Re-reading Theory of International Politics today, I was struck by the following claim.

With both systems-level and unit-level forces in play, how can one construct a theory of international politics without simultaneously constructing a theory of foreign policy? The question is exactly like asking how an economic theory of markets can be written in the absence of a theory of the firm. The answer is “very easily.”

It is interesting to read this in light of Oliver Williamson’s Nobel Prize address. Transactions costs economics—for which he won the prize—dates to the 1930s,

with Coase’s challenge to the profession that firm and market organization should be derived rather than (as was then the practice) taken as given, to include the suggestion that the missing concept was transaction cost. This latter was buttressed by demonstrations (by Arrow and Coase) in the 1960s that much of standard economics was reduced to irrelevance upon pushing the logic of zero transaction costs to completion.

The comment about irrelevance—attributed to none other than Kenneth Arrow, a father of general equilibrium theory in economics—is particularly sharp. I’m not exactly sure how to translate this point into a critique of Waltz except for to suggest most reductionists (Waltz’s term) will concede that Waltz can write down a systemic theory of international politics without conceding that it is worth anything.