States and Firms in Political Theory and International Relations Theory

Abstract

The relationship between states and firms is an important object of inquiry in both political theory and international relations theory. Yet analyses of this central nexus are dramatically different in the two realms. In this chapter I examine the treatment of firms and states in both political theory and international relations theory, focusing on two major theories which typify the two areas. The first, Realist international relations theory, essentially operates without a theory of the state. Yet its foremost practitioners claim that state power, even hegemonic state power, was an absolutely necessary prerequisite for the flourishing of multinational corporations in the postwar period. The second, the theory of the structural dependence¹ of the state on capital, provides the best account of the sources of state preferences in a capitalist economy. But it does not consider the effects of a state’s existing within an international system of states. As a result, it misses a major source of capital’s power and a major reason states are dependent on capital. An analysis of the shortcomings of these two theories will allow us to understand better the complicated interactions among states and firms in a capitalist world economy.