The renaissance of geopolitical thought

Geopolitics differs from the more empirically-focused social sciences in a number of ways. For one thing, apart from repeatable observations it also builds on a tradition of wisdom, anecdotal observations, and educated guesswork. It embraces not only economics, political science, history, and geography, but also the critical-theory tradition. The reason for the link with critical theory is the conviction that continuing critique of contemporary society is essential not only to understand the world we live in, but also to maintain it into the future.

A positivist methodology for the social sciences with a solid peer-reviewed system of journals is a fine path to follow once we have agreed how knowledge is to be built, once we are sure which route will give valuable results. This has been far from true for the social sciences since the Second World War. The current paradigm has instead been molded by a conviction that ever-greater specialization and examination of small samples will yield new insights and social progress. In the journals, theory is regularly preferred to description of reality, and scholars compete with one another to introduce theories with new names, though the observations underlying the novel theories in most cases replicate findings which have been reported over and over again by earlier writers. Very rarely do scholars of the current American-led paradigm bother to read older books by, say, French or German authors. This is as much a question of the generation they belong to as of language skills and cultural ethnocentrism. In consequence, what passes for informed, smart, and up-to-date only looks that way. It has legitimacy because it is supported by an academic establishment (which, by the way, by no means includes all academics). Even in the English-speaking world, by no means all scholars support the current paradigm, just as by no means all economists are neoclassical economists. Many of the best critics of these ideas and schools are English-speaking academics. Furthermore what is being described is not a "conspiracy", in the sense that everyone affiliated to one paradigm is trying to do down everyone else; but it is a struggle for influence, power, and prestige.

The social sciences were sharply separated off from the humanities after the Second World War, because it was thought that they would be more successful at predicting future events if they followed a more scientifically-rigorous direction. The vanguard comprised economics and political science. It was thought that these two subjects would achieve far more as separate fields of study than they would if studied together, as they were in the late-nineteenth-century days of "political economy". And in some areas they have indeed been successful, as when studying various specialized systems, such as the accounting or legal systems of particular countries, or their governmental policies. The problem arises when we want to put things together, to produce syntheses, when we want to draw conclusions that can be useful in general situations or across cultural borders. The problem arises when we come to the macro structures, which are so important in the study of international economics/international business or international politics/international relations. By ignoring specifically political facts within writing about economics and vice versa, by overemphasizing theory rather than reality, and by systematically avoiding material belonging to the domain of the humanities (history, geography, languages), the modern development of these studies has made us less, not more, capable of predicting future events.

Geopolitics and geoeconomics do not accept that new understanding of social facts will come from ever-greater specialization, following the logic that started with the division of political economy into economics and political science. If you study political science while knowing little about economics or viceversa, the chances are that you will not understand much about macro factors. As an economist you might be an excellent accountant, but you will not know how new rules and regulations are implemented, and so will not be able to advise your clients. As a senior macro-economist in a bank you will know very little about the factors actually influencing your business. Endless television programmes feature these men repeating themselves in general terms, ultimately just to try to offer their customers reassurance. Most students of economics specialize strongly either in micro or in macro economics, to the point that if you are a micro economist you do not always know how the central bank system functions, or as a macro economist you cannot explain what derivatives are. This is a greater problem for macro economists than it is for micro economists. As an example, marketing specialists in a private-sector organization will not really know much about accountancy, but there are other colleagues to handle that and the organization will not be much worse off because of that deficiency. Both problems are mainly due to over specialization, but their effects are different.

Criticism of academic economics has mounted in recent years because of the current economic crisis. Many social scientists, including economists, have begun to question the fruitfulness of modern economics as a science. Despite the existence of a system of peer-reviewed journals and high-prestige academic prizes, the field has not made much progress towards developing a framework that helps decision-makers to predict future events. If economics should accept that this is not a possible or realistic goal, that would raise serious questions about the status of economics as a science comparable to the natural sciences, which we recall was very much the initial aim. It would not mean the end of economics as a discipline, but the subject would have to abandon its theoretical aspirations. It would instead have to be seen much more as a craft or art. In some ways that would be a relief. It would then be possible to shift attention from theory to the description of reality. Such description does happen within economics, under the heading of "case studies". But although case studies are certainly appreciated as "pedagogical contributions", they are not regarded as "scientific contributions": an academic economist cannot make a successful career from them alone.

