International Studies Quarterly (2007) 51, 761–777
Powering, Puzzling, or Persuading? The
Mechanisms of Building Institutional Orders
Mark Blyth
Johns Hopkins University
This article offers an agent-centered constructivist analysis of institution
building; that of the ‘‘first’’ New Deal of the National Recovery Administration. It argues that in moments of uncertainty generated by the failure
of existing institutions, institutional choice becomes underdetermined
by structure and open to attempts at creative and underdetermined
inter-elite persuasion. What matters in such moments are the locally
generated ‘‘crisis-defining’’ ideas at hand rather than simply the ostensible material positions of the actors in question. How this process took
place in the U.S. is compared with both similar historical cases and
alternative materialist models. An alternative model is developed,
and in conclusion it is suggested why periods of deflation may be particularly open to inter-elite attempts at persuasion.
A key question in international political economy (IPE) is why do states react so
differently to similar economic shocks? Consider the Great Depression, a continuing favorite of IPE scholars. This was a situation where states faced a common
shock—deflation—that in response spawned a surprisingly large variety of institutional solutions—socialism, fascism, Swedish social democracy, and the American
New Deal, to provide a few examples. Given the conventional wisdom that institutions are ‘‘sticky’’ and that the payoff to changing them is inherently uncertain, one might expect a certain degree of institutional homology arising from
such common shocks. Instead, we find institutional variation. The purpose of
this article is to offer an explanation of this variance based upon the notion of
inter-elite persuasion as a distinct and important mechanism of social construction in moments of economic crisis. It focuses on the case of the so-called ‘‘First
New Deal’’ in the United States (1933–1935), an institutional order that was
based upon, rather than conflicting interests, conflicting ideas about the causes
of, and solutions to, the depression.
In line with the introduction to this symposium, this article examines how
the politics of ‘‘inter-elite’’ persuasion as a mechanism of social construction
combines with the inherent ambiguity of economic ideas in moments of
uncertainty to produce local variation in institutional outcomes. It is argued
that such variation cannot be reduced to either the ‘‘powering’’ of agents
with predetermined and structurally given interests, or the ‘‘puzzling’’ that
occurs by bureaucrats when a limited set of policy-relevant ideas are ‘‘roadtested’’ until they ‘‘find one that works.’’ Instead, as there is no ‘‘regression
to the institutional mean’’ that compels agents toward a particular institutional solution, we suggest that inter-elite attempts at persuasion as to what a
crisis means, and how it should be institutionally resolved, an inherently underdetermined process, should come to the fore.
2007 International Studies Association.
Published by Blackwell Publishing, 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.
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Powering, Puzzling, or Persuading?
The argument developed here states that the reason the U.S. tried to cartelize
its way out of the depression (as opposed to deflate, spend, or even imperialize
its way out) has less to do with the power of different coalitions and more to do
with the particular ideas available in the U.S. at this time regarding ‘‘what went
wrong’’ and ‘‘what to do about it.’’ Constructing institutions out of such ‘‘crisisdefining’’ ideas necessitates persuading agents in positions of institutional
authority of the correctness of one particular diagnosis of the crisis at hand
among competing models. Institutional variation is therefore explicable as an
ideationally path-dependent process where agents construct their institutional
future out of a limited set of ideas generated as an emergent property of an
uncertain present.
To appreciate such dynamics we need to understand how particular notions
of what an economic crisis means ⁄ signifies emerges in situations of choice
under uncertainty. We also must appreciate what makes certain ideas ‘‘persuasive’’; what makes agent ‘‘A’’s’ representation of ‘‘what the crisis is’’ resonate
with agent ‘‘B’’? To understand this we must see agents’ interests as a function of their beliefs and desires rather than being simply derivative of their
ostensible material positions. In moments of uncertainty agents’ interests may
be underdetermined no matter how well defined they appear.1 Hence, if
agents are confused about their desires because their beliefs about the state
of the world are uncertain, then logically their interests must be unstable too.
Beliefs and decisions are interdependent, not independent, of one another,
and it is here that attempts to persuade other agents with crisis-defining ideas
make a difference.
Attempts at persuasion take the form of developing and deploying ‘‘causal stories’’ about the economy that provide agents with an interpretive framework
within which they can define, diagnose, and explain a crisis as an event which
necessitates a particular set of actions. Such ideas are more than a ‘‘road map’’
that defines how to get from A to B (Goldstein and Keohane 1993:3–30).
Instead, they actively promote the notion that going from A to B is a good idea. Such
ideas do more than alter preferences; they reconstitute agents’ interests by providing alternative frameworks through which uncertain situations, and the place of
agents within them, can be understood. In moments of uncertainty crisis-defining ideas not only tell agents ‘‘what has gone wrong’’ but also ‘‘what is to be
done.’’ By defining how the economy works, and the place of the individual
within that economy, crisis-defining ideas both diagnose the disjuncture and in
doing so set limits upon the institutional forms that will supposedly solve it.
To make this case the first part of this paper briefly examines how a common
shock, the Great Depression, created institutional variation across the world far
beyond what standard models would expect. The second part of the paper examines this question of ‘‘what standard models would expect’’ in the specific case
of the United States and shows these to be lacking in explanatory power, until
they begin to analyze the ideas agents have about their interests. Building upon these
arguments, the third part of the paper examines the construction of the First
New Deal itself, details the ideas that were the focus of inter-elite debates that
constituted such institutions, and demonstrates how such ideas were independently
determinative of outcomes. Finally, the paper suggests why it is the case that
moments of deflation may be particularly important for creating the political
space for inter-elite attempts at persuasion and social construction.
1
To take an example from this period, if one accepts a diagnosis of the Depression as the result of insufficient
purchasing power, then one’s interest lies in voting for a reflationary Social Democratic Party. If one accepts the
diagnosis of the crisis as due to the machinations of ‘‘World Jewry,’’ then regardless of structural location or asset
specificity, one’s interest lies in promoting genocide. Being, for example, a worker in an export-oriented job in such
a situation tells us less than we think about the politics which such locations will engender.
Mark Blyth
763
One Cause—Many (Divergent) Cases
If one wishes to make the case that the ideas behind the First New Deal and the
institutions they spawned were unique to the American context and key to
explaining the particular outcomes seen in this case, then gaining some sense of
what was going on elsewhere during the Depression is a good place to start. If in
the context of a common external shock—deflation—one can show that the key
variation between states lay in the different ideas used to diagnose this common
shock and what to do about it, then the case for these crisis-defining ideas being
causally important is strengthened. Furthermore, by demonstrating that there
were multiple crisis-defining ideas ‘‘out there’’ that U.S. policy makers could
have latched onto, but did not, we can further strengthen these claims. A brief
survey of reactions to the Depression in other countries is illustrative in this
regard.
