NATO and energy security

I. Introduction

Energy is vital to every nation-state in the world. Whether the nation-state relies on natural gas, such as Saudi Arabia, nuclear energy, like some nation-states in Europe, or other forms of energy, each nation-state has an energy interest. For nation-states, energy provides the means to power everything from transportation and telecommunications to individual homes and hospitals. Schools and law enforcement rely on energy to power classroom, vehicles, and databases. The banking industry relies on energy to power the massive computer systems that enable the industry to exist. Factories that provide food and medicine to the world’s population rely on energy. A nation-state’s military relies on energy to power its vehicles and move its troops. Knowing all these things about the impact of energy, and its importance to the nation-state, the question remains; how does energy security fit into the current international relations (IR) theories and globalization theories? Does it?

The United States and European countries have already begun discussing the appropriate policies and institutions that could secure their energy security in the future. The Bush Administration, in February 2006, spoke of energy security at a NATO conference. This speech was given with the support of Germany and Britain (Gallis 2006). The European Union has stated that they believe political and economic measures are the first step to ensuring their energy security, although they have yet to outline what those steps will be (Scaroni 2006). Industrialized countries are recognizing the need for energy security, and they are not alone. Developing countries, such as China and India, are engaged in active discussions with the Middle East to secure their energy security (Luft 2009). With all of these individual participants in the energy security debate, is there room for an international institution? Should an international institution, such as NATO, be a participant in energy security?

This paper argues that energy security can be understood by constructivism and neorealism – both current IR theories. Furthermore, this paper suggests that the North Atlantic Treaty Organization (NATO) should, based on constructivist and neorealist theories in IR theory and transformationalist and skeptic theories in globalization, make energy security one of its goals. Even though the motivations of the different theories and perspectives are different, the outcome is the same: NATO should be involved in energy security.

II. Energy Security

What is energy security? Energy security has been defined as protecting the way a nation-state produces its energy (Morse and Richard 2002). This means that, for the global north, energy security means protecting the oil coming from the Middle East; keeping the oil flowing (Morse and Richard 2002). Energy security has also been defined as what a country needs, in terms of energy, to keep its economy and military at the same level it is today (Ebinger, 1982).

Energy security rests on three pillars: supply diversity, transportation diversity and fuel diversity (Rosner 2009). In terms of supply diversity, the Middle East continues to be the largest supplier. In 2006, the Middle East supplied 22 percent of U.S. imports, 36 percent of OECD Europe’s, 40 percent of China’s, 60 percent of India’s, and 80 percent of Japan’s and South Korea’s. Even oil- rich Canada is dependent on the Middle East. Forty five percent of Canada’s oil imports originate in the region[1]. This means that supply diversity is low. Fuel diversity, at this point in time, among industrialized nations is also low; they rely on oil for most of their needs, and use nuclear power and natural gas sparingly (Rosner 2009).

Energy security has been threatened, continually, since the oil embargoes of the 1970s and the price shocks of 1973 and 1979 (Wirth, Gray, Podesta 2003). Of the one trillion estimated barrels of oil reserves that exist in the world, two-thirds of that is found in the Persian Gulf (Ibid). Russia holds the bulk of that balance (Measuring Globalization, 2005). Based on where the oil is located, the world’s dependence on oil, and how the world economy (and individual economies) suffered when oil prices spiked, it is in the interests of the world economy to stabilize energy sources so that such shocks do not occur (Goldstein, Huang, Akan 1997). President Carter said that curtailed oil production in the Middle East was a “clear and present danger to our national security” (Bucknell, 1981).

Energy consumption is higher in the global north than the south, although the global south – which holds the Persian Gulf – is the largest exporter of energy (Goldstein, Huang, Akan 1997). As of 1992, the data indicates that the political instability between the global north and the global south will create energy instability (Ibid). When there is energy instability, there is a lack of economic growth (Ibid). Moreover, energy production that relies on oil – which is still most of the world – is subject to various political and economic instabilities like no other resources (Ebinger 1982). Essentially, the problem seems to be geo-political; the oil reserves are concentrated in an area of the world where there is internal and international political instability (Wirth, Gray, Podesta 2003).

Iran has, again, recently threatened to use its energy reserves to obtain political objectives. Mainly, Iran threatens to cut-off energy supplies to buyers if there are sanctions over its nuclear program (Gallis 2006). Whereas Russia, by increasing its internal stability and rule of law, has been able to increase its oil production in order to use the oil as a political bargaining tool with the West (Morse and Richard 2002).

