Mathias Albert in “On the Modern Systems Theory of society and IR,” discusses research that shows
that international politics can no longer be described as the mere interaction of foreign policies, but can be conceived as functional politics in the sense that it orients political processes towards the processing of functionally defined problems–and not towards the pursuit of interests ascribed to actors.
(Observing International Relations: Niklas Luhmann and World Politics, edited by Mathias Albert & Lena Hilkermeir, 2004. page 25)
The actors here may be states or organization like the United Nations, the World Bank, and the World Trade Organization. But what does “the processing of functionally defined problems” mean? Politics constructs meaning; it defines problems according to its own code and programmes. International relations is not about the interaction of states or other political actors; it about how politics meaningfully communicates.
Rather than conflating the operations of the political and economic system into an “international political economy” or juxtaposing economics and politics as sphere of contending “interests,” a focus on the operative autonomy of politics and economics as self-referential systems allows a sharper focus on the limits of politics under the conditions of economic communication being produced by an observation within the economic system alone. ( Albert 26)
The economic and political systems do not directly conflict or compete because they do not communicate in the same way or through the same medium. The systems are operationally closed, which means that the political system cannot directly regulate the economy. All the political system can do is perturb the economy.
Theories of neoliberalism conflate the political and the economic function systems, and critics of neoliberalism ascribe too much power to politicians and politics. Political power just doesn’t extend that far.
Neoliberal economic theory seeks to transform societies (or individual nations as happened in Chile in the 1970s-80s) through economic interventions, but there are always unintended consequences. The Chile experiment produced major unintended consequences. The same things happens whenever The World Bank, International Monetary Fund, or World Trade Organization tries to regulate some aspect of the global economy. The results are never predictable because the rest of society–the economy’s environment–cannot be held stable or controlled while economists play with economic variables.
There is no power in economics. Power, as a communication medium, belongs to the political system alone, and rich people and organizations only can access power (which is a communication medium, not a thing to possess) by tapping into (or structurally coupling with) politics. Moreover, politics can only regulate politics. It can regulate how it observes other systems, such as the economy.
While MST [Modern Systems Theory] in no way denies that political regulation continually takes place and has effects, it offers a strong theoretical argument regarding the impossibility of regulating the operations of one function system (e.g. economics) by another (i.e. politics) if regulation is seen as an activity in which certain ends are to be achieved causally by certain means. All regulation of the operations of function systems is self-regulation; a political action is only observed by the economic system on the basis of its own operational code, i.e. monetary value. The only question then is whether a complex strategy of regulation can condition how the economic system observes political communication. (Albert 26, emphasis added)
In fundamental opposition to most concepts of power employed in IR [International Relations], MST points out that power can not be understood as a capability of something or someone, but needs to be conceived as code-driven communication. (Albert 27, emphasis added)
Political power is not something that can be possessed, given away, lost, shared, etc. Its not a thing; it is communication medium, or a means of addressing social problems—coordinating expectations among uncontrollable, unknowable operationally closed systems. Political power is not a force that one actor employs to control the action of another actor; it’s not about action or actors at all. Political power must be distinguished from force. Force is about action and actors. Force is used when political power fails.
Political power arose as a solution to a social problem: As human social groups grew in number and complexity, actions needed to coordinated and brute force was not enough to elicit cooperation. Political power elicits voluntary cooperation, as people identify their own interests with those of the political leadership.