Liberalism: Explaining the Current State of International Affairs

By Leo Xavier Minns


This essay shall argue how a hybrid of Neo-Realism and Neo-Liberalism best explains the current state of international affairs. Firstly, this paper shall build an understanding of the two sub-schools of Liberalism whilst explaining their features and criticisms, followed by an analysis and brief of the Realist explanation of current affairs. The focus topics will be on the role of collective security and institutions. Once the two contrasting theories have been explained and compared, application of said theories to the context of the rise of China as a dominant power and relations with the United States shall occur. The reason for choosing this case study in particular stems from the resonance of Sino-US relations throughout the world. The manner of which the US is able to cooperate with China on major topics such as trade agreements and climate change will have ripple effects not only throughout the developed world, but the developing world too. Finally, a cross-analysis of each theory’s contribution to explaining the case study shall find that the Neo-realist observations of anarchy on the international field holds true, in particular with the application and enforcement of human rights -or lack thereof-; whilst the Neo-Liberalist argument of dependency through trade between rational states prevents war also stands true, which provides explanation on the delicate nature of which the U.S. approaches its relationship with China.

What are the defining features of Neo-Liberalism and its criticisms?

When assessing the value of Liberalist thought at explaining our current state of international affairs, we must first establish the difference between the two main sub-schools of Liberalism. Firstly there is Classical Liberalism, a theory championed by the likes of John Locke, Immanuel Kant and Woodrow Wilson, that bases itself on the premise that the key to avoiding conflict is rooted in cooperation. It claims that the likelihood of war is small due to the nature of humans being inherently good, whereas Neo-liberalism builds upon this and updates the Liberalist claims to the modern day. Neo-Liberalism argues that the likelihood of war is less due to the rationality of states. Increased levels of cooperation and therefore interdependency both economically and politically, increases the costs  of war inflicted on a state and its citizens. Therefore, war rarely brings net benefit to the attacking nation, thus entering into conflict over a dispute is deemed irrational. For example, Turkey and Russia partake in very high levels of trade with each other, with a recorded total of $30 billion in 2014 and a target to reach $100 billion a year by 2023 (Financial Times, 2015). However, Turkey and Russia are on opposite sides of the Syrian conflict, where Russia entered the war in support for President Bashar al-Assad, whilst Turkish leader Erdogan has sided with the rebels fighting against Assad. As a result tensions have risen between the two nations over Russian jets impeding on Turkish airspace, yet it would be irrational for either state to engage in conflict with the other due to interdependency on each other’s trade.

Before it is possible to see the contribution Neo-Liberalism offers to the understanding of the relationship between China and the US, it is required that the basis of the Neo-Liberal arguments are defined. Primarily it argues that the most rational option for states is to work past their differences multilaterally with attention drawn on absolute gains rather than relative gains. This means that in a scenario where states are given the opportunity to cooperate, for example, by regulating the amount of oil available on the international market, -despite the fact that a country may have larger oil reserves and may be able to relatively sell more than its competitors- it is rational for states to cooperate with its competitors in order to not flood the market and devalue their resource. Therefore, Neo-Liberalism stands that so long as all parties involved in an act of cooperation are benefiting, it is of no consequence whether state A benefits more or less than state B. This cooperation is greatly facilitated by the role of international institutions, for these institutions enable fair and controlled cooperation between actors. According to the Liberalist doctrine, institutions are able to install a sense of trust between actors, as states are held accountable for defecting from agreements by deterrents in the form of sanctions. Furthermore, regular interactions between actors allow for better understanding of each other’s intentions, regular cooperation both politically and economically, causes states to become more dependent on each other, thus increasing security as the costs of conflict increases.

Neo-Liberalism refutes the Realist argument that war is inevitable, and says that conflicts occur simply out of misinformation, poor regimes, weak institutions and economic grievances; all of which can be remedied by stronger impartial international institutions. Academic Institutionalists, unsurprisingly, consider institutions to be a powerful force for providing stability (Mearsheimer, 1994, p.6), however, Realists look at this argument with scepticism and argue that the international field is inherently anarchic. This is because in order for any institution to have enough power to punish a state for breaking predetermined rules, it must have an army, an army that may be partially comprised of soldiers from the country the institution is trying to punish. Nevertheless, institutions such as the WTO, IMF and at times the UN, still possess the ability to inflict partially effective punishments on defecting states through sanctions, however, these prove to be more of a inconvenience to regimes rather than an effective deterrent. Criticisers of institutional liberalists would argue that sanctions also result in further legitimising authoritarian regimes, as autocratic leaders are able to scapegoat economic hardship and structural issues on the imposed sanctions. Realists also maintain that such institutions merely reflect the distribution of power already seen in the world, with each being directed by the self-interests of the great powers (Mearsheimer, 1994, p.7), an example being the veto power of China, France, Russia, the United Kingdom and the United States in the United Nations Security Council, thus rendering the institutions biased. Nevertheless, institutions have proven to provide a beneficial sense of reciprocity, increased transparency and -in theory- collective security. States that band together to denounce violence and aggression in the form of organisations such as NATO, create a preponderance of power that will serve as a deterrent to potential attackers despite the institution itself being weak. However, it is important to remember that due to characteristic and ideological differences between nations, there shall always remain outsiders of a collective security agreement, resulting in a risk of polarisation of the international system into two groups of security alliances.