III. A Very Brief History of NATO[2]

NATO was first established in 1949 with its fundamental role to act as a deterrent against military aggression by the Soviets against the West. When the Berlin Wall fell, and the Cold War ended in the early 1990’s the threat of Soviet aggression also ended, and many thought that NATO would perish.

However, NATO has changed and expanded since that time hand has assumed new responsibilities, including a proactive role, in the international community. NATO undertook its first military operation in 1995, followed by operations throughout the world, including Afghanistan, Iraq, Africa and the protection of waterways from pirates. NATO has assumed a humanitarian role along side its military role.

When NATO was formed, it consisted of 14 countries. Today there are 28 countries that are members of NATO; this includes many former Soviet-republics and client-states. There are even more countries that seek a larger involvement with NATO through its “Partnership for Peace” program and other agreements that NATO has with non-member countries.

IV. Analysis; IR and Globalization Theory

The question is; how does energy security fit into the current theoretical paradigms so that it can be analyzed and policy can be crafted to fit goals of the nation-states in relation to energy security? Interestingly enough, both the constructivist and neorealist IR theories, and transformationalist and skeptic globalization theories, offer answers to this problem. Whereas the constructivist and neorealist positions are normally at odds with each other, in the area of NATO becoming involved in energy security they both have valuable insight to offer. Additionally, the skeptic position and the transformationalist positions in globalization, which match with the neorealist and constructivist positions respectively, can add depth to the analysis that might otherwise be missing. Regardless of which pairing is used – neorealist/skeptic or constructivist/transformationalist – they both would argue that NATO should add energy security to its list of goals.

Realism is based in power (Morgenthau 1974; Waltz 1979). Hans Morgenthau, a realist, said that power can come from a monopoly or quasi-monopoly of scarce natural resources (1974). Waltz said that the state must use its power for the main goal of a state: survival (1979). Neorealists also believe that states must engage in balancing actions to balance the power of other states (Waltz 1979). The balancing actions can result in alliances between nations when they strive to achieve the same end (Waltz 1979). In an international economic system, states have simple goals that show how they promote their self-interest and survival: economic utility, economic growth, social stability and political leverage (Kazenstein, Keohane, Krasner 1998).

Globalization skeptics believe that the nation-state is still central, and that the world economy, and globalization, is really about the interactions of the nation-states with other nation-states in a manner that promotes the self-interest of the nation-states (Held, McGrew, Goldblatt, Perraton 1999). This ties the economic interests of a state under neorealism to the skeptic position in globalization by creating a list of motivations for states to participate in international economies, and international alliances, without engaging in actions that would lead to dissolution of their sovereignty (Kazenstein, Keohane, Krasner 1998).

By using neorealism, it is easy to see why states should engage in energy policy with NATO. By engaging in an alliance in the framework of NATO, the various countries are able to ensure their survival in the international alliance. Furthermore, the balancing work of NATO is not finished simply because the Berlin Wall fell. Russia continues to engage in active national security policies designed to have its former enemies become dependent upon it for their energy needs (Rosner 2009). 40 percent of EU gas imports originate from Russia, 30 percent from Algeria and 25 percent from Norway; By 2030, over 60 percent of EU gas imports are expected to come from Russia with overall external dependency expected to reach 80 percent -- and are therefore susceptible to supply disruptions, extortion and price manipulations. So when Europeans talk about energy security their think primarily about electricity and more specifically natural gas, Russian gas (Luft 2009). This means that the EU, most members are also part of NATO, considers the need to balance Russian power and ensure that Russia doesn’t become too powerful, a survival, a national-security issue. Individually, each nation may not have much power to balance Russia, but by joining in an alliance they can ensure their energy security, and thus their national security. NATO, should engage in actively promoting its member nation’s energy security, according to realism.

Additionally, NATO represents US interests. The US has already been engages in active military efforts to secure energy sources, along with other NATO governments (although not NATO as an institution) (Gallis 2006). The Carter Doctrine, put forth by US President Jimmy Carter in 1980, states that any attempt to prevent the flow of oil from the Persian Gulf to the US will be seen as an attack on US vital interests and will be repelled by any means necessary, including military means (Luft 2009). With the US putting forth such a strong military position on energy security in the Persian Gulf, someone, according to neorealism, should balance with position. That someone might be NATO. NATO can engage the various governments involved on how to protect against disruptions in oil supplies, and how to protect the various oil interests in the region, which would place the other countries in the NATO alliance in a balancing position against the US (Gallis 2006).

