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International relations is a study through which state leaders, bureaucrats and several other people try to gain knowledge and understanding about global issues so that they can effectively control their states, formulate and follow appropriate foreign policies. There are several theories developed by different theorists to deal with this complexity of international relations. Two major theories purposed by theorists are: Realism and Liberalism.
This essay is based primarily on comparing and contrasting these two theories. What assumptionsabout the nature of world politics are advanced by each tradition? How do these two schools of thought differ? Analyses are also done to determine which theory most accurately described the world during the Cold War era and which one most accurately describes the world we live in today.
Realism is one of the most important international relations theories which govern or dictates the behaviour of states on global scale. Realists believe that all states concerned with their national interests and are in endless struggle among others to attain more power and position in world.  Most of the people think that realism gained limelight in 20th century but it has its roots linked to ancient history. The realistic theories can be easily found in Arthashastra, an Indian treatise written by Kautaliya in fourth century BC to teach politics of power and also in Chinese scriptures written by Han Fei and Shang Yang. 
Realism gives supreme importance to power and state in international relations. It considers state as the most important actor at international level as it doesn't answers to any supreme power. State is considered to have supreme power over its territory and people. Realists concluded that all the states are in endless struggle of gaining power to achieve supremacy and protect national security in zero sum game. 
Another key assumption of realists is that the anarchy system has a firm grip on the world politics. In anarchy the states work on increasing their military power to prevent any attack on their territory. 
Third major assumption of the realism highlights importance of balance of power in international relations. Realists think that balance of power is always required to prevent formation of one state as the only super power. The balance of power is achieved through formation of coalitions between different states that have a similar interest. In 20th century among major known coalitions were East and West blocs. The Eastern Bloc consisted of Soviet Union and its allies and Western Bloc consisted of United States and its allies. These were formed during the time of Cold war to achieve motive of balance of power.
The realists also consider allies as an important source of increasing military strength of the state.  In World War- II Germany allied with Italy and Japan to meet its selfish national interests. Realists also stress that allies motives should be continuously scrutinized so that any deviation from fair motives should be noticed immediately.  To achieve that complete dependence on allies for national security should be avoided. In eyes of realists state should also be self dependant and its military should be strong enough to face any surprise attack. 
There is any other important assumption of realism which differentiates between state objectives of economic and military development. As per realists the military development should be prime motive of the state and economic development should be just treated as a means to support a finance army. Overall, realism gives less importance to economic development. As per realists state should never hesitate in using arms to promote peace. Realism doesn't consider healthy economy as a peace keeping force.
Liberalism theory was developed to cope with the problems disregarded by realism. Liberalism has its roots linked to thoughts of John Locke, Immanuel Kant, and Adam Smith.  As per liberalists' economic interdependence, international institutions and global norms play a special role in international relations. At the core, liberals believe in progress.
The liberalism theory is contains several different assumptions. One of the main assumptions of liberals is that the non state actors cannot be ignored in international relations. They are important entities in global affairs. In liberalism individuals, NGOs and IGOs are considered equally important as state actors. Liberals stress that MNCs also cannot to be overlooked as world economy is becoming interdependent day by day. Liberalists also believe that behaviour of state is regulated by its decision makers, bureaucrats and various other interest groups with divergent interests and goals. 
Another important assumption of liberals gives priority to economic prosperity over national security.  Liberals believe in collective gain of all. Liberals promote free trade or open markets with vision that economic interdependence creates incentive to resolve the disputes peacefully.  Liberals think that military intervention in international affairs reduces profit for the states as economic stability is hampered.
Third assumption of liberals focuses on importance of individuals in state. Liberals promote thought that the human beings should be treated as ends rather than means.  It was also once said by US Secretary of State, Condoleezza Rice "Fundamental character of regimes matters more today than the international distribution of power." 
Liberals also assumed that improving the conditions in which people live can also work towards establishment of peace. In order to achieve this liberals promote establishment of democratic government. This thought was also bought forward by Woodrow Wilson when he said "democratic government will make war less likely."  Most theorists agree that democratic governments also work more towards peaceful resolution of issues instead of following ideologies of military use.
Differences between Realism and Liberalism
Liberal school of thought originated to overcome the issues of the realism because of this there are several points of disinterest between these two schools. Liberalists strongly criticise some of the assumptions of realists. There are five major differences between these two schools of thoughts. 
First, core concern for both schools of thoughts is greatly different. The realists are primarily concerned with war and security. Realists focus on survival of the vulnerable, self interested states in the environment where there are uncertainties about intentions and capabilities of other states.  The liberals have motives of institutionalized peace. They focus primarily on achieving
peace and harmony though rules and organizations which ultimately paves way for collective gains. 
Second, as per realists state is the most important actor in world politics. Realists consider state as the prime actor on the world stage as state doesn't answers to any supreme power. On the other hand liberalists believe that the states, multinational corporations, and international organisations all play a critical role in international politics. Liberals criticize the role of state as a unitary actor. 
