How Does Globalization Influence The IPE

The International Political Economy or otherwise known as the IPE can viewed in many ways by international relations scholars. Globalization has influenced the IPE by affecting how states view trade and other aspects of international relations. It can also be credited for being one of the most powerful influences on shaping how the world of international relations is today. There are several schools that attempt to explain the IPE and they include Mercantilism, Marxism, and Liberalism. Each of the three schools contains theories on how the IPE affects states. The IPE can be viewed from several different perspectives that all have their own ideas on how it operates. The International Political Economy has been shaped by globalization and it …show more content…
Frankel mentions in his text, “Economic globalization is one of the most powerful forces to have shaped the post-war world”. The impact that globalization has on the IPE is clearly demonstrated by Frankel in his texts. Globalization can be defined as the spreading of ideas or supplies across the world from state to state. It has led to states realizing the benefits of trading with other states. The text from Frankel states, “international trade in goods and services has become increasing important,” the text validates the role that globalization has played by increasing the importance of trade. There are several benefits of economic globalization that are mentioned in the text by Frankel. He states, “The two major drivers of economic globalization are reduced costs to transportation and communication in the private sector and reduced policy barriers to trade and investment on the part of the private sector,” meaning that in the post-war era states have decreased tariffs and communicated more frequently leading to the globalization of the IPE. The globalization of the political economy has also affected international relations in the means of creating trade interdependence between states. To validate the point that globalization has created interdependence the text from Frankel states, “The world has become increasingly integrated with respect to trade and finance”. Therefore, showing …show more content…
The issues facing the IPE, as mentioned in the power point slides in class, are states wanting to take advantage of open markets but also wanting to protect losing industries, and also states are concerned about relative and absolute gains nationally. The issue of states wanting to take advantage of open markets but also wanting to protect losing industries must make a choice on whether or not it is worth it to their economy to protect a failing industry. The correct solution of to the issue at hand can be answered in the power point slide that states, “One country holds a comparative advantage over another in the production of a good if it produces that good at a lower opportunity cost compared to the other country,” meaning that if a state should specialize in what it is best at producing in order to take full advantage of the international political economy. The second issue on hand that needs to be addressed is the issue of states wanting relative gains compared to absolute gains. In order to see what is the correct stance on relative and absolute gains in the IPE, one must look at two perspectives that are mentioned in the text by Robert Gilpin. He offers the liberal perspective on absolute gains when he states that, “The emphasis of economic science-or, at least, of liberal economics- is on absolute gains; the ultimate defense of liberalism is that over the long run everyone