Introduction

International Political Economy (IPE) has seen the rise of two influential perspectives - constructivism and Marxism. These perspectives have challenged conventional narratives and assumptions within the field.

Constructivism contends that ideas, values, norms, and identities play a critical role in shaping actors’ behaviors and influencing international political and economic dynamics. It emphasizes the socially constructed nature of factors like interests and identities. Constructivism has become a prominent counterpoint to materialist theories like Mercantilism and Liberalism in explaining motivations behind choices.

In contrast, Marxism originated from Karl Marx’s critique of capitalism and his analysis of its inherent contradictions. Marxism focuses on the exploitative nature of capitalist relations of production. It predicts that the internal tensions of capitalism will lead to its eventual collapse and replacement by socialism and communism. Marxism diverges from traditional IPE theories in its argument that corporations, not states or markets, determine resource allocation under capitalism.

Constructivism Basics

Constructivism centers on the notion that many key aspects of political and economic relations are social constructs rather than inherent facts or realities. According to constructivism, predominant ideas, values, norms, and identities exert significant influence over the behaviors of states, organizations, and individuals in the international arena.

At the core of constructivism is an emphasis on the socially constructed nature of central concepts within international relations and international political economy. Ideas, values, norms, and identities do not exist independently in some objective sense. Rather, they come into being through complex processes of social interaction and interpretation. Their meaning and implications emerge gradually through discourse, debate, and shared understanding among social actors.

Accordingly, constructivism views critical aspects of global politics and economics, like power, security, money, or sovereignty, as social constructs. Their tangible meaning and effects stem from collectively held systems of knowledge and modes of comprehension that develop over time. Actors like states and corporations operate based on these intersubjective social structures rather than reacting directly to objective material realities.

In essence, constructivism grants causal power to immaterial forces like ideas and norms alongside material capabilities. It breaks from rationalist theories that focus predominantly on material factors by asserting that interests and identities are shaped by collectively constructed values and beliefs. This provides an alternative basis for comprehending and explaining political and economic behaviors and outcomes in the international system.

Core Assumptions

Constructivism holds four fundamental assumptions about the role of ideas and social constructs in international relations. First, ideas, not just material capabilities, shape actors’ identities and interests. Constructivists contend that an individual or state’s preferences and motivations are not predetermined or fixed. Instead, ideas, values, and social context work together to produce certain identities and desired outcomes.

Second, the distribution of ideas in society matters more than material structure. Constructivists emphasize that ideas operate as forces that impact how political actors define situations and make calculations. The prevalence of particular ideas, norms, or values within a society influences which options actors view as viable.

Third, agents (individuals, states) and structures (norms, institutions) constitute one another. Identities and interests are produced through interaction between agents and the social structures in which they exist. Neither has inherent meaning on their own. This mutual constitution continually evolves and changes through practice and negotiation.

Fourth, anarchy and the international system are social constructs, not objective realities. Anarchy does not predetermine state interests and behaviors. Rather, it is given meaning through accepted practices and understandings which can transform over time. The international system gains significance only through constructed ideas about appropriate roles and conduct for states.

In summary, constructivism grants ideas and social context causal power equal to material capabilities. It focuses on how collectively held or intersubjective beliefs shape interests and guide choices in international political economy. Constructivists assert that taking ideas seriously is imperative to fully comprehend global relations.

Influence on International Political Economy

Constructivism has exerted significant influence on the field of International Political Economy (IPE), challenging conventional materialist perspectives. It argues that ideas, values, norms, and identities play a decisive role in shaping economic and political outcomes between states.

Specifically, constructivism emphasizes the role of ideas in international cooperation and conflict. It contends that when states share common ideas and values, they are more likely to cooperate even without obvious material incentives to do so. In contrast, when states hold competing ideas and norms, cooperation becomes more challenging, and conflict more likely, even between states with economic interdependence.

Furthermore, constructivism highlights the role of changing ideas and identities in spurring institutional and systemic change in IPE. As intersubjective beliefs evolve within and between states, new possibilities for cooperation can emerge, norms can spread, and innovative institutions can be created. For instance, the rise of environmentalism as a globally shared value enabled unprecedented international cooperation on issues like climate change.

Ultimately, by assigning causal power to ideational factors, constructivism provides a lens to understand how ideas influence international political economy dynamics involving cooperation, conflict, and change in ways that materialist theories cannot fully explain.

Marxism Origins

Marxism originated in Karl Marx’s critique of capitalism in the mid-19th century. Marx identified two defining features of capitalism: private ownership of the means of production and wage labor. The means of production refers to the facilities, resources, and systems used to produce goods and services, like factories, machinery, and raw materials. Under capitalism, these means of production are privately owned by capitalists (business owners), rather than being publicly owned.

Wage labor refers to the system where workers sell their labor power to capitalists in exchange for wages. Workers do not own the products they create or the profits generated. The wages they receive represent only a portion of the value created by their labor.

Marx argued that the value of goods under capitalism derives from the amount of labor invested in producing them. However, capitalists are able to exploit labor by paying only subsistence wages and keeping the remaining surplus value as profits. This extraction of surplus value enables the capitalist class to accumulate vast wealth and capital.

Capitalism Features

According to Marx, capitalism is defined by two key features: private ownership of the means of production and wage labor.