What are the alternatives to Neo-Liberalism?

This risk of polarisation of the international system leads onto the Neo-Realist alternative explanation to collective security. Neo-Realists argue that the most stable international system would be bi-polar in its makeup, where there are two major collective security groups of equal proportion, resulting in such high costs of war that it would be irrational to enter it. However, Neo-Realist thought is built around the premise of an anarchic international system, where all states are opportunistic and look to take advantage of one another, resulting in a lack of trust (van Evera, 1992, p.19)  where all states (like in Neo-Liberalism) are rational unitary actors. However, unlike in Neo-Liberalism, Neo-Realists argue that it is most rational for states to focus on relative gains and act strategically by balancing both internally and externally. Therefore, it stands that the distribution of power is of the utmost significance when analysing the relationship between two states, rather than the opportunity for absolute gains. Critics argue that in a world of balancing under anarchy, the key question is whether regulated balancing based on the notion of all against one, or unregulated balancing predicated upon the notion of each for his own, is more likely to preserve peace (Kupchan and Kupchan, 1995, p.53). This draws reference to the two main sub-schools of Neo-Realism: Defensive Realists, and Offensive Realists. Offensive realists, would argue that a country may strike another country’s offensive forces to blunt an attack that it presumes is about to be made, otherwise known as a ‘pre-emptive strike’ (Waltz, 1981). According to this logic, the best way to avoid threat of attack is by seeking power to achieve primacy, or hegemony, thus siding with the argument that ‘all against one’ is the safest structural system. Defensive Realists on the other hand, seek power to guarantee security, even at the cost of economic growth (Waltz, 1981). Waltz argues that it is foolish for states to attempt to maximise their share of the worlds power, because in doing so, a backlash will occur in order to try and rebalance the distribution of power which may be achieved through conflict (Mearsheimer, 2013). Waltz instead argues that security can be achieved through clearly defined foreign policies and objectives which can reassure potential threatened neighbours, and that the state should respond to hostile actions once made, but not be the instigator of crisis. By clearly stating intensions, states can -to an extent- overcome the fabled security dilemma of an anarchic international system. This refers to the fact that when states cannot be certain of one another’s intensions, -particularly states who may be militarily powerful and seeking to expand- states must resort to assuming the worst intensions of other states and compete for power with them (Glaser, 1997, pp.171-201). On the other hand, Liberalists criticise bi-polar security, based on the date of the theory’s origin. The Cold War was a major contributor to the legitimacy of the bi-polar argument, however, once the war had ended, there was no longer a clear balance of power with the United States remaining, thus the theory lost a large amount of its credibility. Kupchan criticises Mearsheimer’s explanation of war and peace solely in terms of power balancing in an anarchic world by stating that it lacks the ability to adjust to swings in power balance, like what was see post Cold War(Kupchan and Kupchan, 1995, p.52).

Application of Neo-Liberalism an Neo-Realism to the case of China’s relations to the U.S.

Now an understanding of the conflicting stances of Neo-Liberalism and Neo-Realism has been established, the application of these theories to the case study of China’s relations to the U.S. shall give insight to the explanatory power of these theories. Firstly, analysing the Sino-US relationship in the context of institutions, Neo-Liberalism claims that institutions such as the World Trade Organisation facilitates cooperation between the actors which may benefit all parties involved. An example of this kind of cooperation includes the Sino-U.S. demonstration of their role in the global trading system by making a joint commitment to launch a multilateral negotiation of new international export credit guidelines in the International Working Group on Export Credits (IWG) in 2012. The IWG developed significantly and now plays a central role in developing guidelines that, taking into account varying national interests and situations, are “consistent with international best practices” (, 2014). The Realist rebuttal to this institutionalised cooperation would be that China and the U.S. will still prioritise relative gains over absolute gains in this situation, especially when the proposed cooperation is with a competitor deemed to be threatening, thus the formation of the IWG is largely irrelevant as it merely retains the status quo. Nevertheless, other institutions such as the United Nations have enabled regular interaction and the formation of contacts  between the US and China leading to breakthroughs in cooperative action to combat climate change. In November 2014, the US and China unveiled an agreement to collectively reduce green house emissions by 2030. Neo-Liberalists would argue that had the initial interactions between the US and China not been facilitated by the UN, this cooperation may not have occurred.

