When Minsky meets complexity
Peter Newell, The Global Political Economy of Energy Transitions

Economic Ideas in Political Time: Putting Ideas in their Place

by John Mikler on April 3, 2018

International Political Economy (IPE) tends to be tribal.  IPE scholars often say what they are as well as what they study. Wesley Widmaier is an avowed constructivist and in his book Economic Ideas in Political Time he goes further down the ideational rabbit hole to study the rise and fall of economic orders in the United States. He does so magnificently and comprehensively, and I agree with Vivien Schmidt who says in her endorsement that “the book provides a compelling illustration of the central role of ideas and agents”. My problem is that I remain something of a theoretical nomad, unable to strongly commit to any particular ‘ism’, other than perhaps an institutionalism of one kind or another. As such, I am probably a little too theoretically impure and analytically eclectic for some. But what I can say is that I like looking at questions that I think need answers, rather than approaches for so doing. I like to try to answer these questions by looking at the actors involved, their interests, their motivations, and how they attempt to realise the outcomes they desire which are usually things like money, power, and control. So, while I am something of a nomad in the IPE theoretical wilderness, I guess that has me wandering somewhere in the structuralist rather than post-structuralist neck of the woods most of the time; and among the trees of those holding “paradigmatic and institutionalist views of ideas”, as Wes puts it on the book’s opening page, in the context of declaring his intention to counter such views.

Therefore, it is not surprising that I came to a book that looks at the ‘power’ of ideas with a somewhat sceptical eye. Yet, I am enough of a theoretical nomad to say that I enjoyed reading it a great deal, despite feeling somewhat equivocal about its arguments from the outset. Page 10 in particular was where I started wrestling with my feelings and preferences. I was alternately nodding and shaking my head, smiling and grimacing, cheering and groaning, as Wes settled into his theoretical narrative in the following terms:

  • “Material incentives must always be interpreted in social contexts”. Yes, absolutely. The material interests that drive political actors are not satisfied in some vacuum. Political agents must play by the “rules of the game” they establish, or which have been established by previous agents, “that structure political, economic and social interaction”, as Douglas North argued in Institutions, Institutional Change and Economic Performance. But this is followed by,
  • “- which in turn shape agents interests”. To some extent. It is a matter of degree, but at the end of the day it seems reasonable enough to say that firms seek profits, states seek power, and altruism is hard to come by. Surely no great feats of logic or analysis are required to make such claims. We know them to be true without too much navel gazing and can take them as given. Social contexts are the lens through which agents’ interests are viewed, but they do not shape these interests as much as the converse is usually the case. But Wes goes ideas-big to state that;
  • “Indeed, as Alexander Wendt argues, ideas are interests”. This is just too postmodern for me. Such thinking leads to the kind of discussion some commentators are having in Australia at the moment about why our banks are so greedy and untrustworthy. Some say it must be because their ideas about their raison d’etre are flawed, that their ethics are questionable, and that they need to have a darn good look at themselves and change their ideas about how they operate. Others like me would say they do what they do because they can get away with it, and until they are appropriately regulated, and we have a Royal Commission to see in what respects this should be best done, they will continue to act in the same manner in pursuit of their ethereal financial returns. And yet, thinking at a higher level it is the case that,
  • “the rise and fall of economic policy orders are not simply material shifts, but rather changes in the ideas that give them meaning”. This is undoubtedly true, but if the material shifts had not occurred, then the policy order would not have fallen or been re-appraised. Because I am more inclined to believe that ideas about material interests follow, and flow from, those material interests rather than the converse, it seems more accurate to say that ideas are a necessary but not sufficient condition for the rise and fall of economic policy orders. On the other hand,
  • “constructivists highlight (ideas’) self-sustaining nature, as they acquire lives of their own that enable self-reinforcing stability”. Now that is intriguing. Regardless of their interests, regardless of impending disaster, regardless of the evidence in front of their faces, political actors cling to that which they know, and what they believe to be true. When do they change their ideas? When do they adopt new ideas to reflect the new eras in which they find themselves, or those that they imagine that are not yet created? And why do they so often cling to old ideas?

This is where Economic Ideas in Political Time came alive for me. The structures of power that are created by actors pursuing their material interests give rise to dominant ideas and discourses because, as Mark Blyth puts it, “structures do not come with an instruction sheet”. As such, the instructions must be ‘written’ by purposive political actors to become embedded and endure over time as taken-for-granted institutional preferences.  So even if, at least from my point of view, ideas need to be put rather more ‘in their place’ than they are in Economic Ideas in Political Time, they are of course important. And they matter more at some times than others. Or rather, they matter in different ways at different times. And often pathologically.

