Paradoxes of Rationality, Neoliberalism and International System in Modern Eurasia

BY BABKEN G. MATEVOSYAN, Ph.D.

Many articles and analytical pieces about the IR in wider Eurasia, which tried to conclude 2015 and draw some predictions for 2016, brought me to one counter-intuitive question – was neoliberalism failing in 2015 Eurasia? It may seem absurd for a researcher from the first glance, but to explain my perception of the past few years and particularly 2015 Eurasia and to answer that question first we should define/operationalize what I mean by using these two terms – neoliberalism and failing. Here, neoliberalism is understood neither as an IR theory per se[1] (that in research allows us to view and analyze specific features of the relations between IR subjects rather than others, i.e. absolute gain rather than relative (neo-neo debate), cooperativeness, economic factors, soft power and democratic peace, etc.)[2], nor economic theory/ideology[3] (where the same methodology is applied but it implies different features), rather, here under the term are meant the policies based on that features, such as rationality of actors, democratization that provides peace, economic and/or political integration and cooperation, and most importantly, interdependence – the notion that cost of war is the determining factor. Failing, in turn, is understood as a decline, inability to successfully implement the policies based on it or predict their outcomes. Thus, by addressing the question this article provides a generalized and simplified glance on aforementioned specific features of modern international system.

The world is getting more and more interdependent and intertwined.

First of all, the rationality problem has emerged yet again. From Rousseau to prisoner’s dilemma, many depicted that what is rational for a group is not always rational for individual actors, i.e. cooperation is rational for group of states or international community, while cheating is rational for individual states in short term (in long-term interactions, as in games with multiple steps/rounds in game theory, cooperation is rational while cheating has consequences). Moreover, long-term and more important issues are often overshadowed by short-term or even populist agendas (usually done by elites aimed to gain votes/legitimacy/stay in power in both democracies and non-democracies). Furthermore, behavior of international actors based on those paradoxes undermines the international law as well as international institutions that currently are in decline after the relative stability in post-Cold War period[4]. Take for instance the weak European Union (with its financial and demographic difficulties and inability to conduct flexible policies with heavy bureaucracy, inability to form common policies on important foreign issues and construct hierarchy between common and individual interests/goals) or NATO with its hardline east flank,[5] the attempts to politicize the Shanghai Cooperation Organisation or failed regionalist policies in Greater Black Sea area[6]. Examples are many and we are not going to discuss all of them, but each deserves broader analysis to understand the pattern, causation or correlation among a huge variety of initial conditions and intervening factors/variables.

The Next issue is interdependence. While it cannot be described as being in decline – on the contrary, the world is getting more and more interdependent and intertwined – there are two issues I would like to discuss about the phenomenon: its growing complexity and inability to withstand some specific conditions.

A lot has changed from the first attempts to grasp the concept of commercial peace, i.e. with more trade between countries the cost of war rises. While there is a consensus on the benefits of liberal markets and free trade even in ideological non-democracies, in current terms of accelerating history the interdependence is getting harder to control. The growth in the number and wealth of states is not the only source of increased complexity. As Nye argues, the diffusion of power from governments to non-state actors is putting a number of transnational issues on the international agenda (climate change, financial stability, pandemics, terrorism, etc.), at the same time it weakens the ability of the states to respond.[7] As the law of entropy suggests (the second law of thermodynamics), order in the world is being continually replaced by increasing disorder, and some scholars see its projection on the international system.[8] This idea becomes increasingly actual with the development of new technologies where transportation of goods and labor force becomes more affordable, financial markets more interdependent and most importantly, information more accessible and harder to control, while the cost of creating, finding and transmitting it decreased dramatically. Take for instance the role of social media in Arab Spring revolution, how Russia struggles to control public opinion or NSA leak scandals.[9] Unlike the world described in Orwell’s “1984”, the informational revolution not only brought easier government surveillance, but also increased uncertainty and created a new field for different kinds of networks to operate – starting from criminal networks and international terrorist recruiters to corporations that collect customer information and civil society initiatives that make governments accountable and give them less time and space to respond. To generalize, the growing interconnection creates greater vulnerability. That, in turn, makes it harder for states to act alone, creates a need for additional cooperation and ipso facto further contributes to interdependence.

From the façade, all requirements have been met for being a successful example of policy based on neoliberal features in the Eurasian project.