Additionally, Russia has stated that it has not ruled out the application of force to maintain its position of hydrocarbon supremacy (Rosner 2009). Russia’s revised National Security Strategy to 2020 realizes that such a position might destabilize and unbalance the power in the region, but Russia seeks to maintain its energy dominance (Rosner 2009). According to neorealism, this action must be balanced against to maintain the balance of power in the world (Waltz 1979). NATO is the perfect balancer for this situation since its member nation-states in the EU abut onto the territory Russia controls.

Furthermore, according to the skeptic position on globalization, all nation-states are acting in their own economic interests. This correlates with what has been seen in the world so far: Issues of energy scarcity have triggered levels of competition between NATO allies that might lead to military conflict if left unchecked (Rosner 2009). Additionally, the Middle East states are acting as a cartel that prevents other nation-states from securing their economic interests in the region (Luft 2009). Each time that there has been an energy crisis, the world has suffered a depression in economic terms (Luft 2009). Energy is vital to economic output in developed countries, and is vital to continued economic development in all countries (Wirth, Gray, Podesta 1003). In order to prevent more conflict from occurring over energy security, NATO should actively engage in energy security policies to create an environment where all nation-states can secure their future and promote their economic interests without the fear of engaging in a military conflict within the alliance (Asmus 2002).

NATO can enable nation-states to ensure their security and survival – the basic motivation of nation-states under neorealism. Additionally, economic interests of the member-states, under neorealism, mean that the skeptic position – engaging in international alliances to promote their economic interests in the interests of survival – encourages the use of NATO to sustain member nation-states’ energy security.

The constructivist and transformationalist theories also agree that NATO should have a role to play, although that role appears to be different from the role under neorealism and skepticism. Constructivist theories state that the international organization of nation-states is what the nation-states want, and that it can be changed by changing norms and behaviors through international institutions (Wendt 1992). Transformationalists also believe in the role of international institutions; that international institutions are helping change the way that states believe in sovereignty, the way states act and that state behavior must change as they are no longer in exclusive control of what happens within their state boarders (Held, McGrew, Goldblatt, Perraton 1999). When these two positions are combined, they come to meld into a position that maintains that the world can change, and is changing, and that international institutions are a large part of this change (Shaw 1997).

NATO is an international institution, and its existence enables the constructivist and transformationalist positions to be realized in energy security. The reality is that, by 2030 75% of NATO countries’ oil supply will be dependent on a handful of Middle Eastern states, and NATO’s European members will average 60% natural gas dependency on the Russian Federation (Dyner 2000). This means that the NATO countries must change the way they behave because the energy supplies are not within their nation-state boundaries, and they must consider the Middle East when making decisions (Wirth, Gray, Podesta 2003).

By acknowledging the outside influences on the sovereignty of the nation-state, NATO nations are falling within the transformationalist perspective on globalization. This means, like the transformationalist perspective requires, the NATO countries must make use of international institutions – like NATO – to make changes in the world. If NATO countries are concerned about their energy security because most of their supply comes from unstable countries (Shah 2009), then the nation-states must make use of NATO to secure their energy security. With so many nation-states involved in the arena of energy security, it is possible that only an international institution, such as NATO, can prevent a geopolitical cold war over energy sources (Goldstein, Huang, Akan 1997).

NATO has a huge capacity, vested in its civilian and military structure, to analyze energy and its use from a military and civilian standpoint (Rosner 2009). Using this capacity, NATO has the ability, under constructivist theories, to change the way its member nation-states and others view energy. As China follows America’s past patterns, and engages in participation with the Middle East to secure its energy future, it becomes necessary to have international institutions present to prevent military conflict and misunderstandings (Luft 2009). Indeed, if China continues to follow in the footsteps of America, it could lead to a world full of conflict over energy; which is not in the best interest of any nation-state (Luft 2009). Instead, international institutions, such as NATO, should intervene and work with the various energy suppliers and consumers to create a stable environment for energy security (Luft 2006; Rosner 2009; Gallis 2006).

Furthermore, energy security rests on three pillars – one of which is diversity of sources. No one can attach blame for dependence on oil and natural gas in Europe, oil in America, and the developing world’s dependence on oil, to anyone nation-state (With, Gray, Podesta 2003). Instead, the international institutions need to be engaged in cooperating with nation-states to change the view of oil and natural gas dependence into dependence on a different source of energy. Only if energy sources are diversified will energy security be truly promoted; and only an international institution has the power to change such norms and beliefs in the international system (Bucknell 1981).

