As it moves further into the 21st century, the international political economy will undoubtedly be met with a host of new obstacles, questions, innovations, and speed bumps. In these one hundred years, industries will shift, the global balance of power will likely change, and citizens and politicians alike will grapple with seemingly unanswerable questions. But, which of these challenges will be hallmark of this new era? What one issue or group of issues will constantly test the global economy and all the prominent actors within it? Though this question can only truly be answered in hindsight, a number speculative responses could seem quite plausible, given the numerous and complex issues that the world currently faces. All things considered, however, the strongest argument might be made for the business of domestic and international policymaking. In other words, the way in which each major economic actor forms its trade policies, industry regulations, and even domestic values will greatly affect the progress or deterioration of the international political economy.
As Wolf notes in Why Globalization Works, "the policies and capacities of states remain central to any understanding of how economic globalization works" (Wolf 16). Although "policymaking" is an extremely broad response, encompassing a myriad of different activities and areas, it is important to realize its overall role as a "make-or-break" component of the global economy. Today, globalization has created a world that is more interconnected than ever before, marked by international competition, price reduction, product innovation, glorification of free market principles. From a Western perspective, this phenomenon tends to be viewed in a very positive light, having raised the standard of living and created dramatic economic growth. The problem, however, is that not all global actors share these positive sentiments. According to Stiglitz, the 1999 WTO riots showed that "Globalization had succeeded in unifying people from around the world--against globalization. Factory workers in the United States saw their jobs being threatened by competition from China. Farmers in developing countries saw their jobs being threatened by the highly subsidized corn and other crops from the United States" (Stiglitz 7). Those who do not prosper in this system tend to view this global capitalism as "unjust, unstable and inefficient" (Wolf 126). And, not only does today's globalized economy create "losers," who are often struggling developing countries, but it also reveals the different values that back policies in various countries. For instance, the West may praise individuality, victory, and wealth, whereas other cultures support community, economic modesty, and even adherence to various religious codes.
Moving forward, the struggle will undoubtedly be to sustain the system and make it more workable for all players within it. While Wolf might argue that all countries--particularly the struggling developing ones--need to knock down all barriers and jump headlong into a free global market, the problem is nowhere near that simple. In fact, Stiglitz' premise rings true: the major players must find a way to construct policies that make globalization work. Though a few may believe otherwise, the global economic system is here to stay. When the Soviet Union attempted isolation and firm economic controls, it ultimately crumbled. This was "not because it was physically impossible to control cross-border movement of knowledge and ideas, but because the costs of doing so became unbearably high" (Wolf 121). If we take this point to be true, then the central challenge of the 21st century will be for major states and treaty organizations to find a way that addresses the problems of globalization yet still provides a way to sustain it.
So, why will global and domestic economic policies will be increasingly contentious and important in the international political economy? To those in developed, strong, and influential countries, globalization is viewed with optimism and praise. But, these major players cannot leave suffering areas like Africa and Southeast Asia to languish in economic misery forever. Something must be done to encourage their inclusion and adoption of policies that will benefit themselves as well as the global community. In addition to this, political tensions and self-interest consistently drive a wedge between even the most "compatible" economic partners. With China, Russia, and other non-Western countries experiencing recent economic booms, the reception has been somewhat chilled and wary. Although trade among the world's major economic players occurs, political tensions and defense concerns have spurred various tariffs, regulations, and other anti-free market measures. Within some of these countries, an explosive growth in the middle class can invite protectionist policies to "reward" them and guarantee stability in the industries (Wolf 124). Even now, the major economic actors may adopt small tariffs or red tape here and there in attempts to revitalize their economies or spur growth in a given sector. In any case, there are many reasons why the current policy framework is unsustainable--something has to give.
Though a solution to this problem would be quite difficult to construct at the moment, the main states, corporations, and governing groups in the international political economy must give it significant consideration in the coming years. The challenge, then, is to understand how different countries' policies affect the global market, and what forces are backing them. Even within the G20, national concerns and "selfishness" lead to tariffs and trade barriers--all of which reflect an imperfect market. Because the globalized world is not going to vanish or fall out of vogue, it is very important to develop and encourage policies that will make it progress successfully and smoothly into the coming years. While political tensions will always create friction between countries, thus impeding optimal economic relationships, there is a way to lessen other tensions and get more of the world on track to progress and prosperity. Given the current world of interconnectedness, technological advances, and international trade, major actors must evaluate how other players, as well as themselves, can adopt policies that are both fair and beneficial. Though we will not reach a utopian world of perfect markets and wealth for all, perhaps with this in mind, these entities will be able to address some of the problems that have plagued the international political economy of the 20th century.
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