definite outcomes,and straightforward causation.Or does it? Take the example of the trade deficit.It is entirely possible that a widening trade deficit will lead to a decline in the dollar,but such a process is hardly automatic.It depends on what actors think a sustainable deficit is,for example,and this comes with no clear metric.Likewise,a generation ago,lower unemployment may have been met by a further reduction in interest rates rather than a future rise.Being "inflation averse"is not an autonomic response of the human animal;it is a learned behavior.As Frank Dobbin argues,"People in all...places may be self-interested,but the concept of self-interest is of little use in explaining why people behave differently in different places." The point we wish to stress is that material factors such as interest rates, productivity figures,and capital flows are not self-apparent phenomena that unambiguously telegraph to agents "what is to be done"according an obvious metric of behavior.To take an extreme but illustrative example,economies may rapidly deflate, but the decision to conduct reflationary fiscal policies rather than commit genocide against a target population is not given by the material circumstances an agent operates in.This is why a constructivist political economy,one that moves away from seeing interests and the material context of action as unmediated and unproblematic,is so important.Key to seeing why this is the case lies in unpacking three notions;interests, stability,and uncertainty. Part Two:Making the Case for Constructivism in IPE
definite outcomes, and straightforward causation. Or does it? Take the example of the trade deficit. It is entirely possible that a widening trade deficit will lead to a decline in the dollar, but such a process is hardly automatic. It depends on what actors think a sustainable deficit is, for example, and this comes with no clear metric. Likewise, a generation ago, lower unemployment may have been met by a further reduction in interest rates rather than a future rise. Being “inflation averse” is not an autonomic response of the human animal; it is a learned behavior. As Frank Dobbin argues, “People in all … places may be self-interested, but the concept of self-interest is of little use in explaining why people behave differently in different places.” The point we wish to stress is that material factors such as interest rates, productivity figures, and capital flows are not self-apparent phenomena that unambiguously telegraph to agents “what is to be done” according an obvious metric of behavior. To take an extreme but illustrative example, economies may rapidly deflate, but the decision to conduct reflationary fiscal policies rather than commit genocide against a target population is not given by the material circumstances an agent operates in. This is why a constructivist political economy, one that moves away from seeing interests and the material context of action as unmediated and unproblematic, is so important. Key to seeing why this is the case lies in unpacking three notions; interests, stability, and uncertainty. Part Two: Making the Case for Constructivism in IPE
Constructed Interests Beyond the interpretation/outcome problems noted above concerning interests, the notion of acting on one's interests implicitly assumes that agents act in their "true" interests.As the judge of one's own best interests,whatever an agent chooses can only be assumed,by the observer,to be the best the agent can do,given subjective expected utility limitations.To put it bluntly,"interests are interests"and by definition must be those held "truly"by the agents in question.Yet"true"interests can only be assessed and acted upon under optimal conditions with perfect information.Only under such conditions are the full range of alternatives and their relative costs apparent to the agent. Such conditions are rather implausible and are perhaps never found in situations of political interest.If information is processed differently by different agents,or if information is asymmetrically distributed,then interests cannot be "given"by structural location or revealed ex-post in behavior.Yet,it is precisely these situations that are of interest to political economists.Otherwise,we are,simply re-describing the obvious in a somewhat circular manner. Analysts end up in this position because of a conceptual error present in materially derived notions of interest:conceiving of interest as a singular concept. Positing that an agent did something because his or her "interest'”lay in"x”over“y” ignores the fact that the concept of interest presupposes unacknowledged but very important cognates of interest,such as wants,beliefs,and desires.These cognates are not analytically separate from interests and must be considered as part of the concept of interest itself.Seen in this way,specifying agents'interests becomes less about structural
