Neo-liberalism versus Neo-realism
Both neo-liberals and neo-realists agree that anarchy is present in the international system and that the anarchy in the international system encourages states to pursue self-help behaviour as touted in the dominant realist theory. But the points of contention in the debate between neo-liberalism and neo-realism centres around the idea of their own interpretation of war and peace in an anarchic international system. To neo-liberals, cooperation between states is easily facilitated through international institutions in areas where states have mutual interests, while neo-realists believe that other states can never be fully trusted by virtue of being in a constant calibration of each other’s relationship, preventing the other from gaining more thus creating an atmosphere of caution, preventing states from fully cooperating with each other. In this essay, I will first acknowledge that in some respects neoliberalism does provide a good explanation when it comes to explaining the merits of international cooperation through international institutions. But using the following topics: the continued existence of NATO, espionage through cyberspace, and the failure to attain peace in spite of increased trading among states, I will argue that in most respects neo-realism’s belief in relative gains, survival, self-help, and the argument of the state’s centrality in the international system, remains relevant to this day.
First, as mentioned above, neo-realism cannot provide an answer why some states can continue to exist without a military. Likewise, neo-realism always argue about the importance of self-help and survival, downplaying the importance of international institutions, but it fails to explain why some weak states can use international institutions to influence powerful states. These two points are especially significant in the case of Iceland, a country that lacks a standing army. In 1975, Iceland went to war in what is now known as the Cod War of 1975. This was a war between the United Kingdom (UK) and Iceland over fishing rights over a part of the northern Atlantic. The war started because the UK refused to respect Iceland’s fishing rights to two hundred nautical miles from its borders. Owing to Iceland’s distance from any major state, its only real threat was the United Kingdom (UK), which was competing against its fishing industry, a major industry to Iceland.[1]
Since Iceland could not really defeat the UK militarily, it had to do so legally — by joining NATO as a founding member in 1949. The NATO base at Keflavik became the bargaining chip for Iceland, and through this, Iceland was able to call attention to its grievances against the UK. To keep Keflavik open for NATO, NATO partners and the United States (US), although they had no stake in the outcome itself, became instrumental in acting as mediators to the dispute. Left with no choice, the UK eventually relented and it agreed to a resolution accepting Iceland’s territorial claim of the two hundred nautical miles. As this historical event shows, Iceland’s “…membership in a multinational institution provided a mechanism that would not have otherwise existed for ending a security threat.”[2] The important role of NATO in mediating the conflict was significant but this is often disregarded by the neo-realists.
To counter this, neo-realists instead argue that neo-liberals exaggerate the impact of regimes and institutions on state behaviour. Neo-realism contends that “external forces will outweigh domestic ones as state leaders choose a foreign policy that will minimize risk in an anarchical system” and that “[n]ational politics, international institutions, and ideological or cultural affinities among nations have little relevance.”[3] Obviously, this was not the case for Iceland, for the small nation-state had the option to align itself to the Soviet Union to counter UK’s hegemony, but its leaders did not choose to do so because of “[t]he cultural incompatibility of the Soviet ethic with Icelandic social norms, therefore, effectively prevented Soviet alignment from being considered as a viable option. In other words, domestic conditions constrained policymakers’ set of choices for minimized risk. A purely neorealist perspective neglects this reality.”[4]
NATO
In view of the current state of global affairs, however, neo-realists seems to give a more convincing explanation about the survival of NATO in the post-Cold War era and its role as a conduit for American interests in Europe and the rest of the world.[5] Even though the Soviet Union is already gone, NATO continues to exist adding even more members, especially from former Soviet satellite states in Eastern Europe. Kenneth Waltz argues that NATO’s continued existence is primarily because the US and other stronger states still find it useful for their national interests. In a similar respect, neo-liberal theorists Keohane and Martin explain — through the use of Mearsheimer’s idea — how neo-realism and neo-liberalism can be complementary and that states will only cooperate with other states if they jointly benefit from such a cooperation. Therefore, if cooperation does occur (as in the case with NATO members), governments may attempt to facilitate the creation of institutions, which “can provide information, reduce transaction costs, make commitments credible, establish focal points for coordination, and in general facilitate the operation of reciprocity.”[6] Based on recent historical events, NATO clearly serves a purpose beyond deterrence against the Soviet Union thus validating the neo-realist argument of the importance of the state to the existence of international institutions.[7]
Cyberspace
Neo-liberal theorists, especially Robert Keohane and Joseph Nye, Jr., emphasize the importance of complex interdependence in international relations. They argue that the spread of technology across the globe is facilitating more interdependence between states. They also believe that the information revolution has a levelling effect; benefiting not only wealthy states but also the less wealthy ones, especially as the cost of access to the technologies continues to decrease.[8] Their article was published in 1998, which clearly means that many things have changed since then. Billions of people now have access to the Internet and millions more are being added each year.
