Unit Liberal
Unit Liberal
NEO-LIBERALISM*
Structure
8.0 Objectives
8.1 Introduction
8.2 The Liberal Tradition: Main Characteristics
8.3 Classical Liberalism
8.4 Liberal Approach in the Post War Years
8.4.1 Sociological Liberalism
8.4.2 Functionalism
8.4.3 Interdependence Liberalism
8.4.4 Republican Liberalism
8.5 Neo-Liberal Approach
8.5.1 A Break with Traditional Liberalism
8.5.2 The Neo-Neo Debate in IR
8.5.3 The Darker Side of Neo-Liberalism
8.6 Let Us Sum Up
8.7 References
8.8 Answers to Check Your Progress Exercises
8.1 OBJECTIVES
Liberalism is an eminent theory of international relations (IR). It has several
dimensions. The objective is to explore the definitions, history and the various
theoretical standpoints of liberalism. This unit introduces you to the key thinkers
on the subject. Besides, it also helps to understand the key concepts associated
with it. After reading this unit, student shall be able to:
Identify the core principles of liberalism in the years before the Second World
War
Describe the major liberal theories that evolved in the post-war period
Identify the core features of neoliberal approach to study IR
Identify the core features of the Neo- Neo debate
Describe the liberal vision of society, state and market
Explore key aspects of neoliberalism and the evolution of international
political economy
8.1 INTRODUCTION
Like Realism, Liberalism (and its current variant neo-liberalism) is a mainstream
approach to understand international politics. And, like Realism it is a name
given to a family of related theories of international relations. It has a
multidimensional tradition dating back to the 17th and 18th centuries. Historically,
the liberal tradition emerged as a critique of feudal political rule. It also emerged
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Dr. Avipsu Halder, Assistant Professor, Department of Political Science, University of Calcutta 115
Theoretical Perspectives as a critique of mercantilism, the dominant economic strategy of those times.
Liberalism is also a rich tradition of thought concerning international relations.
In this unit, we are concerned mainly with the latter dimension of liberalism.
In the 18th and 19th centuries, liberal philosophers and political thinkers debated
the difficulties of establishing just, orderly and peaceful relations between peoples.
A systematic account of the problems of world peace was given by Immanuel
Kant in 1795. His ideas have had a profound impact on the development of
liberalism in international relations.
In the 19th century, solutions to the problem of war evaded even the most eminent
of thinkers. Much of the liberal scholarship became content with diplomatic
history until the outbreak of the First World War. The Great War and the destruction
that it caused forced the liberal thinkers to find new means to prevent violent
conflicts and create conditions in which reason and cooperation would prevail.
Basing their premise on the inherent goodness of man, these liberal thinkers
focused on negotiations, rule of law and establishing stable international
institutions. The widespread anti-war sentiment within Europe and North America
which existed in the 1920s provided the necessary support for the liberal
enterprise.
However, the failure of the League of Nations and the outbreak of the Second
World War led to the marginalisation of liberal thought that was infused with
idealism. Realism came to the fore as it seemed to provide a better explanation
of the power politics of the Cold War that came to dominate international relations.
Nevertheless, innovations in liberal tradition continued leading to the development
of a number of theories to explain the developments in international relations.
Prominent among them are sociological liberalism (or transnationalism),
pluralism, interdependence theory, liberal internationalism, liberal peace theory,
world society and neo-liberal approaches.
In the early 1980s when conflict between major powers had receded and
cooperation in pursuit of mutual interests had emerged as a prominent feature of
world politics, a new paradigm or framework of analysis emerged in the liberal
tradition- Neoliberal Internationalism. As this approach emerged in response to
the development of neorealism, it is also called as the Neoliberal approach. This
new approach infused greater scientific rigor in liberal scholarship.
Thirdly, liberal theorists focus on state-society linkages and claim the existence
of a close connection between domestic institutions and politics on the one hand
and the international politics on the other. Since the publication of Perpetual
Peace (1795) by German philosopher Immanuel Kant (1724-1804) many liberal
theorists became convinced that there is a causal link between the form of domestic
regime and the possibility of war. Kant had specifically claimed that ‘republican’
(that is, democratic) states are more peaceful at least vis a vis one another. The
contemporary idea of theory of democratic peace can be traced to this idea of
Kant
Liberal theorists are pluralists as well. They believe that state is only one actor
both in within a society and on the international stage. They challenge the realist
assumption that states are the only actors in international politics. Liberals argue
that there are many actors in world politics which play a vital role in influencing
international outcomes. The liberal tradition highlights the importance of non-
state actors such as MNCs and NGOs.
