Global Political Economy is a field of study that deals with the interactions between political and economic forces. It’s main focus is the human welfare and how it is related to state behavior and corporate interests in many parts around the word. States around the world have formed strong relations with multinational corporations and international organizations. As a result, it has changed the way we understand our roles in the global economy. To understand how to approach this big topic, this reading provides specific ways to understand how to manage a global economy.

The Liberal Approach provides a tangible way to approach complex issues of global economics in a way that it is easily understood. The liberal approach as I understand it, is a free market, where the government does not interfere with the market. This can raise a lot of issues, as a self regulating market will inevitably be disrupted by rising levels of income inequality, foreign take over of companies, or disagreements on how to handle an economic recession. Early heroes of the liberal approach, Adam Smith and David Ricardo, Smith argued that this process where consumers go for the highest quality for the cheapest price will entice successful producers to find the lowest cost method of production while still providing good quality. In furtherance, Ricardo states, “under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each’. And, ‘this pursuit of individual advantage is admirably connected with the universal good of the whole”, meaning that this form is very beneficial to all sides as there will be greater consumption which then leads to more jobs. It is a win-win for everyone.

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