Consider Sweden, where in contrast to the United States academic economists
dominated policy debates. Here, despite the Depression buffeting the economy,
this period was, as Carlson notes, ‘‘economic liberalism’s gala performance,’’
and the height of the academic establishment’s policy influence (Carlson 1987;
Blyth 2002:96). As Erik Lundberg puts it, ‘‘neither before nor since the 1920s
have so many Swedish economists played such an active role in the policy
debates on current problems’’ (Lundberg 1996:7). Figures such as Eli Heckscher
and Gustav Cassel dominated the policy debate with orthodox, classical ideas
(Carlson 1987; Blyth 2002:101–104). Given such a hold on the policy debate,
and despite the crushing deflation of the period, even when the Social Democratic Party (SAP) came to power in the late 1920s little changed. The influence
of the academic establishment was such that the SAP governed with the same
classical ideas as the economic establishment and saw deflation as the only way
forward. Only when this cohort of liberal economists were either replaced by
younger ones or were ‘‘persuaded’’ by internal elite debates, did the defining
ideas change from deflation to reflation as the appropriate policy goal (Blyth
2002:105–110).2
France and Japan both provide examples of how local variation in ideas can
have profound institutional consequences. French policy-making in the inter-war
period was, like Japan, obsessed with returning to the Gold Standard at prewar
parity levels, and the costs of doing so were equally large (Hamada and Noguchi
2005). Indeed, France and Japan each underwent a similar policy of ‘‘super
deflation’’ to right the trade balance once and for all; and each was painfully
unsuccessful. What made France different from Japan however, and what made
the power of locally generated ideas all the more critical, was the ability of the
Bank of France to veto any government policy not dedicated to cutting the budget by creating capital flight. Underlying this was the strength of another locally
generated idea; the absolute necessity of maintaining a strong Franc, which ruled
out an external devaluation as a policy option (Kirshner 2007). That these deflationary policies were implemented in France for over a decade, in the middle of
a deflation, rather obviously undermined any attempt at an arms buildup against
Nazi Germany. Even after the reoccupation of the Rhineland and the quadrupling of the size of the German army, the Bank of France continued to press for
budget cuts. While one could argue that deflation served the ‘‘interests’’ of
finance against other sectors, a growing economy would have done so too, and
encouraging occupation by the Nazis should probably not be considered a
2
For an example of Swedish economists’ extraordinary influence, consider that after the Swedish government
refused to consider leading economist Eli Heckscher’s proposal of raising the discount rate during the inflation of
1919, Heckscher published a newspaper article imploring the Swedish people to exchange their banknotes for gold.
The Swedish people duly obliged and caused a run on the Riksbank so severe that the state had to raise the discount rate after all.
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reliable method of ‘‘portfolio diversification.’’3 Crisis-defining ideas, it seems, do
indeed matter.
Pushing this logic further, two countries whose economic policies were definitely affected by very different crisis-defining ideas were Germany and Italy.
Although fascism’s basic belief in ‘‘the triumph of the will’’ and ‘‘the primacy
of politics’’ over economics is often seen as offering no distinctive economic
philosophy, a convincing case has recently been made by David Baker that
such a view misses the importance of fascist ideas for distinctly fascist
economic policies and institutions (Baker 2006). Baker points to four key policy ideas that structured fascist economics. First of all, treating full employment as a policy goal in and of itself was a radical departure from the
orthodoxy of deflationary politics practiced elsewhere.4 Second, fascist economies were allergic to foreign debt and innovated new financial instruments to
avoid it while financing greater investment. Third, while fascist economies
were never fully ‘‘corporatized,’’ they were most definitely actively ‘‘organized’’
by the state along sectoral lines, with the state playing a strong role in what
would later be termed the ‘‘administrative guidance’’ of private firms. Finally,
the core policy goal of fascism, Autarky and self-sufficiency, in combination
with these other policies, led inexorably to imperial expansion as the only way
to promote growth. The political economy of fascism, by virtue of its crisisdefining policy ideas, designed its way out of the Great Depression in ways
different again from Sweden, France, or Japan.
What then does this brief survey tell us about the United States? It suggests
first of all that if the fact of institutional variation can be easily established, then
at least a prima facie case can be made for linking Depression policies and institutional innovations with locally generated ‘‘crisis-defining’’ ideas. Moreover, it
suggests that the outcomes we do see in these cases do not unproblematically
flow from agents’ hypothesized material interests. For example, the collapse in
German imports between 1928 and 1938 as a result of the policy of Autarky, or
the collapse of the French military due to the Bank of France’s fixation on the
value of the Franc, stretches the notion that such policies were a reflection of
these groups’ ‘‘material interests’’ to the point of meaninglessness. Moreover,
the fact that alternative crisis-defining ideas were indeed ‘‘out there’’ but were
not embraced by U.S. policy elites strongly suggests the importance of locally
generated ideas regarding what is possible and what was deemed legitimate in
producing new institutional outcomes. To strengthen this case further, the next
section briefly examines materialist renditions of U.S. economic policy choices
in this period and suggests two things—why they are problematic and why they
ultimately succeed only by eschewing their focus on materialism.
Assumed Interests and (Under)-Explained Outcomes
Similar to the cases outlined above, the experience of the United States cannot
easily be ‘‘read off’’ the assumed structurally generated interests of actors, which
is not to say that attempts to render such explanations have not been made.
What is noticeable is that some attempts to explain outcomes within a materialist
framework tend to shade off into discussions of ideas rather than interests.
Consider, first of all, the thoroughly materialist analysis of U.S. foreign economic
3
Kirshner (ibid. pp. 38) reasons that the interests of finance were determinate in that while the index of industrial production fell from 88.9 in 1931 to 67.4 in 1935, ‘‘the real value of pensions rose 40%’’ over the same period.
I remain unconvinced that a 40% rate of return on pensions over 4 years is sufficient reason to cynically throw the
national economy off a cliff and capitulate to the Nazis. Such an outcome suggests the power of ideas rather than
interests.
4
Apart from, as Sheri Berman notes, in countries were Social Democrats came to power. For an excellent analysis of the similarities between fascism and social democracy, see Berman (2006).
