Hostname: page-component-586b7cd67f-rcrh6 Total loading time: 0 Render date: 2024-11-27T20:42:05.906Z Has data issue: false hasContentIssue false
  • English
  • Français

Transnational Economic Processes

Published online by Cambridge University Press:  22 May 2009

Edward L. Morse
Get access

Extract

Changes in the structure of the global economy have resulted in a withering of governmental control of certain activities presumed to be de jure within the domain of governments. The international monetary crises of the 1960s have demonstrated the emergence of financial markets that seem to operate beyond the jurisdiction of even the most advanced industrialized states of the West and outside their individual or collective control. The flourishing of multinational corporations has affected the national science and economic growth policies of highly developed and less developed states alike by restricting the freedom of those governments to establish social priorities. Tariff reductions carefully and arduously negotiated on a multilateral basis through the General Agreement on Tariffs and Trade (GATT), through bilateral arrangements, or through emergent regional economic organizations have similarly increased the number of relatively nonmanipulable and unknown factors which must be accounted for in planning a wide spectrum of domestic and foreign economic policies—from regional development policy or anti-inflationary efforts on the domestic side to the international exchange rate of a state's currency.

Type
Articles
Information
International Organization , Volume 25 , Issue 3 , Summer 1971 , pp. 373 - 397
Copyright
Copyright © The IO Foundation 1971

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Joseph S. Nye, Jr., and Robert O. Keohane, introductory essay to this volume, p. 332.

2 Kuznets, Simon, Modern Economic Growth: Rate, Structure, and Spread (Studies in Comparative Economics, No. 7) (New Haven, Conn: Yale University Press, 1966), p. 9Google Scholar. A similar definition has been used to describe the revolution of modernization in human affairs; see Black, C. E., The Dynamics of Modernization: A Study in Comparative History (New York: Harper & Row, 1966), pp. 1–9Google Scholar.

3 For example, overseas emigration from Europe was at a level of some 257,000 per year in 1846 and increased to a rate of 1.4 million per year at the outbreak of World War I. Thereafter the rate precipitously declined. Similarly, world trade increased at an accelerating rate through the first half of the nineteenth century, reaching a per decade rate of growth of 61.5 percent in the 1840s and declining to about 47 percent at the outbreak of the First World War. It, too, later declined drastically. With the rapid growth of world trade in the century before World War I the share of the foreign trade sector in the national product also generally increased in the industrializing societies. More complete data on the period between the 1830s and 1960 can be found in Kuznets, pp. 285–358.

4 For an important and stimulating discussion of the relationship between political and economic aspects of modernization in terms of the growth of public as opposed to private goods see de Schweinitz, Karl Jr, “Growth, Development, and Political Modernization,” World Politics, 07 1970 (Vol. 22, No. 4), pp. 518–540CrossRefGoogle Scholar. De Schweinitz views political growth as the process by which the output of public goods is increased. This political output is jointly consumed by all members of the polity—whether or not they wish to consume them: “Everyone must consume political goods. Although I can choose to consume cigarettes, automobiles, or transistor radios, I have no choice but to consume the armed forces of the United States, the space program of NASA, the judicial system, the FBI, the Federal Reserve Authority, or the National Labor Relations Board.” (P. 525.)

5 For an elaboration of this paradox see Hassner, Pierre, “The Nation-State in the Nuclear Age,” Survey, 04 1968 (No. 67), pp. 3—27Google Scholar; and Morgenthau, Hans J., “The Four Paradoxes of Nuclear Strategy,” American Political Science Review, 03 1964 (Vol. 58, No. 1), pp. 23–35CrossRefGoogle Scholar.

6 For an elaboration of this argument see my article, “The Transformation of Foreign Policies: Modernization, Interdependence, and Externalization,” World Politics, 04 1970 (Vol. 22, No. 3), pp. 379–383Google Scholar; and Knorr, Klaus, On the Uses of Military Power in the Nuclear Age (Princeton, N.J: Princeton University Press, 1966), pp. 21–34Google Scholar.

7 The same combination of “security” and “welfare” goals could be found among the various incentives for European integration. On the one hand, European unification was viewed as a means of putting an end to the divisive nationalisms which had been seen as a root of warfare and upheaval in Europe in the century preceding World War II. On the other hand, it was seen as the means of creating a market sufficiently large to support modern industrial growth. For a discussion of these motives in terms of functional, federal, and confederal approaches to European unity sec Spinelli, Altiero, The Eurocrats: Conflict and Crisis in the European Community, trans. Haines, C. Grove (Baltimore, Md: Johns Hopkins Press, 1966), pp. 3–25Google Scholar.

