Globalisation is Undermining the Nation-State: Discuss. posted by Richard Seymour

The Cold War was not just fought between Russia and the United States; Marx and Weber also mixed it up, threatened one another, snapped at each other's heels, took strategic territory, put down internal revolts and ceded zones of control. The theory of the modern state (and its relation to capital) has therefore been cast in terms of this debate. Theories developed in faith as non-aligned, or even neutral, players were sucked up into one of the two competing camps. I trust our new multipolar world will be more tolerable. What follows will be like the world system in two respects: it will be incoherent, messy and bloody; but it will also have an inner logic which some keen dialectician will be able to detect in decades, when this site has long since fossilised into a 404.

That ludic exercise aside, I want to question to category 'globalisation'. It seems to mean so many different things that it is difficult to pin down, from cultural cross-fertilisation to imperialism. Broadly speaking, it connotes mobility - of labour, capital and goods. Very well: there has been a massive growth in international trade over the last thirty years; labour is potentially now more mobile than ever before, given cheaper air travel; capital can move in wider circles than it has done before.

This is where we are, but it is not necessarily where we are forever going. Capitalism has always been 'internationalist' in outlook; the search for new avenues of profitability beyond the boundaries of this or that dominion or state was not exactly unfamiliar in the late medieval era, as Fernand Braudel illustrates in his beautiful trilogy on Capital and Civilisation. Even Marx could write, in the Communist Manifesto:

The need for a constantly expanding market chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.

The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. All old established national industries have been destroyed or daily are being destroyed. They are dislodged by new industries...that no longer work up indigenous raw materials, but raw materials drawn from the remotest zones, industries whose products are consumed not at home, but in every quarter in the globe... In place of the old local and national seclusion we have intercourse in every direction, universal interdependence of nations.

From 1850 to 1914, world trade expanded by about 900%. Subsequently, there was a drastic contraction in trade as national economies reverted to autarky. On the other hand, since 1970, usually taken as the breaking point for the old Keynesian Welfare National State (Bob Jessop's formulation), there have not been the epochal changes in the distribution of imports and exports and in foreign and domestic investment that have often been imagined. According to Michael Mann:

Domestic saving and investment still correlate about 75 percent among OECD countries, indicating that foreign capital is not all that internationally mobile... And the differences in real interest rates between countries are about the same as they were a century ago. Indeed, it is doubtful whether, in many respects, capital is more transnational than it was before 1914, except in the special case of the European Union. ("As the twentieth century ages", New Left Review 214)

Most service and manufacturing capital operating from the US remains based in the US. The same is true for Japan and most of Europe. Further, most capital which is invested in foreign markets remains restricted to the relatively limited zones of the developed world and the select bunch of Newly Industrialising Countries (NICs) where there is some kind of infrastructure to speak of. The rest remain out of the loop, so to speak, and in all likelihood will continue to do so.

Some globalisation theorists, one of the most sophisticated of which is the former ISJ editor Nigel Harris, tell an entirely different story. The nation-state is sinking, they say, and this is a good thing. Such a dangerous, overbearing contraption can no longer be relied upon to deliver the social contracts with its citizens that it once did. It is increasingly undermined by capital and labour mobility and, so long as it does not seek to curtail this process, everyone will be better off. The state, of course, will. By waging geopolitical wars, clamping down on immigration and regulating the mobility of capital, it buttresses its own authority, and maintains the false boundaries of nation-states. Further, as he explains:

Global integration is making the movement of commodities, of finance and of workers, greater and greater ­ movement increases faster than output. The world economy, it seems, has by now passed the point of no return, and we are set upon the road to a single integrated global economy, regardless of the wishes of governments and citizens. Indeed, any efforts to reverse the process, spell catastrophe. (The New Untouchables, 1995, p 226)

Which brings me to my next objection. I want to problematise this stupid state-capital dichotomy. Harris, for instance, is an intelligent and careful writer, but he does feel compelled, occasionally, to launch counterintuitive assertions at his readers:

...I suggest that business has in general no more power over governments than populations (though electorates can be pretty decisive); that is the point of the Nazi example--German business had nearly as little influence over the Nazis as the mass of ordinary Germans...

Perhaps the best way to phrase the criticism of this point is to redefine the problem: it isn't how much 'influence' the capitalist class excersises 'over' this or that government: governments which wish to work and exist within the capitalist system are structurally constrained to adopt its prerogatives, while making concessions to labour and women when they get uppity. One does not have to accept the interpretation of Marxism which says that the state was 'captured' by the liberal bourgeoisie (although I think this is certainly true) to detect a confluence of interests here. Historically, too, Harris' point is inept unless he has reason to believe that the evidence of big business working for the Nazi victory is untrue or insignificant. (On this, see Hans Mommsen ed. Between Vision and Reality).

