Historical Materialism and Liberal Approaches to Globalization - Coursework Example

Historical Materialism and Liberal Approaches to Globalization Introduction Globalization is a reality that has come to stay in our world. It is conceptually the geographical spread and networks among societies of the world. At the same time this interaction happens frequently with more intensity. While it has its obvious advantages like a better standard of living, it has shortcomings in the form of the global decline. In this essay we distinguish between the two major approaches to globalization, namely Historical Materialism and Liberalism. These two systems have become the most influencing factor in every sphere of the modern life. Each has its relative merits and drawbacks. With the passage of time, their relevance to the world also has changed. This is an attempt to compare the two in an impartial manner. We distinguish the two approaches by covering various aspects to this problem from both these standpoints. Definition of Historical Materialism and Liberal approaches Historical Materialism has its roots in Marxist theory, which states the entire world strives for economic change. Marx argued that “society must be analyzed from the structure of social relations and not from individual choices”1. Hence, every nation attempts to develop its domestic economy in order to provide an appropriate standard of living for its society. Political power is possible only if the entire country’s population is transformed economically. States seek material wellbeing of their people; hence, economic factors mold the lives of the general public. This approach is historical in that it alters class structure by considering the divide between a prosperous north and an impoverished south in the world system. Marxists believe slavery should be abolished to remove this unequal class structure. Other distinctions such as landowner and serf in terms of landholdings, and Bourgeoisie and proletariat in terms of a capitalist structure should also be eliminated to create a classless society. Marxists stress economic change drives politics and focuses on mode of production which is how human labor is utilized to produce what is required for survival. Historical Materialism broadly divides the class structure into two sets of people viz. the Bourgeoisie who are capitalists who pump in capital to earn profits. The proletariats, on the other hand, are the workers who work to earn wages and thereby provide the capitalists their profits. Historical Materialists are indebted to Antonio Gramsci for his contribution to the field. According to his theory of cultural hegemony, nations use culture to hold onto power in capitalist economies. Governments use cultural institutions to further their agenda in a specific and targeted manner. Beginning with cultural hegemony, Gramsci emphasizes Historic Bloc, which is a social practice based on important values. Theories, in general are used to explain why a society does something. Hence the practices are the structure which is based on the theory that forms the superstructure. The concept of liberalism commences with European Enlightenment. This led to concepts like laissez faire economics which professes comparative advantage of Ricardo Smith or absolute advantage of Adam Smith or the government funding in public sector projects as postulated by Keynes. However, intervention on the side of the government in economic matters is criticized due to the restrictions it places and its inefficient nature. Liberalism is a positivist theory where non-state actors also play their part. This approach commences with a Prisoner’s Dilemma. However, liberals feel that this is not constant and can be overcome2.Though there are many variants to liberalism, according to Mark Zacher and Richard Mathew, international relations are furthering greater human liberty through peace and prosperity. The liberal International Theory has variants within itself. Each such type envisages different solutions and brings along different merits and demerits. Some of these include the orthodox, the neoliberals, the interventionists and institutionists and the like. The orthodox among the liberals called for laissez faire economy; meaning states should hardly interference in the market. Privatization of government property and investing abroad were among many policies of the government. Margaret Thatcher and Ronald Reagan were advocates of this strand. The Neoliberalism approach consists of Republican or Democratic Peace Research, Commercial and Regulatory. According to Doyle, the Republican flavor elucidates the growing number of democracies in the world could lead to greater international peace and cooperation. In the Commercial (Economic) flavor, Keohane and Nye focus on how interdependence in certain areas, such as capitalist markets etc. could lead to international cooperation. Keohane explains how the Regulatory flavor stresses on the importance of education on the impact of International Organizations (IOs) for international cooperation3. The interventionists demand a certain amount of involvement from the government in the market policies so justice