Mark Blyth
765
policy in the 1930s offered by Jeffrey Frieden (1988). In his account, the key
actors of note are U.S. international banks, on the one hand, and ‘‘domestically
oriented groups’’ on the other (Frieden 1988:60). The former, acting in accordance with the economic logic of their sector-specific assets, want more internationalism and openness, while the latter, given their assets, want more
protection. To make this case Frieden details how U.S. banks indeed became
more internationalized during this period in terms of foreign capital issues and
foreign direct investment as a percentage of their portfolios.5 Building on this
observation he identifies banks as ‘‘internationalists’’ and almost any import
competing sector as ‘‘isolationists.’’ Frieden then argues that these ‘‘various economic interests entrenched themselves in the political arena and found allies
within the government bureaucracy.’’ Specifically, he argues that the internationalists ‘‘dominated’’ the State and Treasury Departments while the Congress and
the Department of Commerce ‘‘were more closely aligned with economic nationalists’’ (Frieden 1988:68). From these positions Frieden deduces that the policies
and institutions of the 1930s closely reflect the shifting balance of power
between these two coalitions.
The problem is of course that while it is eminently reasonable that agents in
these sectors may have these hypothesized interests (positing that international
bankers care about openness is hardly illogical), conceding the logical plausibility of this assumption does not itself count as evidence that these agents indeed
had such interests. More problematic still, even if it could be shown that such
agents indeed held such interests, it is still another step to demonstrate empirically that these agents acted on these interests and impacted actual policy. Unfortunately, none of these points can be admitted. While Frieden asserts that bankers
‘‘worked’’ with the Treasury and American industrialists were ‘‘closely linked’’ to
Commerce, none of the analysis offered actually connects actual policy and institutional outcomes to these hypothetical interests and equally hypothetical
agents.6 In sum, one may observe particular outcomes, and one may logically
link them to ‘‘agents who should have had interests in such an outcome,’’ but
neither hypothesized interests nor hypothetical agents appear historically significant by sheer force of logic.
A similar framework is employed by Stephen Haggard to explain a contemporary institutional innovation, the 1934 Reciprocal Trade Acts, but in this case
Haggard concentrates on real individuals, and ultimately, their ideas about their
interests. Haggard argues that by strengthening the U.S. state in this critical policy area, these Acts provided the institutional blueprint for much of the post-war
institutional architecture of ‘‘embedded liberalism’’ (Haggard 1988). To make
this case Haggard focuses upon ‘‘the interests of state actors, particularly in the
State Department, who sought to reform and expand American power’’ (Haggard 1988:103). Rather than rely on Frieden’s abstract actors, Haggard hones in
on historical individuals and their actual role in the policy process.7 What is of
most interest however is how when Haggard confronts historical (rather than
hypothetical) agents, his discussion of these agents’ interests becomes an analysis
of the ideas such agents held about what their interests should be.
For example, one of Haggard’s key players, Cordell Hull, argued that free
trade was to be promoted because it ‘‘was a universal political solvent…[for]…
international conflicts’’ (Haggard 1988:104). In contrast, for another set of key
5
The figures Frieden offers hardly tell an unambiguous story either. An average FDI holding of 4.4% (1900–
1939) and foreign issues as a percentage of all issues falling rapidly after 1925 hardly shows unambiguous evidence
of internationalizing forces. See Frieden, ‘‘Sectoral Conflict…’’ pp. 64, Table 1, row three; and pp. 66, Table 3.
6
As David Plotke puts it, Frieden ‘‘does not show that the economic sectors he posits were real economic sectors, nor does he show an extensive involvement in politics of the sort he claims’’ (Plotke 1996:90, fn 44).
7
Particularly, John J. Raskob, Al Smith, and Cordell Hull, on the one hand, and the ‘‘Brains Trusters’’ on the
other, each representing different factions of the democratic party.
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Powering, Puzzling, or Persuading?
players, ‘‘Brains Trusters’’ such as Adolph Berle, the causes of the Depression
were domestic, and as such free trade was irrelevant (Haggard 1988:105). However, even when trade came back on the agenda after the 1932 election, Haggard
concludes that the real driving force behind these new policies and institutions
were the State Department’s ‘‘ideological…interests,’’ thus suggesting that interests here take a back seat to ideas about interests, a much more fluid concept
(Haggard 1988:118).
Finally, while maintaining a materialist foundation in principle, Goldstein’s
(1988) discussion of U.S. trade policies in this period shifts still further from
materialism in practice. For Goldstein, the trade politics of the post-depression
period follow neither from sectoral nor state interests, but were instead powerfully shaped by ‘‘a belief in the efficacy of free trade’’ that came out of
actors’ own experiences of the 1920s and 1930s. What gave this belief its salience was not the power of vested interests, as Frieden would suggest. Rather,
the crisis of the 1930s generated a belief in free-trade liberalism that became
embedded in the postwar period. As Goldstein puts it, rather than assume the
primacy of interests in this type of analysis, we should ‘‘assume that there are
competing interpretations of optimal economic policy…and [that] the ascendance of one policy idea, rather than another, has important policy
ramifications’’ (Goldstein 1988:182; fn 6).8 In sum, while Frieden’s materialist
model can posit interests without actual actors, and Haggard’s quasi-materialist
model can have interests that ultimately rest upon ideas, this analysis
follows Goldstein’s insights but takes them in a more fully constructivist
direction.
The Ideas Behind the First New Deal
The economic ideas informing state responses to the Depression in the United States were an amalgam of three elements that oftentimes worked at counterpoint. Three competing and contradictory sets of ideas—sound finance,
antimonopoly, and administered prices—had a long legacy in American economic thinking. The first set of ideas, ‘‘sound finance’’ (or the bankers
credo) sought to explain the Depression as a result of the failure of the government to adhere to the principles of fiscal orthodoxy. The second set of
ideas ‘‘diagnosing the depression’’ were based around antimonopoly doctrines
that had their roots in Brandesian thinking. These ideas held that the
Depression was the result of monopolistic practices, particularly those of large
corporations and trusts. Therefore, if cartelized industrial structures
had ‘‘choked’’ the economy, then antitrust laws were the tonic for recovery
(Hawley 1980).
Finally, working at counterpoint to both sound finance and antimonopoly
arguments was the ‘‘administered prices’’ thesis, which maintained that monopoly was the problem, but only in so far as monopoly had not gone far enough.
