12.3 Liberalism:
Cooperation, Trade, & International Institutions
While realism emphasizes competition, power, and survival, liberalism offers a more optimistic view of international relations.
Liberalism agrees that the international system is anarchic and that states care about their security. However, liberals argue that conflict is not the inevitable outcome of anarchy. Instead, they believe that cooperation is often possible and that states can create institutions, agreements, and relationships that reduce the likelihood of war and encourage peaceful interaction.
According to liberalism, international politics is not only about power. It is also about cooperation, interdependence, shared interests, and the creation of rules that help states work together.
The Liberal View of Human Progress
Liberalism is rooted in ideas that developed during the Enlightenment. Many liberal thinkers believed that human beings are capable of learning, improving institutions, solving problems, and making progress over time. Applied to international relations, this means that war and conflict are not simply permanent features of human existence.
While conflict remains possible, liberals argue that states can build systems that encourage cooperation and reduce incentives for violence. Rather than assuming that international politics must always be a struggle for survival, liberals ask how states can create conditions that make peaceful cooperation more likely. This focus on progress distinguishes liberalism from realism.
Where realists often emphasize competition and distrust, liberals tend to emphasize opportunities for cooperation and mutual benefit.
Economic Interdependence
One of liberalism’s most important ideas is economic interdependence.
Economic interdependence occurs when countries become connected through trade, investment, supply chains, finance, and commerce.
When states depend on one another economically, conflict becomes more costly. For example, if two countries trade extensively with one another, a war between them may disrupt businesses, damage economic growth, increase unemployment, and create financial losses for both sides. Because of these costs, liberals argue that trade can create incentives for peace. Countries that benefit from economic cooperation often have strong reasons to avoid actions that would destroy those benefits.
Trade does not guarantee peace. History contains examples of economically connected countries that still went to war. However, liberals argue that economic ties can make cooperation more attractive and conflict less desirable.
International Institutions
Liberals also emphasize the importance of international institutions.
An international institution is an organization, agreement, or set of rules that helps states coordinate their behavior.
Examples include:
- The United Nations (UN)
- The World Trade Organization (WTO)
- The International Monetary Fund (IMF)
- The World Health Organization (WHO)
- Various regional organizations and treaty systems
International institutions do not eliminate anarchy, because they are not world governments. However, liberals argue that they can help states cooperate more effectively.
Institutions provide forums for communication, establish expectations, create rules, monitor agreements, and help resolve disputes peacefully. For example, instead of responding to every disagreement through threats or military force, states can negotiate through diplomatic channels and international organizations.
According to liberals, these institutions help reduce uncertainty and make cooperation easier.
Democratic Peace Theory
Another influential liberal idea is Democratic Peace Theory.
The Democratic Peace Theory argues that democracies are less likely to go to war with one another than other types of political systems.
Liberals offer several explanations for this pattern.
- One explanation is that democratic leaders are accountable to voters, who often bear the costs of war through taxes, economic disruption, and military service.
- Another explanation is that democratic societies tend to develop habits of negotiation, compromise, and peaceful conflict resolution that influence their foreign relations.
- A third explanation is that democracies may trust one another more because they share similar political institutions and expectations.
Democratic Peace Theory remains widely debated, but it has become one of the most influential ideas within liberal international relations theory.
Absolute Gains vs. Relative Gains
Liberals and realists often disagree about how states evaluate cooperation.
Realists tend to focus on relative gains.
Relative gains ask:
“Who benefits more?”
A state may hesitate to cooperate if it believes another state will gain a greater advantage.
Liberals focus more on absolute gains.
Absolute gains ask:
“Are we both better off than before?”
From this perspective, cooperation can be worthwhile even if one side benefits somewhat more, as long as everyone improves their situation. This difference helps explain why liberals are generally more optimistic about international cooperation than realists.
Strengths and Criticisms of Liberalism
Liberalism helps explain many important features of modern international politics. It provides insight into international organizations, trade networks, diplomacy, global governance, and long periods of cooperation between states.
Many liberals point to the growth of international institutions, economic globalization, and the expansion of democratic government as evidence that cooperation can become more common over time.
Critics argue that liberal theory sometimes underestimates the importance of power, security concerns, nationalism, and military competition. Economic ties do not always prevent conflict, and international institutions often depend on powerful states for support and enforcement. Others argue that liberalism can be overly optimistic about human progress and the willingness of states to cooperate.
Despite these criticisms, liberalism remains one of the most influential approaches to understanding international relations.
At its core, liberalism argues that although the international system lacks a world government, states are capable of creating institutions, economic relationships, and political arrangements that encourage cooperation, reduce conflict, and promote mutual benefit.
In section 12.4, we will examine a third international relations theory: constructivism.