Understanding International Relations, Third Edition

relations of production. Capitalists everywhere exploit workers every-
where. Southern capitalists are junior partners to their counterparts in the
great Northern centre; in principle, the workers everywhere also have a
common interest – although here things are muddied by the propensity for
the Northern proletariat to enter into (junior) partnership with capital.
Developing Lenin’s rather limited idea of a labour aristocracy in the imperi-
alist countries bought off by the profits of imperialism, and adopting
the fashionable 1960s notion, associated in particular with Herbert
Marcuse, of the ‘one-dimensionality’ of the Northern proletariat, struc-
turalists tended to write off the Northern working class. In any event, the
structuralist model of the world was, in principle, resolutely non-statist.
Capitalists everywhere were the enemy.
The intellectual strength of the structuralist view lay for the most part in
its account of the history of the system. Frank’s classic Capitalism and
Underdevelopment in Latin America (1971) was largely a set of case stud-
ies defending in detail the view that close contact with the world economy
resulted in the ‘underdevelopment’ of Latin America, while temporary
breakdowns of the system (for example, in the two world wars) provided
the only examples of successful development. Wallerstein’s thought-provoking
essays and lectures rest on the monumental achievement of his multi-
volume The Modern World System (1974/1980/1989), which provides an
account of the emergence and development of the system since the sixteenth
century. The strength of these studies lies in the way they outline in combi-
nation the ‘political’ and ‘economic’ dimension of the systems, unlike the
more conventional historical accounts upon which International Relations
and liberal political economics usually rely.
However, the political strength of structuralism rests on shakier founda-
tions. As Warren has suggested, a mixture of ‘romantic’ anti-capitalism and
nationalist mythology has been important here, although Warren was
somewhat unfair in suggesting that the originators of the model shared
these views (Warren 1980). The unorthodoxy of the Marxism of the
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structuralists is clear; structuralists place far too much emphasis on trade as
opposed to production, and fail to grasp the achievement of capitalism in
transforming the world by the development of the productive forces
(hence the label ‘romantic’). Moreover, although structuralism is in principle
non-statist, it is easy to see how it could be turned into a defence of the
interests of Southern states – after all, most of the dispossessed of the world
live in the South, and, given the Northern workers’ betrayal of the revolu-
tion, it is easy to see how an anti-capitalist struggle could turn into a
North–South conflict. The anomalous figures here are the Southern capital-
ists and Southern elites more generally, and these groups have a clear
interest in blaming outsiders for the failure of development in the South,
skating over as quickly as possible the thought that they might be impli-
cated in this failure. Such an attitude was very much in evidence in
the Southern demand for a New International Economic Order (NIEO)
articulated in the UN in the 1970s.
The NIEO had a number of components. In the area of trade it called for
the establishment of a Generalized System of Preferences (GSP) for indus-
trial goods from the South to increase the Southern share of manufacturing
production to 25 per cent of the total by the year 2000, and an Integrated
Programme for Commodities (IPC) to level out fluctuations in the prices of
commodities. Aid targets should be increased to 1 per cent of the industrial
world’s GDP, two-thirds in the form of official aid. Debt should be
cancelled and soft loans made available from the World Bank and its sub-
sidiaries. In the area of production there should be extensive transfers of
technology and research and development (R & D) to the South; investment
should be increased, but multinational corporations should be subject to a
strict code of conduct – indeed, the control of MNCs was a major plank in
all Southern programmes at this time.
It should be noted that these are reforms of the liberal international eco-
nomic order (LIEO), albeit very radical reforms. Structuralists criticized the
NIEO, and later manifestations of NIEO policy such as the two Brandt
reports, as failing to grasp the nettle of world revolution. This is clearly true –
NIEO is a statist programme which looks to the continuation of a capitalist
world economy. However, the reforms it envisaged are very radical, and
share some elements of the structuralist position. In particular, the underly-
ing assumption is that the failure to develop on the part of the South is
to be attributed to the operation of the system and not, for example, to fail-
ings in the South itself. The obstacles to development are structural and
must be removed. Moreover, this cannot be done with a free-trade, non-
discriminatory system; scepticism about trade runs through NIEO thinking.
A key theme of the NIEO is management, the need to replace reactive regu-
lation with proactive management. The best way to see this is as a response
to vulnerability. Southern states are vulnerable states who find it difficult to
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cope with the swings and roundabouts of the market; hence the desire for
regulation.
In the 1970s the prospects for the NIEO looked moderately good.
Although the major industrial powers had abstained or voted against the
programme, there was evidence that within the North many of its ideas
were popular, and the Southern coalition at the UN seemed to be putting the
North on the defensive generally, and combining quite effectively with the
Soviet bloc who, although critical of the NIEO programme, were happy to
join in the critique of the West. In the 1980s and 1990s, however, momen-
tum behind the NIEO was lost and although the term is sometimes still
employed at the UN it has little current purchase. Partly this failure fol-
lowed from political mistakes on the part of the South, which clearly over-
played its hand in the 1970s, mistaking votes in the UN General Assembly
and UNCTAD for the reality of power, and which made the false assump-
tion that powerful members of the bloc would use their power in the general
interest of the South. In fact, and predictably, oil-rich countries such as
Saudi Arabia developed a strong interest in the prosperity of the West, and
behaved like their wealthy peers when they took up their seats on the IMF
Board. Also in the 1980s, the emergence of the so-called ‘debt crisis’ derailed
other North–South economic negotiations. Still, the real reason for the
current irrelevance of the NIEO goes much deeper and relates to changes in
the world economy which undermined many of the assumptions upon
which both the NIEO and conventional theories of international political
economy were based.