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Name – Koyal Bagga

Semester – five

Roll number – 2023/632

Subject – IPE assignment

Question -: Compare and critically evaluate how Economic Nationalism, Liberalism,

and Structuralism explain the relationship between states and markets. In your answer,
illustrate how these theoretical perspectives differ in their understanding of power,
wealth distribution, and the role of international institutions.”

Introduction

“Political economy is the study of the mutual relations of power and wealth” (Gilpin,
1987). This insight encapsulates the core debate on how states and market interact in the
global political economy. Different ideologies are not merely analytical tools rather “systems
of thought and belief by which individuals and groups explain how their social system
operates and what principles it exemplifies” (Heilbroner, 1985) and the foundational three of
IPE namely- economic nationalism, liberalism and structuralism offer contrasting
perspectives assigning different hierarchies to state and market While the economic
nationalism views markets as instruments of state interests, liberalism emphasizes market
autonomy and mutual gains, structuralism highlights deep rooted inequalities (Bejamin
Cohen,2008; Susan Strange, 1988). In an era marked by geopolitical rivalry, uneven
development and contested globalization, comparing these perspectives is essential for the
dynamic understanding of the discipline, analyse tensions between national policy autonomy
and global market pressures and institutional cooperation at the world level.

Three approaches

Economic nationalism

Also known mercantilism, rooted in early modern Europe, it understands state market
relations through a framework of state centred view where economic activity is deliberately
used to enhance national power and security. Markets are not autonomous spheres, rather
instruments of national strategy. As Charles Tilly and Ha-Joon Chang shows how early
monarchies during war making deliberately used markets through tariffs, monopolies, and
infant industry protection to accumulate national wealth and reduce dependence on foreign
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rivals. This concentration of authority aligns with realist assumption of essential autonomy in
anarchic world order.

It directly links power to wealth which further generate military capability: trade surpluses
finance armies, secures colonies, raw materials and shipping routes. For instance, Pomeranz
and Topik (2012) demonstrate how European states fused coercion and commerce, using
imperial monopolies and resource extraction to build strategic power

They assume a zero-sum game in terms of wealth distribution in world order where one gains
at the expense of the other, thus, states must prioritize domestic accumulation and protect key
sectors even if it reduces global efficiency.

They view international institutions as instruments of great power dominance rather than
neutral bodies. For instance, Gilpin argues that Bretton woods systems reinforced US’
geopolitical interests with dollar emerging as global currency, IMF’s SAP’s in 1980s forced
developing countries to open for developed world but not vice versa.

Neo mercantilism despite the liberal challenge adapts these principles within a globalized
interdependent context, that these behind the veil still promote interests of the few. States still
guide markets relying on subtler tools- NTBs, export subsidies, control of technology, supply
chains, and critical minerals and energy like US’2022 CHIPS act restricted China’s
semiconductor access while subsidizing domestic chips manufacturing, CBAM by EU in
name of green protectionism disproportionately affects competing products from developing
countries.

Liberalism

it understands state market relations through a belief in market’s capacity to coordinate

economic activity efficiently when individual pursue their self interest. Classical liberals such
as Adam smith argued that markets guided by invisible hand promote collective welfare,
since, excessive state intervention leads to rent seeking and distortionary behaviour.
Competition disciplines self interests and ensures efficient allocation of resources, while that
state’s role is limited to protecting property rights, enforcing contracts and providing security.

On power, scholars like David Ricardo, Balaam, Dillman rejects zero sum assumptions
arguing that international exchange is a positive sum game where all states gain through free
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trade, specialization and increasing productivity. Power flows not from hoarding wealth but
integration into open markets, which stimulates innovation and interdependence and peace.

It views wealth distribution through the market’s capacity to generate overall prosperity,
inequalities are acceptable if growth expands opportunities, though later thinkers like JS Mill
argued that state must address some basic paternalistic concerns like Health and Education.

They emphasize international institutions’ role in creating rules, transparency and

cooperation. Bodies such as. Bodies such as WTO, IMF, and world bank aid stabilize world
order, mutually benefit to state from open markets.

Liberalism has evolved significantly, while classical liberalism failed due to 1929’s great
depression market failure, Keynesian liberalism responded by endorsing state intervention to
sustain employment and stability, but as states’ deficit grew out of the hand, Neoliberalism
inspired by Hayek, Friedman revived classical ideas implemented by Reagan and
Thatcher in US and UK via deregulation, privatization.

In 1846, UK repealed corn laws, embracing free trade to lower food prices and expand
global commerce, an iconic liberal policy demonstrating faith in open markets. In 1947, US
led GATT helped establish global tariff trade reduction, promoting free trade and preventing
conflict.

Structuralism

it views state market relations as embedded within deeper structure of global capitalism
building on Marx and Lenin, where markets are not neutral arenas but mechanisms that
reproduce class dominance at both domestic and international level. Markets operate in
favour of capitalist class, which controls investment and productive assets, while the state
largely functions as an instrument of that class using policy and coercion. (Balaam and
Dillman, 2014).

For structuralist power derives control from control over capital and ability to shape
institutions, ideology and global economic rules, capitalists dominate workers domestically
and core states exploit peripheral ones, internationally, generating dependency in veil of free
trade.
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Wealth distribution remains structurally unequal as value systematically transfers upward,

profits increase while wages stagnate, producing persistent global hierarchies. Welfare
schemes are just a measure to prevent class revolution.