Rather than ‘‘bust’’ trusts as the antimonopolists advocated, administered-prices
theorists argued that state intervention was needed to promote further cartelization. This would allow large firms to fix prices at a socially optimal output (Berle
and Means 1933). As I show in the remainder of this section, the economic ideas
that state elites used to persuade one another of the causes of and resolution to
the Depression period drew upon each of these conflicting models of the economy, with the result that institution building took on a particular cast that cannot be reduced to material factors alone.
8
In this regard, Goldstein accepts that different ideas have different downstream consequences, but she does
not develop a fully constructivist argument that sees the emergence of particular ideas as being an emergent property of uncertainty, like the one developed here.
Mark Blyth
767
‘‘Sound Finance’’ and Academic Economists
The ideas of ‘‘sound finance’’ were as close to an expression of what J. M. Keynes
chastised as ‘‘classicism’’ as one can find. Here, appropriate state policy was
reducible to balanced budgets, internal adjustment, external balance, and the
protection of private property. Following such policies, it was argued, would
maintain business confidence by avoiding any ‘‘crowding-out’’ of investment and
second, such policies would inhibit combinations that would prevent markets
from clearing, especially the price of labor. The message was clear. If the problem
of the Depression was a lack of investment, then only policies that would placate
investors would suffice.
One important source of ideas about the Depression were, of course, America’s academic economists. While the majority of American academic economists
were largely sympathetic to the ideas of sound finance, they were not all classicists wedded to deflation as the only possible way out of the Depression. Rather,
the majority of American academic economists during the 1930s appear as classicists of a rather unusual type. Rather than focus upon wage reductions, what captivated most academic economists in this period was a set of ideas sympathetic to
sound finance called ‘‘modern business cycle theory.’’
Modern business cycle theory was the staple of American economic thinking
in the 1920s. This theory argued that the Depression was not a depression at
all, that is, a secular shift in the long run performance of the economy.
Rather, it was merely a regular, cyclical, and expected ‘‘dip’’ in performance
that would soon cure itself.9 As an influential Harvard monograph that
critiqued the early Roosevelt recovery program, ‘‘any revival which is due to
artificial stimulus leaves part of the work of depressions undone, and
adds…new maladjustment of its own which must be liquidated in turn, thus
threatening business with another crisis ahead’’ (Brown, Chamberlin, et al.
1 1934:19 Jones 1978: 514). According to this diagnosis, the depression would
soon right itself, and any intervention would merely prolong the process of
adjustment and should therefore be avoided. As their ideas told these economists that self-correction would bring recovery, like ‘‘sound financiers,’’ they
urged no intervention, which was ultimately a bit of a problem. By giving the
state no tools with which to fight a decade-long depression, such a stance had
the effect of marginalizing the vast majority of American academic economists
from the policy debates of this period (Barber 1996; Blyth 2002). After almost
a decade of deflation, the argument that the depression was ‘‘therapeutic’’
proved distinctly unpersuasive.
Populism, Progressivism, and the Problem of Monopoly
In the absence of both governmental and popular support for either sound
finance or business cycle ideas, Roosevelt’s initial policy responses, especially the
National Industrial Recovery Act (the NIRA), are better understood as a result of
the persuasive failure of these ideas. Instead, the actual policy response of the
U.S. state had its roots in the divergent intellectual, and distinctly American, currents of populism, progressivism, and Brandesian antimonopolism. And precisely
because they stemmed from such diverse (yet local) roots, these ideas were deeply
contradictory.
Populism and progressivism were social movements of the American MidWestern and Western states in the late nineteenth century. The so-called populist
9
As Wesley Mitchell argued, ‘‘a period of depression produces after some time certain conditions which favor
an increase of business activity…[which paradoxically]…also cause the accumulation of stresses within the balanced
system of business, stresses which ultimately undermine the conditions upon which prosperity rests’’ (Mitchell
1923:10); quoted in May (1981:69).
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Powering, Puzzling, or Persuading?
revolt of the 1890s and the later ‘‘progressive movement’’ set the ideational
boundaries through which the economic crises of the 1930s would be constructed and understood. That narrative was constructed in terms of the relationship between monopolies and free markets. At the core of these movements was
a particular view of the economy based upon a hypothesized link between government and monopoly through the agency of the corporation. As Thomas
Goebel (1997) notes, the corporation was seen in nineteenth-century America as
a governmental creation rather than as a creature of the market. According to
populist ideas, the state granted special privileges to corporations under charters
that facilitated the creation of private monopolies. These ‘‘political creatures’’
perverted otherwise efficient and equitable ‘‘free’’ markets. The monopolies of
the nineteenth century—railroads, banks, and trusts—were held by populist ideas
to be agents of economic exploitation. In contrast to how they were perceived in
Europe, monopolies in the U.S. were seen as administratively generated perversions of an otherwise equitable economic order.
Given these ideas, the concentration of wealth and the generation of violent
business cycles could not be due to market forces. Instead, instability and
inequality were seen to be due to the concentration of wealth, which was itself
determined by legislation and political pressure. Armed with such a political
interpretation, the main forces of opposition to economic dislocation in the latter nineteenth and early part of the twentieth century took the form of a crusade
against monopoly. As the working class ⁄ agrarian populist movement of the time,
the Grange (also called the Antimonopoly Party) put it, ‘‘choke monopolies,
break up rings, vote for honest men, fear God, and make money’’ (Goebel
1997:123).10
With the rise of later ‘‘progressive’’ ideas, the emphasis began to change. That
the state caused monopoly was still not in doubt; as Louis Brandeis argued,
‘‘there are no natural monopolies in the industrial world’’ (Frankel 1935:105;
Goebel 1997:139). Consequently, if trusts were the main agents of economic stagnation as they eliminated competition, then the state should regulate them. This
line of reasoning enabled the construction of a potentially positive role for government in the form of a regulatory state designed to perfect, rather than pervert, market outcomes. In short, this alternative set of economic ideas that
sought to diagnose the depression held that the appropriate role of the government lay in its ability to restore ‘‘free markets’’ and maintain competition.
Monopoly and Administered Prices
Paradoxically, however, this more regulatory analysis of monopoly in turn gave
rise to a third strain of theorizing known as the ‘‘administered prices thesis.’’
