Fairly Contemporary Issue about Global Political Economy - Essay Example

Contemporary Issue about Global Political Economy The Global Political economy is an industry that has grown over the years. The political enemy mainly involves the states, and how the markets presented by this state’s affect one another. Hegemony is a critical issue when trying to explain political economy. This is because hegemony represents a post-war issue. Most economists understand it as an issue explainable in terms of international relationship. Hegemony to economists can be simply defined as a form of dominance. The dominance is a political one in the sense that the dominant state does have the power to exert influence to other system of states. During the post war, economists have studied hegemony and its' importance in global political economy. Kindleberger raises the thought that the world economy has to have a stabilizer for it to be stable and the stabilizer had to be one state. Keohane, on the other hand, presented the idea that most hegemony is established for self-interest. This he explains that in most cases once the hegemony fades the regimes established does linger in the economy for a long time (Keohane 103). Therefore, we argue: in view of the hegemonic theories by Keohane and Fukuyama how does the rise in power by other states cause the fading of hegemony? And also how does globalization affect the American hegemony? Fareed looks at the Post American world, which he states is not about power shift in the political aspect of the global economy, but rather it represents the rise of the rest of the states in terms of economic growth. Fareed explains that the political stability, economic connection and technological connection have enabled the American dominance in the market to lessen and allow other states to rise above the American dominance. Fareed looks at the world in 1979 where the countries that were considered to have a robust economy were 33 countries (Fareed 30). The rest of the countries were locked out of the economic system. However, Fareed states that the post-war era has seen the collapse of communism systems and the soviet empire and a global market system been born in this new era. Let us consider the case of Russian and its rejection of the American influence. Russian strongly believed that central Asia and its backyard. The political interests of both Russia and the United States of America translate to some form of competition between the two nations to gain control over these regions. However, it is clear that the Russian state and the United States had one common interest to block the emergence of new nuclear power. The rise of Russia against the influence of the Americans was due to the fear that they would lose their control over central Asia if the United States influence continued to grow. The U.S had the upper hand considering their stable economy and their policies that looked good. The situation between the US and Russians over the Middle East does prove that hegemonic influences are usually based on self, and it is true that a better state in terms of the economy does gain the upper hand in the influence. The Russians did manage to get influence once their economy rose to match the Americans economy and this happened once the Soviet Union was dissolved. Fareed examines the fade in American dominance, in fields that are key economic indicators of growth. Fareed gives an example the field of patterns produced where china stands to outdo America. Fareed also gives an example of the expansion of Chinas power in Asia as well as Africa, which in the earlier years was US hegemony. Fareed explains that, in any political system, there can never be two dominant countries. Fareed asserts that the rise of the rest of the world is an economic phenomenon. The shift of dominance from industrial, financial, educational social cultural dimensions is evident. The American dominance is evident at the politico-military level. The rise of the rest of the world does define new roles in the global system not only politically but also economically. In view of Zacharias insights, we wonder if Keohanes ideas do hold some truth. Keohane seems to be in favour of Zacharias that dominance does fade, but he asserts that even when dominance fades the established regimes become a part of the global economy for a longer period. therefore Fukuyama, on the other hand, does state that nations are embracing globalization and are against the American hegemony. Fukuyama does refer to Fernando’s Cardoso quote that agrees with an idea presented by fareed in his book. The quote does support Fareeds statement, which did recognize the end of communism, as well as the end of the Soviet Union. This meant the face of the global economy was indeed undergoing transition; Fukuyama associates these events with his description of the end of history, which is similar to Fareeds book the post American war. Let us consider the nuclear conflict existing between America and Iran. The united states so far are using their military power as the main hegemonic source to still influence the world policies. However, Iran have come up with plans to manufacture nuclear weapons that a have proved to be powerful than the U.S weapons. The two countries are also so interested in the Persian Gulf which is once any of the two countries manages to get control over it makes the society immensely powerful. Iran’s control over the Persian Gulf does make them powerful than the United States, therefore, their hegemonic influence over the Arab countries does lie on conquering the control over Persian Gulf. This interest does prove the theory that hegemonic interest are because of self-interest and power seems to be the interest of both Iran and America. On the Other Hand, we consider Qatar a common link between the two countries Qatar provides a base for the United States army in exchange for protection against attacks, however, being an Arab country Iran wishes to gain support from Qatar in its program of manufacturing the nuclear weapons. The hegemonic fading of America does leave Qatar with an established army to control its nation. Fukuyama claims that the end of history is an interpretation of modernization in the sense that it acknowledges the rise of other countries. An example is china and India who their economic integration is a force to reckon with in this era. Fukuyama examines china closely and concludes that Chinas success is through the adoption of the relevant capitalist rules into their authoritarian political system (Fukuyama 26). Fukuyama and Fareed seem to agree that china is changing the transformation does rhyme the way the western countries did achieve the change. China is becoming a powerful country economically. Looking at production industrialization financially the country is powerful. The country almost rhymes the world’s superpower the United States. It is evident that china has proven to better than the united states in terms of