International institutions such as IMF, World Bank, WTO are interpreted as instruments of
core capitalist stats that enforce neoliberal policies keeping developing states dependent. Neo
Marxist development enriches this perspective. Dependency theory and world system
theories by Frank and Wallerstein respectively actively attribute underdevelopment of
periphery to unequal trade and technological control by core. Gramsci added that capitalism
dominance is sustained not only by coercion but by hegemony- ideological manufactured
consent through schools, media and civil society. Althusser similarly argues about
ideological and Repressive state apparatus that legitimize exploitation. Naoroji’s drain
theory also explains the development of underdeveloped.

In recent years MNCs backed by EU and US expanded lithium cobalt deals in Congo, where
raw materials are cheaply extracted while value added manufacturing occurs abroad
increasing dependency

Philippines heavily rely on Outsourcing dominated by MNCs which although generates jobs
but decision making and core skills remain in developed headquarters locking the country in
low wage services and exclusion from decision making.

Comparative and critical analysis

All the three perspectives offer competing explanations of how international political
economy functions, yet each rest on distinct assumptions and produces different policy
implications. Liberalism privileges market efficiency, rational individuals, and mutual gains
from the exchange, presenting the world economy as positive sum arena. But Gilpin stresses
that its assumptions like free competitive markets, perfect information and homogenous
factors are empirically weak and it artificially separates the economy from society ignoring
power, inequality, and political construction of markets. For instance, the 2008 global
Financial crisis exposed limits of deregulated markets to self correct, demonstrating how
political decisions, corporate power shape outcomes more than liberal model predicts.

Economic nationalism by contrast, views the state as primary actor seeking to maximize
power and security by accumulation of wealth in an anarchic world through industrial policy,
strategic trade. Yet its assumption of zero sum game exaggerates conflicts and undermines
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cooperation which cannot be negated in forum like UN, WTO so far achieved. It also treats
society as a unified actor ignoring the role of domestic interest groups struggles, for instance
India in recent time will never agree to import genetically modified crops from US due to
strong Farmer Groups present.

Structuralism differ fundamentally by highlighting class relations, exploitation and

capitalism’s structural tendencies of uneven development where rules of trade masking
neutralities promote greater interests of some beneath. However, its deterministic link cannot
explain geopolitical conflicts between non capitalist states, also it divides the society into
binaries negating role of class like middle class and heavy economic determinism undermines
other identities like race, ethnicity and gender, for instance, it cannot explain, why women in
garment industries of Bangladesh, Cambodia and Vietnam are overwhelmingly employed
with low wages, precarious labour.

Feminist critique

Cynthia Enloe shows that Economic nationalism relies on women’s unpaid reproductive
labour while presenting state interests through masculine lenses. Diane Elson demonstrates
that free competitive global markets mask gender inequalities under the notion of abstract
individuals and intensify the exploitation of feminized labour on export-oriented industries
and V. Spike Peterson critiques the undervaluation of social reproduction, domestic and
informal sector labour predominantly done by women. Maria Mies critiques structuralism
ignorance of exploitation of women labour in Global South that predominantly aides in
capitalist accumulation.

Conclusion and way forward

Despite differences between the three a constructive path requires transcending the rigid
boundaries and integrating their insights into the contemporary policy debates. I an era of
geoeconomic fragmentation, and resurfacing of strategic economic nationalism concerns, it
must be balanced with liberalism emphasis of institutional cooperation to manage issues like
environment, technological volatility and terrorism that affects trade keeping in mind and
working for the structuralist concerns of the global inequality, AI driven transitions and
climate vulnerability that disproportionately affects global south.

References
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• Arrighi, Giovanni. 1994. The Long Twentieth Century: Money, Power, and the
Origins of Our Times. London: Verso.
• Balaam, David N., and Bradford Dillman. 2014. Introduction to International Political
Economy. 6th ed. New York: Routledge.
• Chang, Ha-Joon. 2002. Kicking Away the Ladder: Development Strategy in Historical
Perspective. London: Anthem Press.
• Cohen, Benjamin J. 2008. International Political Economy: An Intellectual History.
Princeton: Princeton University Press.
• Elson, Diane. 1999. “Labor Markets as Gendered Institutions: Equality, Efficiency
and Empowerment Issues.” World Development 27(3):611–627.
• Enloe, Cynthia. 2014. Bananas, Beaches and Bases: Making Feminist Sense of
International Politics. 2nd ed. Berkeley: University of California Press.
• Frank, Andre Gunder. 1967. Capitalism and Underdevelopment in Latin America.
New York: Monthly Review Press
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• Gilpin, Robert. 1987. The Political Economy of International Relations. Princeton:
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• Keohane, Robert O. 1984. After Hegemony: Cooperation and Discord in the World
Political Economy. Princeton: Princeton University Press.
• Mies, Maria. 1986. Patriarchy and Accumulation on a World Scale. London: Zed
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• Peterson, V. Spike. 2003. A Critical Rewriting of Global Political Economy:
Integrating Reproductive, Productive and Virtual Economies. London: Routledge.
• Pomeranz, Kenneth, and Steven Topik. 2012. The World That Trade Created. 3rd ed.
Armonk, NY: M.E. Sharpe.
• Ricardo, David. 1817. On the Principles of Political Economy and Taxation. London:
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• Smith, Adam. 1776. An Inquiry into the Nature and Causes of the Wealth of Nations.
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• Strange, Susan. 1988. States and Markets. New York: Basil Blackwell.
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• Tickner, J. Ann. 1992. Gender in International Relations: Feminist Perspectives on

Achieving Global Security. New York: Columbia University Press.
• Wallerstein, Immanuel. 2004. World-Systems Analysis: An Introduction. Durham:
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