In this analysis, there will be two articles being analyzed with two different theories. The articles being analyzed are both about different topics but are still being related to the IPE theories learned in this course. It is important to be able to analyze an article using more than one theory to be able to distinguish similarities and differences although discussing different topics. The IPE theories that will be discussed in each article are the nationalist perspective, liberal perspective, complex interdependence, and the critical perspective. All have different ideologies and perspectives but it is interesting to see how they can be related in one article.
The first article being analyzed is The Economist “China Tightens Monetary Policy (Discreetly)”. This article talks about the increase in short-term rates in the Chinese central bank. The increases were small but it was enough to get people talking and questioning why the sudden increase in interest rates. There was no explanation given for this increase making it even more suspicious. This increase had a lot of people analyzing why the sudden change. It is a very important move for China because it is showing people the dilemma that the government is going through when it comes to the economy. China has always been known as a very wealthy country that gets most of their money from global trade, so to see that the government is now increasing interest rates in China shows that the country is not doing as well as they previously have. There have been many surveys suggesting that the economic growth in China is decreasing in comparison to previous years but that is not the only thing suggesting that China is not doing well. Some other dangers that are arising in China are credit growth being excessive and financial institutions increasing their amounts of debt. Because of all these changes happening, it is endangering China’s economy which is why the central bank is wanting to strike a balance by raising interest rates, so that investors and lenders pay back what they are owing to the bank, therefore, stabilizing China’s economy in that sense.
This issue that is currently occurring in China relates back to the IPE theories studied in this course. The Economic Nationalist perspective is the most prevalent theory in this article because it is talking about how China’s economy is affecting larger companies prevalently more than smaller companies and their people. This theory is more concerned with the security of the state therefore in this case focusing more on how this interest rate is going to affect these large companies and the global trade of the state. This leads to the ideology of Fedrick List who believed in succeeding as a state and being the best country economically. He believed that in order for Germany to succeed and be the best country in the economy, they should industrialize behind trade barriers because he strongly believed that only the economically strong countries advocated free-trade policies because other states would not be reliable or be in the competition of having a great economy. What economic nationalists want to do is to be able to succeed economically but by doing this individually as a state instead of getting help from other states.
For example, a state would do this by exporting goods more than importing them because there they can then be more globally involved and economically involved rather than just importing goods to the state which would not end up being very beneficial for the state economically. This is shown in this article because of the rise of interest rates that the Chinese central bank is implementing. These raises affect companies who the bank loans money to. Since there have recently been companies who are in need of loans from banks, the Chinese central bank has decided that in order for the countries economy to not go downhill an affordable solution would be the increase in interest rates. This would lead to a common balance for the country by having companies lower or stop getting loans from the bank and helps to have companies pay back the loans that they are owing to be able to have a balanced economy.
Another IPE theory that relates to this article would be the liberal perspective. Liberal theories tend to focus more on cooperation and wealth. A liberal perspective focuses more on cooperating with one another in order to succeed either as an individual or as a state. They tend to force more the negotiation of differences between individuals or states since they see the world as one of interdependence rather than an anarchy. They cooperate together for mutual benefit, therefore, making it easier for the country to work well together. This has a connection with what is being said in the article. In the article it talks about the rise of interest rates in the Chinese central bank. Although the raise is not very much it is being said that it has to do with how poorly companies have been doing, therefore, forcing them to get loans from banks which then results in China’s economy to fall. The idea behind this increase of rate is so that people/companies that already have debts with the bank, pay them back as soon as possible while also reducing the number of people asking for loans from the bank. This is to stabilize the economy so that China does not lose all they have which is mostly the global trade of exporting goods.
The second article being discussed in this analysis is an article by The New York Times “How to Make America Greater: More Immigration”. This article talks about the current situation that is occurring in the United Sates due to the new election of president Donald Trump. He recently has spoken poorly on immigrants and how they are harming America, therefore, wanting to ban them specifically speaking about Muslims. This article explains how by him removing all immigrants from America he will be impoverishing and shrinking the economy of America. “Recent reports on immigration showed how both legal and illegal immigrants produced net benefits with $50 billion a year to the native population,” said Porter, author of the article. This goes to show that having immigrants in America is actually very beneficial to the country. The article also talks about how beneficial living in America is to the immigrants. Highly educated, working immigrants that move to America make a lot more income than they would in their country which goes to show how beneficial immigration is to America and the immigrants themselves.
An IPE theory that is related to this article would be complex interdependence theory. Complex interdependence theory put forth by Robert Keohane and Joseph Nye, explains how the states and their wealth are tied together. In this course, we read about what their ideology is in regards to the state and its wealth. They also continued to talk about how connections between complex transnational and interdependencies between states were increasing while the use of military force was decreasing which is what most countries use to defend their state. Nye then continues by saying that the decline in military force should increase the probability of communication and cooperation among states. Since complex interdependence theory branches off of liberalism, it goes by the idea of cooperation between states to come to a concrete and balanced conclusion. This is prevalent in the article because it is talking about the difficulties that immigrants will be facing because of the ban that Donald Trump wants to impose on immigrants in America. In this case, he would be using military forces in order to restrain people from entering America. There are no cooperations or conversations being had with immigrants and in the government because of this set idea that immigrants are only bringing bad things to America. Meanwhile, statistics show how much immigrants bring to America economically speaking. Many immigrants are now highly professional people in America that are raising their economy therefore by having them banned from the country, America would be losing billions of dollars that would harshly harm the countries economy.
Another IPE theory that is shown in this article would be the critical perspective or critical theories. Critical theories are explained as a Marxist theory which is because they are constantly questioning the way the world is organized and seek to change it at all times to what they believe is the best way to run the country which is why they are sometimes known as radical. Marxists theories mostly focus on the class structure of a state since Marx is known as classifying people according to their wealth in a class structure. In this article, we see this critical theory in the issue at hand. What Mr. Trump is trying to do is to turn away as many immigrants as he can while also removing current immigrants from the state. Now by him doing so, he is not taking into consideration the amount of money that these immigrants are making for America. There have been some economists that have estimated “that allowing free cross-border movement of labor could more than double the world’s gross domestic product”. They say that by implementing these harsh barriers on immigrants would be like leaving “trillion-dollar bills on the sidewalk.” This goes to show that in order for America to have this balanced class regime that they want and financially be able to do that, they need immigrants in America to increase the economic output in America for them to succeed around the world.
In conclusion of this analysis, it shows that IPE theories are very much seen and used in current events and articles. These theories will always be very prevalent in current events today as seen in these two articles analyzed. It is also important to be able to analyze an article using more than one theory to get a different perspective on the article since it does not necessarily just talk about one specific theory. As seen in the analysis of both articles, they were able to be analyzed using two different theories which can contrast each other but it is very interesting to see how the two theories can actually relate to one another.