8 For the most comprehensive review of political aspects of East-West trade see Pisar, Samuel, Coexistence and Commerce: Guidelines for Transactions between East and West (New York: McGraw-Hill Book Co., 1970)Google Scholar.

9 The increased importance of economic relationships as a major concern of international politics is further explained by Susan Strange in “International Economics and International Relations: A Case of Mutual Neglect,” International Affairs (London), 04 1970 (Vol. 46, No. 2), pp. 304–315Google Scholar; and my article, “The Politics of Interdependence,” International Organization, Spring 1969 (Vol. 23, No. 2), pp. 311–326CrossRefGoogle Scholar.

10 Several of these contradictory interpretations are reviewed in my article in International Organization, Vol. 23, No. 2; and in Young, Oran R., “Interdependencies in World Politics,” International Journal, Autumn 1969 (Vol. 24, No. 4), pp. 726–750CrossRefGoogle Scholar.

11 See Kuznets; and Cooper, Richard N., The Economics of Interdependence: Economic Policy in the Atlantic Community (Atlantic Policy Series) (New York: McGraw-Hill Book Co. [for the Council on Foreign Relations], 1968)Google Scholar.

12 The most extreme statement of this viewpoint is found in Waltz, Kenneth N., “The Myth of National Interdependence,” in The International Corporation: A Symposium, ed. Kindleberger, Charles P. (Cambridge, Mass: M.I.T. Press, 1970), pp. 205–223Google Scholar. See also Deutsch, Karl W. and Eckstein, Alexander, “National Industrialization and the Declining Share of the International Economic Sector, 1890–1959,” World Politics, 01 1961 (Vol. 13, No. 2), pp. 267–299CrossRefGoogle Scholar; and Deutsch, Karl W., Bliss, Chester I., and Eckstein, Alexander, “Population, Sovereignty, and the Share of Foreign Trade,” Economic Development and Cultural Change, 07 1962 (Vol. 10, No. 4), pp. 353–366CrossRefGoogle Scholar.

13 Kuznets, pp. 15–16.

14 There are other definitions which have been offered for “interdependence.” Each has a different focus and therefore gives rise to different sets of questions. This one focuses on state actions and consequently lends itself to questions regarding the ability of a state's leadership to attain its objectives and its level of control over activities both within and beyond its borders. Interdependence has also been defined in systemic terms and in terms of the growth of political output or political goods.

In systemic terms, for example, interdependence has been defined “in terms of the extent to which events occurring in any given part or within any given component unit of a world system affect (cither physically or perceptually) events taking place in each of the other parts or component units of the system.” Young, , International Journal, Vol. 24, No. 4, p. 726CrossRefGoogle Scholar. This definition lends itself to the formulation of hypotheses about the systemic effects of increases (or decreases) in the levels of interdependence: “The higher the ratio of interdependencies among the component units of a world system to intcrdependencies within the component units, the greater the proportion of any given unit's resources that will be devoted to external affairs.” Ibid., p. 741.

In terms of political goods or “public goods” (those goods which, if consumed by any single member of a group, cannot feasibly be withheld from other members of the group) interdependence would be defined as a function of the scope and number of political goods produced in a group. See, for example, Norman Frohlich and Joe Oppenheimer, “Entrepreneurial Politics and Foreign Policy,” World Politics, forthcoming.

15 Waltz, in Kindleberger, p. 206.

16 Ibid., p. 205.

17 Ibid., p. 207.

18 For a stimulating discussion of changes in the types of international actors and their current diversity see Young, Oran R., “The Actors in World Politics,” in The Analysis of International Politics, ed. Rosenau, James N., Davis, B. Vincent, and East, Maurice A. (Glencoe, Ill: Free PressGoogle Scholar, forthcoming).

19 Waltz, in Kindleberger, p. 207.

20 Hart, Hornell, “The Hypothesis of Cultural Lag: A Present-Day View,” in Technology and Social Change, by Allen, Francis R. et al. (New York: Appleton-Century-Crofts, 1957), p. 428Google Scholar.

21 Ibid.

22 Ibid., p. 432.

23 For an elaboration of this argument see my article in World Politics, Vol. 22, No. 3, pp. 377–383.

24 For examples of the former see Waltz, in Kindleberger; Deutsch, and Eckstein, , World Politics, Vol. 13, No. 2Google Scholar; and Deutsch, , Bliss, , and Eckstein, , Economic Development and Cultural Change, Vol. 10, No. 4Google Scholar. For examples of the latter see Cooper; and Svenńilson, Ingvar, Growth and Stagnation in the European Economy (Geneva: United Nations Economic Commission for Europe, 1954)Google Scholar.

