Many neorealists compare states in the international system to firms in a capitalist market as they are the principal actors in their respective domains. But to what extent are they similar? States and firms can be compared in areas such as international anarchy, need for survival and security, their capabilities and capabilities of other states and firms in respect to them, power, imbalance of power and multipolarity.
But we cannot understand how states in the international system and firms in a capitalist market work without also understanding the underlying systemic structures. Neorealists argue that states do not always act the “neorealist way”, but then this is built into the theory, just as the occasional bankruptcy of firms does not invalidate economic theory. Both states and firms exist and function in an international anarchy; they both have no overarching authoritative institution above them.
States and firms in an anarchic order must provide for their own security (Waltz, 1988) as there is no transnational government in charge of states or a transnational institution in control of the capitalist market. “Sovereign states are not willing to give up their independence for the sake of any global security guarantee” (Jackson and Sorensen, 2003:75) and so states and firms have to behave in a way that will try and maintain international peace and economic stability. Neorealists also often compare states and firms as their primary motive is to survive; if they don’t survive, nothing else matters. The need for survival and security is the main driving force for the decisions states and firms make.
If states and firms don’t have the ability to survive, they don’t have