The North Atlantic Treaty Organization (NATO) was originally formed to be a deterrent for Russian; to prevent Russia from becoming aggressive towards other European nations (Smith, 1990). However, NATO continues to exist long after its détente purpose has ended (Ibid). In fact, NATO continues to grow and expand. As it grows, it searches for purpose. The growth of China and India, non-NATO countries, as energy consumers, and an inability to produce reliable and alternative energies to oil and natural gas, has led to energy producers needing to ensure access for all to energy sources (Scaroni, 2006). NATO already plays a role in energy security. NATO has many countries that desire a closer relationship with it, either through membership or its “Partnership for Peace” program; many of these countries are the ones who need to secure energy resources because they are energy consumers rather than energy producers (Gallis, 2006). NATO governments have been involved in energy security operations on their own, and there is no reason why energy security cannot become a goal of NATO (Gallis 2006).

Another possible solution is alternative energy sources such as wind power, solar power and photovotalic solar cells. However, current research indicates that these power sources, if fully maximized, could only contribute 1.5 trillion kilowatt hours (kwh) to the total net global electricity generation increase of 13.8 trillion kwh between 2006 and 2030[3]. This means that alternative energy sources alone cannot solve the energy security problem facing most nations. Additionally, most renewable energy sources, other than wind and hydro-power, are not economically competitive with oil and natural gas energy[4]. This means there still must be another solution to the energy security problem.

There are problems with all of these proposals. First, realists thought that force could solve problems of energy security in the 1970’s, but they were wrong (Bucknell 1981). Force alone wasn’t sufficient. The problem was that energy security is a matter of asymmetrical interdependence – where some countries are more dependent on others than other countries – and military power alone has not proven to be able to conquer this dependency (Keohane, Nye 1977). Additionally, NATO has already become involved in energy security through its Istanbul Cooperation Initiative of 2004; the allies are in discussions with Bahrain, Qatar, Kuwait and the United Arab Emirates to build cooperation in energy security[5]. However, the lack of stability in the area of energy security remains (Rosner 2009). It is unknown if time will solve these problems, or if another approach needs to be suggested.

There is another aspect of energy security that needs to be fully expanded upon. The pillars of energy security include supply diversity, transportation diversity and fuel diversity (Rosner 2009). Nuclear energy would solve some of the supply, transportation and fuel diversity problems that currently exist in energy security. Nuclear energy can be a different fuel from oil and natural gas, can be produced at home by most industrialized nations, and is a more reliable supply than oil or natural gas (Ebinger 2009). However, nuclear energy comes with its own set of problems. Most notably, there are problems of storage with the spent fuel – it remains radioactive for decades after it is no longer needed (Ebinger 2009). Nuclear energy also comes with proliferation problems: the material created through the enriching and processing processes, needed to create the nuclear material for civilian use, can also be used as military nuclear material by terrorists (Ebinger 2009). This means that there would have to be significant safeguards against proliferation by terrorists to protect nation-states from a nuclear threat (Ebinger 2009). There are also concerns about how to supply nuclear power to non-nuclear nation-states without those nation-states obtaining the information and materials they need to create nuclear weapons and become a nuclear power (Schneider, Thomas, Froggar, Koplow 2009). In order for nuclear power to become a viable option for the world, rather than just for those nations which already possess it, these issues need to be explored and solutions need to be found for them.

One possible solution, if the constructivist and transformationalist positions are correct, is to use the current international agencies to regulate and control nuclear power. The International Atomic Energy Agency (IAEA) could be used to help regulate these issues. However, Iran has posed a successful challenge to the IAEA’s jurisdiction – which can only be invoked if a nation-state allows the IAEA into its country. This is a limitation of the IAEA that would have to be addressed in order for the IAEA to be an international institution that can help with the transition from oil and natural gas power to nuclear power (Schneider, Thomas, Froggar, Koplow 2009).

However, regardless of the success of the approach at the current time, neorealism/sceptics and constructivism/transformationalists all would agree, for different reasons, that NATO is important to the energy security of the nation-states and should be involved in energy security policies.

V. Conclusion

The IR theories of neorealism and constructivism and the globalization perspectives of skepticism and transformationalists give weight to the idea that NATO should become involved in energy security. Neorealism and skeptics say that NATO should be involved for balancing issues and for protection of the nation-states’ continued survival. Transformationalists and constructivists say that NATO should be involved because it is only through international institutions, like NATO, that anything can change in the area of energy security. Although the reasons for NATO to be involved in energy security are different between the various theories and perspectives, the outcome – that NATO should be involved in energy security – is unanimous.

