Conclusions

This concluding chapter summarizes the findings of this book and revisits the six hypotheses introduced in Chapter 1, in the light of the empirical investigation. It then turns to a discussion of open questions and future research agendas. Finally, it summarizes the main practical conclusion of this book. To achieve international cooperation, neither grand visions of political leaders nor technocratic fine-tuning of the machinery of international institutions are enough. Substantial improvements in international cooperation are difficult, because they need to go hand in hand with institutional and structural changes at the domestic level. The good news is that this book hopefully helped to demystify the origins of international conflicts. Conflicts are neither the result of an anarchic international system nor the ‘natural’ consequence of conflicting national egoisms, but can be traced to concrete deficits of the domestic models of capitalism. These capitalist models are dynamic and internally contested, which gives hope for the possibility of international cooperation.

Integration-Led Capitalism in the EU

The global role of the European Union and its position in the trilemma triangle differ substantially from the global–hegemonic approach pursued by US finance-led capitalism. This chapter first explores the historical choices that countries in Europe made after the collapse of the BWS and the internal, regional dynamics of an emerging integration-led euro capitalism. We show that the EU (and until 1992 the European Economic Community) developed a distinct regional solution for the challenges of globalization with the creation of the single market and the European Monetary Union. This growth model is based economically on a specific European complementary specialization production system and politically on a distinct form of euro-corporatism. This does not mean that national governments and national political economies have become irrelevant, but rather that there is a convergence towards a common EU position when it comes to global economic governance.

The Problem in Detail

This chapter sets the stage for the empirical investigation of the domestic political economic sources of international conflicts and cooperation. It consists of four parts. First, it gives a general brief historical overview over the problems of the international regulation of finance since nineteenth-century imperialism until the global financial crisis that started in 2008. Second, it introduces the G20 as the main forum for global economic cooperation. Third, it offers an overview of the different reactions to the global economic crisis since 2008. Fourth, it introduces the major conflicts in the G20 about the international regulation of finance in the three crucial areas identified in Chapter 1: global imbalances and macroeconomic coordination, financial globalization and financial regulation, as well as currency competition and management.

State-Led Capitalism in East Asia

East Asia is the third world region that is crucial for an investigation of international economic conflicts and cooperation. The rise of East Asia as the ‘factory of the world’ since the 1970s is as important for the global political economy as US-led financial globalization and European integration. This chapter begins with an explanation of East Asia’s role in the trilemma triangle and then turns to an analysis of the historic genesis of the East Asian (developmental) state-led model of capitalism. We then investigate the economic origins of the East Asian success story and in particular the formation of large export-oriented business conglomerates. Finally, we look at the political foundation of the East Asian model, which can be described as an authoritarian corporatist model that is shaped by the alliance of state and business at the expense of labour.

Introduction

This chapter introduces the main argument and the methodology of the book. It discusses liberal and realist mainstream theories of international political economy and offers a critique of their deficient understanding of the domestic origins of international economic conflicts. These domestic origins are not primarily conflicting national egoisms but they are seen in the context of a competition between different models of capitalism that emerged as distinct reactions to the challenges of economic globalization. US finance-led, EU integration-led, and East Asian state-led models are not just growth strategies but include institutional and structural path dependencies. A combination of an international political economic understanding of the interdependence of different models of capitalism, with a sound understanding of their distinct internal dynamics found by studies of comparative capitalism (CC), is a very promising research path to understand the origins of international conflict and cooperation.

Finance-Led Capitalism in the US

This chapter on US finance-led capitalism is the first of the three chapters to investigate the domestic origins of international economic cooperation and conflicts. First it builds on the trilemma triangle introduced in Chapter 2 and explains the US position. The chapter then investigates the historical origin of the US finance-led model of capitalism. It then turns to investigating the economic foundation of this model, before turning to the political economy of the US-specific neoliberal class compromise. As we shall see, the UK is also mentioned frequently as another finance-led country that has similar preferences to the US, and, with the British exit from the EU, the UK will probably align even more closely with the US.