The topic of the likelihood of conflict between China and the United States has been widely covered by many outside of the Neo-Realist and Neo-Liberalist academic schools, yet, all recognise China as the growing challenging -balancing- power against the USA. In 2011, President Barack Obama met with the previous Chinese president- Hu Jintao, and issued a statement that a new shared commitment to a “positive, cooperative and comprehensive U.S.-China relationship” had been formed (Foreign Affairs, 2012). Liberalists would infer from this that the upcoming greater inter-dependency of the two states would provide greater security between them, as countries in which a complex interdependence exists, the role of the military in resolving disputes is negated due to the increased cost of war (Keohane and Nye, 1977), thus grievances must be solved through diplomatic means instead. Nevertheless, Realists would counter argue that in the deceptive word of international relations, words are wind. Despite the increased levels of Sino-US cooperation since 2011; with the restarting of military-to-military contacts and exchange of visits by top Chinese and American officials to discuss strategic and economic issues, many “significant groups in both countries” claim that a competitive challenge for supremacy is inevitable (Foreign Affairs, 2012). Neo-Realists argue that, Washington’s fixed objective will be to hem in a growing China in an attempt to balance power by military deployment and treaty commitments, thus preventing China from dominating and causing a shift in supremacy (Foreign Affairs, 2012). The U.S.’s need for management of China’s growth in power is based on the Neo-Realist thought that the capabilities of competing states should account for more when creating foreign policies, compared to the intentions of the states. Therefore, while the US should not turn a blind eye to the economic, political, and security challenges posed by China’s rise (and should be clear that any aggressive behaviour on China’s part would be met with strong opposition -Realist-), U.S. strategy toward China must focus on creating and grasping opportunities to build on common interests with China. The United States should pursue a strategy focused on the integration of China into the global community and finds that such an approach will best encourage China to act in a way consistent with U.S. interests and international norms. (Hills, Blair and Jannuzi, 2007).

China’s lack of adoption of U.S. -and Western- cultural norms is often cited as a major cause of friction in Sino-US relations, particularly on the topic of human rights. Constructivists argue that states who possess shared norms are less likely to enter conflict with one another due to similar interests and ideologies (Wendt, 1999). Therefore, states do not need to fear the intentions of a state with similar norms, even if said nation has a much more powerful military. For example, the United Kingdom and Canada have little to fear of the U.S due to the similarities of their cultures. This means, should China adopt more Western cultural norms -or vice versa-, the chance for conflict will be greatly reduced. However, critics will point out that transitioning from one cultural norm to another is a lengthy process that may be unpopular within the public due to a sense of lost identity. Furthermore, Neo-Liberalists would rebut the claim that shared norms reduce the likelihood of conflict by stating that the difference in cultural norms has a negligible effect on Sino-US security so long as levels of open trade remain high. This is because it is more likely that the governing body will prioritise millions of dollars over a preference in cultural trade partnerships. For this same reason, it can be argued that during Chinese president Xi Jing Ping’s recent visit to the U.K., Neo-Liberalists would controversially back the U.K.’s decision to turn a blind eye to China’s human rights record. They would do this in order to strengthen higher levels of trade with China with the greater goal of securing stability between the two nations, rather than attempt to impose Western cultural norms upon China.


In conclusion, whilst Neo-Liberalism provides valuable insight into the role institutions play in facilitating cooperation between actors, which creates greater interdependency and stability, it is nevertheless limited in its ability to explain the missing deterrent to stop states from defecting from agreements. Neo-Realism explains how the characteristically anarchic international system does not allow for a policing of agreements due to a lack of a governing international body, and thus results in a lack of trust between states, with a focus on capabilities rather than intensions. This lack of trust leads to the security dilemma states face, where Offensive Neo-Realists argue that states should maximise their power in order to gain security through primacy, which is contrary to the Defensive Neo-Realists’ argument that hegemony is not a necessity but a balance of power is. Constructivism explains how there are exceptions to the necessity to balance power, as shared cultural norms can act as a form of security and easy alliance resulting in no need for fear of a larger military state, as long as there are shared values between the two states. Therefore, a hybrid of Neo-Realist thought on power distribution on the international stage, and the Neo-Liberalist stance on cooperation and interdependency, best describes the current state of international affairs with particular relation to China’s relationship with the United States.


Find more from Leo Xavier Minns on Twitter – @LeoXMinns



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Hills, C., Blair, D. and Jannuzi, F. (2007). U.S.-China Relations. [online] Council on Foreign Relations. Available at: [Accessed 8 Nov. 2015].

Keohane, R. and Nye, J. (1977). Power and interdependence. Boston: Little, Brown.

Kupchan, C. and Kupchan, C. (1995). The Promise of Collective Security. International Security, 20(1)

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Mearsheimer, J. (2013). Structural Realism. Oxford [etc.]: Oxford University Press.

Van Evera, S. (1992). The Hard Realities of International Politics. Boston Review, 17(6)

Waltz, K. (1981). The Spread of Nuclear Weapons: More May Be Better: Introduction. The Adelphi Papers, 21(171), (2014). FACT SHEET: U.S.-China Economic Relations. [online] Available at: [Accessed 7 Nov. 2015].

Wendt, A. (1999). Social theory of international politics. Cambridge, U.K.: Cambridge University Press.


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