Politics, Power and Society

Professor Tony Heron Derwent College D/139 tony.heron@york.ac.uk Ext. 3554 Feedback & Guidance Hours: Tuesday 1-2 & Wednesday 10-11

Globalisation and the state

Has globalisation ended the rise of the nation-state? Where has state power gone to? And can and is anything being done about it?

Has globalisation ended the rise of the nation-state?

http://www.youtube.com/watch?v=IF_7BGdo0RE

The 1992 ERM crisis the state versus the market?

Exchange Rate Mechanism created in 1979 to promote exchange rate stability among EU countries UK joins in 1990, part of a strategy to signal to investors its commitment to fighting inflation i.e. macroeconomic credibility UK enters at a relatively high rate of exchange, requiring a supportive (high)interest rate policy Early 1992 in the midst of recession investors began to doubt the UKs ability to sustain this policy and bet on devaluation UK first attempted to defend sterling but later left the ERM succumbing to the speculative expectations of international finance

What is globalisation?

The widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life . David Held et al. 1996.

What is the nation-state and where does its power come?

Defining characteristics
Unified set of institutions Territory and distinct society Enforcement of collectively binding decisions Monopoly of legitimate violence Seeking sovereignty Existence of public realm Deciding citizenship and control entry

Associated characteristics Common interests Legitimacy among significant groups Bureaucracy and taxation powers Constitution and legal framework Sovereignty is recognised by other states (reciprocity)

Perspectives on globalisation
Hyperglobalism Traditional nation states have become unnatural, even impossible business units in a global economy Kenneth Ohmae 1995. The impersonal forces of world marketsare now more powerful than the states to whom ultimate political authority over society and economy is supposed to belong Susan Strange 1996.

Scepticism Heightened levels of internationalisation rather than globalisation Global economy less integrated that during the classical Gold Standard period Regionalisation between triad rather than globalisation Marginalisation of many developing countries Globalisation a necessary myth

Transformationalism
Globalization is a central driving force behind rapid social, political and economic change, reshaping modern societies and world order. Globalisation is an essentially contingent process replete with contradictions (Held et al. 1996) Globalisation a long-term, but uneven and inherently uncertain, historical process. Existence of a single global system not evidence of global convergence or arrival of single world society

Globalisation and the state?

Important to distinguish between the globalisation of politics and the politics of globalisation (Hay 2008)
A Global Race?

Globalisation and the retreat of the state

UK Public spending as a proportion of GDP (source: whitehallwatch.org)

A race to the bottom?

So whats going on?

Figures may hide important trends e.g. demographic changes or redistribution of government spending But important theoretical link between economic openness and high rates of government spending Low wages poor predictor of the destination of FDI

Taking globalisation seriously

Debates about globalisation and the state often conflate three things that, analytically speaking, are best kept separate:
a) Structural dimension (impact of globalisation on autonomy of the state) b) Ideational dimension (perceived impact of globalisation on autonomy of the state) c) Strategic dimension (intentional deployment of ideas about globalisation for political purposes e.g. welfare retrenchment, low corporation tax rates etc..)

Has globalisation ended the rise of the nation-state?

No compelling evidence to suggest this is the case Though the enmeshment of states in global trade, investment and financial networks has perhaps raised the costs of policy options in certain areas In practice, hard (but not impossible) to disentangle structural, ideational and strategic aspects of globalisation Most tangible challenge to the states power not from markets or technology but from the emergence of a system of global governance institutions.