Another feature of modern interdependence and the one most problematic neoliberal policies were based on in the past few years is that despite the high cost of confrontation/war many actors prefer it for different reasons. In most of these cases, issues such as the internal integrity and discontent towards the ruling elites by the populations are challenged by the use of ideology, information control, creation of an external enemy, etc. Two of the core examples of such irrational (in a specific context) behavior are Russia and Turkey, and ironically, eventually they confronted each other although both of them desperately need short and middle-term cooperation in energy component and beyond. Here, decision-maker(s) in Russia preferred to pay the high, almost unbearable cost for Crimea and for the new frozen conflict in Ukraine as a potential foreign policy tool, while in Turkey the ruling strongman gambled internal and regional stability in order to stay in power and increase it.[10]

The next good illustration of misguided neoliberal policies in modern Eurasia is the policies of integration, e.g. the emergence of Eurasian Economic Union (EEU), the EU Neighborhood Policy (ENP) initiatives. From the façade, all requirements have been met for being a successful example of policy based on neoliberal features in the Eurasian project: the integration project was initiated to provide free trade opportunities, customs liberalization and potentially, common economic/fiscal policies for countries with similar resource oriented (except Armenia) and already interconnected economies. Though, if we glance beyond that façade, it doesn’t require a special knowledge to grasp the variety and complexity of problems, namely: failure in modernizing the economy, corruption and lack of competition, inconsistent hardline ideology (anti-liberalism, anti-West) and nationalism in Russia and overused hard power that undermines any soft power, sharp decline in trade within the union, fiscal and custom wars among the states of the union, etc. Surely, the biggest problem for these countries was declining oil prices[11], but this only uncovered the core problems. Obviously, the emergence of the EEU and especially its timing was purely politically motivated while the cooperation remains declarative.[12] Furthermore, the EU Eastern Partnership initiative and overall ENP have been reviewed and changed, as neoliberal institutionalism was defeated by power (geo)politics and imperative approach.[13]

Certainly, this set of generalized examples does not represent an exhausting list of major weaknesses/shifts in the modern international system. Neither does it argue that strategies based on other theoretical models are doing better. It rather outlines the growing dynamics and increasing complexity of modern accelerating historical processes, where the level of uncertainty rises. Many policies based on neoliberal approach were indeed failing, others were poorly designed or misused to reach other targets (EEU). However, as the paradox of rationality in game theory ironically suggests, the choices made illogically or naively often show better payoffs or outcomes. Hence, better times are to come.

Works Cited

[1] Moravcsik, Andrew, (1997), “Taking Preferences Seriously: A Liberal Theory of International Politics”, International Organization journal, vol. 51, nr.4, pp. 513-553

[2] Keohane, Robert O., and Joseph S. Nye Jr., ( 1998), “Power and Interdependence in the Information Age”, Foreign Affairs 77, no. 5: 81-94.

[3] Taylor C. Boas, Jordan Gans-Morse (June 2009). “Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan”. Studies in Comparative International Development 44 (2): 137–161

[4] Ruggie, John, (1998), “Constructing the world polity”, Routledge

[5] Joint Declaration on “Allied Solidarity and Shared Responsibility” Bucharest, November 2015, retrieved from https://www.lrp.lt/data/public/uploads/2015/11/joint-declaration.pdf

[6] Ivan, Ruxandra (ed.), (2012), “New Regionalism or No Regionalism? Emerging Regionalism in the Black Sea Area”, Burlington VT, Ashgate, p.38

[7] Joseph S. Nye Jr., (2015), “Is American Century Over?”, Polity Press, Cambridge

[8] Randall Achweller, (2011), “Emerging Powers in an Age of Disorder”, Global Governance

[9] “Where Foreign “Experts” and “Political Scientists” on Russian Television Come From”, retrieved from http://www.stopfake.org/en/where-foreign-experts-and-political-scientists-on-russian-television-come-from/

[10] Unluhisarcilki, Ozgur, (November 2015), “The AKParty Wins Big, but at What Cost?”, retrieved from http://www.gmfus.org/blog/2015/11/04/akparty-wins-big-what-cost

[11] “New Russian Budget Based on $50 Oil Passes First Hurdle in Parliament” retrieved from http://www.themoscowtimes.com/business/article/new-russian-budget-based-on-50-oil-passes-first-hurdle-in-parliament/518152.html

[12] “The Eurasian Union’s Troubled First Year”, retrieved from http://thediplomat.com/2015/12/the-eurasian-unions-troubled-first-year/

[13] “Joint Communication to the European Council, the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions”, retrieved from  http://eeas.europa.eu/enp/documents/2015/151118_joint-communication_review-of-the-enp_en.pdf

About the Author 

Babken Matevosyan holds a Ph.D. from SNSPA in Bucharest, Romania. His research focuses on democratic transitions, security in European eastern neighborhood, frozen conflicts, etc.

DISCLAIMER: The views and opinions expressed in the article are solely those of the author(s) and do not necessarily reflect the official policy or position of the ERA Institute.

 

This article is produced by the Eurasian Research and Analysis Institute, Inc. (ERA Institute), a public, 501(c)(3) nonprofit institution devoted to studying Eurasian affairs. All views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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