To cope with more than incremental change in the international system, the neorealist concept of structure and the neoliberal concept of process must be complemented by a third analytically distinguished element: the concept of action. All three concepts can be used on the systemic level of analysis of international relations theory. Their obvious differentiation is the degree of systemic consolidation, with structure at the highest, action at the lowest, and process at unstable intermediate degrees. Without analyzing prevailing models of action of important units of the international system, it is impossible to predict the possible range of outcomes of processes and structural changes in the international system.This article offers Japan's “strategic pragmatism” as a model of action. The model, representing a functional cut across contending economic doctrines, combines relative fiscal conservatism with “progressive” provision of credit, dynamic capitalism with public policy activism, and critical rationalism with philosophical pragmatism. Japan's strategic pragmatism has not only enabled its government and enterprises to cope with uncertainty and change in their domestic and international environment but has also increased global welfare and changed the balance of strategic components of power in the international system. The spread of this model of action both within and beyond Japan's control points to a paradigm change in economic and international relations theory—that is, to the most pervasive form of systemic consolidation.
