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Economic Globalisation and Erosion of Power of States Essay

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Updated: Sep 10th, 2021

Introduction

Globalization is a relatively new concept. As little as ten years ago, the term was hardly used. Today globalization is being discussed everywhere; by businessmen, politicians, economists, academics, right through to the average person on the street (Weiss, 1997, pp. 3-27). It affects all aspects of our modern lives, from what we eat, to what we watch on telly, to the type and amount of crime we experience and to how much money we have in the bank. In this essay I intend to briefly define globalization, explain the term nation state, describe how globalization is manifesting itself and discuss from three differing standpoints the impact that globalization is having in relation to the autonomy and sovereignty of the nation state.

Although globalization can be perceived in many different ways, it is essentially the term used to describe the way in which all manner of people’s lives are crossing national boundaries at an ever increasing speed and transforming the way in which we live. Different cultures are becoming increasingly accessible and interconnected. Modern technology now enables us to access information and communicate with people from the other side of the world virtually instantaneously. News is published and broadcast to us about distant places around the globe. Pollution in one country can affect the environment of another. Fluctuations in the financial market of one nation can affect the value of currency in another. Globalization describes the growing interconnectedness of the world. It is a multi-dimensional process, which encompasses economic, political and cultural aspects. It is important however, to understand that the affects of globalisation are geographically uneven due to the enormous inequality and imbalance of power between rich nation states and poor (Walker, 2006, p. 375).

Discussion

The system of states commonly known as the ‘Westphalian system’ (due to it’s origins in the signing of the ‘Peace of Westphalia’ treaty (1648), when Europe’s monarchs all agreed to recognize each other’s rights to rule their own territories without outside interference) is now a worldwide practice of modern political life these states, which have specifically defined borders and have exclusive authority and supreme jurisdiction over political, social and economic activity within its borders (sovereignty), are known as nation states. There is no doubt that economics has played a significant role in international politics throughout history. The desire for control over economic resources has been part of struggles among political groups for along time. One can say that economic factors have always been essential to the affairs of nations. The interaction between economic and political factors has been transformed in fundamental ways over the past few centuries and decades. How scholars have come to understand these changes has given rise to different theoretical and ‘scientific’ perspectives on international relations, and new fields of study being pursued, such as international political economy. I will begin by giving a liberal account of the relationship between the economy, the state and power (Robinson, 2006, pp. 22-28).

The frequent disputes regarding the interference of the EU in British domestic affairs, demonstrates how feelings run high when it comes to sovereignty and the right to self-governance, and typifies the way in which nation states jealously guard and protect their sovereignty. The impact of globalization on the sovereignty and autonomy of nation states is a hotly debated issue with greatly differing viewpoints from globalists, traditionalists and transformationalists. What is not argued is that there has been a vast expansion of international governance at regional and global levels. There has been immense growth of intergovernmental organizations, such as the International Monetary Fund (IMF) and the World Health Organization (WHO), including Non Governmental Organizations (NGO’s) such as Greenpeace and the World wildlife fund. These organizations have been created to deal with matters that transcend national borders and represent the interests of a huge variety of causes from the environment, to the worldwide drug problem, to child welfare. In addition to these formal bodies, we have seen a dramatic increase in the formation of informal networks which link businesses and an array of various communities, from drug cartels to central bankers, to pressure groups, across national boundaries. This has facilitated the transnationalization of politics and the growth of new centres of authority above, below and alongside the nation state, e.g. the UK government may be subject to the actions of other bodies such as the EU, the UN, and the WHO, the NATO, the Scottish and Welsh Assemblies and multi-national corporations. Alongside global polity is a developing system of a transnational civil society, which represents the collective activity of all NGO’s collaborating across borders to bring their own interests to the political arena and bring pressure to bear on governments to be accountable for their activities. Governments and their citizens have become enmeshed in a new and evolving system of global politics and multi layered global governance (Kanter, 2005, pp. 117-28).

Analysis

Globalists argue that the sovereignty and autonomy of the nation state has been eroded so much by the interconnectedness of world organizations and their politics, that national boundaries of nation states are becoming insignificant. They see the emergence of a new global structure that will control and determine how countries, organizations and people operate, as inevitable. They do not see any opportunity for nation states to exercise agency in the intervention of what they see as the emergence of a new world capitalist order. They see the US intervention (with the help of the IMF) of the East Asian financial crisis of 1997-98, which prevented a global recession, as an example of the existing system of global governance providing a structure for the promotion and legitimisation of a global capitalist society. Pessimistic globalists see the new global governance system as automatically privileging the interests of global capital at the expense of the welfare of nations, their people and the environment. Optimistic globalists see globalization as having the potential to raise living standards, improve quality of life and unify people (Hart, 2005, pp. 65-78).

The traditionalist viewpoint is from the other end of the spectrum and suggests that the impact of globalization on the sovereignty and autonomy of the nation state has been grossly exaggerated. They believe that most economic, political and social activity is regional, citing the EU as an example of regionalization rather than globalization. They see the sovereignty and autonomy of nation states as being relatively intact and believe that nation states are still the masters of their own destiny with plenty of scope to determine their own political and economic priorities. Central to the traditionalist argument is the belief in a hierarchical system of global governance (hegemonic governance or governance by the most powerful nations), with the US intervention of the East Asian crisis demonstrating this perfectly. It is not that the great powers like the US directly legislate or dictate policy, rather that they have the ability to reject or sidestep the decisions of international bodies with relative impunity that gives them enormous influence over global affairs. Traditionalists see globalization as being tantamount to westernisation or more specifically, Americanization (Hart, 2006, pp. 457-76).