prevails in society. They do not go to the extreme of economic activities controlled by the state but stress impartial play. Institutionists are of the opinion strong institutions such as the World Bank and International Monetary Fund (IMF) should act as a balancing factor when market crises arise, providing the necessary expertise and assistance to mitigate such catastrophes. Historical Materialism and Liberal scholars adopt multiple common assumptions Historical Materialism and Liberal scholars have their assumptions. Historical Materialists argue on the basis of a structure and superstructure prevailing in the society. Productive forces interact to form an economic structure which leads to other subsystems4. Liberals assume that the major players in politics are part of civil society. The state and the society interact between themselves. It is on this basis that states make their decisions5. Liberals make some common assumptions. Industrialization and modernization have led to more co-operation. However, this co-operation cannot be easily achieved. Information and communication play a vital role in destroying the obstacles to collective action6. IOs also play an integral role in collective endeavors7. We can conclude that whatever be the approach, the basic assumption is one of a base or society from which to start the concept. The other is that of players on the economic theatre who interact among themselves. Being diametrically opposite, the core concepts look similar. Nevertheless, the two diverge from that point onwards. Historical Materialism and Liberal approaches to politics and economics According to Instrumental Marxism, there is a mismatch between the economic mode of production and the current political system. This is the case irrespective of whether it is a serf and landlord equation or a free market economy or a socialist state with a limited private sector. Hence, the government does not play a proactive role in the economy especially when there are pressures from within the state to ease the burden experienced by the common man. In other words, the state is not interested in safeguarding the people’s interests. Therefore, this lethargic attitude by the government signifies the government sides with capitalists who prevail economically. By neglecting the common man, the government weakens the state, since only one class benefits from economic growth. Marxists opine states are relatively free from capitalist influences. Furthermore states have the political power to restraint any segment of the population attempting to manipulate the government for its selfish gains. While states are not economically influenced by the middle class, known as Bourgeoisie, both have a common interest. The state and the Bourgeoisie want capitalism to survive. This is necessary for both state and middle class to prosper as the elites in the social structure. Liberals view politics and economics as two different activities which are independent of each other. Hence, the role of the state in economic affairs should be minimized. The government should focus on issues such as law and order, governance and social welfare. The state should provide infrastructure such as water, electricity and defense and not leave these fields to the private sector. It should also allow for free competition among various parties involved so that efficiency can be obtained at cheaper rates. The liberals argue states should allow markets to operate unhindered. This would lead to a division of labor based on the strengths of each state. Hence, it can provide goods and services at competitive rates and leave production of other commodities to other states. Historical Materialism and Liberal approaches to the causes and effects of Globalization Historical Materialists and Liberals view causes and consequences of globalization differently. Marxists feel globalization causes capitalists to increase their profits. However, they do not pass on the profits gained from enterprise to the workers who are equally responsible for it. Hence, capitalists gain an edge over labor. Therefore, when new technology is created, it creates more wealth in the hands of the capitalists as this leads at higher productivity at a lower cost. According to Marxists, only capitalists benefit from such a world economic system. Historical Materialists believe globalization hinders welfare and development. A state opens its domestic market to the world economy with high expectations. The state desires that the wealth created can develop its working class develops economically from the wealth created. While the state keeps its resources at the disposal of capitalists, there is no significant growth in employment. Historical Materialists opine that globalization exploits labor. The rich capitalists become richer in a capitalist system, whereas labor does not get any (in) tangible benefits from such a system. While labor is freely mobile and competitive, the gains accrue only to the capitalists. Liberals associate globalization with various factors. Technological development causes changes to spread far and wide as profits are involved. Market forces help disseminate these profits all over