What is neoliberalism with regard to the study of International Relations?

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One of the defining features of neoliberalism is that it seeks to transform many traditional features of political life into economic judgements. While the arena of international relations was once dominated by the whims of political leaders or concepts of justice and fairness, neoliberal thinkers advocate an international system that relies more on economic rationality and expert opinion. For Friedrich Hayek, one of the leading thinkers in this tradition, normative political judgements are extremely volatile and lead to a degree of uncertainty that inhibits economic growth and prosperity. For Hayek, political judgements are often blind to objective facts because politics tends to succumb to emotion and feeling to consolidate power. For neoliberals, the best route to social prosperity is to elevate the role of economics in how we organize society, and that extends to international relations.

Classical realism, a tradition that traces its roots as far back as Hobbes and Machiavelli, is grounded in a egoistic concept of human nature. In this view, all humans, and by extension states, are naturally self-interested, and without a common power to keep them in line (in the case of international relations, this would be a world government), a state of anarchy will prevail. This leads to states prioritizing relative gains, pursuing policies in their own interest at the expense of others. Neoliberals, while they do believe that states should pursue their rational self-interest, believe that governments should prioritize absolute gains. Neoliberalism seeks to break down barriers to trade and promote international cooperation, arguing that states can pursue their self-interest—that is, the expansion of wealth—without inhibiting the prosperity of other peaceful nations.

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Unlike realism, which promotes the idea that nations are motivated by their own interests, the field of neoliberalism in international relations stresses the idea that states can work together to foster international cooperation. The field focuses on how international institutions can create better cooperation among states. Neoliberalism uses game theory to create scenarios that create mutual wins for multiple states.

Neoliberalism is a response to the development of neorealism, which posits that states exist in a state of anarchy and must promote their own self-interest. Neoliberalism agrees that a state of anarchy can exist among states and that each state must pursue its own rational self-interests. In addition, the two theories are in agreement that cooperation can be difficult in an international environment that is plagued with fear. However, unlike neorealism, the field of neoliberalism promotes the idea that states can pursue their own self-interests while also pursuing international cooperation through the creation of international norms and institutions.

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In International Relations, neoliberalism is a theory that holds that states should try to achieve absolute gains rather than trying to achieve gains relative to other countries.

Neoliberalism is a response to neorealism.  Neorealism emphasizes the idea that states have no reason to cooperate with one another.  They exist in an anarchic world where states must all compete with one another.  In such a world, the incentives tend to push countries to compete with one another.

Neoliberalism, by contrast, holds that interactions between countries can be win-win situations.  They believe in the idea that the world can be set up in such a way that cooperation will be rewarded and countries can stop emphasizing competition.

Put in terms of the prisoner's dilemma, neorealism focuses on the idea that states have an incentive to defect.  By contrast, neoliberalism focuses on the idea that cooperating brings benefits to both sides and that the world can be set up with institutions and such that make it easier for states to cooperate with one another.

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