Tools and expectations

My most recent scholarly enterprise has been to read Ruggie's (1982) article on liberal economic regimes ("International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order"). It's a very well-known article; my advisor felt this would be useful because he thinks my work should be able to respond to Ruggie's model and wanted to know if I was envisioning something similar. My short response is, not entirely; Ruggie is talking about very deep-level, slow-changing stuff like norms and ideas about the proper role of governments in the economy, and how those shape economic regimes. The level I'm looking at is maybe one level up, having to do with ideas about best practices and expectations around industrial development and effects of treaties on markets.

The paper's still pretty interesting, though. Ruggie is responding to a wide-spread viewpoint of international economic history that posits an oscillation between liberalizing and protectionist impulses: beginning with liberalization in the late 1900s, proceeding through protectionism, the world wars, a return to liberalization after WWII, and then a swing back to protectionism around the 1970s.

Ruggie argues that in fact there is no disjucture between the early postwar period and the 1970s and after; rather the key shift is from the laissez-faire liberalism of the late 1900s to what he calls "embedded liberalism" in the post-War period. Yes, says Ruggie, both are basically liberal in that they both view a multilateralist international market with relatively free trade as desirable and appropriate. The difference, however, is that by the post-War period, nations had come to believe that the role of the government was not just to ensure the free operation of the market, but also to ensure economic stability domestically. Thus, the postwar economic order had to be one that provided both - the (relatively) free market and the tools needed to ensure relatively stable domestic economic conditions. Ruggie then argues that the "new protectionism" that emerged later on doesn't represent a change in what people want (from liberalism to protectionism) but rather a change in the instruments needed to ensure domestic stability in the face of liberalism (while the US had done a lot of what was necessary in the first few decades after WWII, the erosion over time of its economic hegemony meant that other nations increasingly needed new tools at their disposal to manage - not reverse or freeze - the effects of liberalism).

What I think is interesting is that a lot of today's economic rhetoric, especially from the right, boils down to a demand to return to the tools, the instrumentalities, the structure of pure liberalism seen in the first period of liberalism, in the late 1900s. But this doesn't address the fact that the expectations haven't changed back such that these tools would make sense. Citizens still expect their governments to provide domestic economic stability and manage the economy so as to avoid sudden large adjustments, and get angry if they don't. In other words, they still have the expectations of an embedded liberalism world. We certainly can change the tools we use or the structure of liberalism we pursue. But Ruggie's point is that when the tools pursued are out of whack with the expectations about what governments are supposed to provide - as they were also in the inter-War period - bad stuff happens.

Next up: I have to go back and do a dive into the narrative of COP-15 (Copenhagen) the way I did for Cancun. This is what I get for not doing it back in 2009. But things are always boring until you know exactly why and what you need to know about them, and one of my worst character flaws is poor motivation to do boring things!