Although both schools agreed that monopoly was the problem causing the
depression, where this new school differed was in the policy conclusions it
offered. In complete contrast to the antimonopolist position, ‘‘administered
prices’’ theorists advocated further concentration and cartelization sponsored by the state
as the way out of the depression. Monopoly thus became the solution to the
depression instead of its cause. The roots of this diagnosis lay in the more empirically oriented ‘‘institutionalist’’ tradition of U.S. economic thought which was,
at this time, being eclipsed in the academy by business-cycle theorists (Bruce and
Edward 2006). Where these ideas differed even further from the antimonopolists
lay in their belief that monopoly was, after all, a natural outcome of the market
system.
These theorists argued that due to the scale of plant and equipment demanded
by a modern economy, ever-larger concentrations of capital were inevitable.
10
See also Brinkley (1995:58–59).
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769
Monopoly should be understood as a natural outgrowth of mature capitalism,
rather than the exception to be regulated by the state. Given such an industrial
structure, modern firms had no incentive to respond to decreasing demand by
reducing prices. While in competitive markets the effect of an economic downturn may be to lower prices, in the case of monopolisitic firms, the ability to
maintain ‘‘administered’’ rather than market prices could prevent a downward
adjustment and turn a slump into a depression.
This third view of the ‘‘crisis’’ demanded a conclusion wholly different from
that held by traditional antimonopolists or the sound financiers. It was not the
invidious interests of corporations that promoted dislocation. Rather, the natural
evolution of the industrial structure of the United States made such an outcome
unavoidable.11 If price fixing is the typical response of business given the institutional context, then the obvious policy response becomes ‘‘change the institutional context’’ within which business operates. Seen in this way, government
intervention was legitimate if it took the form of making markets more efficient,
but this time more efficient meant encouraging monopoly.
Accordingly, the appropriate state policy was to provide coordination and
restriction through voluntary codes regulating output and prices. The state
should encourage cartelization and price fixing at socially optimal levels such
that slumps would be avoided. In this way the vice of monopoly was turned into
the virtue of cooperation. Unfortunately, this also meant that a single diagnosis
(monopoly) lead to two mutually contradictory policy conclusions: break up
monopolies and simultaneously encourage their growth. Note also that explanations of the depression based upon international factors are conspicuous by their
absence. Taken together, this contradictory assemblage of ideas—sound-finance,
antimonopolism, and administered prices—formed a rather contested intellectual rationale for the first attempt to engineer an end to the depression in the
U.S.
Constructing at Cross Purposes: Antimonopoly and Administered Prices in
Practice
The main ideas behind the institution building efforts of the early Roosevelt era
(1932–1935) have their origins with the ‘‘Brain Trust’’ monopoly revisionists
such as Adolf Berle and Rexford Tugwell. The actions of these policy makers can
neither be reduced to their acting in accord with the material interest of any specific group, nor is there evidence to support that they did so (Barber 1996; Lawson 2006). These advisers developed a revisionist antimonopoly doctrine based
on the administered-prices thesis. These crisis-defining ideas placed the blame
for the depression squarely on the inability of markets to clear due to the
monopolistic structure of the domestic economy. Deploying administered prices
ideas, these ‘‘Brains Trusters’’ sought to accept the ‘‘fact’’ of economic concentration (itself a particular construction of the economy) and work with business
to ‘‘administer’’ prices. The importance of these ideas was not that they did not
entail extra spending, thus placating demands for ‘‘sound finance,’’ nor that
they appealed to some segments of big business. They were important precisely
because they were the lens through which the state diagnosed the wholesale dislocation of the early period.
These ideas came to fruition in the centerpiece of Roosevelt’s first attempt to
halt the slump, the National Recovery Administration (NRA). The design of the
NRA is a direct consequence of the dominance of the administered prices thesis
11
As Gardiner Means argued at the time, given such an industrial structure, ‘‘the policy of holding up price,
even though volume declined, [was] the only sound business policy for the individual enterprise (Means 1936:
32–33).
770
Powering, Puzzling, or Persuading?
as the crisis defining idea operative in the state at this particular historical
moment; and this design has coalitional implications at its core. In essence, if
the problem of depression is defined as being due to a concentrated industrial
structure preventing market clearance, then the natural ally of the state in turning this situation around is business. As consumers are price takers, only business
can really do anything about prices and quantities. As such, building alliances
with labor, what was to define the later New Deal (1935–1938), was, given these
ideas, originally seen as a nonstarter. As such, the state’s choice of coalition partner was not materially dictated, rather it was socially constructed.
The Constructivist Politics of the National Industrial Recovery Act
The legislation that made the NRA possible, the NIRA was comprised of two separate but complementary parts. The first part encouraged businesses to cartelize
production, given the quid pro quo of uniform standards and official recognition for labor unions. By cartelizing, it was hoped that production would be
rationalized and output restricted, thus allowing prices to recover under what
was called ‘‘codes of fair competition,’’ that is, negotiated prices and quantities.
This is not, however, to reduce the story to one of business’ preexisting interests.
Rather, the project of the NRA depended on persuading business that massive
state intervention (of a specific type) was in their interests; an entirely different
proposition.12
The second part of the plan was increased public works spending, which it was
hoped would offer something to labor and thus cement the cartel arrangements
of the NRA. The two parts of the NRA, the associational plan and the public
works plan, were designed to persuade business and labor, respectively, that
cooperation over codes would stabilize prices and raise profitability, while public
works would increase purchasing power. Together these would stabilize demand
so that the prices negotiated under the codes could be supported. However,
doing so created two problems. It placed a rather large reflationary gorilla in an
otherwise cartel-friendly room, and it opened the door to the return of antimonopoly ideas the moment it was tried in practice.
In order to encourage further cartelization, the problem for the state was to
organize business such that the NRA codes could be established. By a combination of exhortation and prodding, that is, attempts to persuade business elites that
these new institutions were in their interests, NRA administrator Hugh Johnson managed to get the ‘‘big ten’’ industries to agree to formulate and implement codes
to stabilize prices and bring about recovery.13 However, the key problem with
the NRA, given its ideational contradictions, was that right from the start the
NRA meant different things to different actors. Consequently, a coherent policy
response was unlikely as different constituencies were attracted by different
‘‘parts’’ of the NRA.
Within the state, the executive officers of the NRA, General Johnson and Rexford Tugwell, together with popular liberal writers such as Stuart Chase, took this
assemblage of ideas and pushed for national economic planning as the way out
of the crisis. On the other hand, elements of the Brain Trust such as Adolph
Berle mobilized behind those aspects of the NRA that called for cooperative regulation of wages, prices, quantities and business ⁄ labor relations. However, this
fusion of planning and self-regulation offered little to labor. Instead, labor
12
Otherwise, all the NRA parades, Blue Eagle campaigns, stump speeches, press advertisements, radio ads, etc.,
make little sense.