as new technology is efficient. International financial institutions like the IMF and World Bank (WB) also play a role. Since they share information among states, the true intentions of every player are apparent, thus reducing cheating free riding and transaction costs. The liberals apply theories for demonstrating their viewpoint. Institutional Theory is creating policies which highlight the formal and legal characteristics of administrative structures8. The interdependence theory shows the interaction between nation states in the economic and political field for mutual benefit. Modernization results in interdependence. It is affected and influenced by the leadership provided and the organizations supporting it9. Historical Materialism and Liberal approaches to Inequality and Poverty caused by globalization Historical Materialists and Liberals approach inequality and poverty as a result of globalization in contrasting ways. Liberals believe there is inequality initially as efficient workers are paid more. However, over time, those left behind also catch up as the system promotes excellence, which reduces poverty. Historical Materialists stress powerful states and MNCs benefit since resources are concentrated in their hands, thus they control the dictate the direction and pace of economic growth. Consequently smaller or less developed states and companies do not benefit and become mere vehicles to the growth of the elites. The inequality before World War I is seen as one of the reasons for abandoning globalization after the war10. Historical Materialism and Liberal approaches to Democracy caused by globalization The two approaches vary in the manner in which they view globalization leading to democracy. Liberals feel globalization furthers the cause of democracy. Liberals believe that transparency in business can be achieved only through a democratic process and by the rule of law. Furthermore democracy also removes arbitrariness and instills fair play. Historical Materialists believe poor in the south have certain disabilities which include lack of jobs, thus they cannot progress. Additionally less education means the type of employment they receive is of a lower level. Lack of health facilities mean increased costs and loss of man hours. Historical Materialists believe income plays a role in curbing democracy. The poor cannot influence political decisions due to their financial status. Hence, they are denied the fruits of democracy as only the rich are catered in such a world system. Hence, globalization results in moving accountability from the state to MNCs and International Institutions. There are instances of MNCs and the WB arm-twisting states regarding policy decisions. Since they have vested interests, the common man does not gain anything in the bargain. Historical Materialists believe that MNCs and IOs such as IMF and WB are a ‘Historical Bloc’ incentivizing a capitalistic world system. They claim that MNCs charge more than their fair share for goods & services, whereas the liberals consider them as agents of change11. Historical Materialism and Liberal approaches to North and South Relations These two approaches take separate paths in case of North-South relations also. Orthodox liberals opine that North South relations are of no consequence. Economic relations make all states interdependent thus they believe all states benefit from North and South relations. On the other hand, interventionist liberals believe there should be checks and balances to market forces. Unbridled growth could be disastrous at some point of time. Hence, the state should intervene at appropriate points to ensure everyone shares the benefits of economic growth. Historical Materialists are of the opinion contrary to liberals; the South is still dependent on the North. This is in terms of education, technology, local institutions, and investment. The South has failed to develop at the same pace and direction of the North. Resources from the South are moving to the North making it even richer, whereas the South becomes more impoverished. Raw materials and labor from the South are at the disposal of the North, further increasing the economic divide between the two. Critiques of Historical Materialism and Liberal approaches Both approaches have criticism leveled against them. The major grouse of the historical materialists is liberals do not pay attention to power which is concentrated in the hands of the elite. This is a vicious circle, as income inequality leads to inequality in power and vice versa. Hence, the system inequality becomes established and people come to terms with it. After a point of time, exploitation is no longer called by this name. It becomes commonplace does not elicit any reaction from society. It is justified to continue the status quo. Liberals opine that technological advances such as transportation and communication can solve economic and environmental problems. However, better technology only means faster exploitation of natural resources and faster environmental degradation. Better transport and communication also hastens the rate of exploitation which almost always benefit the rich. The liberals see the market