Why do many neorealists liken states in the international system to firms in a capitalist market? How valid is that analogy? Neorealism has emerged as a contemporary theory that attempts to explain the interaction of states on an international level. Oftentimes neorealists compare states in the international system and firms in a capitalist market. There are a number of factors that can be described as similarities or differences between the two and for the sake of brevity, only a few will be discussed below. The factors that I will look at are: the state of anarchy, an overarching regulatory body, their main objective, ranking and sovereignty. This is by no means an exhaustive list. By the end, I will strive to determine whether this analogy is accurate and, if it is, to what extent. Kenneth Waltz is the father of neorealism. His book, Theory of International Politics, departs from the classical and neoclassical realism theories. Instead Waltz sets out to prove his international relations theory in a scientific manner, while choosing to ignore the normative concerns of classical and neoclassical realism (Jackson and Sørensen, 2003: 84). The theory of neorealism – or structural realism – focuses on structures (and on the interacting units, the constants and the changes of the system) as the determinative powers within the scope of international relations (main principle of those being that of anarchy). Jackson and Sørensen (2003: 84) also point out that actors are viewed