poli 480.pdf

poli 480
Globalization and the State: Four Perspectives 633 Every age has its own defi ning terms. In
this age, one of those terms is “globalization,” which conveys the widely held view that
people are living in a borderless world. Consequently, states are incapable of controlling
transnational fl ows of goods and services, and in many parts of the world, states are
collapsing. Furthermore, on a daily basis, people experience globalization as news media
broadcast reports from Australia to Zimbabwe. Th e idea of globalization challenges state
offi cials, who are respon-sible to their citizens for ensuring economic welfare and national
security. Th is refl ects the current international system in which there is no higher
authority above the state, and as a result, citizens only look to the state for the provision
and protection of their well-being. Similarly, globalization challenges scholars of
“international relations” who mostly continue to view the states as the most important
actors in the international system. If the widely held view of globalization is indeed the case,
then international relations scholars must develop new theories of world politics. People
commonly speak of the “globalization of the world econo-my. Th ey say industries of all
kinds are losing their national identity as they move around the planet for capital, markets,
labor, and tech-nology. With such international expansion, the ability of the states to control
domestic activities has been deteriorated and the state sovereignty undermined. Th e states’
management of economic policy has become more complicated with the rise of
multinational corpo-rations, the organizational form of which currently dominates world
trade. Th ese corporations are involved in the cutting edge product development for both
goods and services, and have created business structures that seem to have put them
beyond the reach of any state authority. Ardalan, Kavous. Understanding Globalization : A
Multi-Dimensional Approach, Taylor & Francis Group, 2014. ProQuest Ebook Central,
http://ebookcentral.proquest.com/lib/csun/detail.action?docID=3411322.Created from
csun on 2023-01-20 04:57:43.Copyright © 2014. Taylor & Francis Group. All rights
reserved.
Understanding Globalization64 Th e relation between globalization and the state, as any
other phenomenon, may be seen and analyzed from diff erent viewpoints and that each
viewpoint exposes a certain aspect of the phenomenon under consideration. Th is chapter
discusses four views with respect to the nature and role of globalization and state. Th e four
diff erent views should be regarded as polar ideal types. Th e work of certain authors helps
to defi ne the logically coherent form of a certain polar ideal type. But, the work of many
authors, who share more than one perspective, is located between the poles of the spectrum

defi ned by the polar ideal types. In this chapter, Sections I through IV present the four
perspec-tives, and Section V is the conclusion. I. Perspective One or Functionalist View
Advances in computer technology and communication systems are the primary forces in the
creation of a single global market. Political globalization is a process which is intrinsically
connected to the ex-pansion of markets. Economics possesses an inner logic apart from and
superior to politics. Politics is rendered almost powerless in the face of an unstoppable and
irreversible techno-economic process that destroys all governmental attempts to introduce
or reintroduce restrictive policies and regulations. Th e combination of technological
advancements and economic self-interest is the driving force behind the new phase in
world history in which the government is reduced to the epiphenomenon of the free-
market. 1 In the rise of the borderless world, brought on by the irresistible forces of free-
market, the nation-state is becoming irrelevant in the global economy. Nation-states have
already lost their role as meaningful units of participation in the global economy. Territorial
divisions are becoming increasingly less important to human societies and states have less
and less control over the process of social life within their borders. Global capital markets
drastically reduce nation-states’ ability to control exchange rates and nation-states are
vulnerable to the disci-pline imposed by economic choices made elsewhere. In the long run,
the process of political globalization will lead to the decline of territory as a meaningful
framework for understanding political and social change. No longer functioning along the
lines of discrete territorial units, the political order of the future will be determined by
economies linked together in an almost seamless global web that operates according to
free-market principles. Ardalan, Kavous. Understanding Globalization : A Multi-Dimensional
Approach, Taylor & Francis Group, 2014. ProQuest Ebook Central,
reserved.
Globalization and the State65 Computers and telecommunications have brought the
information revolution which has changed the economy. Th ese technologies have become
powerful economic forces that have done far more than speed up the industrial economy or
enrich it with new conveniences. Th e dif-ference between the old industrial economy and
the new information economy is both quantitative and qualitative. Th e world is changing
not because with the advancement of technology more work can be produced in less time
but because the economy now depends on an entirely new source of wealth; it is the
application of information and knowledge to create value. Information technologies have
created the new economy or the information economy. Th e information econo-my is diff
erent from the industrial economy in the same way that the industrial economy was diff
erent from the agricultural economy. It is notable that the change in the source of the wealth
of nations leads to the change in the politics of nations. Th e Industrial Revolution changed
the source of wealth by trans-forming rock and ore to steel and steam. At the same time, the
Industrial Revolution dramatically increased the power of the nation-state not only by
enhancing its income but also by expanding its regulatory power and the armaments
needed to control the natural resources within its territory. In the last several decades, the
information revolution has increasingly been changing the source of wealth. Th e new

source of wealth is not material; it is the application of information and knowl-edge to work
to create value. Wealth is now created largely through new information and the application
of new intellectual capital to the means of production. Th is shift in the source of wealth
poses unprecedented problems with respect to the power of governments. Th is is because
information resources are not bound to a geographic area and, there-fore, cannot be
controlled by governments. An individual embodying intellectual capital can walk through
customs offi ces anywhere in the world with nothing to declare. Th e information economy
penalizes any control of the territory and diminishes the value of the resources located
within the territory under such control. Information resources include streams of
electronic data, years of accumulated research embedded in computer memories, operating
systems in automated factories, and the intellectual capital carried in the brains of
engineers, managers, or investment bankers. In the new economy where the most precious
resource is immaterial, the economic doctrines, social structures, and political systems
which evolved in an Ardalan, Kavous. Understanding Globalization : A Multi-Dimensional
reserved.
Understanding Globalization66economy devoted to the matter become increasingly
incompatible with the new situation. Now mankind’s most important rules and customs,
and skills and talents should be directed towards uncovering, capturing, producing,
preserving, and exploiting information. Th e world needs to improve the existing models of
economics of information that sche-matizes its forms and functions. In the information
economy, the defi nition of asset is changed, the nature of wealth is transformed, a new path
to prosperity is formed, the way people make a living is changed, and who and how
manages the world aff airs is changed. Th e competition for the most up-to-date information
is totally diff erent from the competition for the best coal-fi elds. Companies or nations who
compete for the latest information are entirely diff erent from those that once competed
primarily for material resources. Th e information economy and its related institutions –
how information is produced and traded, the scope, shape, and protocol of information
markets – have impacted government policy, have set the limits of government power, and
have redefi ned sovereignty. In the information economy, competitive nations are those
who allow information to fl ow freely. Th e free fl ow of information means the free fl ow of
data, people, money, books, newspapers, and electronic media. Free markets require free
expression. Th e information revolution started shortly after the invention of the electronic
computer in 1946, by the rapid progress of computing and communications technologies.
Over the past several decades, com-puters and telecommunications have grown in effi
ciency more than a million-fold. Both technologies owe their rapid progress to microchip.
At the same time that these developments dramatically increased the computer’s power to
process and use information, they also radi-cally decentralized that power by liberating
computer users from the centralized giant mainframe. Although these developments are
crucial, they are not the same as the information economy. Th e information economy is not
in new things that are made of microchips but it is in the use of microchips to make things

