Neo-liberalism. Neo-realism. Two concepts that have caused on of the great scholarly debates for international relations. After the devastation of World War II the major concern of the day was to try and understand how such a conflict could be avoided in the future. This lead to the study of the inter-dependence of states and whether states could co-operate and if so how.
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Before the 1930s Liberalism was the prevalent concept however it faded from history on three separate occasions specifically the 1930s, World War II and the Cold war. However it remerged as neo-liberalism whereby it was much altered from how it had been in the past.
Neo-liberalism sees co-operation as a necessary element to promoting peace and stability as it caused complex interdependence which causes war to be avoided. This stability also results in less military expenditure and as has been seen with the alliance of Japan and the USA this can help aid in economic development. However as has been illustrated by Grieco in 1988 by the prisoner’s dilemma, co-operation is not always possible.
Neo-realism has been the dominant theory where states are anarchic are thus only interested in gaining and maintain power. This was proposed by Carr in 1939 and has been subsequently expanded on to provide us with the concepts of offensive and defensive realism recently.
“Two bald men fighting over a comb” is a quote that was used to describe the Falkland’s war by Jorge Luis Borge (Liukkonen, Kuusankosken: 2008) in 1982. From this quote by Luis we can possibly ascertain that he was implying that both men are fighting over an item which for both of them is useless. This has recently been attributed to the two theories of neo-liberalism and neo-realism. However we need to understand that both strains of theory epistemologically are positivist theories which aim to understand material forces by analysing them as would be done in natural sciences.
Although they may seem similar, especially due to the fact that neo-liberalists now accept some of the principles that neo-realists have championed there is still some divergence on the basis of which the scholars of each school of thought argue.
In my paper I will aim to address what is neo-realism? What is neo-liberalism? How are they similar and how are they different? Which will then help address the question of whether it is just “two bald men fighting over a comb”.
Neo-realism
Neo-realism is the understanding that conflicts between states are inevitable in an anarchic international system due to scarcity (Carr) of resources or human nature (Morgenthau). An example of this can be seen when the British Empire enslaved several lands including Africa and South East Asian which granted them access to natural resources and cheap labour.
There are several core assumptions that neo-realism makes. The first assumption is that states are anarchic by nature as there is a lack of an “overarching” authority on international level thus states are primarily self-interested and are focused on utility maximisation and sovereignty. This then results in states becoming rational in their approach to other states and maintaining the understanding that there benefits supersedes that of other states. In addition states my not co-operate due to them believing that that their allies may surpass them which would affect their power and the future may hold that “today’s friend maybe tomorrows enemy”. Thus restricting the growth of other states is in a state’s best interest. This fact has been illustrated by the Prisoners dilemma simulation whereby both parties would be better off by co-operating however as it is not possible to ascertain how the other will act it results in cheating. Cheating in this sense refers to not fulfilling obligations thus leading to a situation which is not Pareto efficient. From this example we can understand that information can be quite vital and thus good knowledge of the other parties action could have resulted in Nash equilibrium. I will explore this idea later in the paper.
This system of self-interest directly ties into the second and third assumption of an anarchic system that is concerned with the maximisation of power to ensure the states survival and the fact that states achieve this by economic and military capabilities. This illustrates the ideology of hard power, which Joseph Nye defines as the use of the “carrot” and the” stick” so that other states will follow your will. In terms of the “carrot” states would use lower tariff barriers or the offer of military protection and in terms of the “stick” one would use threat of war or economic sanctions. This ability ties into the next assumption that balance of power is important as a hegemonic state would be able to maintain a system which would prevent states from going to war.
Recently realists have further gone on to break down realism into two particular components; offensive realism and defensive realism. Offensive realism is succinctly expressed by Mearsheimer in 2001 that ‘this unrelenting pursuit of power means that great powers are inclined to look for opportunities to alter the distribution of world power in their favour. They will seize these opportunities if they have the necessary capability’. This offensive behaviour results in states working to actively maintain the status quo and sustain their power. In recent years we have witnessed the economic growth that China has shown with many scholars now suggesting that USA as the leading superpower should focus on preventing China’s growth as war may ensue. They reason the past signifies this as Hitler did the so which led to World War II.