Fifth, some liberal theorists, following David Ricardo ((1772-1823) and Richard
Cobden (1804-65), champion free trade as increasing interdependence among
states reduces the likelihood of war. They reject mercantilism which regarded
economic growth and war as compatible goals. Liberals argue that free trade is
preferable to mercantilism as trade produces wealth without war. As we shall
see later, these ideas have formed the basis of an entire current of thinking:
interdependence liberalism.
Liberal theorists also place great emphasis on institutions. They believe that
Institutions are necessary to protect and nurture the core values like order, liberty,
justice and tolerance in politics. They therefore championed the creation of the
League of Nations after the World War I. They were convinced that the League
as an international organisation could prevent war better than the alternatives,
including the traditional balance of power politics.
Adam Smith (1776) believed in the idea of ‘economic man’. Smith believed
that if every individual tries to maximize their self-interest, it will lead to
overall economic prosperity in the society. Smith coined the term laissez
faire economy. According to this idea, the market the state shall not interfere
in the activities of the market. Smith visualized that a free market can bring
about overall national prosperity.
Liberal thinking at that time traced the causes of the World War I to fatal
misperceptions among political elite, secret diplomacy and lack of democracy,
war prone military establishments, lack of international institutions etc. Liberals
played an important role in designing a political programme to address these
issues in the immediate years after the World War I. In doing so, they made a
significant mark on the dominant foreign policies of the day. Much of their agenda
is reflected in the Fourteen Points programme speech delivered by the US
President Woodrow Wilson in January 1918.
The main features of the Fourteen Point programme are as follows:
‘Open covenants of peace openly aimed at’ – This means that that the process
of international diplomacy should be transparent in character. It means that
states shall no longer be able to enter into secret alliances with one another.
Following this logic, liberalism gives importance to the formation of
international institutions so that it can enshrine laws, and rules for the states
to follow.
‘Removal of economic barriers’ – This flows from the liberal belief that as
economic cooperation among states increases, they will not go to war.
‘National Self-determination’ – Every state should try to achieve democracy.
‘Associations of Nations’ – States should form associations among
themselves which would guarantee their territorial integrity and political
independence.
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On the basis of these principles, the League of Nations was established in 1919 Liberalism & Neo-Liberalism
at the Paris Peace Conference. The League was intended to restore peace and
prevent war. Member countries of the League were to protect the territorial
integrity of other fellow members on the basis of collective security. Collective
security is based on the idea of ‘one for all, and all for one’, that is, each state in
the collective accepts that the security of one is the concern of all, and agrees to
join in a collective response to aggression. This is different from Collective
Defence or an alliance of a number of states joining together in response to a
specific threat or for a specific issue of cause.
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Theoretical Perspectives The relations between people across different societies are friendlier in nature.
They are always eager to support one another.
It helps them to develop peaceful relations among themselves.
They can formulate networks among themselves around the world. It can
lead to the formation of global societies (Rosenau 1980).
Another key thinker of this school, Karl Deutsch introduced the idea of ‘security
community’. It means that regular interaction among people can lead to the
development of a ‘community feeling’ among themselves (Deutsch et al. 1957).
It would reduce the possibility of conflict among states. John Burton in his
book, World Society (1972) also discusses the interactions which take place among
different social, economic and cultural groups across the globe. This network is
known as the ‘cobweb’ model. It reduces the chances of conflict in world politics
(Jackson and Sorensen 2008; Little 1996).
8.4.2 Functionalism
The functionalist theorists such as David Mitrany and Ernst Haas argue that if
states cooperate in any one aspect, they would be able to do so in other fields.
Although the primary focus of functionalism is on the economic cooperation
among states, its underlying assumption was that economic cooperation would
allow them to cooperate in the political domain as well (Leiber 1972: 42). In
other words, cooperation in one field will have a spill over effect (Jensen 2010:
272) eventually giving rise to a supranational authority (such as the European
Union – EU).
