Foundations of International Political Economy
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Though not on a current basis, debates on economic behaviour and corresponding human nature have grown consistently over recent years. Matthew Watson’s book on the Foundations of International Political Economy is probably one of the latest attempts to challenge the neoclassical economic tradition and the utility-maximizing behaviour it assigns to the whole range of economic agents. The thrust of Watson’s work is two-fold. On the one hand, he challenges the rationality postulate while, on the other, he objects to the idea that the market economy naturally comes into place and can be automatically applied worldwide. Instead, Watson’s aim is to demonstrate that the theory of action underpinning International Political Economy (IPE) should restore cognition, awareness and reflexivity as valid arguments while attempting to explain economic behaviour. In other words, he advocates a return to the classical tradition of political economy, emphasizing how such an approach would provide a deeper understanding of the meaning and real stakes of the key substantive issues in IPE such as globalization, international trade and international development. Although split into 11 Chapters, the book is logically organized in four main parts, aiming to strike a balance between the outline of Watson’s approach to IPE and the practical test of how this theoretical framework can explain international economic phenomena. In the first three chapters, the current theoretical perspectives within IPE are assessed in such a way as to determine the common foundation shared with neoclassical economics and to also highlight the reason why the classical tradition of political economy would provide a better research framework for IPE. In the first place, Watson identifies the main drawback of current IPE approaches in the fact that almost all analyses are conducted from a ‘states and markets’ perspective, an issue further developed in Chapters 7 and 8. In brief, the explanation of the prevalence of this approach lies in the assumption that IPE forms a subset of International Relations (IR) and naturally takes over the Journal of International Relations and Development, 2006, 9, (216–219) r 2006 Palgrave Macmillan Ltd 1408-6980/06 $30.00
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methodological dichotomy between politics and economics. Consequently, states and markets are viewed as self-governing actors. On the contrary, Watson emphasizes, it is the human agent that acts within the realm of the international economy, while states and markets are only arenas for action and not real actors. Hence, there is the need to view political economy as a social process that is to be explained by value-based theories and less by utility-based theories. It is due to its ability to incorporate moral theory within the study of political economy, to present a historicized perspective on economic relations, to challenge the rational ontology and to provide a theory of social action by focusing on the individual as a conscious actor that Watson supports the tr
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