Transformationalists agree with the traditionalists that the nation state remains militarily, politically and economically powerful, but do not underestimate the potential impact that globalization can have on it’s sovereignty and autonomy. They believe that the consequences of globalization are complex, diverse and unpredictable. Along with globalists, they believe that the autonomy of nation states is structurally constrained by transnational powers that reflect the interests of commercially driven corporations, either because of their pursuit of interests for their own gains, or because of the dominant need to remain competitive in the global market. However, they do not agree that the consequences of global interconnectedness are inevitable. They believe that rather than nation states losing their sovereignty and autonomy, they will have to adjust and adapt to the changing shape of power, jurisdiction and authority, but will still have significant scope for agency to shape the conduct and context of global governance whilst retaining the ability to legislate for the interests of their own citizens. The transformationalists’ slant on the management of the East Asian Crisis indicates the ability of global economic governance to maintain the stability of the world economy and demonstrates the shifting balance of power between global markets and nation states (Greiderv, 1995, pp. 11-15).

Globalization is a complex issue, open to a variety of interpretations. The way in which the significance of the management of the East Asian crisis was interpreted to suit the agendas of all three viewpoints, demonstrates this clearly. From my viewpoint the structural inevitability of the globalist interpretation is too extreme and the traditionalist argument underestimates the impact that globalisation is having on the sovereignty and autonomy of the nation state. The Westphalia system of states is being superseded by a system of multi-layered governance and authority is organized on a varying scale of local regional and global governance. The contemporary system of states is best described as a heterarchy. National boundaries are still important but no longer define political containers and communities. Sovereignty is being redefined but not necessarily eroded. States now use sovereignty more as a bargaining tool rather than a legal claim to supreme power (Hart, 2006, pp. 457-76). The states autonomy and capacity for self governance is being compromised by the necessity to engage in multilateral collaboration with transnational bodies of authority, in order to serve the best interests of its citizens. To take the UK as an example however, far from the nation state being in decline, one could argue that the British government is more powerful today in terms of its capacity to raise taxes, intervene in its citizens’ lives and threaten its enemies with nuclear obliteration, than ever before. What is clear is that we are living in a diverse ‘risk society’, in an age of change and uncertainty. From this standpoint, it is apparent that my views closely adhere to those of the transformationalists.’(Julius, 2006, pp. 453-68).

All thinkers, however, believed that sovereignty should be located in a determinant body. Whoever or whatever this body is, it is agreed upon that this body should be the ultimate authority. This traditional doctrine of sovereignty has come under fire in today’s age; from those who point to its absolutist past, to those who claim it is no longer applicable to modern governments which operate according to a set of checks and balances. Even in Britain – with a parliament that enjoys status as the single legislature, with power to create, change and repeal any laws due to an unwritten constitution – it can still be argued that sovereignty does not lie within a single body or institution. As a European Union member, Britain is subject to European law and subject to the jurisdiction of the European Court of Justice in Luxembourg, which has, in the past, overruled British legislation and declared it unlawful. Political sovereignty is far from complete, as parliament is constrained in its actions by a number of institutions, such as the electorate, pressure groups, major trading partners and the like. (Kanter, 2005, pp. 117-28).

While many can rightfully claim the notion of internal sovereignty is irrelevant, external sovereignty is an issue which is increasingly brought to the forefront in world affairs. During the recent invasion of Iraq, the Iraqi regime repeatedly argued that its external sovereignty was being illegitimately destroyed, and yet the United States claimed it was acting in such a manner in order to defend its own sovereignty from the threat of chemical warfare. A people are only able to guide their own destiny if their nation is independent and free from outside interference, and so calls to defend national sovereignty are met with fervour and passion (Julius, 2006, pp. 453-68).

Conclusion

However, while external sovereignty is extremely relevant in today’s violent world, critics claim it can be used as an excuse for the suppression of a nation’s people while foreign involvement is held back, such as the Iraqi regime’s crimes against its own population. It can also lead to chaos and anarchy as nations use the guise of sovereignty to further their interests – the United States has recently attacked Afghanistan and Iraq under the pretext of defending itself and its external sovereignty (Hart, 2005, pp. 65-78).

References

  1. Hart, Jeffrey A. and Aseem Prakash, “The Decline of ‘Embedded Liberalism’ and the Rearticulation of the Keynesian Welfare State,” (with Aseem Prakash) New Political Economy, 2, 2005, 65-78.
  2. Hart, Jeffrey A. and Aseem Prakash, “Strategic Trade and Investment Policies: Implications for the Study of International Political Economy,” The World Economy, 20, 2006, 457-476.
  3. Julius, DeAnn, “Globalization and Stakeholder Conflicts: A Corporate Perspective,” International Affairs, 73, 2006, 453-468.
  4. Walker, G.R. and M.A. Fox, “Globalization: An Analytical Framework,” Indiana Journal of Global Legal Studies, 3, 2006, 375-412.
  5. Robinson, William I. Promoting Polyarchy: Globalization, US Intervention, and Hegemony. London, New York: Cambridge University Press, 2006, 22-28.
  6. Weiss, Linda. Globalization and the Myth of the Powerless State. New Left Review, 1997, 225:3-27.
  7. Kanter, Rosabeth Moss. World Class: Thriving Locally in the Global Economy.
  8. New York: Touchstone, 2005, 117-28.
  9. Greider, William. One World, Ready or Not: The Manic Logic of Global Capitalism. New York: Simon and Schuster, 1997, 11-15.
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