The most concise expression of the relationship between capital and the state was provided by that avatar of globalisation, Thomas Friedman:

"The hidden hand of the market will never work without a hidden fist. McDonald's cannot flourish without McDonnell Douglas, the designer of the F-l5. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the US Army, Air Force, Navy and Marine Corps."

Now, that is an 'instrumentalist' view of the state entirely compatible with Marx's declaration that the "executive of the state is but a committee for managing the common affairs of the bourgeoisie". There are a number of ways in which it is obviously true. If capital remains largely nationally based, as I maintain, it must perforce rely on the state to provide an educated, healthy workforce and an infrastructure capable of providing precisely the kind of mobility that the globalisation theorists revere.

Further, one can isolate many cases in which the absence of state intervention and care would leave national economies in ruin. The bail-out of the hedge funds by Greenspan's Federal Reserve bank in 1998 may well have staved off a very sharp recession, perhaps worse than the one that eventually took place as Bush assumed public office. Imagine withdrawing the billions of dollars surreptitiously pumped into private capital (not just the military-industrial complex, but health and pharmaceuticals, machine-tools, semiconductors etc) by the US government. Toshiki Kaifu, not George Bush, would have been celebrating victory in the Cold War.

Graeme Gill, from a Weberian perspective, argues that the state is even more fundamentally the guarantor of capital. By standardising pricing, weights, measures and by maintaining the security of the system of private property through policing, the state ensures the conditions in which capital can accumulate. (Gill, The Nature and Development of the Modern State, 2003). I can see nothing in that analysis that is out-dated.

The dependency goes both ways, of course. Peter Gowan, noting that current US policy, and the financial structure of what he calls 'the Dollar-Wall Street Regime" actually harms the US economy, tries to explain why the state accepts and encourages this state of affairs. He puts it like this:

The most straightforward explanation ... is that the regulators themselves are closely linked to the big speculators. The [former] US Treasury Secretary Robert Rubin [was] a speculator himself by profession ... A second explanation might be that these other instances of government have themselves become dependent on the financial speculators for campaign funds... This, again, no doubt has force, but there are other immensely powerful centres of American capitalism outside the financial markets, which would surely cavil if the decisive control of the political establishment had been captured by financial capital. Yet another explanation might be that all the strategic social groups within American society have themselves been captured by the institutional dynamics of the financial markets... (Peter Gowan, The Global Gamble: Washington's Faustian Bid for Global Dominance, 1999, pp 55-6)

In all these ways, then, the state can be beholden to capital and also privilege specific sectors of it.

Moving on, just as when we speak of national capital requiring the services vended by nation-states, insofar as capital has mobility it seeks those same services at the level of a global state substitute like the IMF and WTO. These organisations, and agreements like the Common Agricultural Policy, are both enabling and constraining. They facilitate operations overseas, but impose bureacratic standards on their effects. They are the result of conjugations of states, rather than supra-national efforts. Further, as Ellen Meiksins Wood points out:

Just as the state is far from powerless, multinational corporations are far from all-powerful. Scrutiny of corporations is likely to reveal that 'multinational enterprises are not particularly good at managing their international operations', and that profits tend to be lower, while profits are higher. ... Any success such companies have had in the global economy has depended on the indispensable support of the state, both in the locale of the home base and elsewhere in their 'multinational' network. (Ellen Meiksins Wood, Empire of Capital, 2003, p 139)

Wood adds: "While we can imagine capital continuing its daily operations if the WTO were destroyed, and perhaps even welcoming the removal of obstacles placed in its way by organisations that give subordinate economies some voice, it is inconceivable that those operations would long survive the destruction of the local state."

I think this nails it. The case for 'globalisation' has been over-stated, and to some extent that has been accepted by aspects of the anti-capitalist movement - usually the right-wing, as represented by the leadership of Attac. Inasmuch as the term has any meaning, 'globalisation' is a process that is being facilitated and regulated in various ways by the state. 'Globalisation' as understood by the anti-capitalist movement, is not merely mobility in various economic spheres. It is a political project involving the roll-back of protection and welfare for workers in advanced capitalist economies as well as the increasing entrenchment of destructive IMF programmes in developing economies. Replacing that naughty g-word, which makes it sound natural and inevitable, with the proper noun 'neoliberalism' or even 'capitalism' is part of the ideological struggle of the anticapitalist movement.

That's it. It's been a very long essay and, frankly, if you're not tired of it by now, you should be. Your thoughts in the comments boxes please. I will shamelessly rip them off in an upcoming debate I'm attending.