Founding ThesesFounding Theses

Ch. 2, PayneCh. 2, Payne

Critical political economyCritical political economy: (: (which drew on which drew on the Frankfurt School and the writings of Robert Cox)the Frankfurt School and the writings of Robert Cox)

4 particular debates: position on these four debates 4 particular debates: position on these four debates will constitute the founding theses. These are: will constitute the founding theses. These are:

HegemonyHegemony

GlobalizationGlobalization

Role of statesRole of states

DevelopmentDevelopment

They collectively generate an argument which has the They collectively generate an argument which has the following key characteristics:following key characteristics:

No genuinely hegemonic state powerNo genuinely hegemonic state power

Taking globalization seriouslyTaking globalization seriously, but not , but not overwhelmed by its supposed force overwhelmed by its supposed force

Continuing reality of statesContinuing reality of states but acknowledges the but acknowledges the fact that states are being significantly fact that states are being significantly restructured in the current erarestructured in the current era

Does not reject concept of developmentDoes not reject concept of development, but , but instead reinterprets it as a universal problem by instead reinterprets it as a universal problem by all states and societies in the world. all states and societies in the world.

HegemonyHegemonyCritical political economy’s initial preoccupation with Critical political economy’s initial preoccupation with hegemony. hegemony. Robert CoxRobert Cox’s initial contribution on hegemony ’s initial contribution on hegemony was made at the time neoliberal and neorealist was made at the time neoliberal and neorealist institutionalist strands converged around the theory of institutionalist strands converged around the theory of hegemonic stability.hegemonic stability.

Charles Kindleberger and Robert Gilpin: the need for a Charles Kindleberger and Robert Gilpin: the need for a stabilizer to manage the world economystabilizer to manage the world economy

Robert Keohane described hegemony as: a control over raw Robert Keohane described hegemony as: a control over raw materials, markets and capital as well as ‘competitive materials, markets and capital as well as ‘competitive advantages in the production of highly valued goods advantages in the production of highly valued goods involving the use of complex or new technology.Hegemony involving the use of complex or new technology.Hegemony deployed as force.deployed as force.

Robert Cox’s conception of Robert Cox’s conception of hegemonyhegemony

Neo-Gramscian definitionNeo-Gramscian definition

Dominance with order, ideology and Dominance with order, ideology and consent, general principles that ensure consent, general principles that ensure supremacy of leading states and social supremacy of leading states and social classes but at the same time offer some classes but at the same time offer some measure or prospect of satisfaction to the measure or prospect of satisfaction to the less powerfulless powerfulThere can be dominance without There can be dominance without hegemonyhegemonyHegemony bringing together cHegemony bringing together coercive and oercive and consensual elementsconsensual elements

This understanding of hegemony was used by Cox to This understanding of hegemony was used by Cox to analyse the nature of the post-1945 world order (analyse the nature of the post-1945 world order (Pax Pax AmericanaAmericana).).Based on lBased on liberal international economic orderiberal international economic order- containment - containment of Soviet influenceof Soviet influenceCharacterized by the freeing of trade between national Characterized by the freeing of trade between national economies and the eventual convertibility of other major economies and the eventual convertibility of other major currencies with the US dollarcurrencies with the US dollarDevelopment of national security states in the ‘West’, Development of national security states in the ‘West’, characterized by the acquisition of nuclear arsenals, a characterized by the acquisition of nuclear arsenals, a readiness to fight localized wars in the ‘Third World’readiness to fight localized wars in the ‘Third World’Rhetoric of the Cold War, extolling ‘freedom’ over Rhetoric of the Cold War, extolling ‘freedom’ over ‘repression’ the ideological cement binding the system‘repression’ the ideological cement binding the systemEarly post-war period characterized by a measure of state Early post-war period characterized by a measure of state economic intervention and welfare provisioneconomic intervention and welfare provision