Management as a subject was started, by scholars like Peter Drucker, out of very much this same concern about a "lack of reality". Drucker was never much appreciated among diehard scientific economists from the high-prestige universities, but that did not matter. Practitioners loved him, just because he was relevant.

The current paradigm in academic economics involves a refusal to consider the tradition of critical theory; instead it systematically portrays economic activities in the form of a tribute to the free market economy, with the understanding that critique of society is best left to sociologists. This has been quite unfortunate for the credibility of the economic sciences, but also for our understanding of economic behaviour. Refusing to consider the critical-theory tradition also means that the discipline of economics cannot manage to change direction, now that it is confronted by a theoretical stalemate. That is, positivist, algebra-based neoclassical economics offers no possibility for the discipline to move beyond its own paradigm.

The stalemate in the field of economics has been demonstrated by the fact that our economic theories are failing to lead us out of economic crisis. This has become obvious by contrast with the Asian and especially Chinese economic miracle. According to our economic theories, the State is not supposed to succeed in business. Public companies are supposed to be more efficient than either private partnerships or State-controlled companies. Moreover, Western-style democracies are supposed to be economically superior to more totalitarian states. Liberalism and free-market economics are supposed to lead to a more competitive society. Fewer rules and regulations are supposed to lead to greater productivity, more prosperity, and a better life for all. Currencies are supposed to be stronger when they are allowed to flow freely. All these conclusions and the assumptions behind them must now be questioned. Economics is too important a subject to be reduced to a cheerleader function on behalf of misguided current business practices. On the other hand criticism needs to be more than Marxism or socialism, and deserves a better label than "Heterodox Traditions".

The reason why empiricists are dominant in today's academic world goes back to the well-known Methodenstreit in the 1880s and 1890s, between the Austrian School of economists and the (German) Historical School. After the Second World War the Historical School received what amounted to a death sentence, as waves of German-speaking social scientists left their homelands, disillusioned by what many saw as the negative consequences of their own scientific methodology. The historical method allowed for too many value judgments, the feeling went. The social sciences should instead learn from the natural sciences, proposing hypotheses and testing them empirically using correctly calculated sample sizes to achieve an acceptable level of statistical significance. Now, after more than half a decade of experience with alternative social-science methods, the criticism of the historical method and historicism is less problematic than the lack of results from the alternative methods proposed by economists inspired by Karl Popper and the Austrian School, with its laissez-faire. Many American economists, led by Paul Krugman, have even acknowledged that Keynes's approach, with his long case-based papers and his method based on logical deductions supported by macroeconomic statistics, is superior to the neoclassical style.A method that has achieved wonders in the natural sciences has been far less successful in the social sciences.

It is not that there was any conspiracy to reject alternative methods or any ill will underlying the original project. Its creation was itself a natural consequence of the historical development in the latter part of the twentieth century, following the Second World War and the defeat of Germany. The new era needed new ideas, far removed from what were seen as harmful consequences of Continental European intellectualism. The new social-science project was intended to be a decisive counter-reaction to Hegelian idealism. Thus we can track a development from German-led thinking between the mid-1850s and the Second World War, to thinking led by English-speaking scholars down to the present. What we are seeing now, with financial crises in the Western world and the rise of China as a superpower, is the emergence of a new paradigm for economics. Winners have their own ideas which they will seek to impose on the world.

