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Comparison of all main theories - Coggle Diagram
Comparison of all main theories
Mercantilism
2 perspectives:
Security perspective:
mercantilism saw trade as an extension war
Colonies supplied raw materials, navies protected trade routes,
and navigation laws restricted rivals’ access.
Economic power strengthens state military power.
If your rival grew rich through trade, it could fund armies and
fleets. Therefore, mercantilism assumed trade had to be carefully
managed to prevent empowering enemies
Economic perspective:
focuses less on war and more on wealth.
Economic mercantilism is about national self-sufficiency and
prosperity.
Economy is seen not as an autonomous sphere but as a servant of political and strategic interests.
The key principle:
Exports should exceed imports (Wealth = trade surplus “exports imports”
Domestic industries must be promoted and protected, both to save bullion and to employ the poor (Employment = national prosperity)
The state is deeply involved through promoting tariffs, subsidies, regulations and colonial expansion to protect industries and enhance state revenues
Core assumptions:
Protectionism
Wealth = power = bullion &trade surplus
State controls markets
Colonies as sources of raw materials and markets
Linking economic strength to military power
Core Idea
Wealth = accumulation of gold & silver "money" through positive balance of trade
The world economy is zero-sum (one state’s gain = another’s loss)
Strong state control over trade and the economy
Neo-Mercantilism/ economic nationalism
Economic nationalism re-emphasizes state control over the
economy to protect national interests, employment, and
sovereignty.
It appears when countries feel threatened by
economic dependence or unequal globalization
Key Triggers:
Economic crises e.g., the Great Depression
War and security threats e.g., WWI and WWII
Postcolonial development: new nations in Asia &Africa
adopted state-led industrial policies (import substitution) to
protect their industries
A modern economic strategy that blends free trade with strategic protectionism, using government activism to boost national wealth and power, especially through industrial and technological strength
Schmoller stresses that mercantilism prioritized:
The national economy
Collective prosperity
State strength
Over:
Individual consumer welfare
Short-term price efficiency
➡️ Mercantilism treated the economy as a national project, not a natural market order.
➡️ Free trade requires prior state construction.
Liberalism
Adam smith
liberal economics, which:
Starts from individuals
Assumes self-regulating markets
✓Wealth is not measured by gold and silver, but by the
productivity of labor.
✓Free trade and specialization under comparative
advantage benefit all nations.
✓State interference in trade (tariffs, monopolies) distorts
markets and reduces efficiency.
✓Smith saw mercantilist policies as self-serving for elites,
especially merchants and manufacturers tied to the state.
Trade as Mutually Beneficial: ➢Countries focus on producing what they are best at & trade with each other, both sides gain
Division of Labor: ➢Specialization increases productivity. Just as individuals should specialize in tasks, countries should specialize in industries where they have an advantage and trade with others
Specialization: ➢Based on comparative advantage, countries should specialize in producing the goods and services they are relatively more efficient at, and then trade with others.
Trade barriers
Distort markets > Prevent specialization > Hurt consumers by raising prices > Protect inefficiency
Liberalism is a school of thought emphasizes economic freedom, free markets, and minimal state intervention.
➢When states allow markets to operate freely & encourage international trade, everyone benefits.
Core Principles of Liberalism:
Free markets work efficiently: Prices, supply, & demand determine production more effectively than governments
Trade creates mutual gains: All participating countries can “win” through specialization and exchange
Individuals & firms drive growth: Economic actors—not governments—should decide what to produce, buy, and sell
Interdependence promotes peace: Trade links economies, making war costly and cooperation beneficial
Realism
Core ideas:
Statism: The state is the central actor in an anarchic international system.
Survival: The primary goal of states is to ensure their own survival.
Self-help: Because no global authority exists, states must rely on
themselves for security
Power as the currency of politics: Power (military, economic,
political) is both the means and the end of international politics.
Structural Realism: The cause of conflict is not human nature, but
the structure of the international system: its anarchy. States behave rationally and seek relative power to ensure survival
a theory emphasizing that states act out of self-interest, primarily seeking power and security in an anarchic world with no higher authority,
viewing international relations as a competitive struggle where morality is secondary to survival, leading to a focus on military strength, economic power, and a "security dilemma" where one state's defensive actions provoke insecurity in others,
Marxism
analyzing society through class struggle, particularly the conflict between the bourgeoisie (owners) and the proletariat (workers) under capitalism, ultimately advocating for a worker revolution to establish a classless, communist society where the means of production are collectively owned.
Core ideas:
Proletariat will overthrow the bourgeoisie
Communism leads internationally.
Capitalism transformed the world but creates
inequalities.
Socialism
Economic and political system, the means of production
(factories, land, natural resources, etc.) are owned and
managed collectively, usually by the state or society,
rather than by private individuals or corporations.
Main Goal: reduce inequality and ensure that wealth is
distributed more fairly.
transitional stage between capitalism and communism.
Communism
classless and stateless society where all property is
collectively owned, and production is organized to meet
human needs rather than profit.
Everyone contributes according to their ability and
receives according to their needs.
The state as a political structure disappears because there
are no classes or private ownership to enforce
Key features:
Complete abolition of private ownership of the means of production
No social classes (no bourgeoisie or proletariat)
No state in its traditional sense
Equality in access to resources and
opportunities
Idealism
ideas, consciousness, or thoughts are the primary reality meaning that the material world is shaped or determined by thought
history is not driven by material forces but by the development of the human spirit, reason, or the Idea.
Materialism
Material reality (the economy, nature, resources,
production) is the foundation of everything & ideas are a
reflection.
Material conditions change (e.g., new technology, new
class relations), ideas, laws, and politics also change.
Imperialism
Key feature
Imperialism natural outcome of matured capitalism.
Concentration of production and monopolies
Small competitive firms are replaced by large
monopolies (large, corporations).
gives the bourgeoisie unprecedented control over the
economy.
Economic power is concentrated in a few hands
Merging of bank capital with industrial capital
Banks no longer just lend money they merge with
industrial corporations.
Export of capital (not just goods)
Export capital investments to less developed
countries. To exploit cheap labor, natural resources,
and new markets abroad.
Formation of international monopolies
Creates an international capitalist system, dominated
by a few powers.
division world among the great powers
Territorial Economic expansion leads to political and military
competition for colonies
World is divided between imperial powers
Ex: WWI: rival imperialist powers clashed over
colonies and markets.
International regime theory
“International regimes are sets of implicit or explicit principles, norms, rules, and decision-making procedures around which actors’ expectations converge in a given issue area”
Framework of rules and norms that helps states coordinate their behavior in specific areas of international relations (such as trade, environment, or security)
International regime theorists argue that even in an anarchic world system, cooperation is possible when regimes exist.
Regimes reduce Uncertainty and Information Gaps that states fear in the anarchistic system
2.Regimes create stable rules and procedures, saving time and resources
Encourage Commitments and Punishing non-compliance
International regimes help states overcome Prisoner dilemma by enabling cooperation in the anarchic international system.