There are multiple channels of connection that link societies and peoples. It
includes informal ties between a) government officials; b) non-governmental
individual; and, c) members of transnational organizations. These
classifications communicate the idea that transnational connections important
in world politics. This understanding is different from realism.
Michael Doyle (1983, 1986) who has developed Kant’s perpetual peace theory
explains why democracies are at peace with one another. First, the existence of
domestic political cultures based on peaceful conflict resolution encourages
peaceful international relations. Government controlled by their citizens, will
not advocate or support wars with other democracies.
Second, democracies hold common moral values which lead to the formation of
what Kant called a ‘pacific union’ (not a formal treaty, but rather a zone of peace).
Freedom of expression and free communication promote mutual understanding
internationally, and help to assure that political representatives act in accordance
with citizens’ views.
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Theoretical Perspectives Check Your Progress Exercise 1
Note: i) Use the space given below for your answer.
ii) See the end of the unit for tips for your answer.
1) What are the features of the idea of transnationalism?
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Neo-realism throws light on capabilities of the states. They feel that states
are always uncertain about the intentions of other states. Neo-liberalism
gives more importance to the preferences and intentions of states.
From the above, it is evident that there is much in common between the neo-
realism and neo-liberalism. Scholars outside the United States as well as those
who work outside these paradigms therefore call it a ‘neo-neo synthesis’.
Moreover, they argue that the neo-neo debate has not advanced IR scholarship
as a whole. Instead it has narrowed the field to a superficial enquiry based on
questionable assumptions (such as anarchy) and methodologies that may or may
not be suitable to the discipline.
“regime theory has much to say about economic cooperation among the Group
of 7 (G- 7) and other groupings of advanced capitalist countries with regard to
problems common to them. It has correspondingly less to say about attempts to
change the structure of world economy, e.g. in the Third World demand for a
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New International Economic Order (NIEO). Indeed, regimes are designed to Liberalism & Neo-Liberalism
stabilize the world economy and have the effect, as Keohane has underlined in
his work, of inhibiting and deterring states from initiating radical departures
from economic orthodoxy, e.g. through socialism.” (Cox, 1992,173)
The principal cooperative institution of the Global South during the Cold War,
the Nonaligned Movement (NAM) has received scant attention from the
Neoliberal theorists. Secondly, these theories would ‘assume, rather than establish,
regimes as benevolent, voluntary, cooperative and legitimate’ (Kieley, 1990, 90),
a highly questionable assumption when one considers the exclusionary nature of
some of the regimes and multilateral institution, at least from the point of Global
South. Consider the case of those Latin American countries which have
experienced economic inequality as a result of privatization and Structural
Adjustment Policy (SAP). Bolivia, Venezuela and other Latin American nations
have expressed their voices in protest of the neoliberal economic policies (Lamy
2008: 136). Moreover, it needs to be remembered that due to the increased mobility
of capital, the government of states have faced difficulties in taxing the profits
incurring from privatization-led development projects (Rodrik 1997). Had the
government been able to earn revenues from these projects, it could have been
channelized towards the development of social sectors such as health, education
and social security measures. Hence, it can be argued that as a theory,
neoliberalism is a construct of the developed world. As Robert Cox famously
argued, ‘Theory is always for someone and for some purposes’ (Cox 1981: 128).
Check Your Progress Exercise 2
Note: i) Use the space given below for your answer.
ii) See the end of the unit for tips for your answer.
1) List the differences between neoliberalism and neorealism.
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8.7 REFERENCES
Baldwin, David (eds.). (1993). Neorealism and Neoliberalism: The Contemporary
Debate. New York. Columbia University Press.
Cox, Robert. (1981). “Social Forces, States and World Orders: Beyond
International Relations Theory”. Millennium Journal of International Studies.
10 (2): 126-155.
Gill, Stephen and David Law. (1988). Global Political Economy: Perspectives,
Problems and Policies. London: Harvester Wheatleaf.
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Rosenau, J. (1992), “Citizenship in Changing Global Order” in J. N Rosenau Liberalism & Neo-Liberalism
and E.O Cziempiel (eds), Governance without Government: Order and Change
in World Politics. Cambridge. Cambridge University Press. (272-294).
Smith, Adam. (1776). An Inquiry into the Nature and causes of The Wealth of
Nations. Hampshire. Harriman House.
Sutch, Peter and Juanita Elias. (2010). International Relations: The Basics. New
York. Routledge.
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