The Transition of World Economic Ideology from Gilpin’s Time to the 21st Century

A Time of Economic Nationalism and Marxism

In the book Political Economy of International Relations Gilpin states, “Although my values are of liberalism, the world in which we live is one best described by the ideas of economic nationalism and occasionally by those of Marxism as well” (Gilpin, 1987.) Gilpin made this claim due to the legacy of Keynesian economic ideology, the 1973 oil crisis caused by OPEC, and the presence of communism in other prominent countries during this time period.

Keynes’ work: The Means to Prosperity, and The General Theory of Employment, Interest and Money created modern macroeconomics and influenced countries during the 1930s and 1940s towards interventionist policy and economic nationalism (Yergin, 1998.) His ideology and work led him to orchestrate the Bretton Woods conference in 1944 which, “contributed greatly to the golden age of controlled capitalism (where) even the most conservative political parties in Europe and the United States embraced some version of state interventionism” (Steger, 2003.) The Bretton Woods regime fell during the early 1970’s but Keynes economic ideology would not be abandoned until the adoption of Reagan’s Neoliberalism and the fall of the Soviet Union in the early 1990s (Steger, 2003.) Keynesian economic ideology was the predominating economic theory during Gilpin’s life and would contribute greatly to his claim of world economic nationalism.

OPEC is a clear example of economic nationalism, a conglomerate of countries agreeing to control their respective economies by limiting trade and export of oil. The 1973 oil crisis was caused by countries in OPEC imposing an embargo on the US and several other countries after the US resupplied Israel during the Yom Kippur ...

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...ubmitting accession applications to the EU (Steger, 2003.) China, the world’s current second largest economy (IMF Historical data, 2013), has also been moving towards liberalism trade policy. Since the late 1980s imports subject to licensing have been greatly reduced and total controlled exports in their economy have been reduced from 66% in 1991 to 8% in 1999. China’s private sector has also been growing and fewer people are being employed in state-controlled manufacturing jobs (Lardy, 2003.) The transformation and elimination of communism around the world has all but removed Marxist ideology from the global economic perspective.

Transnational corporations, international economic institutions/agreements and the decline of communism all provide evidence of how the majority of the world has embraced economic liberalism during the late 20th to early 21st century.