International Political Economy

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Table of Contents
1. Introduction................................................................................................................................3
2. Discussion..................................................................................................................................3
3. Conclusion...............................................................................................................................10
References...........................................................................................................................................11

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1. Introduction

The field of international political economy has been expanding in the past few
years. There is a growing interesting by scholars to understand what factors affect
the international political playing field. These are scholars that have a desire to
expand the body of knowledge in the field. The international political economy which
is also referred to as the global political economy looks at the interactions between
the political and economic forces at play in the world (Walzenbach, 2017:87). There
have been a number of scholars that have become prominent in the growth of the
international political economy theory and one of these authors is Susan Strange.
She made significant contributions to this field. One of the key arguments made by
Susan Strange was that power was central to the international political economy.
Some of her key contributions are discussed in the next section of this essay.

2. Discussion

Brief history of Susan Strange in IPE

This section discusses some of the key contributions that were made by Susan
Strange to the field of international political economy. Susan Strange a British born
scholar made immense contributions to the field of international relations (IR) and
international political economy (IPE) not only in the United Kingdom (UK) bit also in
the United States of America (USA) (Tooze, 2000:280; Strange, 1970). The field of
IPE is very much associated with the works of Strange, in 1971 she helped establish
the modern study of IPE at the London School of Economics and Politics and then at
the Royal Institute of International Affairs at Chatham House she played a key role in
the establishment of the IPE group (Hammood, 2009:191). Susan Strange left an
indelible mark in the field of IPE and her ideas are frequently cited in numerous
publications. The methodologies brought understanding on the underlying structures
that guide decision making in the political and economic spheres (Pasch, 2017:3).

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Cui bono / Who benefits?

The starting point in the study of the relationships between states, markets and
society in the IPE was guided by the question cui bono which in English means “who
benefits?” (Balaam & Dillman, 2019:5; Barry, 2020). According to Germain
(2016:22), international politics is largely based on who gets what, who benefits, how
costs and benefits are distributed, who pays adjustment costs and the contestation
over all of these elements. When Strange anchored her contributions to scholarship
on the distributional consequences, she focused squarely on the importance of
structural power. According to Germain (2016:22), those that possessed or
controlled structural power made the rules that others were supposed to follow. For
example when one looks at the United States of America, it can be argued that it
possesses structural power based on the fact it has been able to make its currency
the major currency to be used in all international trade transactions. When a country
wants to use the international financial system, it cannot do so without the US dollar.
When making use of Strange’s image of a four-sided pyramid of structural power
which are production, finance, security and knowledge structures one can arrive at
the conclusion that the US still possesses structural power despite arguments that its
hegemonic power was on the decline (Kitchen & Cox, 2016). Strange also indicated
that there were tradeoffs that nations had to make in every decision that they made.
For example she stated that autonomy may square with efficiency; security
preferences could for example clash with economic integration (Germain, 2016:22).
The case of the United Kingdom which was part of the European Union but retained
the use of its own currency the British Pound because iy realized that if it joined the
EU it would some key elements which had made it unique as a country. The UK
ended up exiting the EU under what was popularly known as BREXIT, this could be
seen viewed through the lenses of Strange. The tradeoff that the UK by joining the
EU (regional economic integration) had been the loss of using its currency and being
able to control immigration decisions which where now made in the European Union
Parliament. The decision to exit the EU also came with its own set of trade-offs. Now
UK firms have to pay tariffs when they are exporting to the EU. A report that
appeared in the Independent online newspaper stated revealed that Brexit had
forced UK firms to pay tariffs on up to £9.5bn of exports to the EU despite the former

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Prime Minister Boris Johnson having claimed that he had struck a “tariff-free” deal
(Merrick, 2021).

Contemporary IPE scholars have also made use of Strange’s framework of “who
benefits” to further gain more knowledge in the field. For example Balaam and
Dillman (2019) then used this framework in an attempt to generate knowledge on the
four dominant perspectives of IPE which are namely: economic,
liberalism, ,mercantilism, structuralism, and constructivism. Strange argued that the
major pillars or structures that formed the underlying foundations of the IPE were
production, trade, finance, security and knowledge (Hammood, 2009:200).

Theory of structural power according to Susan Strange

Strange also made huge contributions as far as structural power is concerned.

