The Three Fields of Global Political Economy

Heikki Patomäki

• Publisher: Routledge
• Year: 2022
• Print ISBN: 9780367763985
• eBook ISBN: 9781000547146
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The Three Fields of Global Political Economy provides a systematic and future-oriented account of global political economy dynamics since the Industrial Revolution and argues that major changes and conflicting processes can be understood through the concept of these three fields.

The first field is constituted by the circuit of capital and is characterised by a tendency towards economic liberalism. The second field is brought about by reactions to, and learning from, cycles and crises and various negative experiences. The third field is the field of reason of state. It is evoked by struggles within and among states and has its own inner generative structures. This book analyses the generic dynamics of these three fields of global political economy and explores their most significant causal effects, such as growth, employment, distribution of income and wealth, wars, and ecological effects. Together, the prevailing three fields, as well as the ideas and causal forces which generate them, constitute the "holomovement" of the global political economy.

This book will appeal to advanced students and scholars of global studies, international relations, international political economy, economic theory, and governance, as well as those working in social theory and sociology, and to a broader audience interested in socioeconomics.

1Introduction

DOI: 10.4324/9781003166795-1

In the 2020s, the world economy seems to be entering a new era as a result of learning and unlearning. The Keynesian spell as a response to the global financial crisis of 2008–09 might have been short-lived, but unconventional monetary policies have become an essential part of the system. The Covid-19 crisis in 2020–22 has deepened the gap between the foregoing macroeconomic orthodoxy and current and emerging policy realities. There is a widespread expectation that the economic role of the state is going to be strengthened permanently. Some of the pandemic-inspired rethinking has been retrospective. For instance, according to the Economist (2020), economic policy focused on inflation control and monetary policy came to an end already during the global financial crisis. The means of the prevailing macroeconomics proved ineffective and this is also because of insufficient aggregate demand and increasing inequality. Perhaps most startlingly, the latter is attributed, among other things, to the growth of corporate power and to globalisation that has led to polarisation within countries.

Despite the ambiguous and contested nature of the term, the era from 1980 to the 2020s can be characterised as “neoliberal” (Patomäki 2009, 2020). As the hegemonic or dominant policy paradigm, neoliberalism has succeeded in transforming social contexts through agency, practices, and institutions, with far-reaching effects. As I argue in this book, the prevailing economic and social policies have causal effects, which in this era have included rising inequalities, progressively more insecure terms of employment, and recurring economic crises. These have led to discontent with the current form of globalisation and various political responses to the perceived situation, including those of nationalist and authoritarian populisms.

This is not the first time such changes are taking place in the world economy that has been characterised by rapid but uneven and unstable growth. Since the industrial revolution and the emergence of a truly planetary economy – “when the dam burst, […] the old world was swept away in one indomitable surge toward a planetary economy” (Polanyi 2001, 93) – there have been many major shifts and changes, often associated with dramatic crises, the two world wars and, to a more limited extent, the end of the Cold War. To what extent do the patterns of current processes resemble those of the earlier ones? To answer this question, a possibility is to explore various historical analogies in their horizontal (concerning similarities and differences between the historical eras at the level of actual events, trends, and developments) and vertical dimensions (concerning relevant causal powers, mechanisms, and processes within them). This kind of work is important also from the point of view of anticipating the future in a world distinguished by new kinds of problems such as highly reflexive mode of responsiveness to pandemics and ecological limits to growth. All historical analogies are only partial, yet together with various structural explanations they can be used to build scenarios about possible futures. Scenarios are not predictions but rather descriptions of what could happen. They start with an analysis of the existing structures and processes and their inherent possibilities, coupled with the assumption that futures remain open until a particular possibility is actualised.

