The agent of structural change in the world, extrapolating from theories of International Relations and International Political Economy and analyzing the events of past few weeks, are the interactions of power in the language of politics. This power can be either relational or structural, i.e. the power of a state can be measured either in terms of its relation with/influence on others in the system or as an intrinsic structural property of the system which through the rules/norms of behavior and engagement categorizes states within the power structure of the world. It is important to note however that both these expressions of state power viz. relational and structural are not just influenced by politics but by economics as well. Although economics plays a vital role in shaping aspects of state power, it is the language of politics and ideologies that acts as the basis and mode of expression to arrive at economic decisions.
Before elucidating some examples from recent past to support the claim that world politics drives economics, we should take a look at and understand very briefly the patterns that are emerging on the global scale for the last few decades. We see interesting pointers to the fact that after the onset of the era of neoliberalism during the Thatcher and Reagan years, geo-economics began to influence geopolitics in many more ways than before and started to predominate the exchanges between states, evidence of which is signified by snowballing volumes of trade, investments and capital flows post 1980’s. This, albeit an important change, was also a product of geopolitical fallout marked by the end of Cold War and the collapse of an alternative economic model driven by a revolutionary political ideology (that of Communism). It brought about new rules, institutions and normative frameworks (constitutive of the structure of power and the power relations that it entailed) that resulted in the predominance of geo-economics over geopolitics through theoretical/conceptual accounts of scholars like the Washington Consensus by John Williamson and policies by Bretton Woods institutions like Structural Adjustment Programs (SAPs).
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