out of the information resources. Computers change what people make, change how people
make it, and change how people make the equipment to make it. Information technology
and industrial technology are diff erent in kind and not just in degree. Information
technology can be pro-grammed to do the required task and can be continuously adjusted.
In industrial technology the task is adapted to fi t the technology. Industrial Ardalan,
Kavous. Understanding Globalization : A Multi-Dimensional Approach, Taylor & Francis
Group, 2014. ProQuest Ebook Central,
reserved.
Globalization and the State67technology involves manufacturing systems which are based
on high volume, long production runs, and standardized products. A change in production
runs usually takes a long time and involves shutdown of production. Information
technology, on the other hand, avoids shut-downs by allowing almost instant resetting of
specifi cations. Computers operate not only in the service sector but also the man-
ufacturing sector. Manufacturing plants now use computer hardware and software that
integrate vast amounts of information into diff erent stages of manufacturing, process vast
amounts information, and pro-vide feedback information in order to make the necessary
adjustments in the manufacturing process with minimum human intervention. Th e entire
production facility is now coordinated by computer software and communications systems
which connect and control digitally controlled machine tools. In this way, now mankind
applies his rapidly increasing knowledge to work in order to create value. Expert systems,
artifi cial intelligence programs, computer-aided design, and computer-aided manufacturing
systems are all knowl-edge-based systems that create value. Th ey are now used in major
companies to perform process planning at aircraft plants, reformat-ting international
payments at major money center banks around the world, or designing and processing
machine parts. Th ey have formed the nucleus of industrial success. As information
becomes the most important factor of production, products contain progressively less
material. Machines get smaller and factories shrink, use less energy, and require fewer
workers. Labor is substituted by information. In the leading industrialized economies,
workers work only about half as many hours a year as they did two decades ago, but the
production capacity of these economies to pro-duce wealth has grown by about twenty
times over the same period. Th at is, in the modern economy, to create value one needs to
put more information into products and services. A society’s source of wealth has a crucial
eff ect on its political and social structure. For nomads, who raised herds of animals by
moving from pasture to pasture, wealth was counted by the size of their herd. Land was not
regarded as an asset. Later, in village agriculture, land and water became forms of wealth.
Men laid down rules about the ownership of land and water, and political power shifted
from nomadic chieftains to territorial rulers. In the industrial economy, real wealth comes
from industry. Indus-trial products are machined and solid, which can be seen and touched.
Ardalan, Kavous. Understanding Globalization : A Multi-Dimensional Approach, Taylor &
Francis Group, 2014. ProQuest Ebook Central,

reserved.
Understanding Globalization68It is manufacturing that creates real value by producing real
goods for sale. Th e mercantilists emphasized three ways of increasing wealth: by
increasing the population; by mining; and by controlling international trade to increase the
infl ow of hard currency and gold, which the state could use to pay for its army. It was a
daunting task to convince the sovereign states to relinquish some of their powers over
international trade and increase the states’ own wealth. Th e current information economy
requires concessions by sovereign states far greater than those asked of the mercantilist
sovereign states. Th e notion of state sovereignty began in medieval era when kings tried to
break the power of feudal lords, city-states, the Church, and trade guilds. In modern times,
sovereignty means that power of a sovereign to act alone, without the consent of any higher
authority. In international aff airs, the ordinary decisions of a sovereign state are not
reviewable by any other state. In a modern sovereign state there are many social and
economic institutions, such as churches, universities, corporations, and volun-tary
associations, which compete with the state for power. All such institutions, even those who
are more powerful, live and act under the sovereignty of the state. Th e information
revolution has eroded the centralizing power of the state. Th e nation-state and sovereignty
will not vanish; and as a matter of fact, there will be many new sovereign nations formed.
However, the power of the state and its sovereignty vis-à-vis other institutions within
society will diminish. Information is not only power, but also wealth. It is nonmaterial and
with the help of modern technology it has become extremely mobile. It can escape
government control very easily. Bureaucratic systems of governments for controlling the fl
ow or use of information tend to destroy or waste it. Useful economic information is usually
original, innovative, timely, nuanced, precise, complex, and challenging. Gov-ernment
bureaucracies destroy all those qualities. Governments may well-govern matter but misrule
mind, i.e., intellectual capital. Govern-ment controls frustrates and demoralizes them.
Governments may be good at regulating, taxing, confi scating, and controlling real products,
assets, and businesses which can easily be seen, measured, and kept track of within their
borders. Governments do not have much controlling power over what readily move out of
reserved.
Globalization and the State69town or across the borders and are concealed inside a
human’s brain. Whereas the real economy is a very important source of government power
and wealth, the information economy can be a source of the erosion of government power
and wealth because the information capital can leave the state’s territory. Industrial
economy’s progress was built on massive economies of scale, in which fi rms, plants, and
machines grew larger, and they could not be moved in the event of government harassment
or expropriation. Governments had great advantage with respect to the captive capital –
mines and land, forests and factories – that allowed and promoted an enormous expansion

of the government power. On such capital, which consisted of factories, heavy equipment,
and natural resources, governments felt free to impose rules and exact payments with no
fear that the nation’s capital base would move away over night. Of course, extreme
impositions reduced productivity, but after all, government held to the power. In contrast,
intellectual capital goes where it is wanted and wel-comed, and it stays where it is attracted
and well-treated. It freely moves across borders and around the world, and even the most
totali-tarian governments can only temporarily impede its movement. States that subject
information enterprises to exorbitant taxes, regulation, political control and repression, or
police and military might lose their information capital. Global competition for information
capital leads governments to reduce such impositions rather than raise them. In industrial
economy, natural resources are the dominant factor of production and therefore, the
conquest and control of territory enhances national power. In information economy, the
conquest of territory is not worth the cost to the nation. Th is is because war and years of
pacifi cation and repression scatter intellectual capital, and the natural resources which are
gained by conquest are declining in value. Also, size may be an advantage but it has lost its
priority. Th e information economy is global because trade in information, which is not
bound by geography and is not made of matter, is global. Global economy requires
compromises of state’s power and sovereignty and it defi es mercantilist or protectionist
strategies. Th is is not easy for some governments because the control of international trade
has been one of the most important aspects of sovereign powers since well before the
Industrial Revolution. People who embody intellectual capital pose a dilemma to gov-
ernments. On the one hand, governments must retain their human Ardalan, Kavous.
Understanding Globalization : A Multi-Dimensional Approach, Taylor & Francis Group,
2014. ProQuest Ebook Central,
reserved.
Understanding Globalization70resources in order for their nation to prosper. On the other
hand, the specialized knowledge of such citizens makes them more diffi cult to be governed.
In many areas of economic and social life, these citizens are better informed than
government regulators, who are resented and opposed by an increasing number of such
citizens. Th ese citizens carry the means of production in their brains and their power and
numbers are growing. Governments’ dilemma is more evident in nongovern-mental
organizations whose subordination to the state is essential to the sovereignty of the states.
Th e government is the only organized power center, but the society and polity contain
power centers, which should be given relative autonomy to produce results. Subjecting or-
ganizations, whether for-profi t or non-for-profi t organizations, to the control of central
government bureaucracy is not compatible with the new realities. II. Perspective Two or
Interpretive View Th e international relationship among states is anarchic because there is
no central worldwide authority above the nation-states. Th e international relationship
among states is a self-help system and each state looks after its own interests. Th e state is
the principal and dom-inant actor in international arena and devotes considerable eff orts
to the preservation of national sovereignty. Internal sovereignty refers to the state’s