Third, realists have a strong belief in the anarchy system. In anarchy system there is no higher controlling power over and above the state. In contrast to this liberals emphasize on complex interdependence among states. As per realists state should be self dependant and always believe in self gains which receive an extensive criticism from liberals as it doesn't satisfy their thoughts of togetherness and collective security.
Fourth, both schools of thought have different approach towards the peace. The realism is primarily focussed on the military preparedness and alliances where as liberalism stresses on maintaining peace and harmony. Liberals don't give military a much importance in resolving the issues between states. Liberals believe that military is costly substitute of dealing with problems. Liberals focus on facilitating dialogue, diplomacy, peace keeping, conflict resolution and other non military means.  As per liberal school of thought international organizations, laws, and non state actors create stable environment for bargaining and increase effectiveness of non military methods of problem solving in international relations. Liberals are also supportive of open markets. Critics of liberalism contend that power hungry states are unlikely to see accomplishment of their national interests through international organizations. The followers of realist school of thought conclude that in case of security threats states will have a trust in their own power not in the promises of global institutions.  This is illuminated by words of former U.S president Jimmy Carter- "It's important that we take a hard clear look...not at some simple world, either of universal goodwill or of universal hostility, but the complex, changing and sometimes dangerous world that really exists" 
Final, the realists and liberals are also differentiated on the basis of approach they have towards world affairs. Realists are known for their pessimism towards global affairs. Realists believe that each and every state of the world is participating in stern security competition. States are striving for power monopoly over the other in relentless manner. Contrary to this liberals are famous for their optimism. Liberals are worshippers of cooperation among humans. They advocate progress through cooperatives measures.
World during Cold War era:
At the end of World War-II, United States and Soviet Union became two superpowers. Both powers followed their own ideologies. Soviet Union was a communist state whereas on other hand United Sates was a strictly a capitalist democracy. Difference in ideologies and hunger for hegemony engulfed these two superpowers into Cold War which begun in 1947. It begun when Kennan sent a famous telegram to Washington assessing sources of Soviet Union's Conduct and Truman doctrine was introduced by former Unites States President Harry Truman stating that United States would support people who will ally with them against communism. 
Start of Cold War was much in line with beliefs of realists. The power transition at end of World War-II is considered significant cause of it. As per realists, the sense of fear developed among the two superpowers (Soviet Union and USA) and each of them tried to increase its sphere of influence. This competition eventually led to division of Europe, with USA and North Atlantic Treaty Organization (NATO) on one side and Soviet Union and Warsaw Pact allies on the other side. 
The arms race also started with entrance of Soviet Union into nuclear arms field in 1949.  The nuclear arms increased military strength of Soviet Union bringing it up to the par with United States. This further strengthened theories of realists as both super powers were now self dependant and strong enough to deter any military attack.
Balance of power was also practised by the two superpowers during Cold War. Evidence is available as United States supported Pakistan in 1971 during India-Pakistan war.  The balance of power is one of the major principles of realism. The two India-Pakistan wars also proved that International organisations like United Nations were not effective enough to maintain peace.
Until late 1980s foreign policy of Soviet Union was consistent with realist theories.  Soviet Union tried to increase its influence in Third world countries and strengthen its control over eastern Europe through power politics.  Alike all realist states, Soviet Union also just focussed on development of military instead of economy development which led ultimately to the collapse of Soviet Union.
Finally, Mikhail Gorbachev proved instrumental in resolving Cold War. He worked toward liberalization of Soviet Union, withdrawal of forces from Afghanistan and Eastern Europe which collectively ended one of the longest wars of the history.  Criticisers of realism say that realism faced a great setback when Soviet Union retreated its forces from Eastern Europe as realist state would never make any move to reduce its sphere of influence.
World we live in today:
Realists and non realists are always been interested in understanding how and why the conflict between Soviet Unionand USA came to an end. In the past, collapse of major super power has always been accompanied by major warfare. The peaceful collapse of Soviet Union was mainly due to development of liberal democracies across the globe.
The world economy is now moving toward globalisation. Introduction of various Free trade agreement like NAFTA, ASEAN incorporate liberal thinking. The upbringing of MNCs and foreign direct investments in India, China and various other countries of the world is making economies of globe interdependent which would help in reducing the security tensions among the nations as no nation would like to create hamper its economic development through war.
The introduction of common currency i.e Euro in Europe is also increasing cooperation among European nations as their economy is interdependent now which will favour peace.
United Nations is also having better control on international disputes through its International court of justice and World bank which take appropriate measures in maintaining peace around globe through various techniques like imposing monetary sanctions on country which disturb peace.
The realists on the other hand claim that there is a flaw in statements that realism has gone. As per realists the recent US wars against Afghanistan and Iraq clearly depict that state and power plays prime role in the world politics. Iraq war which wasn't justifed by United Nations, several other states and non state actors was still carried out by United States to fulfil its national interests. United States led Iraq war to fulfil its motives of anti terrorism without caring about international organisations and prevalent global norms. But liberal criticisers say that Iraq war eventually led to collapse of Bush administration and even US economy suffered a lot due to these wars. For future, it can be predicted that no such ill planned activity will take place.
Overall, it is concluded that liberalisation is significantly governing international relations these days.