Breakdown of system in 1960s and 1970sBreakdown of system in 1960s and 1970s- Vietnam var- Vietnam varDollar overhang: the gap between US foreign-exchange Dollar overhang: the gap between US foreign-exchange reserves and the extent of its financial liabilities overseasreserves and the extent of its financial liabilities overseasInternational inflationInternational inflationUS devalues dollar but avoids recessionary pressuresUS devalues dollar but avoids recessionary pressures by by running a deficitrunning a deficit1980s – Reaganism: militarism and monetarism1980s – Reaganism: militarism and monetarism (increasing (increasing profit margins, weakening trade unions, neoliberalism)profit margins, weakening trade unions, neoliberalism)The strategy to create a new mix of consent and coercionThe strategy to create a new mix of consent and coercionBut US strategy But US strategy partlypartly successful successful- neoliberalism spread via - neoliberalism spread via structural adjustment imposed on Third World Countriesstructural adjustment imposed on Third World CountriesTThe problem US’s inability to tackle the endemic trading he problem US’s inability to tackle the endemic trading and expenditure deficits of the US economy.and expenditure deficits of the US economy.Rising power of other countriesRising power of other countries (Japan and Western Europe) (Japan and Western Europe)

US ‘hegemony’ gave aUS ‘hegemony’ gave a way to US ‘dominance’way to US ‘dominance’. Key . Key difference the evaporation of that broad measure difference the evaporation of that broad measure of consent more or less automatically and of consent more or less automatically and generally willingly given to the leadership of the generally willingly given to the leadership of the most powerful state.most powerful state.

““Clinton boom”Clinton boom” (the US economy grew (the US economy grew substantially and persistently through the 1990s)substantially and persistently through the 1990s)

But US is no longer strong enough to establish But US is no longer strong enough to establish consensual hegemonic orderconsensual hegemonic order

No ideological commandNo ideological command

““Empire”: but really, it is no more than reflection of Empire”: but really, it is no more than reflection of decline and reliance on domination (coercion)decline and reliance on domination (coercion)

The Globalization DebateThe Globalization Debate3 broad schools within the globalization debate :3 broad schools within the globalization debate :

HyperglobalizersHyperglobalizers, the sceptics and , the sceptics and transformationaliststransformationalists

Hyperglobalizers :both neoliberals who welcome the Hyperglobalizers :both neoliberals who welcome the triumph of the market over the states and radicals triumph of the market over the states and radicals and Marxists who are critical of what they see as the and Marxists who are critical of what they see as the ultimate victory of an oppressive capitalist system can ultimate victory of an oppressive capitalist system can be categorized as such.be categorized as such.

They agree that globalization signals the arrival of a They agree that globalization signals the arrival of a new era in human affairs which they see as created by new era in human affairs which they see as created by a technological revolution in communications that a technological revolution in communications that massively accelerated the exchange of people, ideas massively accelerated the exchange of people, ideas and money.and money.

Hyperglobalist accountHyperglobalist accountA borderless world has been thus brought into being, A borderless world has been thus brought into being, characterized by the establishment of proliferating characterized by the establishment of proliferating transnational networks of production, finance and trade transnational networks of production, finance and trade which operate according to a genuinely global dynamic.which operate according to a genuinely global dynamic.

Economic world is constructing new forms of social Economic world is constructing new forms of social organization that are supplanting traditional nation-states organization that are supplanting traditional nation-states as the primary economic and political units of world society.as the primary economic and political units of world society.

They foresee the rise of global governance, global civil They foresee the rise of global governance, global civil society and global cultural motifs. society and global cultural motifs.

The problem with this account: it is too determinist, too The problem with this account: it is too determinist, too sweeping, too apolitical.sweeping, too apolitical.

The skeptical approachThe skeptical approachIt is associated with the critique of Paul Hirst and Grahame It is associated with the critique of Paul Hirst and Grahame Thompson.Thompson.

Their book aims to bring globalization into question. Their book aims to bring globalization into question.

Globalization is no more than ‘heightened internationalization: Globalization is no more than ‘heightened internationalization: intensified interactions between predominantly national intensified interactions between predominantly national economies, the conventional units of economic analysis. economies, the conventional units of economic analysis.

Even these, Hirst and Thompson argue do not significantly Even these, Hirst and Thompson argue do not significantly exceed the levels of economic interdependence witnessed exceed the levels of economic interdependence witnessed historically at the end of the nineteenth century.historically at the end of the nineteenth century.

Globalization is a myth rather than a reality, global corporation Globalization is a myth rather than a reality, global corporation is a rarity, national governments are far from losing their is a rarity, national governments are far from losing their power, global governance is a facade behind which the most power, global governance is a facade behind which the most powerful Western countries continue to dominate the powerful Western countries continue to dominate the traditional international economic and political system. traditional international economic and political system.