What both authors failed to anticipate, however, is the fact that the economically advanced states during the beginning of the information revolution, which already had significant resources invested in the technology, remain ahead of the states which have limited resources and have therefore invested little in technology. For this reason, the supposed levelling effect have not materialized.
Nevertheless, with the continued rise of the Internet as both a means to retrieve and input information, it has been discovered that governments across the world strengthened their capacity to spy on their citizens by intercepting internet data and extracting from it various bits of information that unashamedly violated people’s right to privacy.[9]
But in support of the neo-realist belief in self-help, security and survival, cyber espionage is one of the most effective means through which states can overcome the uncertainty about the intentions of other states. The information age has made it easier for states to spy on other states. States spy others for various reasons, but all states share the same conviction that they perform cyber espionage for the advancement of their national interests. Arguably, all countries across the world perform espionage on another, but to varying levels of sophistication and discretion.[10]
The realm of cyberspace is interesting since it facilitates the neo-liberal perspective, as well as the neo-realist perspective to a varying degree of significance. Cyberspace can be argued as facilitating the increasing inter-state interdependence, especially when it comes to online business and international trade, but it also appeals to the neo-realist argument of states being preoccupied with its security and survival in a competitive international system. With such close comparison, it seems appropriate to add that the idea of interdependence, the neo-liberals admit, has not made a significant advance in the realm of inter-state relations as “security still outranks other issues in foreign policy”.[11] Keohane and Nye explain that the “[o]ne reason that the information revolution has not transformed world politics to a new politics of complete complex interdependence is that information does not flow in a vacuum but in political space that is already occupied”.[12] Second, they acknowledge “that outside democratic zone of peace, the world of states is not a world of complex interdependence”, and “[i]n many areas, realist assumptions about the dominance of military force and security remain valid”.[13] Thus after considering neo-liberalism’s shortcomings it seems that neo-realist theory ultimately provides a better explanation to the real world situation.
Neo-liberalism and Peace
The last point that is going to be discussed is the idea of free trade and why neo-liberals believe that they facilitate cooperation. In an article written by Lawrence Sáez, he lists three neo-liberal institutionalist propositions: “that regional hegemony leads to peace; that trade-linked informal contact leads to peace; and finally that trade itself contributes to peace among democratic nations”.[14]
The first neo-liberal institutionalist proposition is that regional hegemony leads to peace. In his article, Sáez is critical of the neo-liberal proposition that regional hegemony somehow leads to peace, for he thinks that the “…the asymmetries in economic power between different countries in a given region can be conflict enhancing, particularly where there may be growing divergent trends”.[15] He uses India and Iran as his examples and argues that despite the fact that they are economically and militarily stronger than their adversaries, Pakistan and Iraq respectively, these regional hegemonies have not been successful in disposing of the negative perception firmly held by their neighbours toward them.[16] Rather than promote peace, their very existence as hegemons promoted anxiety instead. This vindicates the neo-realist argument that rather than peace enhancing, regional hegemony can be conflict enhancing due to relative gains.
The second neo-liberal institutionalist proposition is that trade-links, particularly informal ones, leads to peace. Sáez disagrees with this arguing that “increased trade is not neutral and need not lead to a reduction in conflict”.[17] He cites Kenneth Waltz’s argument that claims that the increase in trade raises the prospect of at least occasional conflict “providing relative gains to one trading partner over another”.[18] Based on this assessment, the conflict in East Asia over various islands and shoals, involving China and other countries, is a good example in support of the relative gains argument. If China succeeds in usurping the territories, its potential gain from the natural resources in those territorial waters could mean that some members of the Association of Southeast Asian Nations (ASEAN) — who it has a free-trade agreement with — would lose out on this rich source of revenue. Although this example is not exactly an informal trade-link, trade is definitely important in this region. Naturally, none of the countries would want to lose out on their claims, which makes this an area where armed conflict is a distinct possibility.[19] All nations involved are increasing their military expenditures to prevent China from succeeding.[20] This is the scenario that neo-realists have argued: even though states are in cooperative relationships, they are still proactive in preventing others from gaining more, thus reinforcing the importance of relative gains.
