Term Paper on "Compare and Contrast Neo-Realism and Neo-Liberalism"

Term Paper 6 pages (1634 words) Sources: 5 Style: Harvard

[EXCERPT] . . . .

Neo-Realism and Neo-Liberalism

Parenting Styles

Neo-realists and Neo-liberalists are different in many ways. Both received criticisms and support. These two theories differ in many aspects. Their perceptions are different and they have criticized each other in many aspects. Realists' point-of-view is based on conflict, while Liberalists point-of-view is based on agreement and harmony. Debates have been raised as to whether which theory could better improve the society or the country such as United States. but, first and foremost we should discuss each theory independently in no respective order.

The term "Neo-liberalism" was conceptualized in the 1990's. This is when activists used the word Neo-liberalism for global capitalism or market-liberalism and for free trade policies and was in this meaning the particular concept was used and popularized in South America. Globalization is another theory freely interchanged in Neo-liberalism. This theory was also popularly quoted by Elizabeth Martinez and Arnoldo Garc'a in Latin America:

Neo-liberalism is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarely heard in the United States, you can clearly see the effects of neo-liberalism here as the rich grow richer and the poor grow poorer....Around the world, neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank and the Inter- American Development Bank....the capitalist crisis over the last 25 years, with its shrinking profit rates, inspired the corporate elite to revive economic liberalism. That's what makes it 'neo' or new."

Neo-liberalism differ, on the other hand, with liberalism because it does not only concern itself with economics, it is also concerned with the social and moral philosophy. This concept was more phenomenal in rich western market democracies compared to poor economy or markets. Neo-liberalism is characterized as the desire to intensify and expand the market, by increasing the number, frequency, repeatability and formalization of transactions. Neo-liberalism's ultimate goal is a universe where every action of every being is a market transaction, conducted in competition with every other being and influencing every other transaction. Transactions for liberalists occur in an infinitely short time, and repeated at an infinitely fast rate.

Neo-liberalists look for new areas for marketing, expanding the market. For example, expanding market hours, making it a 24-hours economy and less than that would be unjustifiable. A neo-liberalist also maximizes contracts, splits services, negotiate separately. Market forces in a liberalists point-of-view is intensified by intensifying assessment. An employee with a contract period undergoes continuous assessment. New transaction-intensive markets of a Neo-liberalist are created on the model of the stock exchanges. There is no relationship between the growth in the number of transactions, and the underlying production, this is typical of a Neo-liberalists.

New forms of auction in a Neo-liberalist view are another method of creating transaction-intensive markets. Only the complex forms of frequency spectrum auctions is the only valid method of a Neo-liberalist for making allocations. A typical Neo-liberalist phenomenon is a large-scale derivative trading and a characteristic is an accumulation of transaction on transaction. Intensification of "transaction for transaction's sake" in a Neo-liberalist sense is created by automated trading and the creation of virtual market-like structures.

Neo-liberalist's society is a network society, therefore expanding interactivity. Neo-liberalists create links to other people in the society. But Neo-liberalists have reached the point where transaction costs threaten to overwhelm the existing economy. This destroys any economic gains from technological change.

Neo-realism on the other hand, is an Italian literary and cinematic movement. This flourished especially after World War II and sought to deal realistically with the events leading up to the war and with the social problems that were engendered during the period and afterwards. Neo-realism was outlined by Kenneth Waltz as a theory of international relations. He argued that "the international structure acts as a constraint on state behavior, so that only states whose outcomes fall within an expected range survive." This concept developed largely within the American political science tradition. It seeks to reinvent the classical realism into a meticulous and positive social science.

Neo-realists developed a theory that favors structural constraints vs. strategies and motivation. They believe that anarchy defines international structure and that it is measured by the number of great powers within the system by the distribution of capabilities. Anarchy does not have any formal central authority and is said to be decentralized. It is composed of formally equal sovereign states that act according to the concept of self-help. The state seeks its own interest always. This is assumed because this ensures that they will reach their other goals. It is also important in defining their behavior, thus ensuring that they develop an offensive military, consequently increasing their relative power.

Trust is scarce between states. Thus, they require a strong military force and are on guard always other states that may weaken their power, therefore threatening their survival. This concept is otherwise called, security dilemma. States are seen as similar in what they need but they differ from each other in how they achieve those needs. Capabilities differ, and they are distributed by the use of positional placement. This then limit cooperation between states because they fear the relative gains made by other states or by their dependence on other states.

International relations are shaped by the balance of power and gives rise to the security dilemma that nations face. Two ways have been used in order to make balance, internal balancing and external balancing. Internal balancing is when states raise their own capabilities through economic growth and/or though increasing military power, while external balancing is when states inter-alliances to check the power of other states or alliances.

According to Neo-realists there are 3 important systems according to the distribution of capabilities which was defined by the number of great powers within the international system. They concluded that bipolar system which contains two great powers is more stable and less prone to great power war and systemic change as compared to a unipolar system. This is because there is only internal balancing in a bipolar system and there is less opportunity for miscalculations. Therefore, this gives less chance of great power war. And because war is an effective anarchic stricture, it is said to continue in the future.

Neo-liberalism and Neo-realism have been debated on by a lot of people. Which theory is more helpful to the state and which belief system contributes to the states further growth? Anarchy is the core of international relations and the states are the key factor. Neo-realists are first and foremost concern with the survival of the state, ensuring national security and being the most powerful nation, whereas Neo-liberalists are focused on increased cooperation on an international level.

Neo-liberalists see anarchy as a restriction to foreign policy of states and complicates with a complex interdependence that modifies anarchy, whereas Neo-realists only see anarchy as a cause of restriction of foreign policy of states. Neo-Liberalist sees the IP theory as a competition, but emphasized cooperation as a possibility that creates a convergence in the interests of the states. As compared to Neo-realists, they only see the struggle of the IP theory so that the states can survive.

Relative gains are the primary concern of the states according to Neo-realists. Neo-liberalists on the other hand, claims that the states are concerned with absolute gains particularly in situations where the interests of other states come together to form interconnections. This only shows the consequence of the Neo-realists focusing on high politics as the goal of the states. As compared to Neo-liberalists that emphasize on the states following low politics goals because this is where interconnections between states are formed, where common interests of the states meet.

Foreign policies for Neo-realists are for the survival of the states, but Neo-liberalists' understanding of… READ MORE

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