monopoly on the legitimate use of force within its territory, and external sovereignty refers
to the state’s being free of control by any outside authority. Th erefore, power and security
are the aims of states and they place considerable emphasis on their ability to survive and
pursue their national interest. 2 Th e state is not only the most important international
actor but also a unitary actor. Th e state sets its policies by considering subnational and
transnational actors, who operate within the framework of state policies. States act
rationally by maximizing the benefi ts and minimiz-ing the costs when pursuing national
objectives. States may be biased, have misperceptions, and lack information and capabilities
to make the best decisions. Instead of making optimal value-maximizing decisions, states
may settle for satisfactory decisions. Overall, states are essentially rational decision makers.
Each state is most concerned about its gains vis-à-vis other states, that is, its position vis-à-
vis other states. Th us, if two states are gaining wealth in absolute terms, it is the eff ect of
these gains on their relative power positions that is of primary importance to them. Th e
states’ em-Ardalan, Kavous. Understanding Globalization : A Multi-Dimensional Approach,
Taylor & Francis Group, 2014. ProQuest Ebook Central,
reserved.
Globalization and the State71phasis on relative gains is based on the view that their
relationship forms a zero-sum game, that is, one state’s gain means another state’s loss.
States compete with each other in supporting research and devel-opment (R&D) in high-
technology sectors, restructuring industry, and deregulating fi nancial markets. Th e high
economic growth rates of some states are related to their success in fostering a symbiotic
relationship with the competitive marketplace. Politics has priority over economics such
that powerful states can structure economic relations at the international level. It is not the
case that the increases in interdependence and globalization erode state control. In
contrast, globalization is occurring because states permitted it to occur. Th us, the most
powerful states have the capacity to either open or close world markets, and they can use
globalization to improve their power position relative to smaller and weaker states. Th e
hegemonic state has the ability to create an open and stable economic order that can
enhance the globalization process. Global-ization can happen if the hegemonic state has
both a large share of resources to support its leadership and the interest to pursue policies
necessary to create and maintain an open economic order. In addition to being able to lead
and having the interest to pursue globalization, the hegemon must follow policies that other
major states believe are relatively benefi cial. When there is no global hegemon or its power
is declining, economic stability and openness become more diffi cult, but not impossible, to
maintain. Globalization is a political process, that is, it is the successful mobi-lization of
political power in unleashing the forces of globalization. It rests on active human agency. Th
e shape of economic globalization is politically determined and any change in political
preferences changes the shape of globalization and the accompanying social conditions.
Cur-rent economic globalization is the result of a political decision made by governments to
lift the international restrictions on capital. Th erefore, nation-state and territory matter
even in a globalized context. States have the power to regulate economic activities within

their sphere of infl uence, and they are far from being impotent bystanders to the workings
of global forces. In the same way that political decisions changed international economic
conditions in the direction of deregula-tion, privatization, and globalization, a diff erent set
of political decisions can reverse the trend. Of course, it takes an international crisis brought
on by globalization to provide states with the incentive to make their boundaries less
porous to transnational fl ows. Th at is, it is possible to Ardalan, Kavous. Understanding
Globalization : A Multi-Dimensional Approach, Taylor & Francis Group, 2014. ProQuest
Ebook Central,
reserved.
Understanding Globalization72reverse seemingly irresistible globalizing tendencies by
politics, which is the foundation of a proper understanding of globalization. Survey of the
political scene at the start of the twenty-fi rst century provides convincing evidence that this
is the age of the modern state. States have increasingly claimed a monopoly of the legitimate
use of force and judicial regulation; established permanent military forces as a symbol of
statehood as well as means of ensuring national security; consolidated tax-raising and
redistributive mechanisms; established nationwide communication infrastructures; sought
to systematize a national or offi cial language; raised literacy levels and created a national
schooling system; promulgated a national identity; and built a diverse array of national
political, economic, and cultural institutions. In ad-dition, many states have tried to
construct welfare institutions, partly as a means to promote and reinforce national
solidarity, public health, and social security. Moreover, states have pursued macroeconomic
management strategies in order to help improve and sustain economic growth with high
level of employment. States seriously protect their sovereignty no matter how limited their
actual control over their territories might be. Fundamental to state legitimacy is the
bargaining process that they create with their citizens. National political traditions are still
prevailing, political bargains can be entered into by governments and electorates, and states
rule. Th e choices open to states vary dramatically depending on their location in the
hierarchy of states, but at the same time, the principle of sover-eignty and its implied
independence is very important to them in this age of nation-states. Modern nation-states,
as political communities, strongly maintain their ability in establishing national
communities of fate. National politics, and the competence with which it is performed, is at
least as important as it was when states were being formed. In order to meet national
objectives, developed countries try to enhance their strong state capacities and developing
countries need to develop theirs. Of course, national governments are partly constrained by
various pressures coming from international interdependence and economic openness. In
order to understand how national governments respond to globalization one needs to
understand what goes on inside the nation-state. Th e global economy not only constrains
but also enables govern-ments to pursue their national policy objectives. Th e extent of the
outcome depends on the domestic institutional context, including its normative and
organizational aspects. Th e domestic institutions of Ardalan, Kavous. Understanding