13
Consider that if agents have no prior experience of the payoffs associated with a given set of institutions,
then logically they cannot have clear preferences over them vis-à-vis any other set of potential institutions. As such,
their choice is based upon what they think will benefit them in the absence of experience of them, a situation in
which persuasion as social construction is critical.
Mark Blyth
771
stressed the need for public works projects, and at the insistence of Senator Robert Wagner of New York, provisions for the right of labor to choose its own representatives and collective bargaining were added to the NIRA itself. The result
of this syncretism was the institutionalization of these contradictory ideas into a
single agency, which severely compromised prospects for the longevity of institutions based upon such ideas. While persuasion is a powerful mechanism of social
construction, especially in moments of uncertainty, coherence becomes an issue
when a set of ideas becomes too ‘‘polyvalent’’ and offers ‘‘all things to all men.’’
Complicating this uneasy blend of planning and cartelization was the re-emergence of antimonopoly ideas, just as the NRA was getting up and running. The
key issue here was the tendency of the codes to encourage monopoly, and the
old concern with price fixing re-emerged as the diagnosis of the problem causing the slump in the first place. What turned this intellectual fissure into a political problem was that different factions within the state began to interpret the
crisis in paradigmatically exclusive ways. ‘‘Brain Trusters’’ in the Executive and
the Commerce Department argued for cartelization, as they interpreted the crisis
through administered prices lenses; the Treasury argued a sound-finance line;
while the Department of Justice sought to enforce an antimonopoly definition
and resolution. In doing so these departments were not ‘‘doing the bidding’’ of
some already organized set of interests that had ‘‘captured’’ parts of the state.
Rather, they were, given their ideas, advancing interpretations of the depression
and designing schemes, given those interpretations, to resolve it.
Constructing (and Failing to Construct) Interests: Business and the NRA
Despite such ideational contradictions, the state still hoped to persuade business
that these ideas were in fact in their interest. For, if they did not, the NRA was
doomed. Unfortunately for these state actors, American business during the
1930s was ideologically segmented in such a way that coherent collective action
was prohibited. The three main business groups—the American Chamber of
Commerce (ACC), which represented small and medium sized firms, the smaller
and more polyglot National Association of Manufacturers (NAM), and the
Business Advisory Council (BAC), which was dominated by a subset of America’s
largest firms—each displayed different attitudes toward the NRA. Again I stress
that this was not because the NRA failed to appeal to their interests—the whole
point of the NRA was to appeal to all their interests—but because it did so in
such a way as to divide business among itself. As such, coordinated action and
coalition building with business became impossible. Polyvalent persuasion, while
politically attractive, sets its own limits.14
The most vehement opposition to the NRA came from the NAM. Formerly
quieted by the combined effects of the depression and the euphoria created by
the NRA, the NAM rebounded when opposition to the NRA among business
intensified over the issues of labor organization and spending. Holding fast to
sound-finance ideas and discounting the positive effects of the codes on many of
their members’ bottom lines, the NAM became the chief opponents of the prolabor Section 7a of the NIRA. Consequently the NAM stressed the need for
orthodox financial stabilization policies including wage cuts and tax increases.15
In contrast, and far more important in generating support that gave way to
stern opposition, was the ACC.16 The ACC began the depression with typically
14
While constructivist explanations necessarily stress contingency, there is nothing in such arguments to say
that excessive polyvalence does not have costs. For an excellent analysis of polyvalent persuasion working in the case
of the European Commissions’ ‘‘strategic social construction’’ of Europe, see Jabko (2006).
15
For a discussion of NAM policies during this period, see Collins (1981:47–52); Harris (1982).
16
Which suggests that either the ACC did not know their interests, were duped and then realized them, or
were unpersuaded that this particular representation of their interests, pace footnote 11, could be their ‘‘real’’ one.
772
Powering, Puzzling, or Persuading?
sound finance ideas. Chamber President Henry Harriman wrote to the House
Appropriations Committee on the heels of the Hoover tax cut arguing that in
order to bring about recovery the federal budget should be cut by a further $1
billion (Collins 1981). Luckily for the state, however, Harriman soon broke with
orthodoxy and allied with Gerald Swope of General Electric over the so-called
Swope Plan, a recovery scheme proposal that was driven by the same set of ideas
as that behind the NRA (Schlesinger 1957:181–183).
As administered-prices ideas dictated, business cooperation was the key to
recovery. Hence, in a speech to the ACC just before the bill authorizing the
NRA was sent to Congress, Roosevelt attempted to persuade the ACC that,
‘‘[y]ou and I acknowledge the existence of unfair methods of competition…and
of general chaos. You and I agree that this condition must be rectified…The
attainment of that objective depends on your willingness to cooperate’’ (Collins
1981:29). The combination of ‘‘sound finance,’’ as practiced in the calls for a
balanced budget (and as cosmetically applied in the Economy Act), combined
with the promise of an end to antitrust activity by the state, led the ACC to take
poll position in support for the NRA. In doing so the ACC was willing to countenance the second part of the NRA, the $3.3 billion dollars in public-works spending mandated under Title Two as a necessary, and temporary, expedient.
A final business organization dominated by America’s largest firms, the BAC,
was even more fulsome in its support for the NRA than the ACC (Collins
1981:56–62). The BAC was a product of Secretary of Commerce Daniel Roper’s
desire to bring together business and government leaders and promote ‘‘a more
harmonious relationship between government and business’’ (Roper 1941:284;
Collins 1981:57). What attracted this group to the NRA was its synthesis of revisionist antimonopolism, which would rather obviously work to the advantage of
the largest firms, and a belief in scientific industrial and labor management
(Harris 1982:91–105.) In sum, despite these different ideas concerning what the
NRA was, and what it offered each group, what united two out of three of them
was the acceptance of the necessity of some form of planning and coordination
as the only way out of the depression. Leaving one of them out was, however,
enough to cause problems.
Three factors ultimately combined to undermine business support for the
NRA. First of all was the fact that business, just like the state, was divided as to
whether monopoly was the problem or the solution. As the National Recovery
Review Board hearings got under way, ACC support for NRA began to weaken.
