International political economy Strange was an influential thinker on global affairs. She played a central role in developing IPE as a field of study, and is a key figure in
political economy approaches to
security studies. Her 1970 article, "International Economics and International Relations: A Case of Mutual Neglect", laid out her arguments for the need of a discipline of IPE. Strange argued that power was central to international political economy. She observed that in general "economists simply do not understand how the global political economy works" due to a poor understanding of power and an over-reliance on abstract economic models; however, she added that political scientists also have a woeful understanding of how the world works due to their emphasis on institutions and power. Thus she became one of the earliest campaigners advocating the necessity of studying both politics and economics for
international relations scholars. She influenced scholars such as
Robert Gilpin. She was a critic of
regime theory, arguing that the scholarship on regimes was too state-centric and carried a hidden bias in favor of maintaining US hegemony. In the 1980s, Strange disagreed with claims by other international studies scholars that US hegemony was on the decline. She was skeptical of static indicators of power, arguing that it was structural power that mattered. In particular, interactions between states and markets mattered. She pointed to the superiority of the American technology sector, dominance in services, and the position of the US dollar as the top international currency as real indicators of lasting power. She also disagreed with the attempt of economists led by
Milton Friedman to mimic the natural sciences, which she thought was both dangerous and misplaced.
Power and international financial markets Strange's key contribution to IPE was on the issue of
power, which she considered essential to the character and dynamics of the global economy. She distinguished between relational power (the power to compel A to get B to do something B does not want to do) and structural power (the power to shape and determine the structure of the global political economy). Her works were generally successfully and were republished in subsequent years.
States and Markets (Pinter, 1988) delineated four key forms of power—security, production, finance, and knowledge; power was described as the ability to "provide protection, make things, obtain access to credit, and develop and control authoritative modes of interpreting the world". Strange posited that the most overlooked channel of power is financial access, which consequently becomes the most important one to comprehend; in other words, she argued that one cannot comprehend how the world works without a thorough understanding of international financial markets. To illustrate,
Casino Capitalism (B. Blackwell, 1986) discussed the dangers of the international financial system, which she considered confirmed by the
1997 Asian financial crisis. According to Strange, there is a financial "contagion" creating a huge instability in the international financial markets. Her analysis in
States and Markets also focused on what she called the "market-authority nexus", the see-saw of power between the market and political authority. She maintained that the global market, relative to the nation state, had gained significant power since the 1970s and that a "dangerous gap" was emerging between the two. She considered nation states inflexible, limited by territorial boundaries in a world of fragile intergovernmental co-operation; "Westfailure" is what she called
Westphalia. Markets would be able to flout regulations and reign free, creating more uncertainty and risk in an already chaotic environment.
Casino capitalism In
Casino Capitalism (B. Blackwell, 1986), also republished by
Manchester University Press, Strange problemized the nonsystem that the international monetary system had become. In popularising the concept of casino capitalism, she compared it with a casino whereon the foreign exchange plays as
snakes and ladders. She set the stakes that international finance had become stronger than states and deregularised. The
Smithsonian Agreement was weakened, leading further to benign neglect from the US, while the
Eurodollar market and
OPEC strongly undermined the
Bretton Woods system. According to Strange, there is no state or actor governing the international monetary system and the international financial markets. American banks are made free to pursue their interests since the 1980s strengthened by the possibility to finance American bonds in the world, making a carousel of bond trading with the OPEC and the Eurodollar market. The forces of market integration set by the Bretton Woods system was going through. Casino capitalism is the high risk-taking and financial instability associated with
financial institutions becoming very large and mostly self-regulated, while also taking on high-risk financial
investment dealings. This has been a driving motive by investors in the quest for
profits without
production; it provides a
speculation aspect that offers prospects for a quicker and more speculator returns for people,
wealth, and inside assumptions of the factors likely to affect
asset price movements. Typically, this does not add to the collective wealth of an
economy, as it can instead create economic instability. Popularised by Strange in 1986 through her eponymous book, casino capitalism falls alongside the idea of a speculation-based economy where
entrepreneurial activities turn to more paper games of speculative
trading than actually producing economic
goods and
services. It is believed by economists such as
Frank Stilwell that casino capitalism was one of the leading causes of the
2008 financial crisis. Investors sought out a get-rich-quick motive they found through speculative activities that offered a particular individual gain or loss depending on the assets' future movements. Other economists like
Hans-Werner Sinn have written about casino capitalism with commentary outside the Anglo-Saxon
financial bubble. In
Rival States, Rival Firms (1991, Cambridge University Press), Strange discussed the structural change in international production and its related implications for developing countries.
Mad Money (University of Manchester Press, 1998) updated the analysis of
Casino Capitalism to the late 1990s. At the time of her death, she was working on an exposition of her theory of the international money system. Strange argued in
Mad Money that complex derivatives, such as credit default swaps, had increased systemic risk in the global financial system. She has been described as a prescient thinker who foresaw multiple aspects of the 2008 financial crisis and its aftermath. In 2024, the BISA organised an event on Strange's work, which "has enjoyed a renaissance recently". == Personal life ==