Running Head: THEORIES IN GLOBAL POLITICAL ECONOMY 1
THEORIES OF THE GLOBAL POLITICAL ECONOMY
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THEORIES OF THE GLOBAL POLITICAL ECONOMY 2
The current world has for quite some time been touted as a global village. T main reason for this phrase in current use is that both information and transportation have made it very easy to converse and move from one place to another. It hasn’t however been this way and technological advancement has had a huge role to play in ensuring that this happens. The reason behind this advancement is heavily pegged on political and economic supremacy and connectivity of various countries of the world. Indeed, major events of the world such as the world wars might as well explain a lot on the political-economic aspects and struggles to the world. Various theories have been brought forward to explain the advancement of the world politically and economically. Politics and the economy are very inseparable and thus, the theories that mostly explain the global economy incorporate both politics and the economy as a common unit or as complimentary units.
The World Systems Theory
This theory is based on the core. The core in this case refers to the European powers
(countries) that emerged after individuals rose against the feudalistic economy. After the feudal system, trade became the business of most countries and thus, they traded with each other. Due to the failure of feudalism and the rise of trade, market structures replaced the so called subsistence structures. Countries’ governments started building o supremacies to basically protect their wealth. Mainly, political; supremacy was highly based on the military power of a country. The elements of trade were based on technological innovation and a great deal of capital intensive work especially within the core. This began in the fifteenth and sixteenth centuries but was consolidated later on in the seventeenth and eighteenth century.
The capital intensive core required labor and as a result, European countries sought out colonies that became the ‘periphery’ and these countries provided the much needed cheap labor to build

THEORIES OF THE GLOBAL POLITICAL ECONOMY on for the profits gained from business. It is thus easy to say that capitalism is what was
3 promoted by this theory. That is,, making as much profits as possible based on comparative and absolute advantages. On top of these advantages, or rather to gain these advantages, a lot of exploitation took place where major European forces such as Great Britain, France, Germany,
Italy, Spain and Portugal established colonies in other parts of the world (Gilpin, & Gilpin 2001).
These colonies as pointed out earlier, became the ‘periphery.
Advancement of into new territories that provided both the raw materials, cheap labor as well as the markets for the goods produced by these powers resulted to countries that were extremely strong both politically and economically. To date, most of these countries are still quite strong based on this economic and political advancement into new frontiers. The advancement however came to a slow with most of the colonies gaining indigence and with almost all the countries of the world being reached by the system. All in all, the system became the root of capitalism whereby the benefit of an individual or an entity is more important than that of the society. The benefit to the society only comes due to the fact that the individuals see the need to be united to protect what each of them owns and for better welfare as well. This is achieved through formation of governments basically that are run by the general public through elections. Government institutions that control and protect the properties and welfare of the individuals under the system are funded and supported through taxation ( Keohane, 1984).

THEORIES OF THE GLOBAL POLITICAL ECONOMY
Realism Theory
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Liberalism is closely related with the theory above in that it argues for free markets and the rationality of the self-seeking individualism. However, under the theory of realism, it is as much better to argue that the world economy is influenced by more than that. It is a theory that expresses the irrationality of humans. As a result, realism argues on systemizing the power relations of diverse institutions and interdepend of countries and institutions irrespective of their political and diplomatic stands. Such is what leads to alliances ( Keohane, 1984).
The two theories are related in that they actually do argue for capitalism. Realism expresses the desire of the humans, that it is human nature to seek psyche and supremacy.
However, this supremacy can’t be achieved with reliance on other individuals or institutions. It is however impossible for institutions such as countries and governments to be operated by individuals without mechanisms being put in place to govern how they relate.
The two theories however aren’t as related in several fronts. Under the world systems theory, a lot of colonization of new territories is argued for. Realism however doesn’t advocate for colonization. Instead, it argues for interdependence and thus the need for institutions to enhance this interdependence ( Ravenhill, n.d.). The self-gratification sought through the first theory leave some countries worse of. Under realism, the argument goes for a situation that results in mutual benefits without any element of unfairness.
All in all, the two theories are extremely related. It is a fact that realism is a resultant theory from the world systems theory. As a matter of facts it is an improvement on the latter.
Capitalism and socialism/communism are the basic determinants of decisions in the political economy. Either way, the needs and desires of the various parts of the globe are the ones that

THEORIES OF THE GLOBAL POLITICAL ECONOMY result to institutions that determine how the economy of the world runs. It is for instance out of
5 the need for integration of a free market in the world that led to formation of the principle financial institutions of the global economy; the World Bank and the International Monetary
Fund.

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THEORIES OF THE GLOBAL POLITICAL ECONOMY
References
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Gilpin, R., & Gilpin, J. (2001). Global political economy: Understanding the international economic order. Princeton, N.J.: Princeton University Press.
Keohane, R. (1984). After hegemony: Cooperation and discord in the world political economy. Princeton, N.J.: Princeton University Press.
Ravenhill, J. (n.d.). Global political economy (Fourth ed.).