Global Political Economy

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Global political economy is recognition of the need to properly study the interaction of the economy and the state for a better understanding of society. This concept is concerned with the way that governments intervene in the state’s economy and the implications that this has, and the role the government plays. Study into this relationship has given birth to conflicting theories from liberals and Marxists. The ideas of Liberalism in the global economy emerged in 18th- and 19th- century Britain alongside the Industrial Revolution. This liberal outlook offered a new analysis of economic nationalist by arguing that protectionism and restriction of economic activity were actually impoverishing states. The Marxist theory emerged during the 19th…show more content…
For Marxists, they focus on class as the most important actor in the global economy, rather than the state. Both Friedrich Engels and Karl Marx are the founding fathers of this theory and the ones that unleashed the conflict between the workers and capitalists. According to Engels and Marx (1848), the working class seizing power would bring about the resolution of this conflict. Marxist theory rejected the notion of individualism of liberal theory and embraced the collective nature of economic nationalist perspective. Marxists have however, rejected statism and instead choosing to focus on the significance of class. According to O’Brien and Williams (2013), Marx defined class in relation to the structure of production, which creates owners of the means of production (the bourgeoisie) and the labourers who sell their labour power to the bourgeoisie (the workers). The main conflict arises from between the bourgeoisie (the owners of capital) and the proletariat (the workers). Capitalism is built upon two key principles of the pursuit of profit and the protection of private property. These principles allow the bourgeoisie to exploit the proletariat by paying them a wage that is less than the market value of the goods and services that they produce. Marxists see TNCs as contributing to the exploitation and oppression of the working class. Followers of this theory argue the centralisation and concentration of capital visible in the form of TNCs is a key feature of imperialism, whereby dominance is expressed in the global economy. In this case, the state is seen as the representative of class interests rather than the expression of the harmony of communal interests posited by economic

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