forces as a panacea for all problems which is not the case. The role of the state as a final arbiter is negated by reducing it to the role of a bystander especially during g times of crisis; market forces cannot offer a solution to economic turbulent times. At the same time liberals accuse Historical Materialists for claiming capitalism is declining. They allege a constant propaganda on the part of the historical materialists to discredit capitalism and an eagerness to predict its downfall. This optimism is considered misplaced by the liberals. The international political economy (IPE) has moved ahead from the times of a bi-polar world and historical materialism has hardly played any role in the current world system. They have become irrelevant to the present IPE and hence cannot influence policy decisions taken by them. Liberalism offers ample scope for extension in terms of theory12. Historical materialism has not been able to provide answers to economic questions. Even among themselves, there is no unanimity in the approach towards the professed goal of collective development and creation of wealth. They have not been able to provide a foolproof economic system. Conclusion Both the approaches began at about the same time in the 18th and 19th centuries in Western Europe, emerging from the Renaissance and the resultant Industrial Revolution. Two diametrically opposite systems evolved as a reaction or furtherance of the immediate past in Western Europe. Both have commonalities in they want the state to influence economic, cultural and political world systems. The state has the supreme authority to fashion the world in the mold of their principles and concepts. Diverging from this point, the Iraq issue is seen differently by both the approaches. The historical materialists accuse the liberals of extending their hegemony on a sovereign state for a frivolous reason keeping long term gains in mind. The liberals claim the moral high ground by talking of co-operation on this issue which led to cost cutting. Liberalism does leave its legacy on international affairs13. The historical materialists help the poor and marginalized voice their grievances. They accuse liberals that the marginalized do not fit into their scheme of things. The liberals are only concerned about success and profits. They do not believe in taking the underprivileged along. People are having a relook at the Historical Materialists for the following reasons. The disintegration of the Soviet Union led to the collapse of communism in the former Warsaw Pact countries. Prior to this in the 1980s, there was the Debt crisis. This was followed by the Asian Financial crisis in the 1990s. The global economic crisis of 2008 only made matters worse. Going back to the Iraq issue, the liberals are not able to explain why there is conflict when there is co-operation. There exists a spillover effect in that all the parties to the co-operation benefit from it, both in monetary and non-monetary terms. The co-operation is due to interdependence and not due to any altruistic goal. Hence, everyone is trying to further their own interests. There is seething unrest beneath the surface which can erupt anytime. Whatever be the approach one follows, there are no easy answers to the economic question. Both approaches have their flaws. The world is peopled by diverse cultures representing various aspirations. The best policy to follow would be one that is a golden mean of maximum wealth creation and an equal and just society. Bibliography Brewer, Anthony. Marxist Theories of Imperialism, A Critical Survey, Routledge & Kegan Paul 2001. Doyle, Michael W. Liberalism And World Politics, Johns Hopkins University, American Political Science Review, 80, 4 (December, 1986): 1151-1163. Grieco, Joseph M. “Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism”, Neorealism and Neoliberalism, New York: Columbia University Press, 1993. http://www.olivialau.org/ir/archive/gri1.pdf Habermas, Jurgen. Towards a reconstruction of Historical Materialism, Theory and Society, 2, 3: 287-300. Jennifer, Sterling-Folker, “Liberal Approaches” Making sense of International Relations Theory, (2013). Kraft, Micahel E & Furlong, Scott R.  Krafts Public Policy: Public Policy: politics,analysis, and alternatives (2nd ed). CQ; London :Eurospan [distributor],Washington, D.C, 2007. Keohane, Robert O & Nye, Joseph S. “Coping with Interdependence”, In Power and Interdependence, Longman, 2012. Keohane, Robert O. International Institutions: Two Approaches, International Studies Quarterly, 32, 4 (Dec., 1988): 379-396. Moravcsik, Andrew. Taking Preferences Seriously: A Liberal Theory of International Politics, International Organization 51, 4, (Autumn 1997): 513–53. Moravcsik, Andrew. Liberalism and International Relations Theory, Harvard University and University of Chicago, Paper No 92 – 6. https://www.princeton.edu/~amoravcs/library/liberalism_working.pdf Theodore H, Cohn. Global Political Economy, Sixth Edition, Glenview, Pearson Education, Inc. 2012. Williamson, Jeffrey G. Globalization and Inequality, Past and Present, The World Bank Research Observer, 12, 2 (Aug., 1997): 117-135. Oxford University Press. Read More