Constructed Interests Beyond the interpretation/outcome problems noted above concerning interests, the notion of acting on one’s interests implicitly assumes that agents act in their “true” interests. As the judge of one’s own best interests, whatever an agent chooses can only be assumed, by the observer, to be the best the agent can do, given subjective expected utility limitations. To put it bluntly, “interests are interests” and by definition must be those held “truly” by the agents in question. Yet “true” interests can only be assessed and acted upon under optimal conditions with perfect information. Only under such conditions are the full range of alternatives and their relative costs apparent to the agent. Such conditions are rather implausible and are perhaps never found in situations of political interest. If information is processed differently by different agents, or if information is asymmetrically distributed, then interests cannot be “given” by structural location or revealed ex-post in behavior. Yet, it is precisely these situations that are of interest to political economists. Otherwise, we are, simply re-describing the obvious in a somewhat circular manner. Analysts end up in this position because of a conceptual error present in materially derived notions of interest: conceiving of interest as a singular concept. Positing that an agent did something because his or her “interest” lay in “x” over “y” ignores the fact that the concept of interest presupposes unacknowledged but very important cognates of interest, such as wants, beliefs, and desires. These cognates are not analytically separate from interests and must be considered as part of the concept of interest itself. Seen in this way, specifying agents’ interests becomes less about structural
determination and more about the construction of"wants"as mediated by beliefs,desires, and the wider social context of action.Interests are social constructs,not material givens, and should be analyzed as such.Before they can be something that"does the explaining," they themselves need to be explained. As Alexander Wendt has argued,in order to specify interests one must first specify the beliefs an agent has about what is desirable in the first place,which is an irreducibly inter-subjective process.We need to consider "what is desired"as a construction rather than a material given since "we want what we want because of how we think about it"and not because of any innate properties of the object desired.When seen in this way,the constructed and inter-subjective nature of desires and beliefs collapses and a richer constructivist understanding of interests becomes possible. Uncertainty and Stability in the IPE Standard political economy explanations problematically assume,as well as transitivity of preferences and clear interests,a relatively stable structural context in which choices over possible outcomes are being made.Such an assumption may in fact be less tenable than it seems.In situations of environmental stability,agents'interests are indeed relatively unproblematic since any ambiguities they have over strategies are a function of two factors;risk and complexity.Under such conditions agents'interests are stable,they are just more or less"sure"of how,and how likely they are,to achieve them. In situations of environmental instability however,how interests are conceptualized,and
determination and more about the construction of “wants” as mediated by beliefs, desires, and the wider social context of action. Interests are social constructs, not material givens, and should be analyzed as such. Before they can be something that “does the explaining,” they themselves need to be explained. As Alexander Wendt has argued, in order to specify interests one must first specify the beliefs an agent has about what is desirable in the first place, which is an irreducibly inter-subjective process. We need to consider “what is desired” as a construction rather than a material given since “we want what we want because of how we think about it” and not because of any innate properties of the object desired. When seen in this way, the constructed and inter-subjective nature of desires and beliefs collapses and a richer constructivist understanding of interests becomes possible. Uncertainty and Stability in the IPE Standard political economy explanations problematically assume, as well as transitivity of preferences and clear interests, a relatively stable structural context in which choices over possible outcomes are being made. Such an assumption may in fact be less tenable than it seems. In situations of environmental stability, agents’ interests are indeed relatively unproblematic since any ambiguities they have over strategies are a function of two factors; risk and complexity. Under such conditions agents’ interests are stable, they are just more or less “sure” of how, and how likely they are, to achieve them. In situations of environmental instability however, how interests are conceptualized, and
thus how outcomes can be explained,changes drastically.To understand why this is the case,and why such a scenario is as likely than not to characterize the IPE,consider interests under uncertainty understood as a standard problem of risk. Back in 1921 Frank Knight made a distinction between situations of risk,where agents know their interests but are unsure how to achieve them(probabilistic uncertainty) and uncertainty,where no such probabilities can be assigned.In the former situation, uncertainty is the result of "the complexity of the problems to be solved...the problem solving software...possessed by the individual"and incomplete information between agents.Uncertainty,in this guise,is a function of computational failings and environmental complexities,nothing more.Agents rank priors and choose among options to maximize under constraints;some succeed,some fail.The uncertainty faced by agents in this world is equivalent to gambling with dice;it is risk.This was not what captured Knight's attention. For Knight,uncertain situations are qualitatively different from situations of risk. If the situation facing agents is"unique,"that is,having no priors to draw on from past experiences agents can have no conception as to what possible outcomes are likely,and hence what their interests in such a situation in fact are.Being unable to form"a series of instances"of like-type events from priors and thus project probabilities,agents'interests in such an environment cannot be given by either assumption or structural location. Given interests,and thus standard notions of action,have little meaning under conditions of Knightian uncertainty.As Jens Beckert argues "if one can argue...[that]...uncertainty ..does not allow actors to deduce actions from preferences ..it becomes important to