Smaller firms in the ACC began to complain that cartelization was furthering,
rather than solving, the problems of the depression. A materialist rendition of
these events might reason that this split occurred because only very large firms
actually had enough capacity to fix prices, and did so at a level which suited
them. Yet such a position would have to recognize that the institutional design
of the NRA took size into account during the drafting of codes, and indeed that
some of the NRAs biggest boosters were originally medium-sized firms. As such,
‘‘materially given’’ interests were not determinant.
Second, what also began to matter for business, and undermined the attempt
to persuade business that this particular set of institutions was in their interests,
was the NIRAs Section 7a which gave workers the right to organize and bargain
collectively. Regardless of how the NRA was tailored to appeal to business’ sense
of its self-interest, the very idea of according labor ‘‘rights,’’ particularly given
the organizational drives of the new industrial unions whose growth was largely a
result of Section 7a, disaffected business as a whole from both government intervention and business ⁄ government cooperation. Hence, it was at this juncture
the seemingly discredited claims of the NAM that the downward adjustment of
wages and sound finance were the right principles after all began to find new
adherents. Again, this was not because such actions threatened business material
Mark Blyth
773
interests. The state needed business far too much to allow that. Indeed, the NRA
codes were drafted in such a way as to control wages while putting a floor on
consumption, something that was clearly in all business’ interest regardless of
size or sector. Rather, the response was ideational rather than material. Accepting that labor organization could in principle be beneficial was one thing;
accepting it in practice was quite another.17 Third, what also helped delegitimate
the NRA was that the 1933 recovery, which was largely accredited to the NRA,
turned out to be rather short-lived, and by early 1934 the depression worsened.
This allowed antimonopoly and sound-finance arguments to return to the fore,
irrespective of their empirical veracity. They were, after all, the only other locally
generated ideas ‘‘lying around.’’
Unfortunately, despite the core of these ideas being that having the state ‘‘do
things’’ was counter-productive, ‘‘doing something’’ was clearly popular with the
public, and the November 1934 elections handed what was widely interpreted as
a mandate for change to the state. Unsurprisingly, the ACC became increasingly
defensive. While the state argued for intervention into ever wider spheres of
activity ranging from labor markets to securities markets, the ACC advocated ever
greater voluntarism among business without government and labor participation.
Likewise, the state became ever more critical of business. As such, both sets of
ideas were still being sold to business within the boundaries of the administeredprices thesis, but sentiment was becoming polarized as to what ‘‘administering
prices’’ now meant. With Roosevelt’s rhetoric becoming increasingly antibusiness,
and with prominent state officials such as Tom Corcoran arguing that ‘‘fighting
with a businessman is like fighting with a Polack…you can give no quarter’’
(Collins 1981:42), the NRA and the broader attempt to forge a coalition with
business fell apart long before the Supreme Court invalidated the NIRA in the
Schechter case in 1935. Consequently, the ACC recommended that the codes be
allowed to expire in June 1935 and the NRA expired with it. The ideas behind
the NRA, revisionist antimonopolism, minimalist compensatory spending, and
totemic adherence to the doctrine of sound finance, the state’s own favored
combination of treatments, failed to persuade business that their interests lay in
such an institutional resolution.
Beyond the NRA
To finish the account here would be precipitous as the point is to recognize how
the institutions built in this particular historical moment, and the crisis defining
ideas that generated them, even though they failed, set boundaries on what was
constructed next. The ‘‘New Deal’’ proper followed swiftly on the heels of the
NRA. With the attempt to alter business’ conception of their interests and forge
a new set of crisis-resolving institutions in tatters, the state turned to labor,
strengthened it through the Wagner Act, and gave it greater consumptive power
through the Social Security Acts and much greater public spending. With administered-prices ideas having had their moment, and the constant refrain of
‘‘sound finance’’ and antimonopolism proving ineffective against the continuing
slump, those ideas that were ancillary parts of the NRA, pro-consumption arguments, found their opening.
These ‘‘homegrown’’ Keynesian arguments, associated most with figures such
as Mariner Eccles and Lachlan Currie at the Federal Reserve, served as the new
framework for diagnosing the depression. While there is insufficient space here
to go into detail regarding the content of and the mobilization behind such
ideas, the point is to recognize that these ‘‘new’’ ideas could not have taken the
17
What Galbraith was to assert about later Keynesian ideas was equally true here. ‘‘For some businessmen, the
Keynesian remedy was at least as damaging as the depression it was presumed to eliminate.’’ (Galbraith 1956:81).
774
Powering, Puzzling, or Persuading?
particular institutional form that they did, nor found their opening when they
did, had it not been for the prior debacle with administered-prices ideas. The
failure of the administered-prices thesis ideas opened the door to pro-spending
and pro-labor ideas, but left them with a particularly American institutional and
ideological cast. Had it not been for the NRA and the ideas that made it possible
then the New Deal as we know it today could not have occurred.
Remove these contending ideas about monopoly from the explanation offered
above and it would be extremely difficult to explain why the U.S. made the institutional choices it did. Structures do not come with an instruction sheet, and as
a consequence, agents do not monotonically decode the material world around
them and act uniformly. That the U.S. constructed an institutional response to
the depression in this period is hardly a surprise; many states did. But explaining
why this institutional response was so very different from those constructed in
France, Sweden, and Germany demands an explanation that materialist models
cannot adequately supply. This article has sought to show how a large part of
that variation is explained by the fact that different state elites have different sets
of locally generated, crisis defining ideas to work with when attempting to persuade one another and their broader public, in this case American business,
‘‘what has gone wrong’’ and therefore ‘‘what to do about it.’’ Factors, assets, and
coalitions all matter, but they seem to matter to the extent that the crisis at hand
is diagnosed in a specific manner.18
Conclusion: Persuasion, Social Construction, and the Study of the IPE
What analytic lessons can be drawn from this case? In particular, as this article
stresses both the power of and the limits to persuasion as a mechanism of social
construction, can we say anything about when such limits are likely to occur? A
useful place to start is to consider that all three of the articles in this symposium
deal with elite and mass responses to periods of uncertainty. In particular, the
two dealing with periods of economic crisis attend to periods of deflation. Perhaps, then, there is something about such periods that make them particularly
open to inter-elite attempts at persuasion?
