’s interaction with the global economy example finance, trade and industry, the central bank and tourism have become more important. Others that bear less directly on the state's international economic relations like social welfare, healthcare, and labor have to take a back seat. This has brought about a number of shifts. Firstly, there has been u shift from macroeconomic to microeconomic intervention i.e. states can no longer effectively control monetary policy or aggregate employment. The state also, has increasingly relegated to agents for transnational policy regimes, such as those of the IMF. Secondly, there has been a move away from maintaining certain key strategic services or industries for self-sufficiency. This means that energy, food or arms production have been distributed as a response to competitive conditions in different economic issue areas. Connell (2003) has described this process of state transformation as a shift from states primarily insulating or protecting domestic constituencies from the disruptive impact of a tempestuous and volatile global economy. This is where globalization forces states to act more like businesses, subjecting the state's citizens as if they were employees, to the full force of the competitive global economy. The policy here is keeping up or getting out. This underlying ethos is referred to as ‘competition state’. This phenomenon will therefore, determine whether equitable production and distribution of wealth will take place or not. Therefore, it is important to understand a state’s position on the production and distribution of wealth so that international financial institutions may lay down structures that will facilitate this process based on international relations (Connell and Smith, 2003). Reference Dunne, T., Kurki, M., & Smith, S., 2010 International Relations Theories – Discipline and Diversity, 2nd edn, Oxford: Oxford University Press Baylis, J., Smith, S., Owens, P. 2008 The Globalization of World Politics – An Introduction to International Relations, 4th edn, Oxford: Oxford UP, Burchill, S., Linklater, A., Devetak, R., Donnelly, J., Paterson, M., Reus-Smit, C., True, J. 2005 Theories of International Relations, 3rd edn, Basingstoke: Palgrave Macmillan, Smith, S., Booth, K. Zalewski, M. (eds.) 1996 International Theory: Positivism and Beyond, Cambridge: Cambridge UP, Connell, J., and Smith, G. 2003 Politics and the Environment – From Theory to Practice, 2nd edn, London: Routledge, Crawford, R., and Jarvis, D. (eds.) 2001 International Relations – Still an American Social Science? – Toward Diversity in International Thought, New York: State University of New York Press, Read More