The Profits of Power: Commercial Realpolitik in Europe and Eurasia

55 Pages Posted: 14 Sep 2010 Last revised: 1 Sep 2011

Rawi Abdelal

Harvard University - Business, Government and the International Economy Unit

Date Written: October 12, 2010

Abstract

Old-style realpolitik – bilateral, sentiment-free, and organized by great powers – has returned to Europe, thereby wreaking havoc on traditions of solidarism and multilateralism in the European Union. The renaissance of the Russian state and the rise of Gazprom, Russia’s natural gas monopoly, have produced patterns of international politics that seemed almost inconceivable just a few years ago. Three of Europe’s major powers – France, Germany, and Italy – have cultivated bilateral energy relations with Russia at the expense of a common stance on the continent’s dependence on Russian gas, and much to dismay of other EU members.

This pattern of international relations carries profound implications for theory and practice. I argue that the obvious theoretical conclusion and conventional practical understanding of these politics are both wrong. The roots of this realpolitik cannot be found in realist theory. Europe’s realpolitik has, instead, fundamentally commercial and ideational origins. Firms have literally conducted this realpolitik. The empirical puzzles presented in this paper imply a theoretical challenge for international political economy, which has, as a field, failed to understand deeply how firms work and what kinds of roles they have come to play in contemporary international relations. In this paper I propose some theoretical foundations for a better understanding of commercial realpolitik: great-power politics based on the profit motives and shared ideas of firms.

Suggested Citation

Abdelal, Rawi, The Profits of Power: Commercial Realpolitik in Europe and Eurasia (October 12, 2010). Harvard Business School BGIE Unit Working Paper No. 11-028. Available at SSRN: https://ssrn.com/abstract=1676865 or http://dx.doi.org/10.2139/ssrn.1676865

Rawi Abdelal (Contact Author)

Harvard University - Business, Government and the International Economy Unit ( email )

Morgan Hall 287
Harvard Business School
Boston, MA 02163
United States

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