During the 1990’s and beginning of 2000’s there was a debate about
globalization and its impact on the state. The debate was taking place between questions
if the role and power of the state was declining or being empowered. For
example, in 2004 Göksel concluded the following[1]:
1.
Globalisation has contributed to the
limitation of sovereign statehood
2.
The state still
survives in the era of globalisation
The debate about globalization and sovereignty included positions that
because of globalization, states were now limited or unable to deliver “traditional”
public goods as regulatory goods (property rights and protectionist measures),
productive goods (agricultural subsidies, innovation support), redistributive
goods (welfare benefits, health-care). Among the “extreme” arguments was that
globalization would lead to total erosion of the state as an institution.[2]
In 1998 Susan Strange, recognized as creator of
International Political Economy (IPE), argued that globalization was about
retreat and erosion of the state. From a realist view (state are the main
actors in the world) one of her main arguments was that the state was
“vanishing” and that state sovereignty was under attack. Strange also provided
arguments that International Relations-research was not doing enough to involve
analysis of big corporations and transnational business into the research
field. For her, actors as transnational corporations, banks and oil companies were
until middle of 20th century mainly operating within framework of
national markets and laws while they were now (in 1990’s) operating through
ideas of “global strategy”. ¨
According to Strange, states were, as it was reported by United Nations
Center for Transnational Corporations, implementing policies for accommodation
of foreign owned firms (FOF). This was done by “lowering of barriers” by making
it easier for financial flows and conditions for TNC:s or FOF:s to establish
themselves in accordance to taxes, environmental protection and labour laws. Among
several contemporary scholars of IR the views was that states were not acting
by conviction but by necessity and barriers would be increased in case of new
necessity. For Strange, it was instead the case of technological development
because development of information communications provided firms both with a
possibility and also necessity to operate globally. Limiting oneself to local
or national markets meant losing money, competitiveness and existence when it
came to pace of technological development. In practice, for companies it meant
that they had to operate and sell their goods and services on several markets
at once regarding costs for developing new products and processes and developments
of new legislation in different parts of the world.
Another vital reason for such development were changes within the
international financial system which was the integration of capital markets for
savings and credit which was giving advantage to TNC:s to borrow money. The “losers”
of this development were locally based companies and “national champions”
relaying on public and government subsidies. For Strange, the case was that
“the structural changes are hardly likely to be reversed. The genie of
technology cannot be put back into the bottle. And it will be very hard, short of
a really catastrophic collapse of the global financial
system, to go back to a system of national
financial systems linked only by trade and investment flows as they affect
exchange rates between national currencies.[3]
However, not all who were skeptic or negative towards globalization were
warning for erosion of the state. A more famous example are writings presented
by Hirst and Thompson in their critique of globalization theories. [4] One
of their main arguments was that globalization would not replace “internationalization
of the world economy”:
1. The present international
economy is not unique in history.
Statistical evidence shows that it
is rather less open now than it was between 1870-1914.
2. Genuinely
transnational corporations appear relatively rare.
3. Capital mobility is exaggerated.
Foreign direct investment is highly
concentrated among the advanced
industrial countries.
4. Trade, investment and financial
flows are concentrated in the triad-
Europe, Japan and North America.
5. Major economic powers have the
capacity, if they coordinate
policy, to exert powerful
governance over financial markets and economic tendencies.
One can ask the following, what is the difference between global and
international? According to Hirst and Thompson the difference was that in
global economy, national politics were futile in sense of being seen as unimportant
and limited. In international economy, national politics were in function and
meaningful. Basically, in international economy it is the nation-states that
through intergovernmentalism are the main drivers of international economic
governance. The process of internationalization was also a process of
strengthening the nation-state as an institution. It was that state that
transferred powers up to international agencies and unions as the EU, and down
to regional and local levels. The nation-state was seen as important because of
the function of policing over borders and territory and because of states being
representatives of their citizens.[5]
An interesting aspect is that Hirst and Thompson also argued that about
growth in trans-border political issues and problems which were eroding
distinctions between domestic and foreign affairs. Therefore, there was a need
for trans-boundary co-ordination and control according to them. Similar
arguments were provided in sense that globalization and international society
(not the global one) were about interaction resulting in world politics.
