This is a guest post by Pepper D. Culpepper, Professor of Political Science at the European University Institute, as part of the Duck of Minerva’s Symposium on Structural Power and the Study of Business. This post draws on ideas developed at greater length in Culpepper’s article found here. Links to other posts in the symposium can be found here.

Crises shake up the real world. Sometimes, they even shake up the world of political science. The recent global financial crisis and the ongoing bank and sovereign debt crisis associated with it in the Eurozone have led many scholars to reach back into the toolbox of structural power to help understand some puzzling developments. The symposium that is appearing this week brings together contributions from several scholars who have found this toolbox useful.

Let’s acknowledge the obvious problem first: structural power has toxic brand name recognition. The adjective “structural” has biased conversations about structural power such that the focus on agency in structural power explanations had almost vanished, at least prior to the most recent round of scholarship. Whether exercised through business or states, the claim that structural power is at work implies neither a deterministic outcome nor that the exercise of structural power must happen automatically and apolitically. If structural power is to prove a useful addition to contemporary theories of politics, those who would use it need to be attentive to this labeling problem and the issues that get smuggled in by using the adjective “structural.”

Structural power analysis has also suffered from the subfield silos that separate international and comparative political economy. This lack of dialogue has been particularly costly because scholars in both have tended to focus only on one side of the coin. For CPE scholars, that one-sided account has stressed the way in which the privileged position of business stacks the deck in favor of business-friendly outcomes, leaving underemphasized the simultaneous and related power of states to pressure firms because those firms depend for their future income on access to markets, and markets are regulated by states. For IPE scholars, the unilateral temptation has been to stress the dominant position of the United States with respect to other countries and their banks, without any heed to the way in which the American government must be deeply sensitive to the effects of its policies on international holders of capital, including its own giant banks. Conceptualizing structural power as a set of reciprocal dependencies among states and the large firms operating within their regulatory jurisdiction represents one way to develop a more balanced notion of how structural power operates in the global capitalist economy (as more fully argued here).

One important recent example of the dependency of national economies on the size of the financial sector is the size of bank bailout packages: the bigger the financial sector of a country, the larger the size its bailout as a proportion of GDP. These banks were often too big to fail, at least without catastrophic consequence for their economies. Yet it is also true that the American market is a large and lucrative one for many banks. That the largest players in the American banking market make most of their money in the United States means that these banks depend on the benign neglect of American authorities. They are dependent on the American state, just as the American state is dependent on them (see here). Studying structural power means being attentive to the political implications of both elements of this mutual dependency.

Accounts of structural power can be especially penetrating when they demonstrate how this reciprocal structural relationship influences the action of both states and businesses. We see this dynamic at work in the case of Swiss banking secrecy laws, as shown by the work of Patrick Emmenegger (see here and in the post this afternoon). His research shows how one state can discipline firms, and the way he employs structural power is especially credible because the story is embedded in both the power and the vulnerability of states that want to pressure large financial institutions. One way for future scholarship to be clearer about the limits of structural power is to keep one eye on the mutual interdependence that underlies it.

The rethinking of structural power resounds especially in discussions of the most important countries in the international system (see here and Winecoff’s post on Wednesday), and above all the United States. Nowhere is the distinction between CPE and IPE more glaring than in the contrasting portrayals of the American political economy: the former depicts that system as hopelessly captured by the lobbies of large businesses and the super-rich people who lead them, while the latter sees the American state as a colossus in the international system, one that pursues rogue banks across international borders without regard to the finer points of international law. There is a significant degree of truth in both pictures. Understanding how they can simultaneously coexist is a task that should be on the agenda of anyone interested in understanding the character and limits of structural power in contemporary politics.