The third proposition is the quintessential liberal idea of democratic peace argument. The democratic peace theory claims that economic interdependence among liberal democratic nations can lead to peace. It is not without its detractors, of course. Neo-realist critiques argue that the inherently asymmetrical nature of economic interdependence in some regions has important implications for the proposition that trade promotes peace. For instance, in Sáez’s article, he raises the idea that not all countries could promote the idea of economic interdependence because of the reality imposed by trade incongruence — states that produce and export the same resource means that they will have little need for trade with one another. It is a factor that could explain why some countries trade little with their neighbours. Sáez used the example of the countries in the Persian Gulf and argues that because most of the countries in the region primarily produce oil-related products, they therefore do not need to trade with each other for the obvious reason that they have little demand for these products.[21]
Kenneth Waltz further expands on Sáez’s argument, but rather than using the word ‘theory’ in the democratic peace argument, he refers to it as ‘thesis.’ In his definition, “democratic peace thesis holds that [liberal] democracies do not fight democracies.”[22] Waltz contends that the democratic peace thesis is a case where people mistook correlation as causation.[23] He argues that even powerful democracies, such as Great Britain and the United States, often had to resort to the use of force to “gain their ends by peaceful means where weaker states either fail or have to resort to war.”[24] Waltz then refers to two examples of American interventions, one in the Dominican Republic under the democratically-elected president Juan Bosch, and the other in Chile under the democratically elected president Salvador Allende.[25] Waltz criticizes democracy as a system where people “may show bad judgment”[26] and he thinks that America’s interventions had been “wise,” for he is convinced that these “democratic” countries had to be saved from themselves.[27] Obviously, Waltz is right when he said that democratic societies sometimes make bad decisions. Even in a democratic society, there is always the risk of people using democratic procedures to vote undemocratic governments into power.[28] But one could argue that what Waltz sees as “wise” does not really speak to the whole story that unfolded after the American interventions — that these countries were then headed up by brutal dictators who practiced repressions against their own citizens.
Conclusion
Through careful considerations of both neo-liberal and neo-realist arguments it is clear that despite neo-realism’s shortcomings, neo-realism ultimately gives us a better explanation why states are central to the existence of international institutions such as NATO, why the Internet failed to facilitate the anticipated levelling effect between strong and weak states, why states spy through the Internet, and why peace remains elusive despite the increase in inter-state trading. In all these points, the state remains important and they all demonstrate that the three realist assumptions of statism, survival and self-help, continue to remain relevant to this day.
Footnotes
[1] Lieb Doug, ed., “The Limits of Neorealism,” Harvard International Review 26, no. 1 (Spring 2004): 27, accessed October 2013, 11, Business Source Complete.
[2] Ibid., 28.
[3] Ibid., 26.
[4] Ibid., 28.
[5] Kenneth N. Waltz, “Structural Realism after the Cold War,” International Security 25, no. 1 (Summer 2000): 20, accessed October 19, 2013, Academic Search Complete.
[6] Robert O. Keohane and Lisa L. Martin, “The Promise of Institutionalist Theory,” International Security 20, no. 1 (Summer 1995): 41–42, accessed November 3, 2013, http://www.jstor.org/stable/2539214.
[7] “NATO Operations and Missions,” North Atlantic Treaty Organization, October 18, 2013, accessed November 04, 2013, http://www.nato.int/cps/en/natolive/topics_52060.htm.
NATO has been involved in a number of operations and missions. These are all listed in their website.
[8] Robert O. Keohane and Joseph S. Nye, Jr., “Power and Interdependence in the Information Age,” Foreign Affairs, September 1, 1998, section goes here, accessed October 7, 2013, http://www.foreignaffairs.com/articles/54395/robert-o-keohane-and-joseph-s-nye-jr/power-and-interdependence-in-the-information-age.
[9] James Risen and Laura Poitras, “N.S.A. Gathers Data on Social Connections of U.S. Citizens,” The New York Times, September 28, 2013, accessed November 4, 2013, http://www.nytimes.com/2013/09/29/us/nsa-examines-social-networks-of-us-citizens.html.
[10] Peter Foster and Raf Sanchez, “The Spying Game: Europe Accused of Hypocrisy over US Intelligence Disclosures,” The Telegraph, November 2, 2013, accessed November 05, 2013, http://www.telegraph.co.uk/news/worldnews/northamerica/usa/10422998/The-spying-game-Europe-accused-of-hypocrisy-over-US-intelligence-disclosures.html.
[11] Keohane and Nye, “Power and Interdependence in the Information Age,” Foreign Affairs.
[12] Ibid.
[13] Ibid.
[14] Lawrence Sáez, “Trade and Conflict Reduction: Implications for Regional Strategic Stability,” British Journal of Politics & International Relations 10, no. 4 (November 2008): 700, accessed October 2013, 11, doi:10.1111/j.1467–856X.2008.00333.x.
[15] Ibid., 702.
[16] Ibid.
[17] Ibid, 705.
[18] Ibid.
[19] “China’s Maritime Disputes,” Council on Foreign Relations, accessed November 5, 2013, http://www.cfr.org/asia-and-pacific/chinas-maritime-disputes/p31345#!/.
[20] “Military Spending in South-East Asia,” The Economist, March 24, 2012, accessed November 5, 2013, http://www.economist.com/node/21551056.
[21] Sáez, “Trade and Conflict Reduction: Implications for Regional Strategic Stability,” British Journal of Politics & International Relations, 708.
[22] Waltz, “Structural Realism after the Cold War,” International Security, 6–7.
[23] Ibid., 9
[24] Ibid.
[25] Ibid.
[26] Ibid.
[27] Ibid.
[28] Fareed Zakaria, “The Rise of Illiberal Democracy,” Fareed Zakaria, November 1, 1997, accessed November 05, 2013, http://fareedzakaria.com/1997/11/01/the-rise-of-illiberal-democracy/.
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