This book relies on claims about the adequacy of certain historical analogies, but overall the approach is somewhat different. My main aim is to provide a systematic and future-oriented account of the dynamics of the world political economy since the industrial revolution and the emergence of a truly planetary economy. I argue that the conflicting perspectives on world political economy can be understood as fields that generate the dynamics of world economy and politics. This holistic approach is based on field theory and process metaphysics (Rescher 1996, 2000), while it also relies on various post-Keynesian and other heterodox economic theories as well on the holism of global Keynesianism (Göhler and Tausch 2002) and other globalist viewpoints (e.g. Wallerstein 2004; cf. processual reinterpretation by Robertson and Lechner 1985). This approach involves risks. Cognitive integration of diverse approaches at this level of abstraction and generality means the necessity of learning by error. Hence, The Three Fields of Global Political Economy is meant to be a methodical opening that develops a new reflexive perspective where constitutive effects are causal, but not all causal effects are constitutive (the key concepts are explained in Chapter 2). The social production of theory and policy takes place within, and is an essential part of, the processes of global political economy. Prevailing ideas and theories have causal effects through agency, economic activity, and their regulatory-institutional implications, and are co-responsible for uneven growth and cyclical changes both within countries and in the global political economy as a whole.

The key concept of this book is “field”. The concept originates in physics, where a shift from mechanical to field theories started in the mid-19th century and includes theories of electromagnetism, relativity, and quantum forces. In sociology and other social sciences, the concept of field and related theories have been widely discussed and applied (e.g. Bourdieu and Wacquant 1992; DiMaggio and Powell 1983; Fligstein and MacAdam 2012; Martin 2003). I will discuss the concept in some detail in Chapter 2. Here it suffices to mention two ways in which my use of the concept is novel. (1) The first is that I follow the guidelines of methodological globalism. Methodological nationalism subsumes societies under nation-states and presumes that national borders demarcate societies from each other (Beck 2007). In contrast, methodological globalism allows for the possibility that trans- and supranational spaces and processes are crucial for generating outcomes such as public policies and economic growth. Thus the first two fields associated with economic liberalism and social/democratic theories respectively, swing, alternate, and evolve globally. Not all processes of determination are trans- or supranational, however. The third field – the field of the reason of state, sovereignty, nationalism, and power-balancing – is constituted by modern states. State-structures too are entangled with non-territorial practices and institutions – even power-balancing is a practice that cannot be located inside or outside – but the state itself is organised territorially. (2) The second novelty is that I understand the dynamics of the fields in terms of world-historical processes that involve collective learning in various forms, including unlearning and pathological learning. The processes of collective learning occur through conflicts and institutional transformations.

Instead of substances exerting mechanical force on each other, what we have in the world are diffused processes spread out in a field-like manner over regions of space. Fields are spatially distributed potentials. The overall structure of a field or the organisation of an environment can be the cause of what is happening in it (Bhaskar 2008, 75). Learning occurs within generic fields that have powers and tendencies to manifest characteristic properties and produce particular outcomes. The causal outcomes, including crises, are in turn a source of learning and can thereby shape the fields. Like Pierre Bourdieu, I use the concept of field as a partial analogy to physical fields, bending social space-time and thus defining the taken for granted, obvious, and relatively effortless direction of social activities in pursuit of the desirable values and things characteristic to that field. The analogy is only partial: people, unlike mass, particles, and waves, can and do change the principles that structure a field. Agency and ideas matter. Changes occur through learning, power struggles, and institutional transformations. It is at the same time true that the habitus of embodied actors, which is acquired through practical learning, is a generative dynamic structure that adapts and accommodates itself to a dynamic field but can also be in tension or conflict with the prevailing field.

The constitution of political economy dynamics has causal consequences. Capitalist market economy is integrated across the planet to varying degrees. States within it are part of a system that generates growth and other economic outcomes with partly synchronised fluctuations, cycles, and crises that manifest themselves at different scales of time. As will become evident in Chapter 4, theorists such as Karl Marx, John Hobson, Michał Kalecki, John Maynard Keynes, Joseph Schumpeter, and Hyman Minsky have explicated some of the key aspects of the complex processes of the determination of growth and political economy fluctuations and crises. Their works have various conceptual and geohistorical limitations, are in part mutually incompatible, and at times verge on methodological nationalism. However, for this book, it is enough to posit claims such as Say’s law does not hold. In contrast to the idea of equilibrium, causation is often cumulative and self-reinforcing processes dominate, although there are also negative feedback loops. In addition, I hold that the lack of efficient aggregate demand occurs not only, perhaps not even primarily, within states, but in wider regions and in the world economy as a whole. My account of the fields of world political economy relies on a synthesis of some basic elements of heterodox economic theory, which in part also defines what I mean by positive or progressive learning. At first sight, this may appear as something close to a petitio principii fallacy, but the point is that we cannot study a global whole without being situated within it ourselves. Our situatedness does not compromise the possibility of making rational yet fallible judgements about the truth of economic and social hypotheses and theories.