25 See Russett, Bruce M., Trends in World Politics (Government in the Modern World) (New York: Macmillan Co., 1965), pp. 7–10Google Scholar. J. Edwin Holmstrom has pushed the exponential growth curve back several millennia to the use of wagons and the consequent increase of capacity over “man-transport” and pack animals. See his book, Railroads and Roads in Pioneer Development Overseas: A Study of Their Comparative Economies (London: P. S. King & Son, 1934), p. 56Google Scholar.

26 This decrease in transportation costs also, of course, affects global trade. See Cooper, pp. 65–66.

27 For details on the volume of international migration in aggregated as well as disaggregated form (by country of origin and country of entrance) see Svenńilson, pp. 65–68; Kuznets, pp. 51–56; and Myrdal, Gunnar, An International Economy: Problems and Prospects (New York: Harper & Brothers, Publishers, 1956)Google Scholar, chapter 7.

28 Myrdal, p. 95.

29 Figures are drawn from the United Nations Statistical Yearbook (12th and 21st eds.; New York: Statistical Office of the United Nations, 1961, 1969)Google Scholar. The number of international travelers during 1970 has been estimated at over 200 million. The largest part of this travel, some 50 percent, represented exchanges among persons residing in the industrialized societies of Western Europe and North America.

30 For a more complete discussion based on a disaggregation of capital flows sec Kuzncts, pp. 321–334, for the period between 1820 and 1960; Cooper, pp. 82–91, carries the discussion through the middle of the 1960s. A discussion of some of the political effects of these flows in the postwar period is found in the essay by Lawrence Krause in this volume.

31 Kuznets, p. 327.

32 Cooper, pp. 88–90.

33 Waltz, in Kindleberger, p. 216.

34 Ibid., p. 214.

35 Kuznets, pp. 294–295.

36 Ibid., p. 305.

37 See Deutsch, and Eckstein, , World Politics, Vol. 13, No. 2Google Scholar; and Deutsch, , Bliss, , and Eckstein, , Economic Development and Cultural Change, Vol. 10, No. 4Google Scholar. In addition, the following works should be consulted: Deutsch, Karl et al. , France, Germany and the Western Alliance: A Study of Elite Attitudes on European Integration and World Politics (New York: Charles Scribner's Sons, 1967)Google Scholar; and Deutsch, Karl, “Transaction Flows as Indicators of Political Cohesion,” in The Integration of Political Communities, ed. Jacob, Philip E. and Toscano, James V. (Philadelphia: J. B. Lippincott Co., 1964), pp. 75–97Google Scholar.

38 Kuznets, however, disagrees with Deutsch's findings for the pre-1914 period. He finds “that the trends in the trade proportions of the older developed countries in the period before World War I were generally and significantly upward, not downward.” Kuznets, p. 316.

39 Ibid., p. 319.

40 There were other effects of the war which fostered stagnation in economic growth. Among these were financial losses, losses of manpower, of overseas markets, and a withering of the psychology of free trade; sec Svenńilson, pp. 18–20 and 41–61.

41 Kuznets, p. 321. The reasons, of course, are far more complicated than the highlights outlined above. Fuller treatment is found in Kuznets and in Svenńilson.

42 Yet, there is some importance in the fact that these do not represent the same specific states.

43 It is this disintegrative quality of modernization which Marion Levy has in mind when he argues that “the structures of modernization, once they have reached certain levels of development, constitute a sort of universal social solvent.” Levy, Marion J. Jr, Modernization and the Structure of Societies: A Setting jor International Affairs (Princeton, NJ: Princeton University Press, 1966), p. 14Google Scholar.

44 See Svenńilson, pp. 175–180.

45 Cooper, pp. 60–61.

46 Kuznets, p. 302.

47 Deutsch et al., p. 218.

48 Ibid., p. 220.

49 Ibid., p. 221.

50 Young, , International Journal, Vol. 24, No. 4, p. 733Google Scholar.

51 Ibid., p. 734.

52 Cooper, p. 151.

53 Ibid., p. 152.

54 See, for example, Mayer, Arno J., Political Origins of the New Diplomacy, 1917–1918 (Yale Historical Publications, Study No. 10) (New Haven, Conn: Yale University Press, 1959)Google Scholar.

55 Something of this is found in Boulding, Kenneth E., Conflict and Defense: A General Theory (Center for Research in Conflict Resolution Publication) (New York: Harper & Brothers, Publishers, 1962)Google Scholar, but the notion is widespread.

56 Kuznets, p. 286.

57 Ibid., pp. 286–287. For a more general view of the phenomenon of modernization defined in terms of cumulative growth of knowledge see Black, pp. 7ff.