There are other questions raised by this paper that are left unanswered. One of the main questions is: To what extent should NATO become involved in energy security? Additionally, how would NATO address the ongoing instability in the Middle East that contributes to the pessimism about energy security in the future? There is also a large question of what role science, and the discovery of new technology will play in the quest for energy security. It is possible that another theory, or approach, would have the answers to these questions. Continued development of energy sources, energy storage and more energy-efficient technology will also help the energy security issue. It is up to science whether enough energy alternatives and energy-efficient technology can be developed to aid in the fight for energy security.

Energy security will continue to be a security issue, and an issue that all nation-states must address, so long as energy is needed. Regardless of where energy comes from, or how energy gets to where it needs to go, energy is needed. It provides the very basis for the current international society. Without energy, the world would change into something unrecognizable by today’s standards. In order to protect the world from energy crises, energy security should be an issue that all international institutions and nation-states are actively engaged in.

REFERENCES

Asmus, R. Opening NATO’s Door: How the Alliance Remade Itself For A New Era. Columbia, NY, Columbia U. Press, 2002.

Bucknell, H. Energy and the National Defense. Lexington, KY. University Press of Kentucky, 1981.

Dyner, I. Energy Modeling Platforms for Policy and Strategy Support. The Journal of Operantional Research Society, Vol 51:2 (2000) pp. 136-144

Ebinger, C. Security Implications of the Expansion of Nuclear Energy. Brookings Institute (October, 2009).

Ebinger, C. The Critical Link: Energy and National Security in the 1980’s. Cambridge, Mass. Ballinger Publishing Co, 1982.

Gallis, P. NATO and Energy Security. CRS Report for Congress, December 21, 2006

Goldstein, J and Huand, X and Akan, B. Energy in the World Economy, 1950-1992. International Studies Quarterly, Vol 41:2 (June 1997) pp. 241-266.

Held, D and McGrew, A and Goldblatt, D and Perraton, J. Global Transformations. Stanford University Press, Stanford CA, 1999.

Kaplan, L. The Long Entanglement: NATO’s First Fifty Years. Praeger, 1999.

Kendall, B. NATO Searches for Defining Role. BBC, 2005

Keohane, R and Nye, J. Power and Interdependence. Boston, Little Brown Publishing Co. 1977.

Luft, G. Dependence on Middle East Energy and its Impact on Global Security. Retrieved on 11/142009 from www.iags.org archive.

Morgenthau, H. The New Diplomacy Movement. Encounter, 1979.

Morse, E and Richard, J. The Battle For Energy Dominance. Foreign Affairs, Vol 81:2 (Mar-Ap 2002), pp. 16-31.

Rosner, K. Twenty Years After the Fall of the Berlin Wall: NATO’s Enduring Energy Challenge. October 2009. Retrieved from Journal of Energy Security archives on 12/02/2009.

Sandler, T and Hartley K. The Political Economy of NATO: Past, Present and Into the 21^st Century. Cambridge U. Press, 1999.

Schneider, M and Thomas, S and Froggar, A and Koplow, D. World Nuclear Industry Status Report 2009. (August 2009) Retrieved on 12/11/2009 from http://www.bmu.de/english/nuclear_safety/downloads/doc/44832.php.

Shah, A. Reliance on Foreign Sources of Energy and Geopolitics. Retrieved on 12/12/2009 from www.globalissues.org/article/595/energy-security#Relianceonforeignsourcesofenergyandgeopolitics.

Shaw, M. The State of Globalization; Towards a Theory of State Transformation. Review of International Political Economy, Vol 4:3 (Autumn, 1997), pp. 497-513

Smith, J, ed. The Origins of NATO. Exeter, United Kingdom, U. of Exeter Press, 1990

Waltz, K. Theory of International Politics. McGrawHill, NY, 1979.

Washingtonpost.Newsweek Interactive LLC. Measuring Globalization. Foreign Policy, Vol 148 (May-June 2005). Pp. 52-60.

Wendt, A. Anarchy Is What States Make Of It. International Organization, Vol 46:2 (Spring 1992).

Wirth, T and Boyden Gray, C and Podesta, J. The Future of Energy Policy. Foreign Affairs, Vol 82:4 (July-Aug 2003) pp. 132-155

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[1] Energy Information Administration, http://www.eia.doe.gov/imp/imports.html

[2] All information in this section was obtained at the official NATO website: www.nato.int; a search was performed for “history of NATO” and this is the information that was collected.