Economic globalization as in terms of deregulation, liberalization,
privatization was presented as part of interactions between states in their
“socialization process”. T
According to Hirst and Thompson, the argument of globalization being
irreversible could be challenged since the world was still consisting of
independent states. Globalization was possible thanks to the existence of states
who were also playing roles for supporting technical and economic advance as
through subsidies or by promoting national competitiveness as in East Asia
where a positive connection between state power and economic globalization was
seen. Therefore, globalization was not about state’s diminishing role but about
changing conditions how state power was exercised as though role of the state’s
though regional and global governance institutionalization.[6]
Göskel provided a position here that was critical to both optimist and
pessimists. It was not evident that world would become a “full integrated
economy” nor that there would be a “decline of the state”. According to her
there were also structural obstacles of state diminishing[7]:
“Votes
have to be cast somewhere, taxes have to be paid to particular authorities,
which can be held accountable for public services such as education
and health. Moreover, states continue to create a regulatory environment
for their economies”
At the same time, there were “challenges” and “transformations” to
statehood and sovereignty. The case was that states now, in beginning of
2000’s, had less power in control in some activities. Technological and
economic flows made the state unable to control phenomena as global companies,
production and trading or to control financial markets alone. She referred to
institutions as IMF, G7 and GATT and also argued that “globalization has also
loosened some important cultural and psychological underpinnings of
sovereignty”, since because of technological advances “supra-territorial” bonds
have been created among different groups and movements as regarding women’s
rights and environment. Göskel conclusion was that there was strong evidence of
globalization challenging sovereign state and also that different states were
having different actions towards globalization on basis of their history,
political structures, economic conditions.[8]
One of the arguments in favor of globalization-optimists was about flow
of ideas and information. Because of Internet, the states could not control or
prevent different ideas getting transformed across territorial boundaries. It
also had to with change of political dimensions itself. Rather than politics
being international it became post-international and global. In 1990 Rosenau
argued that “there
are important dimensions of global life other than the relations between nations”. [9]
[2] Strange. Publication
date: 2017-10-17. Downloaded: 2018-12-28. Website: http://blogs.lse.ac.uk/internationalrelations/2017/10/17/professor-susan-strange-1923-1998-a-tribute/
[3] Strange,
Susan. “Big Business and the State” in Millenium: Journal of International
Studies, vol.20, N:o 2, p.245-249. Strange
also presented a number of arguments in her book “Retreat of the state” that
were based on many-sided analysis [3] Strange, Susan.
The Retreat of the State. The Diffusion of Power in the World Economy. (1996,
Cambrigde University Press, Cambridge).
Publication date: Unknown. Downloaded: 2018-12-28. Website: https://journals.sagepub.com/doi/abs/10.1177/03058298910200021501
Publication date: Unknown. Downloaded: 2018-12-28. Website: https://journals.sagepub.com/doi/abs/10.1177/03058298910200021501
[8] Göskel. State and globlaisation p.11-12 Comment: As a final word, I
believe that in the post Cold War world, national interests still
matter a great deal. Each state takes pride in its unique history and
accomplishments. Each state’s people continue to speak their own language
and to fly their own flag. Considering the document, “the national security
strategy of the United States of America” presented in September 2002,
it seems that the US intends to act as a hegemonic power. The most recent
example of this hegemonic power has been observed in Iraq since the US
led military intervention in 2003. Furthermore, the EU has not reacted as a collective
regional voice on this issue but rather as individual states. While Germany,
France and Belgium protested US policy in Iraq, England
supported it. Thus, in the European
Union, as in the world, nationalism remains as an
important force in the era of globalisation. The world is still, in territorial
terms, made up of separate states, each of which enjoys certain basic
sovereign rights. Each state still has its own interests to advance and defend.