Defensive realists have instead focused on the idea that states wish to maximize their security and will focus on maintain a balance of power (Waltz 1979). Thus the idea of shared values arise whereby maintain a system of order is ideal for most states particular where a hegemony is present such as the maintaining of the dollar as the international currency even after the demise of the Bretton woods system. However Rendall (2006) agued that defensive realism contradicts one of the underlying assumptions of realism that states are prepared to take big risks in the pursuit of regional dominance. However I disagree with Rendall in that although states are prepared to take big risks they are also rational thus they will only take step to promote their dominance when they assess that the risk is sufficiently less for their action to be successful. I feel that the quote “Do not wound what you can’t kill” is particularly relevant in this situation.
Neo-liberalism
Liberalism has appeared in three successive presentations prior to the current decade; functionalist integration theory in the 1940s and the early 1950s, neo-functionalist regional integration theory in the 1950s and the 1960s and interdependence theory in the 1970s (Grieco 1988:486). Although realism was the dominant theory liberalism re-emerged as a challenge towards realism. This neo-realism claimed that it accepts a number of core realist propositions including the assumption that “anarchy impedes the achievement of international co-operation (Grieco 1988:486). On the other hand liberalist still believe that realist over emphasize conflict and underestimate the capacities of international institutions still remains an important part of the theory. In addition another major assumption is that there is a natural harmony of interests and that constitutional government sand the rule of law are universal principles. These universal principles of law allow countries to co-operate with each other as transactions cost can be reduced which results in a strong sense of interdependence.
Realist discuss the fact that as globalisation has become fundamental in the way that society works, between states there is now complex relations as a result of complex interdependence. Keohane and Nye(1977:8) discussed this phenomenon and indicated that interdependence can be understood as mutual dependence which are situations characterized by reciprocal effects among countries or among actors in different countries.
As these transnational relations have expanded the requirement for military security has decreased considerably. Liberalists suggest that this is a result of “elites and members of the public placing greater value on economic values as compared to security, status, and self-assertion” (Jervis,1999:57). In addition international committees such the European Union and the United Nations that can resolve issues without the need for military force to deployed. Liberalist also add that giving power to autonomous actors could result in institutions having a “life of their own” whereby the people then become the instruments of the institution rather than the other way around (Jervis 1999:59).
Keohane and Nye further argued that international regimes that “networks of rules, norms, and procedures that regularize behaviour and control its effects” could be helpful in achieving lower transaction cost as these sets of standard rule will help eventually reduce the cost as both parties involved will follow those rules (Keohane,2004).
Robert Putnam in 1988 expanded on this theory by adding that there is a two level game that is played; one on an international level with other states and one on a domestic level with interest groups. As long as at the domestic level there is an agreement then at an international level agreements can be facilitated. Keohane in 1984 suggested that the facilitation of these agreements help states due to three reasons, they lower the transaction costs of making agreements in comparison with ad hoc agreements, they reduce uncertainty and improve information available and to a lesser extent they establish a framework for legal liability. Thus as states are rational-unitary, utility maximising decision makers these benefits will maintain co-operation between states even if the underlying power structure changes.
Neo-liberalism and Neo-realism
Although neo-liberalist and neo-realist agree that an absence of a sovereign authority that can make and enforce binding agreement allows the opportunity for states to advance their own interests thus making it difficult to cooperate with each other they still differ on several key points.
Neoliberals argue that states are atomistic actors thus they are only concerned with absolute gains irrelevant of whether other states gain or not. They base this on the fact that they state that was is due to misunderstandings rather than human nature. On the other hand neo-realists argue that states are positional actors and for them they are more interested in the relative gains that they achieve in comparison to other states as this arises from the idea of gaining and maintain power as our predecessor have done in the past (liberalism and world politics). This attention to relative gains results in states not wishing to co-operate as co-operation could result in their allies progressing at a much faster rate than them. This example can be noticed from the way the multi-national cooperation’s in developed countries work by building in developing countries without sharing their technology with those countries as this could result in the cheap labour either disappearing or the cost of recruitment to increase.
In addition Doyle (1995) has argued that democracies do not got with each other thus the spread of democracy with market economy will ensure a peaceful order. Doyle extracts this idea Joseph Schumpter, Niccolo Machiavelli and Emmanuel Kant. They differed in their perspective of liberalism with Schumpter championing Liberal Pacifism, Machiavelli Liberal Imperialism and Kant, Liberal Internationalism. Kant’s idea is the one that Doyle feels is the most relevant to current times in that Kant has argued that there are two legacies the pacification of liberal states(1155) and international ‘imprudence’. This signifies that liberals are likely to form coalition with each other and that their peaceful restraint only seems to be for other liberal states.
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