tisdag 30 april 2019

Globalization or Internationalization?


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]


[1] Göksel. Globalisation and the state. P.2
[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
[4] Göksel State and globalisation p.7
[5]
[6] Göskel. State and globlaization p.9-10
[7] Göskel. State and globlaization p.11
[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.
[9] Rosenau

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