Suzan Strange defines structural power as the power “to decide how things shall be done, the power to shape framework within states that relate to each other, relate to people, or relate to corporate enterprise” (Strange 1998:25). She further adds that structural power “means rather more than the power to set the agenda of discussion to design”. Susan strange makes it more clear that “power over structures” is more important than “power from resources”, this arguing of a consideration of the actual value of economic resources and military capacities for the outcomes of divergences between great powers in the modern world (Strange 1996:25-30).
Structural power is a critical viable that merits more extensive and more explicit in Latin American political economy and in comparative politics more broadly (Tasha Fairfield 2015: 411-441). Structural power is also involved with playing a primary effect on the structures of the state. For example; United States and China, each of these countries has power to influence the direction it wants to take to reap the benefits of global integration.
These countries, because of their specific power structures, have an advantage of getting access to the marked opportunities in a certain country thereby having power over such countries. The marked opportunities, being opportunities as well as resources; especially natural resources and technological resources. The structural power is very powerful in influencing the direction of the world we are living in today. The concept of structural power became popular with the writings of Susan Strange (1987) and Lawton et al. (2000).
International political economy is used as a retaliation tool; it captures the way authority is distributed between people within groups such as governments, institution or society. Structural power within political economy structures are of interest to various fields, including sociology, government, economics and business. International political economy (IPE) has four dimensions: security, production, finance and knowledge (Suzan Strange theory, Christopher May).
International political economy is the study of how economic interests and political processes interact to shape government policies. For example; the decisions by bush administration to raise tariffs on imported steel in spring of 2002, the decision to raise the steel was prompted by the owners of American steel firms and the united steel workers of America. The steel industry lobbed for higher tariffs because imported steel was capturing a large number of plant, clothing and layoffs.
IPE is also the study of the interplay of economies in the world arena in the most general sense; the economy can be defined as a system of producing, distributing and using wealth. Politics is the set of institutions and rules by which social and economic interaction are governed, for some political economy refers to primary study of political basis of economic action, the ways in which government policies affect marked operation while for others the principle preoccupation is the economic basis of the political action, the ways in which economic forces hold government policies. The two focuses are in a sense complementary where politics and market are in constant state of mutual interaction. (Balaam and Veseth 2008)
IPE is interested in the fact that the world economy has a considerable power. The international political economy is about the clash between the market and the state in reference to international arena rather than national arena. It is interested in the gains of the market and it presumes that the state, MNCs and other powerful actors use their power to influence. IPE is the network of bargains between and among states and markets. These bargains determine the production, exchange and distribution of wealth and power (Christopher May 1996).
IPE is made more complex and development more difficult for vulnerable states because the structural power can also be used as a retaliation tool by other states against others. “Strange has argued that structural power within the international political economy has four dimensions; security, production, finance and knowledge” (Christopher May 1996: 167-189). The four main structures produce and distribute power and wealth.
The security structure is whereby each state aligns with a state in which they can secure or share common interests. Through this structure, where states with the common interest align together does not allow the effectiveness of market on vulnerable nation states. For instance; United Nations and China are already powerful and them joining forces could make IPE more complex as the y will use their power to manipulate market forces in increasing their own rival states leaving the other weak states without freedom to market their own values and interests because they do not have power to safeguard their own values and interests (Strange 1987).
Security is the basic human need as both individuals and state need to secure their interests. The weak nation states; the developing countries are unable to protect themselves because the most powerful states with the same goal has joined forces. Through their power, they take control over the states that are helpless and unable to safeguard their own values such as resources especially because they are not powerful enough so the powerful states gets to decide fir such states what to do with its resources.
With their power through security structure, the stronger states are able to manipulate the market forces in the other vulnerable states in increasing their own power and they favour friendly states only. This means that the weak nation state is likely disadvantaged and therefore unable to manage and protect their market and this means they do not benefit through the Neo-classical economy’s concerns that markets need to be independent.
There is purely maximisation of profits by powerful states through the use of the weak states and such disadvantaged nations remain or rather are left behind in terms of economic growth through markets. This makes those countries’ individuals unable to market well because the nation state is interfering due to its weakness towards other powerful states that tends to control it.
The structure of production goes together with trade. “The issue of who produces what, for whom, and on what terms lies at heart of the international political economy” (David Hume:15). The countries producing for them and selling globally earns such countries’ industries huge sums of money which ultimately can shift the global distribution of wealth and power easily. Countries producing for themselves make international trade effective and all countries benefit but not in the case of vulnerable states.
Powerful states influence the design and functioning of production and trade in helpless countries to advance their own political economic as well as their own interest. The IPE presumes that the state, MNCs and other powerful actors use their power to influence the nation states, which in turn tends to work accordingly. Economies are indifferent to the role of economic affairs because their interests are on markets where the state is in the distribution of gains affecting domestic welfare and military thereby living the vulnerable without a choice but to go with the flow because they lack military power which is most important to a state that becomes reluctant to trade for economic gains. This therefore acts as an advantage to powerful states to use the weak states anyway they want.
