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1. When we imagine our own version of the international economic system, we mostly taking the perspectives of structuralism views of the international economic system the most. As we all know, structuralism is a very different perspective than the other because of several reasons. Firstly, it observes IPE from a very different lens, that is “from below”, which is from marginalized classes, people, and developing nations with the purpose of getting a deeper understanding of some negative impacts from capitalism. Structuralism also brings up concerns about human freedom and the role of reason in shaping both national and global institutions. Last but not least, structuralism thinks that capitalism and other forms of production methods are all influenced by conflict but still changeable. It is important to see the perspective that views a whole different side and point of view, especially in this contemporary world, when everything is changing day by day. That is why structuralism remains relevant in this era. This can be seen as Structurist approaches to economic development emphasize growth and distribution, and recommend flexible state intervention to promote growth and reduce poverty and inequality (Dutt, 2019). They argue government intervention is needed to avoid market failure and increase growth. Structuralism is crucial to avoid developing countries’s difficulties to grow. It was caused by hegemonic industrial centre and a dependent agricultural periphery, while these issue continue to emerge Structuralist argue that is it possible for unequal economic to continue grow (Economy Studies, 2015).

However, structuralism has its own weaknesses such as neglecting historical context, overemphasis on the structure, and many more. They relied heavily on government market intervention to avoid market faillure, this could lead into government dependence where once the protection is lifted it could lead to market crash instantly (Lin, 2019). Other issue with struturalism is that they ignore Endogeneity, where low-income/developing states are forced to follow capital-internsive industry while it can’t be developed instantly. From those weaknesses, it is needed to use other perspectives to build a very “upgraded” version of each and every perspective.

To conclude, our group imagines our international economic system not too far from all those perspectives of the international economic system. It observes the contemporary world and talks about every class, people from various backgrounds, with a mission to create a significant economy and social development and infrastructure.

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2.  Structuralism is founded by Karl Marx and it is takes major influence through marxism, covering important aspects of economic structures. Karl Marx once stated that he predicted the fall of capitalism and how negatively it had impacted the trading space, leading to unbalanced and unfair in the economic policies. Structuralism places the relationship between economics and politics as the most crucial element in seeing things concerning influencing social, cultural, and political life itself with the hope of creating justice for the whole class. (International Political Economy: Theoroes and Case Studies, 2020).

In other words, structuralism is considered to be the response and criticism to realism and liberalism. This framework also believes that globalization usually leads to the increase of inequalities within the social and political space, leading to a prolonged issues and the possibility of exploiting labor. Structuralism is divided into two perspectives: the dependency theory and the world system theory.

Structuralism is rooted from Marxist perspective which focuses on economic power and class structure. In structuralism, structure refers to the global capiltaist economy which defines social, political, and economic institutions and imposes constraints on what is possible. Structuralism emphasises on the structure of the global economy system (Dutt, 2019). Structuralism also focuses on the differences between developing and developed countries by the employment and production structures (Rodrik, 2011).

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3. Based on the book by David N. Balaam and Bradford Dillman, the structuralist explanation of the current financial crisis includes several key elements:

Concentration of Wealth and Income Inequality: Over the past four decades, the capitalist class has gained increasing power, evidenced by rising income inequality. The share of national income going to the richest 20% of Americans increased significantly, while that of the poorest 20% decreased.

Example: In the 1980s, CEOs of major companies earned about 30-40 times the average worker’s salary. By 2020, some CEOs were making 300-400 times more than their employees. While the wealth of top executives and shareholders increased, many middle- and low-income workers saw stagnant wages, highlighting the growing gap between the richest and poorest in society.

Stagnation of Earnings:Despite economic growth, median earnings for full-time male workers did not keep pace with inflation, highlighting a disparity between income growth and economic performance.

Example: During the Great Depression (1929-1939), wage stagnation was widespread. Despite some companies still operating, wages fell or remained stagnant due to massive unemployment and economic collapse. Many workers, particularly in industries like agriculture and manufacturing, saw their earnings drop significantly. This period is marked by declining consumer purchasing power, forcing families to live on less even as the cost of living remained high, exacerbating economic hardship.

Structural Instability: The combination of high levels of debt and growing inequality created an unstable economic foundation. The subsequent drop in housing prices triggered a banking crisis and recession.

Example: In Jakarta, the 1997-1998 Asian Financial Crisis exemplified structural instability. High foreign debt and income inequality created a precarious economic environment. When the rupiah depreciated sharply, it triggered a banking crisis, leading to the collapse of many businesses and financial institutions in Jakarta. This crisis resulted in widespread unemployment and social unrest, highlighting the vulnerabilities in Indonesia’s economic foundation, particularly in urban areas like Jakarta.

Role of the State: The state is viewed as serving the interests of the capitalist elite, particularly during crises, by providing bailouts to financial institutions while neglecting lower and middle classes.

Example: In Indonesia, during the 1998 financial crisis, the government intervened by bailing out banks and large corporations, such as Bank Central Asia and Bank Niaga, to stabilize the financial system. However, this support came at the expense of the lower and middle classes, who faced rising unemployment and social unrest. The state’s actions reflected a prioritization of elite interests over those of ordinary citizens, leading to significant public discontent.

Empirical Evidence of Capital Returns: Thomas Piketty's work highlights that the rate of return on capital often exceeds economic growth, reinforcing the structuralist view that without intervention, inequality will persist and worsen.

Example: The wealth accumulation of billionaire entrepreneurs like Jeff Bezos and Elon Musk. Their capital returns through investments and business ownership have outpaced overall economic growth, leading to increased wealth concentration. This trend highlights the structuralist view that without policy intervention, such as higher taxes on wealth, income inequality will continue to grow.

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Balaam, David N., & Dillman, Bradford. (2018). Introduction to International Political Economy (Edisi ke-7). New York: Routledge. Halaman 303-308.

Bielschowsky, R. (2009). Sixty years of eclac: Structuralism and neo-structuralism. CEPAL Review, 2009(97), 171–192. https://doi.org/10.18356/d8b97556-en

Dutt, A. (2019). Structuralists, Structures, and Economic Development. The Palgrave Handbook of Development Economics. https://doi.org/10.1007/978-3-030-14000-7_4.

Eagleton, T., & Anderson, P. (1985). Marxism, Structuralism, and Post-Structuralism. Diacritics, 15(4), 2. https://doi.org/10.2307/464931

Economic Policy Institute. (2021). CEO pay has skyrocketed 1,322% since 1978. Washington, D.C.: Economic Policy Institute. Pages 1-10. https://www.epi.org/publication/ceo-pay-in-2020/

Economy Studies. (2015). Structuralist Economics – Economy Studies. Economystudies.com. https://www.economystudies.com/structuralist/

http://repository.uki.ac.id/1899/1/IPE_THEORIES_CASE_STUDIES.pdf

Lin, J. Y. (2019). New Structural Economics: The Third Generation of Development Economics. https://www.bu.edu/gdp/files/2019/04/Lin-Justin.2019-GEGI-WP-27-Final-1.pdf

Pace, D. (1978). Structuralism in History and the Social Sciences. American Quarterly, 30(3), 282–297. https://doi.org/10.2307/2712503

Rodrik, D. (2011). Comments on “New Structural Economics” by Justin Yifu Lin. World Bank Research Observer, 26, 227-229. https://doi.org/10.1093/WBRO/LKR008.