Skeptical account has been overtaken by events and now in Skeptical account has been overtaken by events and now in real danger of appearing as if it has an irredeemably closed real danger of appearing as if it has an irredeemably closed mind on the matter.mind on the matter.

Transformative account much sensitive and persuasive.Transformative account much sensitive and persuasive.

Globalization is defined as a massive shake-out of societies, Globalization is defined as a massive shake-out of societies, economies, institutions of governance and world order. economies, institutions of governance and world order.

The direction of the shake-out remains uncertain. There is The direction of the shake-out remains uncertain. There is thus no end-game, no single ideal-type of what a ‘fully thus no end-game, no single ideal-type of what a ‘fully globalized’ world would look like. globalized’ world would look like.

Yet certain trends: historically unprecedented levels of Yet certain trends: historically unprecedented levels of global interconnectedness in trade, finance, production, global interconnectedness in trade, finance, production, culture and much else. culture and much else.

Virtually all parts of the world are functionally part of a Virtually all parts of the world are functionally part of a global system. global system.

Transformationalist accountTransformationalist accountNo global convergence. New, emerging patterns of No global convergence. New, emerging patterns of stratification in which parts of some states and societies are stratification in which parts of some states and societies are becoming enmeshed in the globalizing order whilst others becoming enmeshed in the globalizing order whilst others are being marginalized.are being marginalized.

In short we are provided here with ‘a dynamic and open-In short we are provided here with ‘a dynamic and open-ended conception of where globalization might be leading ended conception of where globalization might be leading and the kind of world order which it might prefigure. and the kind of world order which it might prefigure. Transformationalist account is better in comparison to first Transformationalist account is better in comparison to first two because it offers a strong sense of globalization as an two because it offers a strong sense of globalization as an unfolding historical process. unfolding historical process.

It insists on the capacity of actors to alter structures by It insists on the capacity of actors to alter structures by their actions which means that they can and do influence their actions which means that they can and do influence the process of globalization. the process of globalization.

The State debateThe State debateRetreat or return of the state?Retreat or return of the state?

Rather rRather reorganization of the state (neither decline of the state, eorganization of the state (neither decline of the state, not rejection of globalization)not rejection of globalization)

The usual understanding of a dichotomy between the state The usual understanding of a dichotomy between the state and globalization is an illusion, as the processes of global and globalization is an illusion, as the processes of global restructuring are largely embedded within state structures and restructuring are largely embedded within state structures and institutions, politically contingent on state policies and actions.institutions, politically contingent on state policies and actions.

The state is neither transcended nor unaltered, instead each The state is neither transcended nor unaltered, instead each state is transformed because of globalization. state is transformed because of globalization.

Different authors explained this transformation in different Different authors explained this transformation in different ways.ways.

Cox described the process as the ‘internationalisation’ of the Cox described the process as the ‘internationalisation’ of the state, a process that gives precedence to certain state state, a process that gives precedence to certain state agencies, such as ministries of finance and prime ministers’ agencies, such as ministries of finance and prime ministers’ offices. offices.

Peter Burnham highlighted the widespread shift in the Peter Burnham highlighted the widespread shift in the politics of economic management in advanced capitalist politics of economic management in advanced capitalist societies from ‘politicized management’ (discretion-based) societies from ‘politicized management’ (discretion-based) to ‘depoliticized management’ (rules-based).to ‘depoliticized management’ (rules-based).

Peter Evans, construction of a leaner kind of stateness Peter Evans, construction of a leaner kind of stateness which came to be associated with the thinking of Clinton, which came to be associated with the thinking of Clinton, Blair administrations.Blair administrations.

Michael Mann: the state remains crucial to contemporary Michael Mann: the state remains crucial to contemporary economic and political practice, but great sensitivity must economic and political practice, but great sensitivity must always be displayed to the enormous variety of forms of always be displayed to the enormous variety of forms of statestate

The Development DebateThe Development DebateEnd of national Keynesianism; end of developmentalismEnd of national Keynesianism; end of developmentalism1980s: debt and balance of payment problems1980s: debt and balance of payment problems in states in Africa, in states in Africa, Latin America and the CaribbeanLatin America and the CaribbeanStructural adjustment programsStructural adjustment programs (routinely involving deregulation, (routinely involving deregulation, privatization, devaluation, the removal of trade tariffs, increased privatization, devaluation, the removal of trade tariffs, increased indirect taxation). indirect taxation). The planned extension of global free trade The planned extension of global free trade Neoliberalism: world development ideologyNeoliberalism: world development ideology: development as a : development as a process attainable all over the world, provided that the ‘market’ process attainable all over the world, provided that the ‘market’ was allowed to assert itself over the ‘state’. was allowed to assert itself over the ‘state’.

