Does Globalisation necessarily mean the end of the "nation-state"?
Does Globalisation necessarily mean the end of the "nation-state"?
Globalization is certainly the buzzword of the new millennium as a term that we hear, see, or look everywhere in many subjects. It is an idea whose time has come, yet it lacks precise definition.1 Definitions of globalization are various since there is no certain and exact meaning of it. Thus, it attracts attention of different levels and has been questioned and debated. The debates have raised different school of thoughts whereas they argue how globalization should be best-conceptualized. Although a thesis refers it as 'a necessary myth',2 I believe that globalization happens. I tend to refer it as a set of processes.
There are many aspects covered by globalization thus it undoubtedly is an important issue in International Political Economy (IPE) as well. When it comes to the world economy, globalization has made a vast change when the world becomes more borderless. The increasing transactions across the border of nation-states with a borderless trade and market, the eroded autonomy of nation-state's government to control over economy and political agenda, the emerging economic integration which has a possibility in becoming a supranational institution are just a few examples of what makes globalization becomes the most interesting yet the most ubiquitously debated issue today. The phenomenon has risen the question of what the role of nation-state will eventually be in the future if the world becomes more 'globalized'. It has such raised questioned whether or not globalization will be the phenomenon that will end the existence of nation-state.
Does globalization necessarily mean the end of nation-state? I tend to believe that globalization does not necessarily mean the end of nation states. Main arguments of my answer are based on the three issues of which they have arisen in the process in economic globalization. They would be the growing international movement of Multinational Companies (MNCs), the emerging regional integration, and the tendency of international trading regime. Meanwhile, an approach of Realists is also used to support and in defending my argument. It should be noted that, in term of IPE, this essay only emphasizes on economic globalization and how it has influenced the contemporary world politics within its reconfiguration. In supporting my arguments, debates of globalization surrounding the topic are also mentioned.
First of all, we have to know what globalization is. Scholte wrote that globalization is a distinctive and significant feature of recent world history.3 As a phenomenon, globalization covers an extensive range of aspects such as economic, politics, social and cultural. There are many essential definitions covering the idea of globalization. What David Held stated perhaps links to the term of economic globalization in this case, globalization is fundamentally a spatial phenomenon; it lies on a spectrum with the local and national at one end and the (supranational) regional and global at the other. ...It is about the interconnections between different regions of the world - from the cultural to the criminal, the financial to the environmental - and the ways in which they change over time."4 International flows of people, activity and interaction, goods, information and technology, communication, and cooperation indicate the process of globalization.
In term of economic globalization, some would say that, today, fewer and fewer activities are oriented towards local - or even national - markets; more and more have meaning only in regional or a global context.5. Bhagwati described that Economic globalization constitutes integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short-term capital flows, international flows of workers, and humanity generally, and flows of technology.6 Economic globalization seems to be the most debated issue since it has not only caused such a vast change in economic field but also in other aspects when the world becomes more borderless. In essence, Activities such as the accelerating international flows of goods, capital, people, and services; international free trade and free market; international and or regional organizations, institutions, and cooperations; international trade and finance organizations; and increasing of Multinational Companies (MNCs) across borders - which some has also been transformed into Transnational Companies (TNCs), somewhat denote the contemporary economic activities. For example, we can find tropical fruits sold in Saint Martin Indoor Market in Birmingham even in winter time because it has been imported as a benefit of the international flows of goods. The contemporary trend of globalization has made it possible for foreign people in a country competing with native ones. The global economy, characterized by massive transnational flows of capital, labour, and dominated by Multinational Companies, looms large in this process.7
On the other hand, political globalization is what happens in world politics as a result of the increasing economic activities within that of multiple processes. In this process, world politics has experienced a reconfiguration whereas there are other actors besides nation states in world politics that should be acknowledged; actors such as MNCs, international and or regional organizations, International Non-Governmental Organizations, and international pressure groups. The reconfiguring shape of contemporary world politics brought up a question about the role of nation states in political activities; whether or not these changes will finish the state, or even its sovereignty ...
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On the other hand, political globalization is what happens in world politics as a result of the increasing economic activities within that of multiple processes. In this process, world politics has experienced a reconfiguration whereas there are other actors besides nation states in world politics that should be acknowledged; actors such as MNCs, international and or regional organizations, International Non-Governmental Organizations, and international pressure groups. The reconfiguring shape of contemporary world politics brought up a question about the role of nation states in political activities; whether or not these changes will finish the state, or even its sovereignty and legitimacy. Such question brought up debates surrounding it within which they are most debated by the globalists and the sceptics. The foremost debate is whether or not globalization will finish the end of nation states and its sovereignty.
