To what extent is globalization undermining the nation state?

To what extent is globalization undermining the nation state?

To what extent is globalization undermining the nation state?

This essay is going to argue that globalization is occurring to certain extent and that it is not fully undermining the nation state and its autonomy.  The paper will be divided into two main sections. The first section is going to look at the definition of the globalization. It will state that globalization is occurring as the world is “shrinking” due to innovation in technology and communication. It will also define the contemporary state which will be identified with the nation-state and explain the division of the world into North and South. The second section will discuss how globalization affects the global as well as domestic economy. It will look at the capital flow, neo-liberal policies, Foreign Direct Investment, mobility of capital, Multi National Corporations and its footloose quality. It will also analyse soft and hard geopolitics, interventions and it will consider the emergence of European Union as a result of regionalisation rather than a result of globalisation and European Union will also be compared to the United Nations. Environmentalist issues in terms of globalisation will be also examined alongside with fundamentalist movements.

Globalization can be defined in many ways. Many globalist enthusiasts compare the present day situation to the 18th century revolutions in industry and to the changes of human society. (Mann, 1997) Most of the commentators describe it as a process of eliminating distance with the technological breakthrough. (Fulcher, 2000)

Constant development of new methods of communication as well as new ways of transport is making the world smaller. As Allen and Hamnett say, “the world is shrinking” (1995, pp.1) New infrastructure was created recently as planes allow us to travel around the globe in less than a day. Data is transferred instantaneously using modern information systems. (Mann, 1997) Telephones alongside with telegraphs were the first devices that made the distance a relative term in the 19th century. Even before that, inventions such as compass allowed the discovery of the new world. (Fulcher, 2000, pp. 525)

Giddens summarises this phenomena of globalization in a well know definition as:

… the intensification of world-wide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa. (cited in Fulcher, 2000, pp. 524)

The constant development and globalization, that is taking place to certain extend, are affecting the contemporary state, which was established in recent history after the collapse of European empires and termination of the Soviet Union. The so called nation-state is defined by sovereignty exercised over its territory. It is based on the fact that citizens belong to one nation - they speak one language and share one cultural heritage. (Fulcher, 2000)

Many experts consider the nation-state to be loosing its sovereignty and becoming powerless as a result of globalization. As one of many, Castells states, that “globalization, in its different dimensions, undermines the autonomy and decision-making power of the nation-state”. (cited in Fulcher, 2000, pp. 523)

Mann argues that people in the society authorise four main types of power arrangements: “ideological (or cultural, if you prefer); economic; military; and political”. Closer elaboration of them is needed in order to shows to what extent are the claims about undermining the nation-state true. (2001, pp. 52)

The fact that has to be borne in mind during this discussion is the division of the otherwise integrated world into two zones - North and South. This division is based on the wealth of the countries rather than on the geographical location. Most of the impoverished countries are excluded from the integration process and the majority of the international investment is concentrated in the North. This causes the increase in the economic inequalities between developed countries and developing countries from the South. Now it seems that a dualism is present in the world but the opposite is the truth. Even in the history, globalization was multiple. Different nations had different opinions about matters and when they came together, it was not rare that a conflict was created. (Mann, 2001)

When the economic power of the nation-state is examined, few facts come up. The capital flow has not been changed drastically during the 20th century. The constant level of export suggests that globalization has no effect on the trade. Also the case of the faltering trend of greater integration proposes the low influence of globalization. (Weiss, 1997)

On the other hand, the global market forces the state to adopt neo-liberal policies and therefore the government's weight in the society is lessened. In the transnational economy privatisation is preferred and state planning is abolished in 3rd world countries even though it was considerer to be a good strategy before. This still does not mean that states are absolutely undermined. In some respect, the position of national institutions is strengthened due to lack of strong international financial regulations. (Fulcher, 2000)