Ebook Central,
reserved.
Globalization and the State73governance mediate the challenges of openness. Th ese
institutions refl ect ideas about the state’s economic role and public purpose, ar-rangements
that produce cohesive elites, structural policy networks connecting state and society, and
the representation of interests in the political and policy process. Th e global constraints
are most eff ective in the fi nancial realm (most prominently the monetary policy) and least
eff ective on the social, trade, and industry and innovation policies. It should be noted that
even the loss of monetary policy control under conditions of capital mobility and fl oating
exchange rates is not complete. It is not complete because it applies mostly to the loss of
control over the exchange rate. Howev-er, with respect to the levels and types of private
debt, governments can regulate domestic credit expansion. Th e loss of monetary policy
control tends to apply more to the small, highly open economies, but less to the larger ones.
With respect to fi scal policy and its social implications, some argue that globalization places
constrains on the government’s ability to run fi scal defi cits and follow infl ationary
monetary policy because global fi nancial markets react negatively to infl ationary policies.
Th e count-er-argument is that this market-imposed constraint does not disappear in the
absence of global fi nancial markets. Th at is, such policies have always been subject to
private sector evaluation, irrespective of capital market integration. Overall, globalization
imposes macroeconomic constraints on gov-ernments, but not completely, such that
governments retain autonomy in many signifi cant areas. Economic interdependence has
grown very signifi cantly over the past several decades (though not necessarily beyond
what it was a century ago), but some people overstate the consequent constraints imposed
on government policy. In contrast, it is shown quantitatively that the all-powerful, bor-der-
erasing globalization is far less advanced than it is claimed. By set-ting quantitative changes
in trade, capital, and investment fl ows within a larger perspective and evaluating their
overall weight as a proportion of national economic activity it can be concluded that
economies are still primarily national in scope. International fi nance is the exception,
where genuinely global markets (especially in foreign exchange, bonds, and derivatives) are
central characters. Overall, there is little doubt that economic interdependence in trade,
investment, and fi nance has not displaced the national networks. It has made the system
more complex such that both international and transnational networks have Ardalan,
reserved.
Understanding Globalization74developed in parallel with, and complementary to, national
systems of production and fi nance. Th erefore, the reach of globalization is limited; it has
important historical parallels that counter the notion of state power depletion; and borders
and national states still matter very much. Th e discussion related to the extent of

globalization is limited be-cause it has little to do with the national responses to, or
capacities for managing, the challenges of economic openness. Interdependence has both
enabling and constraining eff ects on the nation-states, and its specifi c concrete results
depend to a signifi cant degree on the existing national institutions. Th ree enabling aspects
of globalization are as follows. Th e fi rst enabling dimension of globalization is based on
compe-tition and insecurity, which generates incentives for governments to strengthen the
national system of innovation and social protection. Th is enabling dimension of
globalization shows why it does not necessarily produce a “race to the bottom” in
government taxation and spending policies, and why it does not necessarily prevent
governments from pursuing their economic and social objectives. In other words, wide
exposure to world markets heightens insecurity among the majority of the population,
which increases demand for social protection. Consequently, governments have incentives
to increase domestic compensation rather than implementing generalized cuts. Th e greater
the extent of economic interdependence, the stronger the population perception of
vulnerability, and the greater the probability of com-pensatory domestic structures, which
reduce rather than increase the pressures of openness. Th erefore, in contrast to the
expectation that capital mobility, in the form of multinational corporations and fi nancial
market investors, generally reduces social spending and corporate taxes to avoid the threat
of exit, one must bear in mind the less noted enabling aspect of globalization. Th e
heightened perception of vulnerability among national population encourages
compensatory policies and actions by the government. Government responses vary with
national institution-al setting. Th e enabling aspect of globalization has diff erent impacts
according to the prevailing normative and organizational conditions in the country. Th e
second enabling dimension of globalization stems from global competition, which serves to
enhance business access to national in-novation structures, to a constant pool of skilled
labor, and to various Ardalan, Kavous. Understanding Globalization : A Multi-Dimensional
reserved.
Globalization and the State75other infrastructural resources that businesses need. With
increased exposure to competitive world markets, fi rms’ needs for continuous innovation,
industrial upgrading, and competent workers increase. Th erefore, rather than reducing
corporate taxes and shifting the tax incidence from capital to labor, governments have
strong incentives to provide the basic services to capital in exchange for the tax revenue. In
contrast to the neoclassical claim about the harm brought about by state intervention,
internationally oriented fi rms welcome the benefi ts off ered by host governments. Th e
third enabling dimension of globalization is related to the inten-sifi ed competitive
pressures that threaten to destabilize key economic sectors, such as agriculture,
telecommunications, and fi nance. Th ese competitive pressures urge governments to devise
new policy respons-es, new regulatory regimes, and structural reforms. To respond to these
challenges, governments need to develop new or strengthen existing policy networks. In
some cases, it means the expansion of intergov-ernmental cooperation. In some other cases,

it means the extension of relation between government and business in order to increase or
improve policy input from the private sector. In still other cases, it means more eff ective
information sharing and policy implementation. In each case, neither government nor
business autonomy is negated. In fact, they are interdependent. Th is results in a
transformation in the state’s relational interdependencies with other power actors. In other
words, openness creates strong pressures for maintaining or extending cooperative
relationships between government and industry, information sharing, coordinated
responses to collective action prob-lems, and provision of public good by the government.
Instead of the transformation of public-private sector relations, in some cases, increased
competitive pressures have resulted in the restructuring of central-local government
relations. Globalization does indeed impact on national governance and its domestic
structures. Its impact is not only, or even generally, constrain-ing, but also contributing to
the expansion of governing capacities through both the transformation of public-private
sector relations and the growth of policy networks. Again, the extent to which the enabling
conditions of international competition and their generated political incentives for
intervention are going to aff ect policymaking depend to a large extent on the institutions of
the nation. Globalization is a process with enabling dimensions. How these enabling
dimensions aff ect government policy responses depends to Ardalan, Kavous.
reserved.
Understanding Globalization76a large degree on specifi c national institutions, which
mediate them. A balanced view of globalization consists of a more realistic picture of
constraining eff ects and the enabling face of globalization. In summary: 1. States have
signifi cantly more fl exibility and control in the global economy than the mainstream
functionalist globalization theory allows. 2. States have fl exibility and control because
globalization enables as well as constrains states’ governance. 3. Within the fl exibility and
control that the states have, a state’s policy decision is crucially shaped by the character of
domestic institutions, that is, normative orientations and organizational arrangements.
Globalization has strong enabling dimensions, which over the long run are likely to prove at
least as signifi cant as, if not more im-portant than, its constraining aspects, depending on
the institutional environment. III. Perspective Th ree or Radical Humanist View Th e
spread of transworld spaces is not inconsistent with territorial spaces, and territory-based
institutions, such as the state, do well in globalization. States have been the major players in
the promotion and implementation of supraterritoriality, and they are key players in the
contemporary governance of global fl ows. 3 Of course, globalization has changed the state.
Overall, changes in the state are similar to changes in capitalism, that is, the core remains
entrenched while some features are modifi ed. Globalization has led to fi ve general changes
in the state, namely: (1) the end of sovereignty; (2) the service of supraterritorial and
territorial interests; (3) the reduction in the provision of public-sector social welfare; (4)
the reorientation of warfare; and (5) the increase in multilateral regulatory arrangements.