The pathological role played by ideas was actually for me the most exciting aspect of Wes’s analysis. I agree with Penny Griffin in her preceding piece that one of the most insightful things Economic Ideas in Political Time does is that it “makes it really obvious that the dangerous cycle of ideas, self-reinforcing expectations and mythic stability has not been broken, or even fundamentally challenged, during and following the global financial crisis”. As a crisis hits, actors find themselves not with a blank canvass on which to draw in addressing it, but constrained by the ideologies, norms and institutions that underpin the current order. They find themselves working ‘within’ these to address the current crisis they face, and in so doing may deepen the likelihood of the next one. As I read Economic Ideas in Political Time I was reminded of Robert Wade’s Antipode article after the global financial crisis in which he posed the question “is the globalisation consensus dead?”. He found that it was not because Western economists, the U.S. and British governments, and elites in the financial sector – in short those who had helped to create and sustain the ideological status quo – refused to let neoliberalism die. Even with all the evidence to the contrary, they stuck to believing that the status quo served their interests, when surely it means that without substantial changes, and different ideas, another crisis is just around the corner.

Yet it is also possible at such times of crisis that new ideologies, normative preferences and institutions that political actors desire involve them working purposively to construct them. What can be said in general is the well-known point made by James March and Johan Olsen on logics of appropriateness and consequences, on materially-informed and instrumentally-motivated rationality versus norms and ideas:

Any particular action probably involves elements of each [logic].  Political actors are constituted both by their interests, by which they evaluate their expected consequences, and by the rules embedded in their identities and political institutions.  They calculate consequences and follow rules, and the relationship between the two is often subtle.

In reading Economic Ideas in Political Time I was also reminded of Ash Amin and Ronen Palan who, in promoting a non-rationalist approach to IPE, opine that:

It is rarely understood that non-rationalist thinkers in the social sciences are not negating rationalism.  They do not seek to contradict and destroy an enemy, as much as query the pervasive confidence rationalists have in their own project. Rationalism has many faces, but a rich and varied tradition has progressively narrowed down to become a theoretical and methodological straightjacket.

Economic Ideas in Political Time helps us to further loosen the straps on the straightjacket.

My only real point of contention is how much they should be loosened. As you might expect from someone wandering my neck of the woods, ideas were stressed a little too much more than material interests, and agency a little too much over structure. I could not help thinking why not a critical theory approach that considered more the interplay of ideas, material capabilities and institutions? Or why not Antonio Gramsci? Why was it that the ideas were stressed so much as opposed to the interests that drive them, and the structural power employed in service of interests that organises things ‘in’ and ‘out’ of politics? Well, I would say that wouldn’t I, because I don’t think that ideas are interests! It means that I was a little less enthusiastic about claims that “social structures initially shape self-reinforcing orders”, but excited by the way it was convincingly demonstrated that “agents subsequently repress aspects of those orders in ways that destabilise them” (p. 209).

Overall, in reflecting on Economic Ideas in Political Time in some respects I feel like the character in the joke who is asked for directions to a destination who replies “I know where that is, but if I was going there I wouldn’t be leaving from here”. Yet, travel broadens the mind and so I am glad that on this occasion I did leave from a different place! And not just for the theoretical variation in scener but for the focus on the United States in particular throughout the book, which I have not focused on here. For surely economic ideas in the United States, and the economic orders it has created, are important despite the challenge Wes levels at approaches which stress hegemony in the creation and maintenance of eras and regimes.

I learnt a lot, and thought a lot, as will anyone who reads this book.  It is a towering achievement and a landmark study.


John Mikler
John Mikler is an Associate Professor in the Department of Government and International Relations at the University of Sydney. He researches corporations’ relations with states, civil society and international organisations, as well as the ways in which they are political actors in their own right. His previous publications have contributed to theorising corporate power in respect of globalisation, private authority and state sovereignty, and on issues including climate change, online gambling and technological innovation. He has edited journal special issues for Global Policy and Policy and Society; published over 30 journal articles and book chapters in journals such as New Political Economy, Regulation and Governance and Business and Politics; and four books: Greening the Car Industry: Varieties of Capitalism and Climate Change (Edward Elgar 2009); The Handbook of Global Companies (editor, Wiley-Blackwell 2013); Climate Innovation: Liberal Capitalism and Climate Change (co-edited with Neil Harrison, Palgrave Macmillan 2014); and The Political Power of Global Corporations (Polity 2018).

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