[3] US Energy Information Administration , “International Energy Outlook 2009”, May 2009

[4] Ibid.

[5] Istanbul Cooperation Initiative, NATO, Brussels, Jan. 2006

A general background for international political economy

I. What is IPE: interaction of economics and politics – how political forces influence economic decision-making and how political decisions can affect the economy.

a. Substantially

i. Reciprocal influence of politics and economics

ii. Economist: purpose of economy is to maximize wealth

iii. Gilpin: political economy studies how the wealth is redistributed

iv. Trade, production, finance, and international development is the substance of IPE

1. If we were interested in the politics of finance, how would we use Frieden and Martin to set up a research question:

a. Interest, institutions and information

b. 1999-2008

i. 1999: Repeal of Glass-Stiegel

1. so we look at House and Senate: motivations, interests that have mobilized around the institutions

c. By using this format, you can break down the domestic/international barrier and even use institutions that are multi-national

b. Analytically

i. Level of analysis is international and domestic and then the interaction between the two

ii. How are the differences between international and domestic expressed? (Lake notes)

1. International political view

2. International economic

3. domestic institutional

4. domestic societal

iii. Waltz (levels of analysis)

1. International: this is what waltz wants to argue for (neorealism)

2. State

3. Individual

iv.

c. Theoretically

i. Realism

1. state-centric

2. system-centric realism

ii. Liberal

iii. Marxist (neomarxist)

iv. Constructivist/critical – tends to apply to IR, and is limited in its approach to IPE

1. agents influence structures which come back to reconstitute the agents

2. Ideas influence structures; structures can influence ideas

II. Differences between Economics and IPE

a. Gilpin: economists study the market and ho resources can best be used efficiently (rational actors), you can explain all behavior in market terms. But IPE looks at how the resources are divided

b. Economists treat economics as a hard science rather than IPE which is treated as a social science: always one answer in the model for economics, whereas in IPE there is theory and some less of the “right” answer.

c. Economists look at abstractions of markets; IPE starts with the assumption that markets are created by societies and so they are influenced by society

d. Exogenous: Outside the variables included in the models

e. Endogenous: Variables that are important and included in the model

f. Market: Economists – an entity; IPE – created and embedded in a societal and historical context

g. Purpose of Market: Economists – develop wealth and efficient use of resources; IPE – distribute resources

III. Evolution as a Subfield

a. 19^th century

i. Ricardo

ii. Adam Smith: Wealth of Nations and A Theory of Moral Sentiment

iii. John Stuart Mill

iv. Marx

v. They were political economists because they looked at the interaction of politics and economics

b. 20^th century

i. Professionalization of economics

1. Marshall (1890)

2. Robbins (Early 1930s)

3. Emphasize methodological individualism – all actors can be treated as individuals. They individuals always pursue their own self-interest through a cost-benefit analysis.

4. All resources are scarce (neoclassical economists)

5. All markets are natural – emerge naturally and can be self-regulating

ii. Professionalization of IR

1. First department of IR – University of Aberswyth in 1919 after WWI: Purpose – how to prevent another world war.

2. After WWII – the US became the leader

3. Leaders in IPE:

a. Koehane and Nye

iii. When did the convergence of economics and politics occur in US?

1. 1970s and on because of a series of events…..

2. US hegemony declines

3. 1971 – Bretton-Woods, US taken off gold standard

4. 1973 – oil crisis

5. 1974- recession

6. 1976 – increasing unemployment, Britain goes to IMF for loan

7. 1979 – oil shock number 2

8. 1982 – debt crisis

a. In order to understand you need the integration of economics and politics

9. End of Cold War (late 1980s) – need more economics and politics to combine

iv. Developments within economics

1. Public choice: Rather than market failures there is only government failure (failed policy) but not because people misunderstand economic policy it is because there are distortions in government.

a. Keynsians were emphasizing market failure and how to prevent market failure

b. Public choice people think humans are rational actors – but to the extent the government is a rational actor which pursues its own interest – it can intervene in the market to cause corruption

i. Causes rent seeking behavior

c. No such thing as public good – only can pursue self-interest and individual goods

d. This approach gets public acceptance in 1962 when “Calculus of Consent” is published

2. Neoclassical Institutionalism: Motivated by the economy and ignoring social factors – institutions are formed to promote the efficient use of resources

3. New Political Economy

a. Economists who will apply basic assumptions of economics to the study of poliy/politics

v. Within IR and IPE (Koehane articles)

1. 1920 -1930s: Idealist is the predominant paradigm – institutions can be created to manage conflict

a. Kellog-Brian Pact (Pact of Paris): All signatories to the league of nations will renounce violence as a foreign policy instrument – all conflicts would be resolved peacefully

b. 1931 – Italy invades Ethiopia and Japan invades Manchuria: there are no punishments, and so this approach is lost.

