Thomas Oakley is an economist who has written the critically acclaimed book International Political Economy. In it, he discusses globalization, its drivers, and its effects on various actors in the international scene. The book distinguishes itself by its modernity and continuous updates that analyze new policies by prominent nations and corporations, as well as their effects. As such, the author can monitor changes in the global economic environment and adapt his theory to explain the new circumstances. He can also discuss specific details and institutions, providing a practical foundation for his argument. The latest edition, first printed in 2018, discusses events up to and including 2016.
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The overall approach of the book focuses on the three traditional schools of political theory: liberalism, mercantilism, and Marxism. The first highlights personal initiative and the search for improved well-being that every human being pursues. The second contrasts this theory by focusing on individual countries and their political aspirations, which involve gaining more power at the expense of others. As such, the process has both positive and negative implications, depending on one’s perspective. Nevertheless, it continues, as it is beyond any single entity’s power to stop people from cooperating with foreign bodies. As such, the purpose of the book is to observe globalization and provide an overview of its main actors and events.
Mercantilism focuses on the interests of the state and assumes that a wealthy country will work on enhancing the well-being of its residents. As such, Oakley notes that countries compete for resources and try to maximize exports while minimizing imports to collect wealth internally (9). As such, the government exerts a powerful influence on the country’s economic activity to bolster specific industries and reduce its dependence on others. However, other fields are neglected as a result, and the state is expected to discover any issues in time and address them. Overall, this approach slows globalization down, as every country becomes interested in selling but not buying.
The ability to access external resources increases one’s choices, enabling a better, more informed, and beneficial selection. According to Oakley, the proponents of this approach claim that the individual is central to the economy and that any trade, both import and exports, leads to an overall increase in global well-being (10). As such, liberalism’s adherents promote free international business without restrictions as the method by which humanity may prosper. As a result, every person is expected to lead a better life due to the availability of wealth to everyone. Liberalism supports increased globalization, as it makes free trade easier.
The third and final theory, Marxism, contrasts liberalism by claiming that wealth ultimately concentrates in the hands of a rich elite instead of benefiting humanity as a whole. These people, known as capitalists, function similarly to mercantile governments but act in the group’s interest (Oakley 11). They are not tied to any specific nation and thus promote globalization to maximize the benefit for themselves. However, their actions are not driven by competition, and ultimately, they restrain humanity’s progress and overall well-being. The combination of all three theories and their application has led to the current situation. The book’s author uses them to explain the current status of various political and financial institutions.
The book provides two perspectives on several aspects of a nation’s political economy. It discusses the formation of trade policy as a combination of societal and state preferences. The former organizes its needs based on class and industry conflicts, while the latter follows a set strategy and protects specific companies to let them grow. The author also highlights the same stakeholders in the issues of monetary and exchange rate policies. The former is separated into the electoral, partisan, and sectoral models, and the latter is informed by the control over factors such as unemployment. Overall, the two factors combine to create the state’s international strategy.
However, there are also many influential international players in the process, which control the methods through which trade takes place. Oakley highlights the World Trade Organization, which oversees the management of trade agreements between nations (23). Governments have to sign contracts that dictate their mutual trade and involve various provisions such as tariffs, stimulating or reducing trade. The author also discusses the issues with import substitution and the emergence of new paradigms such as neoliberalism and institutionalism. Lastly, he covers developing countries, which rely on foreign capital to grow, and multinational corporations, some of which are large enough to rival smaller nations. All of these factors promote or hinder globalization and should be considered by economists.
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Thomas Oakley provides a contemporary view of the achievements and issues of the global economy. New models have emerged recently that contradicts all three of the traditional economic schools, such as developing countries with their focus on external finances or large multinational corporations with global interests. As such, financial institutions and nations have to adapt their old policies to benefit from the growing globalization of the world. To do that, they have to understand current events and their implications, as well as the mechanisms through which national economic policy is formed.
Oakley, Thomas. International Political Economy. 6th ed., Routledge, 2019.