The Political Economy of International Trade Book

Strange asserts that nation-state and the corresponding financial market are flawed and not working and demands for an international government while Dicken is deeply suspicious of international strategic alliances and prefer the TNC and the market forces themselves. Dicken emphasizes the world paradigm through the economic lens as the determining factor that created new geographic activities and other political patterns. While Strange emphasizes on the social and cultural aspect and the perpetuation of the dominance of global hegemony and the inherent problem within the economic and financial system.
As Susan Strange claims, in States and Markets, that governmental structure and the financial system, market forces and academic narrations are constantly interacting with each other and cannot could never be analysed with only one factor alone. Strange argues that the Westphalia system is a failure because the market is irrational especially concerning environmental protection, and performance on financial markets. Additionally the current system is allowing the aggregating development of the polarity between the power nations and the relatively powerless ones in the international arena.
Strange argues that world’s political powers exerts itself through structural configuration by determining the rules and frameworks of the organizations and corporations. There are four major sources of pillars of the building of power according to Strange: security, production, credit and knowledge. Therefore we could be inferred that whoever who have military might, a.k.a. provide security, who have economic momentum and productivity, whoever has a certain accumulation of wealth of the past economic production, and who occupies the front of advanced technology and knowledge are in the dominant position of global power paradigm. Whoever is in the dominant position of the global power paradigm could control authoritative narration of the interpretation of the world itself.
Strange coined the term “casino capitalism” In retrospect, her book “Mad Money” was written in the late 90s yet she has the vision to see the potential problems lies within the American financial system rooted in the Reagan era and observed an explosion of the derivatives market where banks are undertaking increasingly risky behavior for blind profit chasing under little regulation. In the famous book of the price of inequality by Joseph Stiglitz, the author raise the similar point raised by Strange ten years before the crisis that the system constructed under the neoliberalist school under the Reagan regime created a system that disproportionately redistribute wealth from the vast majority of people to the tiny few at the top of the pyramid.
Although Strange identifies herself as a realist, I find Strange’s ideology close to that of Gramsci’s constructivism. Gramsci raised the idea of cultural hegemony, which is similar to Strange’s fourth point on power on how the state could maintain its dominant position in world’s financial and economic market through its cultural and technological dominance. “The bourgeoisie developed a hegemonic culture, which propagated its own values and norms so that they became the "common sense" values of all.” Similar to Strange, Gramsci also rejected the notion of only analysing one aspect such as the economic factor or the military might in isolation for a state’s power relationship in International Political Economy. Gramsci advocates for a union of all the soft and hard power as a “historic bloc” that forms the basis of legitimacy of its intellectual and political leadership role. Thereby reproducing its own dominant cultural hegemony position.
Strange is more specific than Gramsci in advancing the claim that world need functioning international authorities because the nation-state created under the Westphalian system is not working. Gramsci proposed the similar idea before that a political superstructure is needed to perpetuate the dominance of the current economic power relationships of the dominance of the hegemonic power. However Strange did realized the problem in her book even in the 90s that the nation-states are all unwilling to entrust part of their sovereign power to an international bureaucrats. Her observations in the book are all provisions and even prophesies of what happened in the 2008 financial crisis,
Strange would argue for the discrimination against the organizations and states at the relatively periphery of the political superstructure built by the dominance powers, however Dicken would argue those players are too poor in themselves to be a good participate in the global economy. One thing Dicken did not examine in his economic analysis though, is the effect of the globalization on the polarization of wealth distribution between developed and developing world and within the developed world itself which Stiglitz did after the 2008 financial crisis and proves Strange’s prophesy. Similar to Strange, Stiglitz argues that inequality is self-perpetuating enabled by the hegemonic political system. Similar to Dicken, Stiglitz also does not believe that technological forces are itself a factor in the gigantic economic inequality. While admitting that free market is beneficial for global economy however he calls for proper governmental regulation as proposed earlier by Strange. Following the legacy of Dicken, Stiglitz also warns about the proper behavior of TNC and the potential problem of dense concentration of market power within a few powerful TNCs.