Among other things, political globalization involves economic globalization. Basically, politics and economics are inseparable within social relations whereas politics (the acquisition, distribution, and exercise of power) is in integral to economics (the production, exchange, and consumption of resources), and at the same time economics is integral to politics, helping to determine where power lies and how it is exercised.8 Political Economy requires analysis of both views - political and economy - in which politics shapes the economy, and of the way in which the economy shapes politics.9 Thus, the reason concerning why globalization does not mean the end of nation state will be discussed using the approach of IPE wherein globalization is a matter of global political econmy.
It is assumed that globalization reflected the neoliberalism theory which builds on the conviction of classical liberalism that market forces will bring prosperity, liberty, democracy, and peace to the whole of humankind.10 Neoliberals advocate the removal of state controls on prices, wages, and foreign exchange rates.11 Such processes in economic globalization challenge both the sovereignty and legitimacy of states. They have challenged the political structure such as who plays the key role - the nation state has not been the only important actor, and what situation influences the decision making process - international institution or a multilateral trade agreement has taken part in influencing it. The globalist thesis fully agrees to this assumption. In contrast, a nation states remains an important actor in global political economy. Its role is, indeed, experiencing a reconfiguration, while its government, as sceptists argue, is not the passive victims of internationalization but, on the contrary, its primary architects.12
Before moving much further, it is important to give an explanation of a simple definition of what the term nation-state means. We all know that nation-state is generally defined as a country by which it is ruled under one government. Specifically, the nation state is constituted by the government assuming a legal and moral right to exercise sole jurisdiction, supported by force in the last resort, over a particular territory and its citizens. This involves institutions for managing domestic and foreign affairs.13 Some also refer nation-state as modern-state as it's defined in Elmer Social Science Dictionary that nation-state is Modern state in which a government has sovereign power within a defined territorial area, and the mass of the population are citizens14. It is said that the power and role of nation states in a globalizing world, the capacity of nation states to shape domestic and world, has already undermined, and it would feasibly do so further. That may be the reason why globalization is often believed as the phenomenon ending nation states. But it is wiser to say that they are experiencing a transformation in their structures and processes.
In addition, 'Sovereignty' in it modern form is a highly distinctive political claim which is to exclusive control of a definite territory15 - within which the territory includes control over political and economic activities within their border - and the claim to sovereignty is the entitlement to rule over a bounded territory from state autonomy - the actual power the nation states possesses to articulate and achieve policy goals independently.16
The increasing process in economics globalization has been assumed as something that undermines the role of nation states thus it will finish the nation states. Holton argues that nation-state can not be regarded as being in decline or overrun by globalization and this is in large measure because global capital is mostly not of an anarchic variety and still requires state functions to be performed17 because a nation state is the actor which has made globalization to happen, and in order to maintain such a global world, nation states have formed the regulation to maintain it.
My first argument is about the growing international movement of MNCs. The mobility of MNCs across borders has had impact to economic activity in the contemporary world and is considered to influence nation states' economic and political policies as well as the society. For instance, many people in the world today highly use the cellular phone; it has become a vital need with a vital role in order to function daily activities. One of the successful leading companies providing cellular phone is a Japanese brand, Nokia. Brilliantly, this company uses such a slogan that reflects the idea of globalization that is "Connecting People". Even in a third world country such as Indonesia, Nokia's cellular phone has become the most commercial brand among the people.
The globalist thesis of globalization analyzes that MNCs are the new important actor in world politics, thus it undermines the role of nation state. As Ohmae stated that in today's more competitive world, nation states no longer posses the seemingly bottomless well of resources from which people used to draw with impunity to fund their ambitions... Are these nation states - not withstanding the obvious and important role they play in world affairs - really the primary actors in today's global economy?".18
In this respect, we must acknowledge that some nation states are home base for MNCs. While shareholdings in various MNCs indeed have happened to be transnational, yet they headquarters place within a single nation. Thus, some amount of their profit are feasibly expected to be sent back to the state of the company origin., and they also hold yearly shareholders' meetings in that nation as well as develop close relations with the nation state's government in which they are domiciled. They also depend on state structures to guarantee stable property rights or at least predictability in determining the rules of the game under which they operate.19 In short, the role and the existence of nation states are still important, even for MNCs which has been talked as another important actors in economic globalization. To conclude this argument, Hirst and Thompson stated that "International business are still largely confined to their home territory in terms of their overall activity".20
Secondly, it is about the emerging regional integration. Simply put, 'regionalism' is development of institutionalized cooperation among states and other actors of regional contiguity as a feature of global politics,21; and 'integration' is creation of a new polity bringing together a number of different constituent parts (member states).22 Since the Second World War, global politics have witnessed the emergence of a new political phenomenon that is the cooperation and integration of states on regional scale. The prime example among these regional groupings is the European Union (EU).23 Therefore, to explain my position, I use the EU as the case study in this point.
