International Political Economy: Economic Liberalism and Economic Nationalism
International political economy (IPE) analyzes disciplines in political, economic, and international relations. IPE helps one to understand the organizations and changing aspects of power which control investment, trade, globalization, and the influence of wealth and poverty distribution within governments, continents and the world (Balaam& Dillman, 2018). There are three schools of thought on which International political economy is built. Economic liberalism, Marxism, and Economic nationalism provide ideologies on developing a more global scholarly history on the fundamentals of international political economy (Oatley, 2018). Whichever the ideology is discussed or adopted, its strengths and weaknesses on the market and individuals have been witnessed. This paper will give an overview of the three thoughts and their strengths and weaknesses.
Economic liberalism is an economic and political thought based on support for a free market that promotes free trade and open competition. The philosophy supports a market economy and private property as the means of production (Stahl, 2019). The ideology bases its strengths on the way it promotes and multiplies the exchange in the free market. Open and free markets away from government interference create a venue for more and variety of goods and services, increasing exchange in the market. Further, the ideology creates wealth for the players in the market since everyone has a chance to trade and engage in production in an open competitive market. In addition, due to open competition, the chances of creativity and innovation surges. Every production of goods and services is required to keep up with emerging trends; thus, more innovations are added to the market due to the stiff competition experienced in the market.
The philosophy, however, possesses some weaknesses where it can lead to dominance by particular able and well-established players. According to Stahl (2019), the free markets might create wealthy people who might take advantage of the lack of interventions and regulations to amass great wealth and dominate most market sectors. Moreover, dominance by few certain individuals creates and accommodates poverty and inequality. Wealth and economic growth are not equally distributed in free and open competitive markets since some individuals may develop fast and dictate trade factors such as supply. Inadequate interventions leave loopholes for equality, leading to low wages and unemployment because every market player is focused on accumulating wealth and keeping up with the competition.
Economic nationalism is an ideology that supports economic patriotism through government interventions. The idea underlies other market mechanisms and calls on local control of economic factors such as labor, goods, and funds (Reznikova et al., 2018). The strength of the thought is that it promotes more market entry for retailers and manufacturers due to the low cost of business entry. With lower rates of entrepreneurship, consumers enjoy low-priced quality products and services. The scale and investment, both domestic and international, is increased by the ideology, which promotes innovations and technological advancement. Cross-border mergers bring effectiveness in service and product production through high demand for lower-cost goods. Further, the creation of jobs is increased by protecting every player in the economy.
However, Reznikova et al. (2018) explains that the cross-border mergers and purchases present a competitive threat to the local establishment, who might feel threatened by the acquisitions. Additionally, the promotion of foreign players by economic nationalism creates a job loss threat to local workers due to the cheap imports by international enterprises. There is always a fear that international mergers might bring international workers for local jobs, leaving the locals jobless or working at minimum wage. It has a weakness of creating conflicts among players in the same industry, especially where political interests are immense. Some local businesses may feel outlooked by policies such as tariffs that favor international traders and squash them locally. It also makes it difficult for individuals or regions to discover and explore their comparative advantage.
Marxism is a set of economic, political, and social ideas that expresses the class conflict between the workers, who the wealthy capitalists exploit. It further scrutinizes the effects of capitalism on economic development, productivity, and labor, fronting the idea for a workers’ revolt to reverse capitalism for communism (Block, 2021). Marxism has helped reduce debt tendencies where people come together to work towards the collective object of achieving success through effective and equitable distribution of government resources. The idea protects workers’ rights from exploitation by the management, predominantly through unions who stand for the individual rights of the workers. By promoting equality, especially human rights, the ideology champions equal gender roles and the distribution of government resources such as education and health. Its strength is class struggle and social forces that require a whole society to work towards change that they require for societal and community development.
The weaknesses evidenced in Marxism are its adverse effects on private ownership and entrepreneurship. Block (2021) exclaims that the idea opposes individual ownership in favor of societal development, and one is given a place to live since every individual contributes to community growth. Hence no absolute choice or control over the place of residence. It downplays the notion of taking business advantage over the other. Further, it opposes entrepreneurial ideas suggesting one would be working for the government and everything runs by the government. Marxism abolishes religion since it supports the practice of faith on an individual basis and not in a systematic and structured way by others. The theory assumes that religion places superior status on certain individuals over others, undermining the idea of equality it promotes.
Economic liberalism is an economic and political thought based on support for a free market that promotes free trade and open competition. The philosophy backs a market and private property economy as the resources for production. Economic nationalism is an ideology that supports economic patriotism through government interventions. The idea underlies other market mechanisms and calls on local control of economic factors such as labor, goods, and funds. Marxism is a set of economic, political, and social ideas that expresses the class conflict between the workers who the rich capitalists exploit. All the three ideologies have their strengths and weaknesses, and their adoption requires further research of economic, political and international relations.