As a clear evidence of actual globalization, Foreign Direct Investment (FDI) and mobility of capital are usually presented. Considering aggregate FDI figures, a conclusion that the interconnection of the manufacturing production is increasing might be reached. This is a bit misleading as the non-productive assets, long term investment as well as other factors are not taken into account. (Weiss, 1997)

“The footloose quality of multinational corporations (MNCs)” is considered to be one of the greatest threats to the nation-state. Common knowledge tells us that MNCs are driven by cost-reduction but reality shows a different conclusion. At the end of 20th century, 81% of the world's FDI stock was located in the Northern countries where the wages and taxation are higher. This is cause mostly by the ability to invest in new technologies, to introduce new methods into production and also the fact, that home basis still plays an important role because of domestic linkages. (Weiss, 1997)

According to Susan Strange, the globalisation is not the reason why MNCs exist. They were present for a longer period of time. What actually globalization causes is the fact, that markets are becoming multinational and the products significant for certain domestic markets are exported worldwide on multinational markets. (1995)

Interesting point is that there are still industries in some of the Northern countries that are not subject of transnational trade even though they involve noticeable transnational networks. Until recently, health care in USA was subject of extensive bureaucracies. (Mann, 1997)

When considering military power of the nation-state, globalization caused, for the first time ever in the reality, that the war is irrational and considered to be the last resort. It does not completely disappear as human beings are irrational but it is mostly reduced to the countries that belong to the South. These states tend to resist the “ostracizing imperialism”. (Mann, 2001, pp. 57-58)

Warfare between North and South might be also caused be the greedy nature of Northern states and their intervention in the South in order to keep the development of southern states behind the North. Actions such as taking sides in local conflicts, providing any kind of support against regional enemies or interference on market create tension in the area. (Mann, 2001)

Even though the idea, that nation-states are undermined by globalization, trends in the reality are significantly various. Emergence of the European Union is an example of regionalism rather than globalization. Weaker states transferred some of its political powers onto stronger states within the region. (Mann, 2001)

Even in 17th century, political thinker Thomas Hobbes saw, when analysing the state of nature, that on the international level, states behaves like individuals but are not equal in ability unlike human beings. He had foreseen the need of cooperation as some states are weaker than the others and need assistance in order to survive. (Heller, 1980)

Diplomacy becomes more important, “soft geopolitics” is prefers and a high level of integration is achieved. (Mann, 2001) Northern countries learned their lesson hard way when practising hard

geopolitics - they have been significantly transformed. (Mann, 1997)

United Nations tries to act as a mediator in conflicts in order to avoid warfare but also tries to act as peacekeeping force within nation-states. UN charters recognised universal human rights which are superior to national laws. In order to fulfil its mission, UN and Non-Governmental Organisations linked to the UN sometimes have to enter the country but it never does so without invitation. United Nations as an organisation is significantly depended on its member states as it does not have its own funds or military troops. (Fulcher, 2000) It differs from European Union significantly as adopted documents are not legally binding to its member states. (Kolektív autorov, 2007)

Transnational solutions are needed also when exercising political power over environmental issues. As Mann in his work suggests:

… environmental issues mainly encourage dual networks of interaction, one a potentially local/transnational civil society, the other inter-national, in the form of soft geopolitics. The former may transcend the nation-state, the latter coordinate state more tightly together, through perhaps in partially consensual terms which are not incompatible with a gradual scheme of a civil society. (1997, pp. 490-491)

It is also vital to consider the cultural differences between North and South as well as between neighbouring countries within one region. The currently most discussed question concerning cultural differences is probably fundamentalism. Fundamentalist movements “assert the priority of religious identity over national identity, of holy texts over national laws, of clerical authority over secular authority”. (Fulcher, 1997, pp. 533) Spread of such movements poses a threat to the nation-state as well as to individual citizens, as fundamentalists with strong conviction tend to commit terrorist attacks such as for example the September 11. (Fulcher, 1997; Mann, 2001)

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