Th e spread of supraterritoriality has neither caused contraction nor elimination of the
state, but has changed the state. Historically, the state has never been fi xed, but it has
always been in motion, evolving, adapting, and in transition. Th e most signifi cant change in
the state under globalization has involved the demise of sovereignty, which is defi ned by
the Westphalian international system that formalized the modern concept of sovereign
statehood in 1648. Moreover, globaliza-tion has made important changes in the
constituencies and policy in-struments of states. Diff erent states, based on their diff erent
capacities, Ardalan, Kavous. Understanding Globalization : A Multi-Dimensional Approach,
reserved.
Globalization and the State77have responded diff erently to globalization. Developed
countries have generally been able to exert far more infl uence in global spaces than
developing countries. State has been a major part of the contemporary accelerated glo-
balization. Even in countries whose neoliberal governments have tried to shrink the public
sector, states have increased their payroll, budget, and scope of regulation. But many states
have contracted relative to privatizations. Neoliberal states have privatized some social
security arrangements. However, state expansion in other areas has generally more than off
set such contractions. Th e expansion of states is closely related to the spread of supraterri-
toriality. For example, technologies of globalization have provided states with surveillance
tools and military equipment, such as computerized data banks and spy satellites and long-
range missiles, which are highly sophisticated and destructive. Furthermore, the increase in
global fl ows has persuaded some states to pursue greater environmental and consumer
protection, to enact new data protection legislation, and so on. However, some states have
come under particular pressure in this globalizing world. Faced with unprecedented
globalization since the 1960s, states are no longer sovereign in the traditional sense of the
word. In contempo-rary globalization, the state cannot exercise ultimate, comprehensive,
absolute, and singular rule over their country and their foreign rela-tions due to both
physical and ideational reasons. State sovereignty is defi ned with respect to a certain
territory, where all events occur within territorial jurisdictions or within controlled
borders. Th e end of territorialism, therefore, means the end of sovereignty. Ironically, most
new, post-colonial states have never been able to exercise sover-eignty because they were
established during the time of accelerating globalization. In current globalizing
circumstances, many changes have transcend-ed the territorial geography that underlies
sovereignty. Computerized data transmissions, radio broadcasts, satellite remote sensing,
and telephone calls occur: (a) at such speeds that defy advance state surveil-lance; and (b)
in such quantities that defy comprehensive state tracking. Electronic mass media have
reduced state’s supreme authority over language construction and education. A state does
not have complete authority over transborder associations or global companies. Now, many
regulations are not formulated by state; rather, they come to the state from suprastate
bodies and global law. States intervene in, rather Ardalan, Kavous. Understanding

Ebook Central,
reserved.
Understanding Globalization78than control global trade. Th e state has lost sovereign
authority over the national money supply and country’s foreign exchange rate due to the
development of global currencies, credit cards, and the like. State cannot successfully assert
sovereignty over the global fi nancial fl ows that pass through the country’s fi nancial
system. Transworld ecological issues, such as ozone depletion and biodiversity loss, have
violated the premises of sovereignty. States have been unable singularly and fully to control
the global spaces that aff ect their jurisdictions. States can aff ect supraterritorial activities,
sometimes even substantially. However, even the most ca-pable state has not been able to
exercise sovereignty over transborder relations. States cannot fi x global circumstances in
their territory, within which states desire to exercise absolute authority. Many tran-sworld
relations aff ect circumstances in a country without ever directly touching its soil.
Globalization has not only overturned the material preconditions for sovereignty but it has
also loosened crucial aff ective underpinnings of sovereignty. On the one hand, the new
geography has created various non-territorial identities and communities. Transborder
loyalties to such lines as class, gender, profession, race, religion, and sexual ori-entation
have diluted, rivaled, and overridden solidarity to the nation, which has traditionally
provided strong support to legitimacy of state sovereignty. On the other hand, globalization
has also reinvigorated local solidarities. In this age of globalization, many people have left
the state as their local home in order to attend to their possibilities of community and self-
determination. Moreover, citizens have given less importance to sovereign statehood and
have given an increasingly high priority to values such as economic growth, human rights,
and ecological integrity, none of which is bound to territory. Th e concept of sovereignty
has not lost its importance in contempo-rary political discourse. Th e idea continues to play
an important role, as people are divided in their beliefs regarding whether sovereignty
should persist or should be retrieved. States defend their sovereignty even if the traditional
meaning of sovereignty has not been in place for long. Many citizens have defended their
state’s sovereignty because they associate sovereignty with their cultural identity and
broader security. Th e persistent rhetoric of sovereignty is quite diff erent from the reality
of sovereignty. Under contemporary circumstances of global-ization, no state is able to
achieve absolute, comprehensive, supreme, Ardalan, Kavous. Understanding Globalization :
A Multi-Dimensional Approach, Taylor & Francis Group, 2014. ProQuest Ebook Central,
reserved.
Globalization and the State79and unilateral control of the global fl ows that it encounters.
Meanwhile, sovereignty is no longer seen as the primary norm of world politics in global
circles of environmentalists, feminists, human rights advocates, investors, managers,
religious revivalists, youth, and so on. Constituencies that states serve have also changed in
current times of globalization. Previously, states represented, defended, and advanced

domestic or national interests in the world and defended citizens against harmful external
or foreign intrusions. Of course, sovereign states usually represented and favored the
interests of certain strata within their population, such as particular classes, religious
denominations, or ethnic groups, more than others. With globalization, the territorial line
between inside against out-side has become blurred for states. Instead, they have become
sites of collaboration and competition between a host of territorial and supraterritorial
interests. For instance, transgovernmental cooperation is performed at the level of
ministries, for example, health departments collaborate on the management of a certain
epidemic. Some of these collaborations have increased inter-ministerial divisions within
states. For instance, environment ministers from various countries have regularly com-
plained about their economics ministers. Similarly, fi nance ministries and central bankers
have often found more views in common among themselves and with the multilateral fi
nancial institutions than with other ministers in their own state. In these and other ways
suprater-ritorial connections have led to the deterioration of the cohesiveness of the state.
Other examples of the break in the traditional pattern of states defending the national
interest include the activities of contemporary states in promoting some global social
movement. Some states have supported global environmentalism or human rights issue.
Many gov-ernments in the South pay close attention to the priorities of transbor-der
foundations and non-governmental organizations when designing and executing their
development plans and policies. Another example is that states have often been sites of
tension be-tween territorial and supraterritorial capital. Some states have frequent-ly
served the interests of global capital in addition to, and on occasions instead of, their own
national capital. Th at is, contemporary state policies have attended to the demands of
global companies, transworld fi nancial markets, supraterritorial mass media and
telecommunica-tions, and so on. Many states have provided suffi ciently appealing Ardalan,
reserved.
Understanding Globalization80taxation and regulation environments, in the fear that
footloose global capital may desert them. Many developed countries have used trade
protectionism in support of certain domestic businesses. Th e state’s willingness to serve
both national and global interests can result in ambiguous and contradictory policies. Th e
decline of the welfare state is linked to globalization, which currently operates under the
neoliberal ideology. Th e growth of suprat-erritorial capitalist constituencies has put strong
pressures on states to reduce their provision of social security. Th is is especially in contrast
to the policy of states during the fi rst three-quarters of the twentieth century, i.e., cradle-to-
the-grave public sector guarantees of nutrition, health care, housing, education, minimum
income, and other welfare needs supported by a regime of progressive taxation. Th e
growth in the power of global capital signifi cantly aff ected the drastic change in the path of
social welfare during the last decades of the twentieth century. Th e desire of transborder
capital for decreased taxes and labor costs has pressured many states to reduce social