2. 1960’s – 1970’s Realism (IR is about the unending struggle for power – just like all politics; politics is supreme over economics; states are the supreme actors)

a. Transnationalism emerges as the challenge to realism

i. States are sometimes important, but sometimes international organizations can help

ii. There are other areas that security issues

iii. Not a zero-sum game

iv. The use of force is becoming less useful in international politics – not that it is unimportant or irrelevant, it’s just that force isn’t always the answer

3. 1970s

a. Hegemonic stability theory: The presence of a hegemon makes the IR system more likely to maintain stability

b. Realist interpretation: the hegemon will pursue the national interest (malevolent hegemon)

c. Liberal interpretation: the hegemon can help create the conditions to purse the global or international interests – national interests can overlap with other interests – and create other motivations for the hegemon

4. 1980’s

a. NLI

i. Even when the hegemon declines, the regimes will remain because the states realize it is in their national/rational self-interests to follow the rules and regulations of the regimes

b. Neorealists

i. Once the US begins to lose its status as the hegemon, it is unlikely that the international regimes will stay in place b/c the regime and the states cannot be self-governing…skepticism of international oranizations

c. Constructivists:

i. The regimes continue regardless of hegemony because the rules of the regime have become ingrained in the people

d. A continuation of the old debate between realism and liberalism

5. 1990’s: Constructivism vs. Rationalism (realism and liberalism are both rationalism)

a. For the rational:

i. Agents (domestic focus) or structure (systemic focus)

1. But don’t look at the interactions

ii. Material power

iii. interests

b. For the reflective/constructivists:

i. Identities

ii. Ideologies

iii. Agents and structures are integrated with each other and influence each other

vi. British school

1. Argue that the American approach was wrong

2. focuses on historical and institutional approaches

3. more willing to look at critical approaches that combine traditional approaches

4. Willing to include sociologists

5. Tend to study more international development that the US

6. Susan Strange: Critiqued regime theory

a. Most prominent British IPE

b. Regime theory is a device to legitimize US imperialism

c. The debate – realism/liberalism – is just legitimizing US and never considered the redistributional aspects of the regimes they were studying

IV. Overview and evolution of IPE – Historical Junctures

a. Post WWI 19^th century liberalism

i. Repeal of corn laws (1846)

1. Tarrifs on grain applied by the British against anyone who tried to import grain to Britain (Germans and French really)

2. This means that taxes applied to agricultural imports are reduced and eliminated

ii. Coben-Chevaliar in 1860’s

1. Uk and France

2. Agreed to lower tarrif’s to allow trade between the two countries

3. Signifies that European countries are going to subscribe to liberalization of trade, finance and immigration

b. WWI - Return to Protectionism

i. US

ii. 1921 safeguarding of industries act

iii. 1922 Ford act

iv. 1930 Smoot-Hawlie Act

v. 1932 @ Ottowa conference

1. British go off the Gold Standard, and return to an Imperial Preference System (rely on colonies) signal protectionalism that has become institutionalized

c. Post WWII

i. Bretton-Woods Institutions

1. IMF (1944)

2. World Bank (1945)

3. GATT (1947)

a. Becomes subsumed within WTO in 1995

ii. G8, G7, G5, G3, G1: informal meetings of world’s largest economies

d. 1973 – liberalization of finance

e. 1995 – formation of

f. 1990s – repeal of Glass-Stiegel

Johns S. Mill on representation

What is representation and why does Mill think that it is essential to good government? What are its potential evils?

For John S. Mill, representation is the best form of government. “The ideally best form of government is that in which the sovereignty, or supreme controlling power in the last resort, is vested in the entire aggregate of the community; every citizen not only having a voice in the exercise of that ultimate sovereignty, but being, at least occasionally, called on to take an actual part in the government, by the personal discharge of some public function, local or general” (Chapter 3). For Mill, representation is essential to good government because is passes the “test” of good government; it has a high level of order and progress. For Mill, representation “promotes the good management of the affairs of society by means of the existing faculties, moral, intellectual, and active, of its various members” [order], and improves “those faculties” [progress] (Chapter 3).