Based on the previous discussions by Hammond (2009) structural power within
international political economy had four pillars namely security, production, finance
and knowledge. According to May (1996:167), the United States which she argued
had structural power needed not to fail to lead but could choose to exercise its
economic power not only for its own interests but for those of the international
system as a whole. It is important that the concept of structural power according to
Strange is defined. . structural power as the power “to decide how things shall be
done, the power to shape frameworks within which states relate to each other, relate
to people, or relate to corporate enterprises” (Dao, 1998). She adds that structural
power “means rather more than the power to set the agenda of discussion or to
design”. Strange emphasizes that “power over structures” is more important than
“power from resources”, thus arguing for a reconsideration of the actual value of
economic resources and military capabilities for the outcomes of divergences
between great powers in the modern world. This notion of power as a dispositional
concept presents a fundamentally different approach to the conceptualization of
power than the concepts of hard and soft power. In Strange’s understanding, power
cannot only settle outcomes within interstate relations due to material or ideational
factors but “even more importantly”, power can shape and define the structures or
tacit bargains states are actually embedded in and these structures become a

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resource of power by framing the rules of the game in favor of the actor (Hammood,
2009).

Threats to society

According to Hammond (2009:191), Strange argued that IPE was not just a study of
institutions or organizations but it also delved into society’s culture, values and the
history these elements reflect. The approach to the discussion of threats to society
was also widened by Strange according to Hammond (2009:191) who revealed that
threats to a state’s national security was not military from foreign armies but also
emanated from factors such as foreign influence, foreign firms and their products
and services, foreign influence over international laws and organisations and also
came from media which has the potential to affect social and cultural cohesion. The
Western culture emanating from countries such as the United States of America and
countries such as the United Kingdom can be viewed as major threats to South
African culture. For example, one major aspect any country is its language, dressing
and even music and films which showcase its culture but when one looks at major
Video on Demand (VOD) platforms such as Netflix, one can note the domination of
American movies and series and when one watches Multichoice’s DSTV music
channels there is a heavy influence of America hip-hop culture. All these represent
threats to South African culture. When the country’s youths shun their own culture, it
must be of grave concern as it can result in an identity crisis.

Decline of state authority or power

Tooze (2000:282) argued that it is the combination of what she wrote and said and
how she said it and when it was authored that makes her contributions to the field of
IPE of fundamental importance. Du Plessis (1998) discusses some of the main
contributions made by Strange. The main theme of one of Strange’s publications
known as The Retreat of the State, borders around the decline of state authority in
domestic and international affairs. According to Strange, some governments are
increasingly failing to deliver what is traditional expected from governments by
citizens such as the maintenance of civil law and order and protecting the country
from external threats (Du Plessis, 1998:153). The key theme here is also around
power, where is the power moving to and from where it is from moving from.

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Essentially Tooze (2000:282) indicates that power is the at the core of political
economy. Concerning power, Strange argued that “impersonal forces of the world
markets had become too powerful than states who are supposed to wield the
ultimate political authority over society and the economy is supposed to belong (Du
Plessis, 1998:153). The bone of contention between the state and non-state actors is
power. Elements from the private sector or who control enterprises or the means of
production and political actors are competing for the control of power. Strange
argues that the once more powerful states are now gradually being forced to make
room for more powerful markets. The central element in this section is power.
Strange indicated that in real life, durable conditions in political economy could not
be created if they ignored the interlocking interests of powerful people (Barry, 2020).
Barry (2020) made additions to the issue of the distribution of power in society. He
emphasized on the integration of markets and argued that politics affected
economics, economics affected politics, and structural power seemed to have
strange ability to travel between different contexts.

The power that Strange is referring to can be seen in the discussions of state
capture in South Africa which led to the powerful Gupta family controlling the major
appointments in the cabinet of President Jacob Zuma. A report that appeared in
Businesstech an online daily, alleged that the powerful Gupta family offered Mcebisi
Jonas R600 million to work with family which meant doing whatever the powerful
business family wanted done by someone working for the state (Businesstech,
2016). The once powerful Gupta family also offered Mcebisi Jonas a total of
R600,000 for him to become the Finance Minister before Nhlanhla Nene was fired by
President Zuma. The case of state capture that happened in South Africa, if viewed
through the works of Susan Strange, one can conclude that this was a classic case
of powerful non-state actors becoming attempting to control the state. These are
basically economic actors that are attempting to control the activities or operations of
the state because they have become very powerful. The concept of state capture
according to Uzelac (2003), meant that private actors especially private business
entities attempting to influence how the state is run for their own purpose. This takes
us to what was stated by Barry (2020) who stated that it was not possible in the real
world to create durable political economy if the interlocking interests of powerful
people were not catered for.

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Even though the Gupta family left South Africa under the threat of arrest from the
Hawks, other powerful figures in that remained such as Patrice Motsepe, the
country’s wealthiest black man has been accused of also attempting to capture the
state and the President Cyril Ramaphosa has been accused of being under the
control of the “Stellenbosch mafia” which comprises of Rupert (Remgro and
Richemont), Jannie Mouton (PSG Group), Christo Wiese (ShopRite, Pepkor, Brait,
Tradehold and Invicta Holdings), Koos Bekker (Naspers), G.T. Ferreira and Paul
Harris (FirstRand and Rand Merchant Bank), Markus Jooste (Steinhoff ) and Michiel
Le Roux (Capitec) (Marais, 2019). These business people have been said to be very
powerful and this can be viewed as to what Strange meant by the increasing power
of non-state actors or economic actors. The rise of global markets and non-state
actors is intimately associated with the scholarly work of Susan Strange with the
consequent erosion of state power in the global system. The reaches of the state are
retreating in the face of the advancing tide of the market, like some atoll facing
submersion in the face of global warming (Germain, 2016). The rise in the power of
non-state actors can be seen in the immense role played by one of the world’s
richest people Bill Gates who did play a significant role during the fight against
COVID-19.