welfare provisions in the name of global competitiveness. Every state has bowed to the
downward pressures of neoliberal globalization on government material welfare programs.
Of course, states have reduced their welfare provisions entitlements at diff erent rates and
to diff erent extents. Moreover, certain departments within the welfare state have
encountered greater limitations than others. States that tried to resurrect policies of
nationalization and Keynesian demand management, experienced capital outfl ows and
censure from global economic institutions, and decided to reverse the course of their
policies. No state dares to pursue a program of radical progressive re-distribution of wealth.
Th is is because those states that embarked on this path soon reversed their programs of
redistribution. Meanwhile, many states have accepted and followed the neoliberal logic in
the belief that growing economic inequalities are side eff ects of increased effi ciency and
viable public fi nance. It is a mistake to conclude that globalization and state welfare
provision are inherently in tension. Th e downward pressures on state welfare provision
are the result of neoliberal globalization in which states address social welfare individually
and in competition with other states to attract global capital. An alternative policy course
would be a global cooperation to underpin social security. Armed forces and the ways they
are deployed by states have also changed as a consequence of contemporary widespread
globalization. Ardalan, Kavous. Understanding Globalization : A Multi-Dimensional
reserved.
Globalization and the State81Th e major force behind the rise of the modern state and its
later pre-occupation has been the preparation for and engagement in armed struggle. Th e
means and purposes of warfare have changed over time, including the period of
supraterritoriality. Th e expansion of supraterritoriality has reduced incentives for
interstate war, particularly where globalization has penetrated the furthest. Th is is
because, interstate war serves little purpose for the global circulation of capital,
transborder communities of religious, racial and class solidarity, the management of global
environmental degradation, and so on. But globalization has not reduced the use of arms by
the state; on the contrary, it has encouraged domestic application of armed violence by the
state. National police have tried to secure the position of global companies, the
implementation of neoliberal structural adjustment programs, or the privileges of the
exploitative local elite whose benefi ts are more intertwined with global markets than with
its own country. States have used armed force to repress subnational ethnic movements or
religious resurgence, both of which have often been supported by globalization.
Multilateral governance arrangements are a distinctive feature of states under conditions of
contemporary globalization. In contrast to earlier periods, states have had less incentive to
take unilateral initiatives in world aff airs. Th eir foreign policy has frequently involved
interstate arrangements such as regional integration schemes, the expanded Unit-ed
Nations (UN) system, and Group of Seven (G7) consultations. Th ese collaborative measures
have often been applicable to states’ internal aff airs as well as their interstate relations. Th
e multilateral arrangements have been related to civil strife, labor policies, technology

standards, industrial subsidies, local environmental protection schemes, and so on. Th
rough multilateral arrangements, globalization has blurred the distinctions between
domestic and foreign aff airs that characterized the Westphalian state. Multilateral
arrangements are interstate as well as suprastate phenomena. Although multilateral
regimes have acquired characteristics beyond that of the participating states, they have as
well remained an integral matter of states. Multilayered state governance and privatized
governance are two additional distinguishing features of governance in the age of global-
ization. Th e contemporary growth of supraterritorial spaces both has enhanced capitalism
as the dominant form of production and has caused the state to lose some of its primacy in
the area of governance. Ardalan, Kavous. Understanding Globalization : A Multi-Dimensional
reserved.
Understanding Globalization82Th is relative decline has occurred in two ways. First, state
governance has become more multilayered. Th e growth of supraterritoriality has shifted
much regulatory power downward to substate authorities (i.e., at local and provincial
levels) and upward to suprastate governance bodies (i.e., at regional and transworld levels).
Second, globalization has shifted regulatory power to non-offi cial entities. Th at is, states
have received signifi cant inputs from civic associations and fi rms. In contemporary
accelerated globalization, the complex public sector includes not only states but also
multiple substate and suprastate enti-ties. Consequently, contemporary governance has
become considerably more decentralized and fragmented. Various substate and suprastate
entities have a relative autonomy from states, as they regularly make their own decisions
without need-ing states’ approval at all times. However, local, provincial, regional, and
transworld institutions have limited authority to the extent that they interact with and are
shaped by states. In short, globalization has made the public sector increasingly
multifaceted, with no player holding systematic primacy over the others, which is in
contrast to the Westphalian system. Privatization of governance has involved business
associations, nongovernmental organizations, foundations, think tanks, and even criminal
syndicates. Th ey have played a major role in: (a) implementing offi cial policies; (b)
participating in offi cial policymaking processes; and (c) formulating regulations outside
offi cial circles. In contemporary globalization, the post-sovereign state is a major part of a
multilayered complex of regulation in which private as well as public agencies play key
roles. IV. Perspective Four or Radical Structuralist View Th e capitalist world economy
constitutes a historical system. It came into being in Europe in the sixteenth century. It is
based on the drive to accumulate capital, the political conditioning of price levels (of capital,
commodities, and labor), and the steady polarization of classes and regions (core and
periphery) over time. It has developed, expanded, and covered the whole earth. It is in a
long crisis as a result of its contradictory developments. 4 With its development, the
capitalist world economy has created all of the major institutions of the modern world:
classes, ethnic or national groups, households, and states. All of these institutions were
created after capitalism came into existence, not before it. All of these Ardalan, Kavous.