Does current economic theory have much relevance to business success? There is surely great discrepancy between theory and practice here too. How does it happen that countries which have traditionally shown little interest in the new social sciences, such as South Korea and Japan, but also Germany,40have performed so well economically? Could it be because applied developments in engineering and the natural sciences matter far more than the study of social sciences? Is it because most business practices can be learned on the job? Perhaps learning how to work rationally is all one needs, and maybe that is better learned by studying the natural sciences. What if a decent upbringing is more beneficial for business success than going to business school? The former chairman and chief executive of Asea Brown Boveri, Percy Barnevik, said recently that he only learned two per cent of what he needed to know as a leader at business school - and he went to one of the better ones. In other words we must ask: how much of our teaching in economics and management is ultimately political, and how much actually helps our organizations gain competitive advantage? To what extent is our business education geared to turning out obedient workers, and how far does it turn students into critical citizens, into what the humanist European tradition views as fully developed, responsible, and mature human beings? This question lies beyond the purview of present-day economics; but it does not fall outside the responsibility of our elites and of those who decide what we should study. Perhaps the social sciences are not all that well suited to educating critical individuals. Perhaps that task is better left wholly to the humanities. If so, then there are even stronger reasons to question the usefulness of current social-science methodologies.

The lack of a clear real political perspective in social science courses today is confusing our students. It is making them less prepared for the realities of business and public office. From a broader perspective, the Western approach to the social sciences has always been ideological. In this respect there is not so much difference between Marxism and laissez-faire capitalism. They are both powerful Western ideologies. We have an obligation to our students to tell them the real political truths about the world in which they will be working, and not to let them be duped by idealist fables spun off the great European revolutions. Whether we like it or not, the fact is that chance plays an important role in history. For example, Lenin's project of returning home and overthrowing the Tsar was largely financed by the German military command, and the so-called Russian Revolution was a confused coup d'etat carried out by a handful of Bolsheviks and some naval seamen who had been persuaded more or less at the last minute to support the rebellion. After the initial coup, the whole undertaking rapidly turned into a tyranny. Another example spun out of the same ideology is the myth of Napoleon as an unselfish, self-sacrificing hero of the Revolution. Napoleon was no democrat but a clever opportunist, who used the ideals of the Revolution to enrich his family. All Western politicians since then have to some extent been Napoleon's children, playing a game of manipulation to win favour with the masses -a system and logic unmasked in the works of the great thinker Ortega y Gasset (e.g. 1930).

We must question our claims to occupy the moral high ground. For instance, politicians (unwittingly in most cases, but systematically) manipulate the public when they claim that we are helping the developing world through overseas aid programmes. In reality our policies are more effectively designed to keep the poorer countries indebted, to control them and make them dependent, to justify our own protectionism and subsidies to our own voters while appearing to be doing good. Only secondarily does overseas aid achieve positive results for certain of the poor and needy in certain cases, as in the example of much-needed emergency relief. As Goulet and Hudson (1971: 78-87) remind us, funds provided as loans by States are often governed by tougher conditions than private-sector banks impose. Yet the former are called "aid", and the latter "investment". Furthermore, most of what we class as overseas aid comes back to our own companies and nationals in the form of salaries and profits and to pay for the administration of the programmes. Most of our political decision-makers know this is so, but the system is seldom questioned, because it works. In the public eye it creates an image of a moral high ground, which allows us to continue exploiting the poor. On these issues I have often found that my Asian and Chinese students have a much clearer understanding of reality and the political intrigues which take place on the world stage.

When the previous French president Jacques Chirac gave funds to his friend President Omar Bongo of Gabon, he saw part of that money returned as political contributions to his political party, the UMP. Bongo, who ruled his country from 1967 to his death in 2009, never distinguished between the country's money and his own; and the French public never seriously objected to this, mainly because they did not know, because the facts were hidden from them. Instead the French were led to think that they were doing good. It also follows that because we are morally superior we can to some extent do as we like, even if that means going to war and invading other countries.

Very little overseas aid actually reaches the people who need it. It only looks that way, and we enjoy and enhance that appearance in a self-deceiving way, ultimately because it is part of the political fabric we believe in. Of course there are exceptions, but that is not the point. People in the West are just as prone to self-deception as people in other cultures, perhaps sometimes even more so. Uncovering these mechanisms is leading a whole generation of students, especially non-Westerners, to question the established social sciences which serve to legitimize the status quo. The fact that we are now slowly being overtaken by another civilization is serving as a catalyst, a triggering mechanism for questioning our understanding of the world and how to succeed in it. From this perspective we need more realism and less ideology, more description of reality and less theory. It is what is leading to a renaissance of geopolitical thought.

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