thus how outcomes can be explained, changes drastically. To understand why this is the case, and why such a scenario is as likely than not to characterize the IPE, consider interests under uncertainty understood as a standard problem of risk. Back in 1921 Frank Knight made a distinction between situations of risk, where agents know their interests but are unsure how to achieve them (probabilistic uncertainty) and uncertainty, where no such probabilities can be assigned. In the former situation, uncertainty is the result of “the complexity of the problems to be solved...the problem solving software...possessed by the individual” and incomplete information between agents. Uncertainty, in this guise, is a function of computational failings and environmental complexities, nothing more. Agents rank priors and choose among options to maximize under constraints; some succeed, some fail. The uncertainty faced by agents in this world is equivalent to gambling with dice; it is risk. This was not what captured Knight’s attention. For Knight, uncertain situations are qualitatively different from situations of risk. If the situation facing agents is “unique,” that is, having no priors to draw on from past experiences agents can have no conception as to what possible outcomes are likely, and hence what their interests in such a situation in fact are. Being unable to form “a series of instances” of like-type events from priors and thus project probabilities, agents’ interests in such an environment cannot be given by either assumption or structural location. Given interests, and thus standard notions of action, have little meaning under conditions of Knightian uncertainty. As Jens Beckert argues “if one can argue ... [that] ... uncertainty ... does not allow actors to deduce actions from preferences ... it becomes important to
look at those cognitive...and cultural mechanisms that agents rely upon when determining their actions."Interests,once again,must be seen as constructed. If this is the case,then the key question becomes,what type of situations do agents face in the political economy?Are they faced by risk or uncertainty?If the world is generally "risky"rather than fundamentally "uncertain,"then materialist-rationalist theories may be justified in treating "stability"as the normal state of affairs and extrapolating from this basis.Notwithstanding the criticisms offered above, constructivism might then only serve as a gloss on an otherwise useful and parsimonious set of theories that explain a great deal.Unfortunately,for such perspectives,uncertainty may not be the exception in the political and economic world,occurring only in moments of 'crisis'and other 'creedal periods'of change.It may in fact be more the norm than we think.Specifically,agents may assume they act in conditions of risk when in fact they are acting under uncertainty,with a host of unintended consequences as the result.If this is the case,then the world pictured by materialist-rationalist theorists may be the exception rather than the rule,thus opening the door for constructivist understandings ever wider. To see why this is the case,consider the following. Taleb and Pilpel argue that in order for an agent to find out if the world one operates in is risky or uncertain,one needs to generate a probability distribution of likely events.Unfortunately,the generator of probabilities in the social and economic world (unlike a roulette wheel)is not directly observable,only the results are.As a consequence,the future may be risky (priors can be ranked)but it could also be deeply uncertain(there are no priors).How would an agent know the difference?First of all,to
look at those cognitive…and cultural mechanisms that agents rely upon when determining their actions.” Interests, once again, must be seen as constructed. If this is the case, then the key question becomes, what type of situations do agents face in the political economy? Are they faced by risk or uncertainty? If the world is generally “risky” rather than fundamentally “uncertain,” then materialist-rationalist theories may be justified in treating “stability” as the normal state of affairs and extrapolating from this basis. Notwithstanding the criticisms offered above, constructivism might then only serve as a gloss on an otherwise useful and parsimonious set of theories that explain a great deal. Unfortunately, for such perspectives, uncertainty may not be the exception in the political and economic world, occurring only in moments of ‘crisis’ and other ‘creedal periods’ of change. It may in fact be more the norm than we think. Specifically, agents may assume they act in conditions of risk when in fact they are acting under uncertainty, with a host of unintended consequences as the result. If this is the case, then the world pictured by materialist-rationalist theorists may be the exception rather than the rule, thus opening the door for constructivist understandings ever wider. To see why this is the case, consider the following. Taleb and Pilpel argue that in order for an agent to find out if the world one operates in is risky or uncertain, one needs to generate a probability distribution of likely events. Unfortunately, the generator of probabilities in the social and economic world (unlike a roulette wheel) is not directly observable, only the results are. As a consequence, the future may be risky (priors can be ranked) but it could also be deeply uncertain (there are no priors). How would an agent know the difference? First of all, to