Various alternative arguments to neoliberalism:Various alternative arguments to neoliberalism:Neo-Keynesianism: Brandt CommissionNeo-Keynesianism: Brandt Commission (1980) and (1980) and Socialist Socialist

InternationalInternational to promote the belief in the fundamental to promote the belief in the fundamental interdependence binding the ‘developed’ and ‘developing’ worlds.interdependence binding the ‘developed’ and ‘developing’ worlds.

Yet such alternative arguments had difficulty in shaking the Yet such alternative arguments had difficulty in shaking the ideological hold of neoliberalism. ideological hold of neoliberalism.

Neoliberalism laid effective claim to the new mainstream Neoliberalism laid effective claim to the new mainstream development paradigm. Yet not an unchanging paradigm.development paradigm. Yet not an unchanging paradigm.

Softened structural adjustment policiesSoftened structural adjustment policies- more time allowed - more time allowed for implementation and emphasis placed on social for implementation and emphasis placed on social measures.measures.

Emphasis on ‘good governance’Emphasis on ‘good governance’ in 90s- a phrase used to in 90s- a phrase used to catch the essence of all that was considered to be best catch the essence of all that was considered to be best about ‘Western’ liberal state forms.about ‘Western’ liberal state forms.

Useful insights raised within the literature that can lead to a Useful insights raised within the literature that can lead to a nnew approach ew approach ofof development development::

- Schuurman: dependency theory too general, too dogmatic, Schuurman: dependency theory too general, too dogmatic, too pessimistic. It de-emphasized the local, and it was too pessimistic. It de-emphasized the local, and it was insufficiently sensitive to the great diversity of situations in insufficiently sensitive to the great diversity of situations in Africa, Asia, Latin America and the Caribbean. Africa, Asia, Latin America and the Caribbean.

- Hettne: in mid-1990s the field of development become Hettne: in mid-1990s the field of development become trapped somewhere between an obsolete ‘nation state’ trapped somewhere between an obsolete ‘nation state’ approach and a premature ‘world’ approach. A stance approach and a premature ‘world’ approach. A stance needs to be taken at a mid-point between these two needs to be taken at a mid-point between these two extreme positions. extreme positions.

- From these beginnings, it is possible to identify the main From these beginnings, it is possible to identify the main features of a new critical political economy of development. features of a new critical political economy of development. Marriage between certain strands of development theory Marriage between certain strands of development theory and certain strands of international political economy. P. 40and certain strands of international political economy. P. 40

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It can be assembled in four stages:It can be assembled in four stages:

1-It rejects the exceptionalism of a 1-It rejects the exceptionalism of a special category of countries deemed special category of countries deemed to be in particular need of to be in particular need of development and aims to recast the development and aims to recast the whole question of development as a whole question of development as a universal questionuniversal question

2-It focuses attention on 2-It focuses attention on development strategy, principally as development strategy, principally as still pursued by a national economy, still pursued by a national economy, society and/or polity, albeit within a society and/or polity, albeit within a global/regional environmentglobal/regional environment

3-It recognizes that such strategy 3-It recognizes that such strategy necessarily involves the interaction, necessarily involves the interaction, and appropriate meshing of internal and appropriate meshing of internal and external elementsand external elements

4-It insists upon duo recognition of 4-It insists upon duo recognition of variations of time, place and history variations of time, place and history in development predicaments. in development predicaments.

Development: collective building by the Development: collective building by the constituent social and political actors of a constituent social and political actors of a country of a viable, functioning political country of a viable, functioning political economy, capable of advancing the economy, capable of advancing the material well-being of those living within material well-being of those living within its confines (p. 41)its confines (p. 41)

Redefined in this way, development is as Redefined in this way, development is as much a problem for the ex-hegemon as much a problem for the ex-hegemon as the smallest ex-colonial territory. the smallest ex-colonial territory.

““Development is everywhere”. Development is everywhere”.