In the EU, supranational institutions and national governments share political authority, and where market forces play an important role in the setting of standards and regulations.24 In the case of regional organization, the European Union (EU) is often referred as a perfect example for this - where closer integration in terms of market and political decisions shows how far transnational relations and institutions can be created in one form25. The EU has achieved substantial progresses towards the establishment of global governance, with a single market and a single currency creating less trade barriers and a competitive business and market environment. Externally, economic integration has led to a common trade policy that has made the EU a key player in international negotiation.26 This is true. However, the EU has not been succeeded in its political integration in which member states are still put their national interests above others. This means that political integration has somewhat lagged behind, and efforts at creating a common foreign and security policy have tended to promise more than they were able to deliver.27 For instance, in term of Common Foreign Policy, it should be remember that there are differences of member states' foreign policy towards United States' current invasion to Iraq. Britain as a member of the EU supported US by joining as the alliance of US in this invasion and sending its military forces to be part of the US alliance troops. Another example is that Britain remains undecided towards the singe currency of EU. If we look back, the basic motivation regarding why Britain joined the European Community (EC) - which now has formed to be the EU - is based on its national interests, which if Britain did not join the EC, then it would be left out in its own region in term of economic affairs.28 And also, its 'so-called special relationship' with US made Britain being under pressure since the former US President, Kennedy, personally stressed that it would prefer to choose the EC over Britain if Britain would not want to join.29
The tendency of international trading regime, which is another process within economic globalization, is my third argument. An impart dimension of globalization has been the establishment of worldwide regimes to foster rule-governed within the international system,30in which one of those regimes is international trading regime. Global trade and finance have spread unevenly between different regions and different circles of people. In the contemporary world, there is an International trade and finance organization named as World Trade Organization (WTO) that was formed to liberalize the world market. WTO is a permanent institution to replace the provisional GATT, with a wider agenda, covering services, intellectual property, and investment issues as well as merchandise trade, and has greater powers of enforcement through its dispute settlement mechanism.31 Again, in arguing my answer that nation states remain important in economic globalizations, WTO is the case study to explain it.
If we think again, WTO was formed by nation states with regulations that was formulated by nation states altogether. Although it was formed for the purpose of free trade, basically, is to open another chance in obtaining each national interest. Fundamentally, nation states bring their main concerns and area of its interests of its national interests to the meeting and brought it up in it to be negotiated. If their negotiation succeeds, all member countries have to implement it. That way, they gain a broader market for their area of interests. Countries such as US and UK, for instance, if their main area of interest is services, so they will attempt to goal it in the negotiation. And if they succeeds, they get a broader market for their flows of services. In essence, nation states will always try to maintain and protect their national interest.
Unfortunately, such case above does not happen easily to the Third World Countries because their voices are never taken. That is why they still struggle until today. WTO, with its purpose to liberalize the international economy, has had serious effects in Asia and in emerging financial markets, leading to economic crisis, unemployment, and impoverishment.32 The South East Asian monetary crisis was as a result of the liberalization since every single member of WTO has to implement the result of agreements although not all nation states have enough capabilities for it. Third world countries such as Indonesia had difficulties in implementing it, thus it has led Indonesia to a more complicated multi crisis.
Furthermore, to support my argument, I will use the approach of Realists that the states is assumed to aggregate and reflect the sum of the interests of the members of civil society,33 while a state interested in building its power will see the import of capital as a rational policy so long as it does not become too dependant on foreign funding, or else become weighed down with foreign debts.34 This means that any process in economics and political globalization, the main purpose of the nation states are clearly its national interests. We can see the case of Britain in the EU, for instance. While, unfortunately, in the case of the Third world countries in the WTO, they have become too dependent on foreing funding. It is because of the limitation of their capabilities. Therefore, they face a problem considering foreign debts.
For example, the limitation of capability of Indonesia makes it difficult for them to implement the trade agreement. Thus, Indonesia has become too dependant on foreign funding, and has suffered as a result of globalization since its industry does not possess a comparative advantage in raw materials, yet it is forced to try to keep labor costs at a minimum in order to compete globally. The case of labour in Nike factories in Indonesia does fit this matter. As John Pilger reported, "In these factories are thousands of mostly young women working for the equivalent of 72 pence per day. Nike workers get about 4% of the retail price of the shoes they make - not enough to buy the laces. Still, they count themselves lucky: they have jobs."35 It is devastating to know about what globalization has had impact in the country. But, actually, what really happens in Indonesia in term of globalization is more like what happens in the world, that globalization is not equally tasted by every individual - the rich becomes richer while the poor becomes poorer. At one time in the capital city, Jakarta, while all items in a GUCCI store - a brand that has successfully been famous in the country as a result of globalization - were sold out, the headline news on newspapers and televisions was about a suicide of a poor family because they could no longer face the distressing poverty. It is a case of disparity of globalization.