Private ownership refers to the means of production - things like factories, machinery, and raw materials - being owned and controlled by private individuals and corporations rather than by the state. This gives the owners power over the whole production process. They make the decisions about what to produce, how to produce it, where to produce it, and what to do with the profits.

Wage labor is the system where workers do not own the means of production and so have no choice but to sell their labor power to those who do own it. Workers exchange their labor time for a wage to survive. The wages paid to workers represent only a portion of the value they create through their labor. The surplus value is kept by the capitalist as profit.

Marx argued that these two pillars of capitalism created an exploitative economic system. The owners of capital profited from paying workers less than the full value their labor generated. This extraction of surplus value was the source of capitalists’ wealth accumulation. At the same time, workers were left struggling to survive on subsistence wages.

Marxist Analysis

Marx’s analysis of capitalism centered on the concept of exploitation, which he believed was inherent in the capitalist mode of production and exchange. According to Marx, capitalists extract surplus value from workers by paying them wages that represent only a fraction of the value they produce through their labor.

Marx identified the source of profits under capitalism being the surplus value produced by workers and appropriated by the capitalists. He differentiated between labor power, which workers sell to capitalists in exchange for wages, and labor, which is the actual work done during the production process. The value of labor power is equivalent to the subsistence goods necessary to reproduce the worker’s capacity to work. However, workers must labor for longer than is necessary to produce the value of their subsistence wages. The additional value created constitutes surplus value, which the capitalist retains as profit.

Marx further developed the concept of the rate of exploitation, which quantifies the relationship between surplus value and the value of labor power. The higher the rate of exploitation, the greater the surplus extracted from the workers relative to the wages paid to sustain their labor power. According to Marx, the capitalist drive to maximize profits perpetually pushes the rate of exploitation higher, intensifying the conditions of inequality and hardship for the working class.

Revolutionary Outcomes

Marxist predictions revolve around the dynamics of capitalism leading to a revolutionary outcome driven by several key economic factors.

First, Marx contended that capitalism would result in the concentration of capital, with wealth and means of production concentrating into fewer hands over time. As large corporations came to dominate more industries, small businesses and entrepreneurs would be pushed out, unable to compete. This process of monopolization centralizes economic power.

Second, Marx argued that the rate of profit in capitalist economies would inevitably fall over the long run. As competition forced employers to invest in labor-saving technologies that improved productivity, the ratio of profit relative to investment in production would decline. This creates a lag in the economy, with production growing faster than profits.

Finally, Marx highlighted an inherent imbalance between production capabilities and consumption capacity in capitalism. As capitalists strive to maximize profits, workers’ wages are suppressed, limiting their ability to purchase goods. This results in overproduction, spurring recurring crises of overaccumulation and overcapacity compared to demand.

Together, these dynamics were predicted to fuel a revolutionary uprising, as an increasingly desperate and impoverished proletariat revolts against the wealthy bourgeoisie control of capital and means of production. The inherent contradictions and instability of capitalism would precipitate its own demise, according to Marx’s analysis.

Resource Allocation

In the realm of resource allocation, Marxists argue that large corporations, not states, play a decisive role in determining how society’s resources are used. This stands in stark contrast to Mercantilism’s emphasis on the state and Liberalism’s focus on the market. According to Marxism, states function as agents of the capitalist class, perpetuating the socioeconomic disparities inherent in the capitalist system.

The Marxist view is that corporations, not governments, are the real decision-makers when it comes to allocating capital and resources in society. States may enact policies and regulations, but their actions ultimately serve the interests of the capitalist elite who control the means of production. The free operation of the market, as espoused by Liberalism, is considered an ideological myth that obscures the dominance of big business.

Marxists contend that corporations funnel resources towards investments that maximize profits, not towards socially beneficial goals. Their enormous economic power allows them to shape government policy in their favor. States end up facilitating and protecting the profit-making activities of corporations, rather than intervening on behalf of common citizens. This entrenches inequalities as the capitalist class accumulates more wealth through corporations extracting surplus value from workers.

In summary, Marxism diverges from mainstream IPE theories by identifying corporations as the prime movers in how capital and resources flow through society. Their unchecked power enables the perpetuation of a system where prosperity accrues to capitalists while depriving workers of an equitable share. Only by transitioning to an economic model not driven by corporate profit can true social justice be achieved from a Marxist perspective.

Conclusion

Constructivism and Marxism offer contrasting perspectives for understanding dynamics in international political economy. While both challenge conventional materialist theories, their core focuses differ.

Constructivism emphasizes the role of ideas, values, norms, and identities in shaping actors’ interests and behaviors. It contends these socially constructed factors can outweigh materialist considerations like military or economic power. In the IPE context, constructivism argues that shared ideas and values are pivotal forces enabling cooperation and driving change.

In comparison, Marxism spotlights the primacy of economic factors, specifically the dynamics of capitalism, class conflict, and modes of production. Marx’s analysis predicts capitalism’s inherent contradictions will lead to its collapse, catalyzed by a workers’ revolution. Regarding IPE, Marxists stress corporations’ central role in allocating resources, rather than states or markets.

In summary, constructivism grants causal power to immaterial factors like ideas, while Marxism privileges materialist economic forces as the key determinants of societal outcomes. Despite their differences, both theories provide alternative perspectives to conventional IPE frameworks like Mercantilism and Liberalism. Further synthesis of these approaches may yield additional insights into the complex machinations of the global economy.

Source: Oatley, T. H. (2012). International political economy (5th ed). Longman.