Neo-Liberalism as a Fundamental New Approach in International Relations Theory - Coursework Example

Neo-liberalism is a Fundamental New Approach in International Relations Theory Neo-liberalism is a concept that focuses on the idea that countries are supposed to be concerned primarily about unconditional gains and not relative gains (relative to other countries). It is a concept that stemmed from Germany in the period between the First and the Second World War. The Great Depression of the 1930s showed the way to the development of neo-liberalism and invigorated socialism and Keynesian school of thoughts (Hartwich, 2009, pp. 7-23). Mainly the goal is to run an economy that is not solely led by private interests or public interests. Neo-liberalism works to move a part of the economy’s control to the private sector from the public sector. That is to say that neo-liberalism is an economic conception that values the ideals of free and unregulated market and globalization. Therefore, neo-liberalism occupies a fundamental position in the theory of International Relations. Neo-liberalism is a concept of political and economic practices that put forwards that human welfare can best be developed by liberating personal industrial freedoms and expertise inside an institutional framework typified by sound private property rights, unregulated and free markets along with free trade (Harvey, 2007). In the period after 1945, the liberals resorted to international institutions to perform several functions that the state could not carry out. This was the mechanism behind the integration theory in Europe and pluralism theory in the United States of America. Near the beginning of the 1970s, pluralism had built up a considerable challenge to realism and showed the way to neo-liberalism. Neo-liberalism stands for a more refined theoretical challenge to existing realism. They give explanation to the durability of institutions in spite of significant changes in circumstances. As said by neo-liberals, institutions exercise a causal influence on international relations, determining state preferences and fastening them in to two-way co-operative arrangements. It concentrates on new players like transnational corporations, NGOs (non-governmental organizations) and new types of relations like interdependence and integration (Galbreath, n.d.). Basically neo-liberalism states that free trade and unregulated market along with unobstructed supply of capital will lead to the production of the most efficient products that are most economically, socially and politically viable. It emphasizes on the significance of sound institutions like property rights, freedom of agreement, open markets, rules of legal responsibility, and monetary stability as nuts and bolts for markets to show a profit and thrive (Hartwich, 2009, p. 23).. As stated, neo-liberalism propagates ideas that emphasize on regimes and institutions which facilitate and mediate the governance of an anarchic and a competitive international structure. This encourages as well as necessitates multilaterism as well as cooperation as a way of fostering national interests. The institutionalists of the neo-liberal regimes focus on issues related to political economy, environment and human rights which comprise the low politics issue agenda (Galbreath, n.d.). They are more alert about absolute gains compared to relative gains since they believe that everyone would benefit from the absolute gains. This is because they believe that the others actors in the economy will cooperate with the state if they are assured that all the states would act in accordance with the rules and believe that cooperation will lead to absolute gains. Neo-liberalism consists of both collection of theoretical principles and a set of socio-political practices, every single one of which is aimed at extending and intensifying capitalist market relations in nearly all the realms of social lives. A good deal of such neo-liberal assault on notions of the public and its associated institutions has been substantiated with recourse to the conception of globalization. Besides, larger incorporation into the global market is considered as the universal remedy to poverty, social disparity and economic backwardness. Hence, globalization is a means to increase the size of the economy into one big entity since a larger territory has a greater amount of wealth and higher standard of living (Angell, 2007, p.42, pp.288-290). Neo-liberal policies that range from fiscal asceticism to anti-labor legislation are as a result being adopted through the tune of globalization as the sole game in play. Such policies are moreover being expediently externalized in ways that consign responsibility for their approval on the apparently unfamiliar and elusive forces of the world market. It is considered that the neo-liberal concept and policy of globalization attempts to achieve a restructuring of the relationship between the States and the markets on an international level (Colas, n.d.). Neo-liberalism both as a theory and course of action has not caused capitalist globalization. However it has certainly brought in and facilitated this process. In actual fact, neo-liberalism can be defined as the response to the predicament in the world capitalist structure