In Chapters 3–5, I describe and analyse each historical field and its powers to organise and line up outcomes concerning learning, policy, and institutions. The first generic or power-field is characterised by a constant tendency towards liberal-economic orthodoxy (OL-field where “OL” stands for orthodox liberalism). Since the industrial revolution, the OL-field has been intertwined with population and per capita economic growth, and from this its potential and power has largely stemmed. Yet its powers are context-dependent and its sources do vary and can be ambiguous. The second field is brought about by reactions to, and learning from, cycles and crises and various negative experiences associated with the OL-field, including unemployment and sense of alienation, heteronomy, and injustice. The C>L-field is commonly associated with short and long cycles in the world economy and with wars and other crises (“C>L” stands for from crises to learning). Historically, these two fields emerged in a relatively rapid historical succession and – to simplify – their interactions can be thought dialectically as thesis ↔ antithesis resulting in various syntheses, but also as a learning process that has resulted in new ways of understanding for example the world trading and monetary system.

Finally, the third field – SSR-field – presupposes the existence of separate states and is evoked by various contradictions and characteristic responses within and among states. The SSR-field exhausts the physical space of the planet. This field too has its own inner generative structures (“SSR” stands for strategic short-sighted reasons to underline the characteristic tendencies of this field; it could also be called the field of raison d’etat and it is connected to national-statist imaginary). The point is to examine the simultaneous effects of these fields and their interactions in the open and historically changing global political economy.

I will be stressing time and again that the three fields of global political economy are not ahistorical. Rather they have deep geohistorical roots and continue to evolve. My sketch of the field-theoretical framework concerns mainly the period from the industrial revolution onwards, roughly from the first half of the 19th century to the first decades of the 21st century. During this period, many relevant structures and institutions have changed and continue to change; and so have the ways in which these fields are evoked and generated. Together the prevailing three fields, as well as the mechanisms and complexes that generate them, constitute what can be called the holomovement of the global political economy as a whole (cf. Bohm 2002, 182–99), including real-world trends and oscillations in economic growth and distribution of incomes and wealth. The whole consists of the interacting fields and their inner “codes”. The process involves contradictions and conflicts. Both the whole and its parts are in constant movement and dialogue and in a process of becoming something different.

The underlying learning process is at the heart of the planetary holomovement, which is the central theme of the book and the main topic of Chapters 6–8. However, learning can be also regressive or pathological. Overall, the dynamic whole creates bursts of actual geohistorical processes through which its forms and parts are transformed and metamorphosed. It is from this viewpoint that I assess the world economic situation of the 2020s and beyond and the goal-directed processes of world history. For reasons that are related to the fact that the dynamics of the whole can be studied only from within in a participatory manner, our anticipations of the future are reflexive and thus potentially self-altering (self-fulfilling or self-defeating). I argue that a learning process towards qualitati...

Table of contents

• Cover
• Endorsements Page
• Half-Title Page
• Series Page
• Title Page
• Copyright Page
• Contents
• List of figures
• Preface
• 1 Introduction
• 2 Key concepts: Field, causation, time, process, and holomovement
• 3 The first field (OL): The momentum and energy of economic liberalism
• 4 The second field (C>L): Collective learning from critique and crises
• 5 The third field (SSR): The reason of state bending social space-time
• 6 Holomovement: Collective learning through the dialectics of fields
• 7 Political economy of scale: Towards holoreflexivity in the 2020s and 2030s
• 8 Political economy of time: Holomovement and the future of the C>L-field
• Appendix: stages of cognitive-moral learning
• Index