reserved.
Globalization and the State83 institutions are consequences of capitalism, not its causes.
Furthermore, all these institutions create each other. Classes, ethnic or national groups, and
households are defi ned by the state, through the state, in relation to the state, and in turn
create the state, shape the state, and transform the state. Th ey are in constant movement,
they have repet-itive regularities, but their details are always unique. In the capitalist world
economy, the existence of a state is defi ned by its relation to other states. Its boundaries are
to a good degree accurately defi ned. Th e extent of its juridical sovereignty varies from one
state to another. Its real power to control the fl ows of capital, commodities, and labor
across its frontiers is varied. Th e real ability of the central author-ities to enforce decisions
on groups operating within state frontiers is dependent on the particular state. Th e ability
of the state authorities to impose their will in zones outside state frontiers varies among
states. Various groups, located whether inside or outside any given state borders,
constantly seek to increase, maintain, or decrease the power of the state. Each group seeks
to make these changes with the hope that such changes improve the group’s ability to profi
t, directly or indirectly, from the operations of the world market. Th e state is an institution
that most conveniently establishes market constraints in favor of particular groups.
Historically, the development of the capitalist world economy began with relatively
amorphous entities. Th en, more and more states were created and they started operating
within the interstate system. Th eir boundaries and formal rights have been defi ned with
increasing clarity in the contemporary United Nations structure of international law. Th e
types and characteristics of group pressures in the formation of state structures have also
been increasingly defi ned, such that both the legal limits on such pressures and the rational
organization by groups to transcend these limits are clarifi ed. In this institutional network,
there has been at all moments a power hierarchy of stronger and weaker states refl ecting
their relative power continuum, and at no moment, there has been any one state whose
hegemony was not challenged, although relative hegemony has occurred for limited
periods. Social institutions, in general, and states, in particular, once creat-ed, have lives of
their own. Th at is, many diff erent groups use them, support them, and exploit them for
various, and even contradictory, motives. Moreover, permanent staff s of large and
structured institu-tions form a group of persons, the bureaucracies, who have a direct
socioeconomic stake in the existence and promotion of the institution, Ardalan, Kavous.
reserved.
Understanding Globalization84quite independent of the ideological foundation of the
institution and the interests of the major social forces that maintain it. Th e issue is not who

has some infl uence in the decision-making process of a state, rather who has critical infl
uence on and defi nes key issues of state policy. Th e key issues are: (a) the rules governing
the social relations of production, which critically aff ect the allocation of surplus value; and
(b) the rules governing the fl ow of the factors of production—capital, commodities, and
labor—within and across state borders, which critically aff ect the price structures of
markets. Th e change in the allocation of surplus value and the price structures of markets
changes the relative competitiveness of producers and their profi ts. It is the states that
make these rules, and it is the stronger states that intervene in the decision-making process
of weaker states when the latter attempt to make the rules according to their own
preferences. Th e analysis of the political functioning of the state should be based on a solid
ground. Although the consciousness of groups has some continuity, the consciousnesses
themselves are not continuous. Na-tionalisms are one of the salient forms of consciousness.
Th e history of nationalisms shows that nationalist movements construct conscious-ness,
that is, they revive languages, create names, and emphasize cus-tomary practices that
distinguish their nation from other nations. Th ey maintain such consciousness and claim
that it has always been there. But in fact, one must stretch the interpretation of historical
evidence to fi t such partisan claims. Th is applies not only to new nations of the twentieth
century but also to the old nations. Moreover, successive ideological explanation of a given
name, that is, what it encompasses and what constitutes its tradition, are diff erent and
discontinuous. Each successive version refl ects the politics of its time and they vary widely.
Th e analysis of state is based on the centrality of the class struggle. Classes are groups who
are defi ned with respect to their positions in relation to the mode of production. In the
capitalist world economy, production processes are integrated. Th e boundaries of these
inte-grated production processes far exceed those of the individual states, and even subsets
of production processes do not correspond to state boundaries. Th erefore, there is no
reason to assume that classes are confi ned within state boundaries. Even though class
consciousnesses have tended historically to be national in form, the analytics of class
struggle should correct this defi ciency. Th e strength of state may not be visible in certain
areas. Some states claim that they are strong. Th ey seek to limit opposition; they seek to
reserved.
Globalization and the State85impose decisions on internal groups; they are ready to start
war against external groups. Th ey may be merely assertions of power. States that are
comprised of relatively more homogeneous strata (because of the unevenness of the
distribution of classes in the world economy) may achieve via soft political methods what
others strive, and perhaps fail, to achieve via coercion. Entrepreneurs who have
economically strong market positions do not need the assistance of state to create
monopoly positions for them, although they may need state assistance to prevent the
creation of monopoly privileges in other states, which would hurt these market-strong
entrepreneurs. States are institutions whose creation refl ects the interests of classes in the

world economy. Th ey are defi ned and created within the frame-work of the modern
interstate system. Th is interstate system constitutes a set of constraints on the abilities of
individual state, even the stron-gest state, to make decisions. States are defi ned sovereign
and equal, but in fact, they are neither sovereign nor equal. More specifi cally, stronger
states impose on other stronger or weaker states limitations regarding their modes of
political and military behavior, and limita-tions regarding their abilities to aff ect the law of
value, which underlie capitalism. States get involved in a lot of activities that constitute a
defi ance of other states. Despite the fact that the interstate system is much rule-ridden, it
looks as being on the verge of anarchy. Th e rules are broken constantly and mechanisms
are set up to force changes in the policies of the off ending states. Th e production
processes of the capitalist world economy are built on a central antinomic relationship
between capital and labor. Th e operations of the system force individuals to participate in
the work process in one capacity or the other, that is, as contributors to surplus value or as
receivers of it. States have played a central role in the polarization of their pop-ulation into
those who accumulate appropriated surplus, that is, the bourgeoisie, and those whose
surplus value is appropriated from them, that is, the proletariat. States created the laws that
not only permitted and facilitated the appropriation of surplus value, but also protected the
resultant appropriated surplus value by enacting property rights. Th ey created institutions
that ensured the socialization of children into the appropriation roles. As economic forces
brought classes into objective existence, and in relation to each other, one class sought to
alter and the other class sought to maintain the unequal economic and political power
reserved.
Understanding Globalization86 relationship between them. To this end, they had to create
the necessary institutions to infl uence state decisions. Th ese institutions mostly turned
out, over time, to be institutions created within the boundaries of the state, leading to the
worldwide defi niteness of state structures. Th is has led to confusion about their self-
perception and accordingly contradictory political behavior. Both the bourgeoisie and the
prole-tariat are classes formed in the capitalist world economy, that is, their objective class
position. Th e bourgeoisie fi rst became class-conscious and it was later that the proletariat
became class-conscious. Both classes found disadvantages as well as advantages to defi ning
themselves as world classes. Th e bourgeoisie’s class interest is in the maximization of profi
t in order to accumulate capital. Th erefore, the bourgeoisie sought to engage in its
economic activities with no regards to geographic location or political considerations. For
instance, in the sixteenth and seventeenth centuries, Dutch, English, or French
entrepreneurs entered trade re-lationships, even in armaments, with their countries’
enemies during war. Furthermore, entrepreneurs frequently changed their place of
residence and citizenship to pursue optimization of their gain. Th us, the bourgeoisie refl
ected itself in tendencies toward a world cultural style in consumption, in language, and so
on. However, on the one hand, the bourgeoisie was discontent under limitations placed by a