after 1973, which led to the deepening and speeding up of the transnational propensities of capitalist globalization (Colas, n.d.). The crisis that took place was political as well as economic. It questioned the authenticity of states, both capitalist and revolutionary alike and plunged highly developed capitalist economies into an unmitigated phase of inflation, recession and bulk unemployment. It also subjugated weaker capitalist nations to neo-liberal reorganizing through the regulation of international debt. Out of this predicament there emerged a collection of policy prescriptions sustained by a new pattern of social forces. These policies through resorting to the neo-classical doctrines encouraged the types of interdependence and multilateral guidelines that is at present known as globalization. Similar to capitalist globalization, the unfolding of neo-liberalism was an irregular and long-drawn-out process, exposed to all types of socio-political challenges and contingencies. Some of the central capitalist states such as Germany and Japan pursued a fairly watered down form of neo-liberalism. Again some of the larger developing economies such as India and the People’s Republic of China put into practice these policies at a pace guided by their ability which were distinguished by national compared to international political and economic factors. It thus becomes important to make out different periods in the worldwide spread of neo-liberal programmes, and to differentiate between the diverse ways in which such policies were adopted by states with highly different capabilities and positions in the hierarchy of the global system (Colas, n.d.). Such differences define the role of neo-liberalism in International Relations theory even more explicitly. The majority of neo-liberals therefore see globalization as a likely upshot of an untrammeled capitalist market. They consider it to be a positive process that unfolds slickly once artificial distortions formed by the state, scope for political advantage or other prospects for rent seeking are eliminated from the path of unrestricted and equal exchange. The guiding postulation in such neo-liberal or neo-classical interpretations of the capitalist market is that our world consists of rational and utility-maximizing units that usually refer to firms. These firms by following a profit-guided approach through free and unfettered exchange and in due course lead to a market equilibrium. The point of equilibrium explained most fundamentally through the concepts of law of supply and demand signifies the most efficient means of generating wealth and apportioning limited resources (which may be human, natural or man-made). Hence, this equilibrium point explicates the intrinsic worth of the free market and competitive efficiency (Colas, n.d.). The neo-liberals concentrated more on enhancing cooperation on an international scale. They thought that if more power was bestowed upon the United Nations and if enticements were given to states so that all of them would act in accordance with UN decisions, then the international institution could be the authority that is missing in the anarchic international structure. A further major focus of neo-liberalism is free trade. It is considered by neo-liberals that if free trade is carried out internationally, all the nations equally would experience that the disparity between the developed and underdeveloped countries of the world has been reduced and both would reap the economic benefits of such a global trade. Moreover, neo-liberalism played an important part in supporting the relatively weaker economies in the global structure through the conception of International Financial Institutions. Neo-liberalism has spread in the developing world through the system of Structural Adjustment Programs (SAPs) framed by the International Monetary Fund (IMF) in the 1980s. These were implemented as a prerequisite for borrowing or receiving loans from IFIs. Apart from IFIs, other multilateral institutions such as the OECD and WTO have played an important part in the neo-liberalism regime (Colas, n.d.). The main points that are attached with the concept of neo-liberalism in relation to International Relations theory is that the States are one of the many actors in an economy that are complex and yet rational. Also States exist with institutionalized cooperation and ask for cooperation rather than conflicts. The present regime of globalization has led to the conceptions of neo-liberalism as the new foundation of International Relations Theory. References 1. Hartwich, O. M., 2009, “Neoliberalism: The Genesis of a Political Swearword”, Available from: http://www.cis.org.au/temp/op114_neoliberalism.pdf (Accessed on Mar 9, 2010). 2. Galbreath, D, n.d., “Neo-liberalism, IR2501 Theories of International Relations”, available from: http://www.abdn.ac.uk/pir/notes05/Level2/IR2501/neolib%20web06.pdf (Accessed on Mar 9, 2010). 3. Harvey, D, 2005, A Brief History of Neoliberalism, Oxford University Press. 4. Colas, A, n.d., “Neo-Liberalism, Globalisation and International Relations”, Available from: http://www.bbk.ac.uk/polsoc/staff/academic/alejandro-colas/colas-neo (Accessed on Mar 9, 2010). 5. Angell, N. 2007. The Great Illusion, New York: Cosimo, Inc Read More