Representation, for Mill, means that the government is a completely popular government – the people vote. This is necessary in representation because only the individual will consistently stand up for their rights, that an individual is only secure from being disregarded when they get involved and vote for their rights, and that each individual’s vote will even out when they are brought into the aggregate will of the voters. This is the ideal of representation for Mill. This means, according to Mill, that each individual is responsible for the protection of his rights and liberties. Because representation is the only form of government that can protect the individual’s rights and liberties, it is essential for good government.

This does not mean that Mill is an advocate for direct democracy – he is not. He advocates for a representative government. This is where the people, or some “numerous portion” of them, “exercise through deputies periodically elected by themselves the ultimate controlling power” (Chapter 5). For Mill, the “ultimate controlling power” is where one branch of the government can stop all government from doing anything – essentially a veto power. Mill states that in a representative government this power doesn’t have to reside with the people, explicitly, but does rest with them because they appoint the people in the government who then can exercise this power.

One of the pitfalls of representative government can occur when the representative body tries to do the work of the government, rather than simply deciding on the agenda of the government. This leads to inexpert legislation and regulation of various aspects of life. For Mill, this pitfall is easily avoided. Instead of granting the representative body the ability to do the work of the government, the representative body is granted the ability to decide on the agenda of the government, and then the experts in the bureaucracy are allowed to do the work. This prevents the representative body from doing the work that should be done by experts.

An example Mill gives, in Chapter 5, is how to draft legislation. In Mill’s ideal representative government, the representative body would decide what they want covered in a law, then ask the legislation committee – staffed by people who are experts at creating laws – to draw up the law. Then the representative body would vote on the law drafted by the committee and not be allowed to enter any amendments to the law. For Mill, this is a reasonable precaution to take because the representative body is not suited to doing the work – here the legislative commission would be doing the work – but only setting the agenda for the work. This avoids the pitfall of having the representative body doing the work of the government.

These are Mill’s solutions to preventing the representative government form engaging in business for which it has no expertise. The other problem a representative body faces is that the assembly is too close to the industries/people being regulated and are influenced by the very people it is trying to govern (also known as capture). In order to solve this problem, Mill suggest that people be able to vote for whatever representative you wish, and not be governed by geography. An example of this would be voting for the California State Senate in a system where you simply vote for candidates, rather than for candidates from a district.

Additionally, Mill believes that having proportional representation is better than having a majority vote because, he believes, you don’t have to vote for the person that you know, but you simply vote for what the person believes in. This enables government to remove the concept of a “safe district” which makes the elected representatives more responsive to the people and will create better candidates from which the people can elect representatives. This means that as representation improves, and as candidate quality improves, the issue of capture becomes less possible.

According to Mill, representative government can only exist when the people: (1) Are willing to be governed by representative government, (2) Are willing to do what is necessary to maintain the representative government, and (3) Are willing and able to fulfill the duties and functions that they must under a representative government. This means, that when any of these conditions fail, there will be problems in a representative government. These potential evils include: failing to invest enough power in the administration (bureaucracy) to do the work of the government, and the failure to develop active citizens; which is the “failure to develop by exercise the actual capacities and social feelings of the individual citizens” (p. 120). Mill also says that there are two problems that are specific to a representative government: That there are insufficient mental capabilities in the governing body and that the people become subject and controlled by an interest that is not their own (Mill calls these a sinister interest).

All of the issues Mill presents that could be problems in a representative government can be solved by having active participants in government. By “active” it is meant that the citizens take care of themselves, rather than have the government be paternalistic. This involves voting, being educated and looking out for the common good instead of sinister interests.

For Mill, sinister interests include majorities split by race, religion and economic status. These sinister interests don’t consider the good of society as a whole, but consider their majority status and work in their own interests. However, this can be solved by opening districts up so that people can vote for whomever they want. Then a racial minority can band together and get candidates elected to the representative body regardless of geography. The same is true for economic and religious minorities. This prevents great cleavages between classes and will result in a truly representative government, rather than just a majoritarian one.

If the people being ruled by a representative government become passive and are no longer willing to maintain the government, or are no longer willing to be controlled by their interests, Mill’s solution is to have a tyranny take over. He believes that a change in government will make a passive people become more active, which means they can progress from a tyrannical government – which can govern passive people - to a representative government. A change in government type is Mill’s prescription for people that have become passive and are no longer willing to maintain the representative government and do not want to fulfill the duties and functions that they must under a representative government.