Global economic system and structural changes

Strange also argued that structural changes in the global financial and monetary
order have resulted in wider pattern of changes in the global economic system,
particularly market integration in the domain of production and trade (Kitchen & Cox,
2016). States and state policy (or lack thereof) have been integral to these
developments, developments which have conferred increasing power on non-state
actors, particularly firms and other market players but also on private networks and
systems of governance related to the growth of international markets. Companies
such as Facebook, Twitter, Microsoft and others owned by the world’s richest people
have increasingly gained immense power in the world. These developments
represent a 'retreat of the state', and states have been full participants in this
process. The states have therefore been gradually giving more and more power to
firms and other non-state actors. Those that criticise Strange argued that that states
remained the dominant force in the global economy (Dao, 1998). The critics of
Susan Strange’s works also argue that it was neither possible nor advisable to

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conclude that there exists any general trend in the power of the state. Other
scholars in the field of international political economy have argued that the general
claim put forward by ‘retreat’ scholars is that the magnification and extension of
economic relations across traditional boundaries has eroded the ability of states to
autonomously influence transactions within their own borders (Dao, 1998:64).
Businesses such as multinationals like MTN, Vodacom, Microsoft, Total, Caltex,
Toyota, Mitsubishi are some of the non-state actors who have influence across
borders and the governments do not possess such kind of power which transcends
borders. This just goes on to indicate that some non-state actors have become more
powerful at a time when states’ power is on the decline despite what the critics have
put forward regarding the writings of Strange.

Relational power

Susan Strange has developed the notion of ‘relational power’ in contradistinction

to ‘structural power’ power actors source not from the possession of resources,
but from their capacity to control the structures (e.g. of security, production,
finance and knowledge) that define the environment within which their
interactions take place. In a somewhat different manner, Iris Marion Young
(2009) has spoken of structural power as engendering the injustice of ‘structural
processes of privilege’ – a notion that attributes the power to the structure itself,
rather than to actors who control that structure. What we can name, accordingly,
‘structural domination’ – domination produced by social structures (i.e. such as
the gendered division of productive and reproductive labour, or the private
property and management of the means of production), has also become a
distinct object of critique in Forst’s critical theory of justification.

Forst observes that ‘theories of justice that are blind to the structural injustices that
are the hallmark of our global capitalist era are particularly deserving of criticism’
(Forst 2017, p. 22) and notes that ‘[t]hinking about justice after Marx means avoiding
a truncated and distorted conception that focuses exclusively on the distribution of
goods and neglects the essential question – the question of the structures of
production and distribution and of who determines them in what ways’ (Forst 2017, p.
173). Forst recognizes that the distributive perspective on justice obscures ‘the
question of how the goods to be distributed come into the world, hence questions of

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production and its just organisation’ (2017, p. 161); this perspective ‘neglects the
political question of who determines the structures of production and distribution and
in what ways – hence, the question of power’ (ibid). In his seminal ‘Noumenal Power’,
Forst admits that ‘[a]n important test of the realism of the theory of noumenal power
is whether it can explain the power of “structures,” be it general social structures or
more particular organizational structures’ (2017. 62).
3. Conclusion

The essay is based on the international political economy field. The focus of the
discussion in this essay were the key contributions that were made by Susan
Strange, a British scholar to the field of international political economy. Susan
Strange has made great contributions to the development of the international political
economy which integrated the research field of economics and political science into
the framework of international political economy thinking. One of the central
assertions that were made by Susan Strange pertained to the central role power
occupied in the field of international political economy. According to Strange the
effects of globalization are vaguer than those facing firms or governments due to the
fact they entail a variety of social, ethical, as well as economic issues. The critics of
Strange’s works have argued that it was not possible for non-state actors to gain
control over global power but also indicated that the power that non-state actors
especially firms had gained related to globalisation. The critics argued that
globalisation was providing a distinct context for the exercise of state power.
Economic actors were able to extend their influence across borders and most states
could not extend their power beyond the borders of the country.

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References
Balaam, D. N. & Dillman, B., 2019. Introduction to International Political Economy. 7th ed. New York:
Routledge.

Barry, A. S., 2020. Strange, International Political Economy, Cui bono. [Online]
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Businesstech, 2016. Guptas offered deputy finance minister R600 million to “work with us” – report.
[Online]
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