The answer to solve such a problem like this is offered by Realists that in the case of foreign direct investments in a country, it will be rational to regulate and restrict the activities of foreign companies, so as to make them serve 'the national interest'.36
Finally, this essay has provided the answer to the question about wheter or not globalization necessarily mean the end of nation state. The answer is clear that it does not. By analyzing three important process in Economics globalization - which are the growing international movement of MNCs; the emerging regional integration whereas emphasizes on the EU; and the tendency of international trading regime with the WTO - and using a Realist approach, I have explained my argument. To conclude, Economic globalization with its global market is on the process to expand, but it does not necessarily mean that people are subject to the phenomenon, thus the role of nation states is not finished. Because, one of the key issues in the implementation of global regulatory arrangements is the role of nation states in general and in particular the influence of the powerful nation states. Their role may be reconfigured in facing other important actors to be considered, yet it remains to have such significant roles in governing the contemporary world economy.
David Held and Anthony McGrew, David Goldblatt and Jonathan Perraton, Global Transformations: Politics, Economics, and Culture (Polity Press, 1999) p. 1.
2 Discussed in detail in Paul Hirst and Grahame Thompson, Globalization in Question, (Cambridge: Polity Press, 1999), chapter 1.
3 Jan Aart Scholte, Globalization: A Critical Introduction, (London: Macmillan Press Ltd, 2000), p. 3. Try also ch. 1 - 4.
4 As stated by David Held in an intewrview by Montserrat Guibernau, "Globalization, Cosmopolitanism, and Democracy: An Interview", http://www.polity.co.uk/global/held.htm
5 Peter Dicken, Global Shift: Reshaping the Global Economic Map in the 21st Century, (London: Sage Publications Ltd, 2003), p. 9.
6 Jagdish Bhagwati, In Defense of Globalization, (New York: Oxford University Press, 2004), p. 3.
7 Robert J. Holton, Globalization and the Nation-State, (New York: Palgrave Publishers, 1998), p. 1
8 Jan Aart Scholte, "Global Trade and Finance", in John Baylis and Steve Smith (eds), The Globalization of World Politics: An Introduction to International Relations (New York: Oxford University Press, 2005), p. 600.
9 Stephen Gill and David Law, The Global Political Economy: Perspectives, Problems, and Policies, (Baltimore: The John Hopkins University Press, 1988), p. xviii.
0 Scholte, p. 34.
1 Ibid.
2 Held and McGrew, Goldblatt and Perraton, p. 6. Try also Hirst and Thompson, p. 270
3 Cohen, R & Kennedy P., Global Sociology, (Palgrave, 2002), p. 78.
4 Elmer Social Science Dictionary, http://www.elissetche.org/dico/index.htm
5 Hirst and Thompson, p. 256.
6 Held and McGrew, Goldblatt and Perraton, p. 29
7 Holton, p. 155.
8 Kenichi Ohmae, The End of The Nation State, (London: HarperCollins Publishers, 1996), p. 2
9 Holton, p. 83.
20 Hirst and Thompson, p. 96
21 Christiansen, "European Integration and Regional Cooperation", in Baylis and Smith, p. 580.
22 Ibid.
23 Ibid.
24 Ibid, p. 595.
25
26 Thomas Christiansen, "European Integration and Regional Cooperation", in Baylis and Smith, p. 595.
27 Ibid.
28 Analysing based on the book: Colin Pilkington, Britain in the European Union today, (Manchester: Manchester University Press, 2001).
29 Ibid,
30 Richard Little, "International Regimes", in John Baylis and Steve Smith (eds), The Globalization of World Politics: An Introduction to International Relations (New York: Oxford University Press, 2005), p. 370.
31 Scholte, in Baylis and Smith (eds), p. 601.
32 Ibid.
33 Gill and Law, p. 25.
34 Stephen Gill and David Law, The Global Political Economy: Perspectives, Problems, and Policies, (Baltimore: The John Hopkins University Press, 1988), p. 29.
35 As video of this report has been watched in the IPE class, the complete report can be found in: John Pilger, "Globalisation in Indonesia: Spoils of a Massacre", Guardian Weekend 14 July 2001, http://www.inminds.co.uk/globalisation-in-indonesia.html
36 Gill and Law, p. 29.