production. China has proven that American dominance is fading. However, the fact that countries adopted the system of the Americans in terms of production and even perfected the skill does prove that the regime of dominance continues to exist even after dominance fades (Fareed 58). Fukuyama believes the control of the U.S over countries has been fading over the years, and this is what explains the concept end of history. Fukuyama believes that the European Union does present an ideal structure that the contemporary global political economy needs to adapt. The united states present a clear example for a politically and economically successful society (Fukuyama 25). This presentation is what countries like china and other powerful countries are trying to attain. This presents a trend that a dominant state has set and remains in the economy for a long time even when the dominance of U.S fades. China in the spirit gaining power has expanded it control over Asia and is slowly gaining control over Africa. Fareeds idea that other powers are rising is proven by Chinas prosperity in Areas once dominated by the United States (Fareed 50). Scholars like kindelberger gave rise to the Hegemonic Stability theory where they believed that the distribution of power among states did give the international economy stability. However, keohane and other scholars do disagree with this concept (25). Just like Fareed, Keohane and other scholars believe that the possession of power by one state does not offer the world the desired influence. The dominance of one country may not benefit the global economy, but it would cause conflict and sometimes a political clash in a stable economic system. Keohane does agree that hegemony does play an enormous role in setting up the international institutions that contribute to the success of the global economy. However, keohane does believe that when the hegemony fades does not translate to a collapse of the institutions, but he asserts that these states do prosper in making the global economy a success (keohane 105). Fareed explains the contemporary global economy is different when compared to the economies that preceded it. The American dominance in the economy has been unique and has allowed the global economy to expand (Fareed 88). The U.S dominance in the global economy was shaken during the Russia/Brazil crisis, which was made worse by the recession in 2001. The recession slowed down production, reduced household savings, which created a large trade deficit. Globalization in the modern economy means escalating the incorporation of the national economies into a single body. It is evident that after the post war globalization increased. Globalization has proven to be beneficial for many states in the sense that it increases the net worth of most countries. However, it is also true that globalization does have a political effect on many of the states (Fareed 90). Globalization has been seen to exert pressure on numerous states to alter their policies and institutions in a given manner. This has been a way of converging policies among the countries already exposed to modern global economy. Scholars advice that for an effective global economy there's a need in liberalizing trade policy, the removal of capital controls, the opening of financial markets to foreign investors and lastly reducing the role of the state in the economy. Globalization in the modern economy transfers power to investors, multinational firms as well as global financial institutions. These groups have the power to change the economic policies and punish the states that do not comply by the rules. These institutions have proven to the reduction of the American dominance in designing policies for states under their regulation. The globalization of the market does reduce the dominance of the Americans in the market and allows other states to enjoy the rise in power brought about by their change in policies. However, many would argue that the global institutions that formulate the new policies are a product of the American dominance. This does hold some truth, but the institution does operate separately from the American state. The American power and globalization relate because the United States policies does shape the current international economy. Many anti-American states believe that the global economy is still controlled by the Americans. Therefore, they believe that the global economy is an extension of the American trade policies and the exertion of the U.S power on other states. However, the united States deny the allegations and respond by stating that the Americans also feel the constraints set by the global market. " In my opinion the hegemony has a historical context, it existed before the First World War, and this was mainly under the power of Britain. However, after the world war II American strong economy gave it the power to control the trade policies of other state and the economy of the world. The hegemonies according to many scholars did contribute to global political economy in different ways. In the fading of the hegemonies, it is evident that the global economy does possess regimes that reflect the British regimes and others that reflect the American regime. The distribution of power among states in the global economy does rid the states the mentality that the American hegemony is still a part of the global economy. However, it is of considerable importance that the global market should acknowledge that the American influence has been influential in setting up politically, and economically successful societies. The American hegemony has been useful in setting up healthy competition among nations that have risen up to be the best in production, as well as strengthening of their economies. The American hegemony has created regimes that have been of help in coming up with a global market. The American hegemony has proven to be useful in setting up institutions that operate separately to ensure that the developing countries are integrated into the global market, and they make a significant contribution to the market. Keohane was right when he stated that hegemonies do fade, but the regimes set up by these hegemonies continue to exist, and effect the changes needed in the creation of a global political economy. It is clear that Fareeds idea of the rising of power of other states is evident in the global market; however, the dominance of two nations in power over a region is not appropriate for political stability. Work Cited Bousfield, Dan. Hegemony in International Political Economy. 12 July 2009. 12 April 2010 . Fareed, Zakaria. The Post America War. w.w.Norton & Company, 2011.Print Fukuyama, Francis. “The Clash of Cultures and American Hegemony.” The American Interest 1 September 2006: 25-27.Print Keohane, Robert. After Hegemony: Cooperation and Disord in the World Political Economy. Princeton: Princeton University press, 1984.Print Narouzi, Ebrahim. Iran Oppossess U.S Hegemony. 2 January 2012. 12 April 2012 Read More