For power position of other states, high technologies industries are distributed across the world and because the vulnerable states are unable to do this, they end up being over powered all the time because they are unable to join with other states. Ever since the 1990s, the governments of the developing economies have sought to attract foreign investors in promoting the production of a range of goods for export ( Andrej Pustovitovskij, Jan-Frederik Kremer: 2011) but they still need to rely on powerful states for the equipment and they seem not to benefit at all as the powerful states puts conditions that contribute to their interests only.
Western countries are the most powerful countries have lobbied their government for protection against barriers and gains cheap imports from other states in order to preserve jobs and profits. This cannot be the case with the vulnerable states because they have nothing and will therefore have to agree to free trade and foreign direct investment while at the same time wants to protect their cultural value, social status and political economy.
The interested powerful states makes IPE complex through powerful market forces of trade and makes the weak nation states forget about the fear that international markets are gaining momentum and this could destroy political economy and cultural autonomy of cultural societies. Because the vulnerable states’ governments are already weak, they channel their own economic activities to serve the powerful groups within the international relations or societies, leaving the state backward and undeveloped.
Whereas the market is interested in locating economic activities wherever they will be most efficient and profitable, the state is interested in processing the economic growth and capital accumulation to increase power and economic welfare to the nation. This is not the case in the helpless nations as they are highly decentralised and markets let the invisible hand of individual action being their state to make decisions that affect resource use in influencing the creation of wealth and its distribution within nations.
The finance structure; this means the pattern of money flows between and among nations. The structure defines who has access to money and at what terms, the interest is in what money can buy and thus how certain resources are distributed between nations and in this case money is most of the time viewed as means, not an end itself (Strange 1988). The exercise of power affects the distribution of resources and the people who have command on resources in society has power and therefore the market influences the state.
Money generates an obligation between states and the international money flows pay for trade and also serve as a financial investment but for the vulnerable states this does not benefit them at all because they do not have power. They experience little of money flow because they are powerless and end up trading for free so that they could get financial investment from the powerful states without being aware that is the way some states are going to get power over them as they will not have any income from trade.
This structure involves the distribution of money among states in the form of loans, direct investment. The different states have their own interests and are bound by certain obligations with much impact on other structures if IPE. Tension is created by the differing of interest between nation states and this tension can be resolved at different times and different ways.
Financial bargains also reflect obligations as money moves from one state to another in the form of loans needs to be paid back, and for vulnerable states this means it may not be easy for the state to payback thereby giving the powerful states power to rule their movement of money and resources of such country. For instance; the issue of China and Lesotho, China cancelled Lesotho’s arrears to it and for that matter Lesotho government has to allow the Chinese to come into the country in promotion of their own business and this hinders Lesotho’s development.
The powerful nations in this manner get to be the one managing monetary use in trade and the changing of behaviour of patterns of the market affect the values in the nation states. The last structural power being the knowledge structure states that knowledge and technology are the source of power and wealth for states that can use them effectively. Poor nations without access to knowledge in the form of technology, scientific discoveries are disadvantaged and this also affects other IPE structures, security, and finance because they depend on access to knowledge. ( Balaam and Veseth 2008).
The vulnerable states lack skills therefore they do not have knowledge on how market can go well and how production can be effective. The use of machines to produce quality goods for market is very important when it comes to international trade and this benefit the powerful states even more as the helpless nation states gets stuck on them without choice because they are unable to exercise their power.
The knowledge structure includes rules and patterns affecting intellectual property, technology transfers and migration opportunities for skilled workers (David 2002: 177-191). When the weak states ask help from other states in order for their market to run smoothly maybe in terms of having machinery in industries, the powerful states does not teach the people of that country, rather it brings its own expects to run the whole production and this gives them more power over the vulnerable nations and in that way those nations cannot develop.
Powerful nations may use their power in knowledge and technology to get the resources from other nations. For example if say the state wants to build industries in promotion of market, the powerful state may give terms and conditions to helping in such project and one of the conditions could be that the same vulnerable state offers that state one of its resources. The resource that the vulnerable state would be told to submit with, one may find that it is one of the powerful resources that country would have used to develop economically but because of lack of knowledge and skills the state does not know the value of that resource.
International political economy as influenced by the Neo-classical economic which aims at purely maximising profits with less interest in state regulations is aimed to assure that in every society gains from efficient function of international markets are emphasized when talking about international political economy. Even though the world economy has power, some states need not to remain undeveloped than the other.
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Strange S. (1996) THE RETREAT OF THE STATE: The Diffusion of Power in the world Economy. Cambridge university Presshttps://doi.org/10.1017/CBO9780511559143
10 OCTOBER 2018
ASSIGNMENT 1: Assess the view that structural power can make IPE More complex and development more difficult for vulnerable nation states.