The Subservience of Politics to Economics in the International Sphere

Two recent developments in international relations have revealed important characteristics of the contemporary international system; namely, that increasingly so, politics is subservient to economics, and that economics not only determines hierarchy but also state policy in many ways. Those developments are (a) Japanese foreign policy; and (b) the interstate relationships within the European Union. The liberal argument, that politics and economics are separate notions, in line with a respective public/private split, is thus rendered as an incompetent lens through which to view the muddle that is international relations. Such an argument suggests that the political decisions of one state may affect its economics, which through interdependence with other economies may affect the politics of another state. This is how liberals would explain structures such as the Eurozone, where economic interdependence has begun to affect the politics of the states involved. However, the liberal argument can be picked apart as a misinterpretation. In fact, by much evidence, politics cannot be separated from economics at all, and the relationship between the two spheres is fundamentally biased towards economics: i.e. political economy, or in fact more correctly, economic polity.

Shinzo Abe, Japanese Prime Minister
Shinzo Abe, Japanese Prime Minister

Japan and International Hierarchy

Since the end of the Pacific War, Japan’s international position has been determined almost entirely by economics and not politics. During the Allied Occupation – dominated by the US – the Japanese economy was saved (a) by a series of policies known as the Dodge Line, which tied the Yen to the Dollar; and (b) the Korean War, which returned production and nominal GDP to pre-war levels. The legacy of the Occupation produced the postwar Japanese experience, which saw Japan re-enter the international sphere on the basis of its economic strength (as is much the same with China today). More recently, the bursting of the East Asian economic bubble in the 1990s reduced Japan’s political influence and set course for American dominance, especially due to Russian frailty after the transition to a market economy. In just the last couple of weeks, re-elected Japanese Prime Minister Shinzo Abe has sought a renewed economic alliance with the US, in attempts to limit the regional power of its neighbour, China. It can be noted here that both the US and Japan are looking to limit China’s global dominance through economics, and not politics, full-knowing that such economic policy will have distinct political effects. Thus, it is impossible to disconnect the two in the international sphere, and one must conclude that economics is driving politics.

David Cameron, British Prime Minister
David Cameron, British Prime Minister

Britain and the European Union

As discussed on April 1st (http://wp.me/p3g0mz-W), Britain – referring to both the public and private sphere as one – accepts the autonomy of the European Union based on economic liberalism, and not political liberalism. The discontent emitting from Britain concerning the EU has roots in the proposed increased regulation of markets by a growing European central government. One must remember that the origins of the European Union lie purely in economics – the union was even originally named the European Economic Community – and political unity has arisen to govern the interdependence created by economic unity. Britain is beginning to reject this structure. While politics may dominate domestic government – loss of political autonomy is certainly a major worry to EU-sceptics – economics dominates international policy, and so issues are rising in the midst of a now complicated relationship between the politics and economics of EU-member states. The next foci will be on the position of the Euro as a currency, and the European economy in general when/if David Cameron is able to call a national referendum on the matter in 2017. Hence, once again, economics is driving politics both within and without the state.

Conclusion

The liberal idea that the role of the state is beginning to diminish is being held in some doubt in the wake of the global financial crisis and its related effects. This is because, for most people, the state is the best tool for maintaining the economic status quo, and thus the politics of the state is determined by economic desire. Globalisation is fundamentally an economic concept: the phenomenon was catalysed by economics, is fuelled by economics, and has been intensified by economics. Throughout this process, the state has been an important actor, and thus so has the politics of the state – i.e. allowing the phenomenon of globalisation to occur, and aiding the effects. Hence, politics in the international sphere is fundamentally subservient to economics, because of the economic nature of relations on the global stage.

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