This research examines the debate within the discipline of International Political Economy (IPE) on the connection between three subject areas--free trade, economic growth, and international power relations--from the perspectives of Realism, or neo-mercantilism; liberal internationalism; and historical structuralism, or dependency theory. The research will set forth the basic tenets of each theoretical perspective and discuss how each perspective interprets the dynamics of the three subject areas, noting, as appropriate, how the theoretical perspectives overlap, converge, and diverge.
As Frieden and Lake explain, "Realists perceive politics as determining economics" (1996, p. 31). With power as the chief political concern, it follows that political benefit, or power, would translate into economic benefit, and that any benefit a nation-state might enjoy in the geopolitical arena would come at the expense of benefits and power of other nation-states. In the area of free trade, the Realist position would be that the nation-state would aim to (for example) minimize its own liability for tariffs or other fees on goods that it exported, while attempting to levy tariffs or other fees on goods that it imports, so as to protect the ability of domestic makers of similar goods to compete with those goods on price, hence shore up its domestic economy and demonstrate its ability to manipulate trade: "Thus, trade protection--which might reduce a country's overall income by restricting the market--may be adopted for reasons of national political power" (Frieden & Lake, 1996, p. 31).
Adam Smith, whom Goddard, Roe, Passe-Smith, and Conklin characterize as the father of liberal economics, makes an argument against foolish protectionism, hence Realism, when saying that it would be unreasonable "to prohibit the importation of all foreign wines [to Scotland], merely to encourage the making of claret and burgundy in Scotland" (Smith, 1996, p. 40). How...