The Global Economy

Paper Summary:

This paper discusses the relationship between state power and the economy. It looks at how far the realist explanation of political systems goes in addressing the nature of a global political economy. The paper then goes on to discusses the theories that explain the growth of international organizations in the past 25 years and provides examples to support its contentions.

Table of Contents:
The Relationship Between State Power And The Economy
International Organizations Over The Past 25 Years

From the Paper:

"Let us start with free trade organizations, common markets, economic unions and the like. In the case of an agreement like NAFTA, where we start with the United States, Canada and Mexico the operation of the state's (economic) interest can be clearly seen. The United States is the major importer of Canadian goods, resources and raw materials. If Canada does not cooperate with a trade agreement it runs the risk of losing its major client. Certainly, if it does cooperate, it runs other risks, such as a loss of cultural autonomy--the ability to privilege Canadian content in the media, keep news sources Canadian, etc--or an environment where smaller Canadian companies find it difficult to compete with larger US ones. In the end, however, it is the economic interest which prevails, and unavoidably so. The thought process of the government faced with the decision might go something like this: We run the risk of doing damage to Canadian culture and industry, but if we do not go along with this trade agreement, we may irreparably damage the Canadian economy--and it would have no positive impact on Canadian culture or industry if we were to be plunged into a recession or depression, with no market for our goods, therefore we have no choice but to accept it. The government is not, in this case, attempting to uphold a capitalist system it is a part of it--it is just another producer ensuring that it maintains its customers, does not price itself out of the market and does not end the fiscal year in the red."

Sample of Sources Used:

• Cohn, Theodore H. Global Political Economy: Theory and Practice. New York: Longman, 2000.

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• Book Review # 96323 : "The Global Economy"
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