Critically evaluate which theoretical approach in International Essay

Critically evaluate which theoretical approach in International Political Economy best explains the nature of power in the inter - Essay Example Governments have to relate with other government. Governments must also consider the non state actors if they are to have an impact in the trade and policies. Some states are influenced by liberal theories. Trade must be having some duty and tariffs. These tariffs are sources of government revenues. Mercantilists’ theory has also been instrumental in the International Political Economy. Liberalisms dates back to the revolutions in the 18th century. The mercantilist financial arrangement developed into free enterprise. They were initially termed as centrists believed there should be little state intervention in the economy. According to the liberal economic theory, states were discouraged to minimize intervention in the economy. The theory advocated for free market and believed that internal markets should have negligible intervention from the state. The theory suggested that tariffs should not be used to prevent competition between countries (Eatwell & Wright). According to Co mfort, the initial liberal market theory advocated for a free market approach and was referred to as left wing or centrist in terms of outlook (Agh 1998). The liberal theory was enshrined on the premise that people can acquire wealth and property whenever they want. The basis was that freedom in culture and belief was influential in developing capital and gaining property. According to Wright, states, individuals and businesses were encouraged to freely gain capital under the liberal theory. The classical liberal approach suggested that free market should come up with system of setting the process of goods and services. The theory set currency exchanges and wages and resources. The move depended on sheer optimism in the free market (Smith 2003). However, it became clear that fluctuations in the free market have caused serious consequences politically and economically. This has resulted in unemployment and poverty. This has made international competition hard. Governments have attemp ted to deal with this challenge by establishing strict tariffs on goods. Governments have attempted to set up welfare or subsidizing businesses and industries. According to Harvey, tariffs and restricting trade were the foundation and reasoning behind the capitalist premise. The theory suggests that the government should be involved in restricting trade and controlling the flow of goods and services. The government does this in an attempt to reduce the challenges that are created by international competition (Ambrose & Brinkley 1997). The government believes that the use of tariffs shields the populace from international trade aggression and becomes a dominant source of revenue. During the 19th century, the theory of broadmindedness was the popular in IPE. Britain dominated the global trade by lifting restrictions. This facilitated Britain’s spread in the international trade arena (Smith 2003). The liberal theory of the power of international political economy seemed unassail able. According to research, the economic elites in many developing countries had no reservations in playing subordinates because they made profits in the process. Nonetheless, steps were made to start restricting trade. The initial moves came from the United States of America and Germany. The United Kingdom started to doubt the free market venture. After the First World War, the prominence of the liberal theory appeared to decline in the sphere of international