Consider that the periods of deflation analyzed by both Seabrooke and Blyth
generate uncertainty of a type that is not simply a problem of risk or incomplete
information.19 On a macro level, continually falling prices leads to increased
competition between firms, which hits profits and lowers investment.20 Growth
slows, unemployment rises, and this reinforces the slump already under way. On
a micro level, these conditions do not simply render agents unsure of how to further their interests in that the optimal strategy becomes opaque. Rather, such
conditions fundamentally undermine agents’ conceptions of their interests. To
see why this is so, consider the type of agent targeted by the NRA, a hypothetical
businessman in the midst of a sustained deflation.
Our businessman could conclude that the prices he is charging for his goods
are simply too high. This may be a local event due to, for example, shifts in
demand, and if this is the case, the appropriate response would be a price cut.
Alternatively, the same businessman may decide that falling prices are a global
event over which he has no control. But such knowledge would hardly help. If
our businessman is facing falling prices, and he has creditors, inventory, wages,
etc., then regardless of the ‘‘true’’ nature of the slump, his ‘‘interest’’ is to sell
first at a discount and take market share in order to meet costs. But knowing
18
To use a rather blunt example, there was nothing in the asset baskets of German firms that made mass extermination an optimal economic policy.
19
For a fuller discussion as to why this is the case, see Blyth (2006).
20
Even if the deflation causes the real value of money balances to increase in the short run.
Mark Blyth
775
this, his competitors will do the same thing, thus bringing about the deflation all
of them are trying to avoid in the first place. What is locally rational is globally
suboptimal, regardless of whether one knows what is ‘‘truly’’ causing the deflation or not; and the more agents pursue such strategies, the worse off they
become.21 Action by any one set of market agents (labor and agriculture as well
as business) to protect themselves becomes zero-sum against all others.
This is how the downturn of the 1930s generated the type of uncertainty that
underdetermines agents’ conceptions of their own self-interest, irrespective of
their ostensible material positions. Actions undertaken to protect oneself (given
one’s perceived best interests) serve only to worsen the overall situation, that is,
cause greater uncertainty of a type which defied experience. Within such an environment, one’s own interests become increasingly uncertain since following
them only seems to make things worse. Indeed, following ‘‘the usual strategies’’
to achieve these goals produces negative feedback, thus undermining one’s conceptions of self-interest ever more. In such a situation, it is not that agents are
not, in a probabilistic sense, sure of their interests but unsure of their strategies.
Rather, following their first best interests produces the very dislocations that they
seek to avoid. In such a context agents become more open to persuasion, and
hence the influence of ideas as interventions that diagnose moments of crisis
can become much more pronounced.22
This also suggests, apropos the introduction, why it was that the state emerged
as the key actor in this period, albeit with huge variations in the type of ‘‘statism’’ that emerged. If businessmen were unclear as to what their interests actually were, and if following what they thought were their interests only made
them worse off, then only the state had the breathing space (both politically
and intellectually) to develop and deploy new ideas and narrate a way forward.
Thus, regardless of the form taken, whether ‘‘cartelistic then reflationary liberal’’
(the U.S.), social democratic (Sweden), fascist (Germany), or self-destructive
(France), the common experience of the deflation of the 1930s produced crisis
defining ideas of intervention that stressed the role of the state in promoting stability. Furthermore, if agents are vying over the set of ‘‘as yet to be built’’ institutions that will arguably (not probabilistically) resolve the crisis, and if such
agents have no a priori experience with these institutions, then their interests in
such institutions are necessarily under-determined. Combine this with an environment in which the degree of freedom that state actors operate under is
increased, and persuasion as a mechanism of social construction comes to the
fore.
This discussion also shows, however, that such attempts at persuasion can be
undermined by these same conditions. For example, Seabrooke’s article for this
symposium shows how even if such a dominant interpretation of a given crisis is
achieved among the elite, this does not necessarily translate into acceptance by
mass publics of such a diagnosis (Seabrooke 2007). Similarly, Widmaier’s article
for this symposium shows how strikingly similar policy rhetoric can be constructed to frame very different wars in similar ways. But simply because
the frame resonated in one context in no way guarantees that it will work
equally well in another; all of which suggests contingency, under-determination
21
This is why the NRA sought to assuage businessmen’s chief complaint in this period—that the slump was the
result of ‘‘ruinous competition.’’ It was a diagnosis that resonated with their own local experiences; and it was the
diagnosis that lay at the heart of the administered-prices thesis.
22
This is not to reduce the story to one of agents with fixed interests playing out a multi-person prisoner’s
dilemma. First of all, no amount of information about the true game structure will assure a stable equilibrium. Second, the players are not directly playing against each other vis-à-vis fixed payoffs. Rather, by following first-best strategies and consistently reaching suboptimal outcomes, agents come to be unsure as to what the pay-offs are, and
indeed, what their interests are, hence they become more open to attempts at persuasion that seek to redefine
those interests.
776
Powering, Puzzling, or Persuading?
of interests, and the strong role for mechanisms of social construction such as
persuasion in such moments (Widmaier 2007).
In sum, this article suggests that building an agent-centered constructivism
that pays attention to persuasion as a distinct mechanism of social construction
can provide us with more robust and exacting answers to traditional IPE questions. First of all, the first-order materialist problem of painting history in accord
with an overly broad theory is obviated as a deep and critical engagement of
what real actors did, and thought, in specific historical moments comes to the
fore. Rather than attribute outcomes to some set of hypothesized interests and
capabilities that ‘‘must have been there’’ given various factors or assets, one can
actually show how agents acquired specifics beliefs and interests, and sought to
advance them through attempts at persuasion.
Second, such an approach demonstrates that while the material environment
obviously conditions choice, it in no way determines it. The declared interests of
various sections of U.S. business varied widely over this time period, and the
attempt by the state to ‘‘persuade polyvalently’’ was key in explaining this variation. This was no mere problem of information. Rather it was a problem of identity and inter-subjectivity over the diverse understandings of the depression held
by different groups. The tensions between different American crisis defining
ideas—rather than simple exogenous pressures—explain the design of, and the
tensions that emerged over, the NRA.
Third, such an approach allows researchers to build models that get around
the problem of tautology inherent in materialist models that assume intentions
from outcomes. By decoupling intentions from outcomes and paying attention
to the actions and ideas of agents themselves, rather than the logically correct
theory as to what interests such agents should have had, analysis can only be
enriched. Ideas and interests are a compound. To separate them out, even analytically, may obscure more than it illuminates. In contrast, treating them as a
compound concept sheds new light on critical concerns of the field. If a constructivist approach, such as the one sketched above, can make analysts take
these points seriously, then it will have made a substantial contribution to the
study of IPE.
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