Key Liberal Thinkers

Robert Keohane, After Hegemony (2005)

Keohane has been characterized as a key figure in the development of a discipline of International Political Economy in the United States. Along with Joseph Nye, Keohane coined the concept of complex interdependence to capture the ways in which power had been fragmented and diffused in economic affairs.

Keohane was one of the proponents of the idea of complex interdependence, which argues that states and their individual fortunes are inextricably linked. He challenges the idea that realists will always reject international cooperation because of their preference for protecting their national interest, arguing that it is more rational and indeed increasingly in states’ national interests to find more ways of cooperating with each other. Keohane agrees that states are inherently egoistical. But international law and institutions that try to persuade and enable states to reach shared solutions, rather than enforce decisions on states, can still be successful. Robert Keohane coined the term Hegemonic stability theory in a 1980 article for the notion that the international system is more likely to remain stable when a single nation-state is the dominant world power, or hegemon. Keohane's 1984 book After Hegemony used insights from the new institutional economics to argue that the international system could remain stable in the absence of a hegemon, thus rebutting hegemonic stability theory

Kenichi Ohmae, The End of the Nation State (1995)

Globalisation has brought about a deep and revolutionary set of economic, cultural, technological and political shifts that have dramatic implications for state sovereignty. Ohmae argues that states are losing their economic power and are no longer the main participants in the global economy.According to Ohmae (1994) political boarders are becoming less and less important, as countries increasingly form a giant, interlinked economy – this is especially true of the most developing countries, such as America, Europe and Japan, and these being joined by rapidly developing countries such as Taiwan, Singapore and Hong Kong. Ohmae argues that in the Interlinked Economy, corporations and consumers are more closely connected across boarders than ever, and politicians, bureaucrats and the military are declining in importance.

All of this has happened because of the opening up of the world economy and increasing trade between nations, which in turn has been driven by rapid developments in communication technologies – the rise of the internet has made it easier for people to see what people in other countries consume, and has made it much easier to buy products from other countries too.

Global Citizens and Regional Links

Individuals have become global citizens through their consumption habits – they want to buy the best and cheapest products where ever they are made, and any government who tried to prevent this happening would risk upsetting millions of potential voters.Ohmae also believes that Transnational Corporations do not see themselves as being rooted in one country – if they did, this would be to their disadvantage – in order to maximize their profits, they have to think about global markets and adapt products to fit different local demands.

Because of all of the above factors, governments have largely lost their ability to control their economies.

Governments and Consumers

Ohmae argues that the global economy also makes the use of military force less likely – if you attack your neighbour, the chances are you will be destroying some of the assets of your citizens, and their destruction will only result in a downturn in economic growth for you, since we are all economically interdependent.

Ohame believes that role and function of the nation state today is limited to that of producing the conditions in which consumers, worker and corporations can thrive in a global economy. They are still necessary to provide an infrastructure such as roads and legal system, for example.

Above all, though, they need to provide a good standard of education for their citizens, as Ohmae believes economic success results from having a highly educated, entrepeneurial and well informed population.