Table 10.1. Paradigms of the Global Political Economy Today


Neo-Liberal (Conservative) Paradigm

Social Democratic Paradigm

Main Loyalty

Business Corporations

The Public Good (Civil Society)

Economic Ethic

Economic Efficiency and Corporate Profits

High Employment and  Economic Equality

Favoured Institutions

Transnational Corporations, the IMF, the World Bank, the World Trade Organization

Democratically-elected legislatures, citizen groups, labour unions, environmental organizations

Position on Government Intervention

“Night Watchman” State: Minimal government regulation of the economy; profits come first; skepticism about ecological concerns

Welfare State: Moderate to high government regulation; Keynsian interventions when needed; social equality trumps corporate profits; ecological concerns real

Public Services that should be run by the State

Police, Armed Forces, Primary Education, basic infrastructure (though not especially utilities)

Police, Armed Forces, Water, Gas, Electricity, Parks and Nature Preserves, Health Care, Education, Infrastructure (e.g. roads), some Transportation (e.g. national airline), some Communications (e.g. state-run television network), Post Office

Position on International Trade and Finance

Free trade; floating exchange rates; disciplining of weak economies by a “free” market and stricter controls on deficit-spending governments by refusing World Bank/IMF assistance

Regulated trade: national tariffs and subsidies are acceptable; regulation or fixing of exchange rates; more consideration to be given to developing countries which fall behind on loan payments