particular state; on the other hand, the bourgeoisie needed to utilize the state to strengthen
its position in the market vis-à-vis competitors and to protect itself vis-à-vis the working
classes. Th is meant that the world bourgeoisie had an interest in defi ning itself as national
bour-geoisie as well. Th e proletariat followed the same pattern. On the one hand, when the
proletariat became class-conscious, it recognized that in its class struggle, the prime
organizational objective has to be the unity of proletarians. Th is was because the
bourgeoisie operated in the world economy and transferred sites of production whenever it
found advan-tageous. Th erefore, the unity of proletariat could only be at the world level.
However, the world proletarians’ unity has never really been eff ective. For example, the
Second International failed to maintain an anti-nationalist position during World War I. Th e
reason for this lack of unity is as follows. Th e state is most readily available mechanism to
improve the relative conditions of segments of the working classes, and the proletariat has
almost always formed its political organization relative to state-based organizations.
Furthermore, this proletarian Ardalan, Kavous. Understanding Globalization : A Multi-
Dimensional Approach, Taylor & Francis Group, 2014. ProQuest Ebook Central,
reserved.
Globalization and the State87tendency has been reinforced by the successes their national
organi-zations have had in attaining partial or total state power. Ironically, both the
bourgeoisie and the proletariat express their consciousness at a level that does not
correspond to their objective economic role. Th eir interests are intimately related to the
operations of the world economy, but they seek to enhance their interests through the state,
which has limited power to aff ect the operations of the world economy. Th is irony
constantly makes bourgeoisie and proletariats express their interests in status-group terms.
In the modern world, the most eff ective status group is the nation, because the nation lays
claim on the moral right to control a specifi c state structure. When a nation is not a state,
there is potential for a nationalist movement to rise and fl ourish. Of course, a nation does
not breed a nationalist movement, but it is the nationalist movement that creates, or seeks
to create, an entity called a nation. When nationalism is not available to serve class
interests, then status-group solidarities may be formed around religion, race, language, or
other particular cultural patterns. Status-group solidarities are less limited than the
national class organization or consciousness and therefore have less contradictory
structures. However, they may also obscure the class struggle. When key groups fi nd the
consequences of particular ethnic consciousnesses intolerable, there will be either re-
emergence of overt class organi-zations, or redefi ned status-group solidarities, that is,
drawing the boundaries diff erently. For instance, particular segments of the world
bourgeoisie or world proletariat may shift from pan-Turkic to pan-Is-lamic to national to
class-based movements over a few decades. Th ese shifts refl ect not the inconsistency of
their struggle, but the diffi culties of dealing simultaneously with objective classes of the
world economy and subjective classes of a state structure. Households are the atoms of the
classes and of the status groups. Th ey are partly shaped and reshaped by the objective
economic dynam-ics of the world economy. Th ey are also partly shaped by regular and

deliberate manipulations of the states that seek to create and change their boundaries in
terms of the needs of the labor market. In turn, the households may set their priorities,
resist the pressures, and assert their solidarities, either less eff ectively by passive means, or
more eff ectively, by creating status-group and class solidarities. Th e totality of these
institutions—the states, the classes, the ethnic/national/status groups, and the
households—forms an institutional Ardalan, Kavous. Understanding Globalization : A Multi-
reserved.
Understanding Globalization88vortex that is both the product and the moral life of the
capitalist world economy. Th ey are not pre-existing essences, but they are dependent and
coterminous existences. Th ey are not segregated or separable, but they are intertwined in
complex and contradictory ways. None of them determines the others, but they are avatars
of each other. Over time, individual states have become stronger, but unevenly, despite the
ideology of juridically equal sovereignty. Th e hierarchy of unequal powers has been
ensured by the operation of the bal-ance-of-power mechanism in the interstate system. Th e
states in which core economic activities took place have become stronger. Th is is the result
of the eff orts of groups resident in these states to ensure that the state could be used to
provide quasi-monopolistic privilege for their enterprises and to prevent others residing in
other states from creating similar privileges to the detriment of their enterprises. Th e
states in which peripheral activities took place became either weak-er or stronger relative
to the time of their incorporation. Under the pressure of the strong (core) states and local
cooperating groups, the weaker states have become too weak to interrupt the economic fl
ows of the capitalist world economy, but strong enough to facilitate these fl ows. In semi-
peripheral states, groups have sought to strengthen the state in order to change the
composition of the production processes that took place within their borders in order to
change their relative position in the division of labor within the capitalist world economy.
Th e attempts by semi-peripheral states and the counter-pressures of the core states have
involved military tension in the interstate system. Th e outcome is a moving equilibrium in
which all states have become stronger, but the degree of dispersion of strength has
widened. Large-scale entrepreneurs have wanted states to help them both in their short-
run objectives of economic gain and in their longer-run objectives of the political stability of
the system. Th e longer-run objec-tives have frequently confl icted with the shorter-run
ones. Th ey have understood the necessity of making short-run economic compromises to
maintain the long-run political superstructure of the system. Th e socialist movements fi nd
themselves in a parallel short-run/long-run dilemma. While the entrepreneurs wanted a
weaker state in the short run, and saw the long-run necessity of having a stronger state to
maintain the world capitalist system, the socialist movements want to destroy the state in
the long run, but see the necessity of having a stronger state in the short run in order to
protect, preserve, and enable the movement to destroy the world capitalist system. Ardalan,

reserved.
Globalization and the State89 V. Conclusion Th is chapter discussed four views expressed
with respect to the nature and role of globalization and state. Th e functionalist paradigm
views globalization and state as eroding state power, the interpretive paradigm views
globalization and state as maintaining overall state power, the radical humanist paradigm
views globalization and state as dividing the power of state, and the radical structuralist
paradigm views globalization and state as the domination of stronger over weaker states.
Each perspective looks at the nature and role of globalization and state from a certain
viewpoint. Collectively, they provide a much broader, deeper, and more balanced
understanding of the phenomenon. Notes 1. For this literature, see Fonte (2011),
Friedman M. (1962), Friedman and Friedman (1980), Friedman T. (2000), Fukuyama (1989,
1991, 1992, 1995, 1999), Hayek (1978), Lewis (2013), Locke (1964), Mises (1974), Mok
and Yep (2008), Naisbitt (1995), Ohmae (1990, 1995), Ricardo (1963), Smith, A. (1910),
Spencer (1972), and Westaway (2012). Th is section is based on Steger (2002) and Wriston
(1992). See also Cohn (2005) and Steger (2003). 2. For this literature, see Aldrich (2009),
Boyer and Drache (1996), Delawatde (2011), Duina (2006), Gainsborough (2007), Gilpin
(1975, 1981, 1984, 1987, 2001), Hamilton (1966), Helleiner (1994), Hirst (1997), Hirst and
Th ompson (1996, 2000), Krasner (1978, 1993, 1999), List (1916), Mann (1997), Nayar
(2009), Skocpol (1985), Sodersten (2004), Veseth (1998), Waltz (1970, 1979), Weiss (1998,
2003), and Zysman (1996). Th is section is based on Cohn (2005), Held and McGrew
(2002a), Steger (2002), and Weiss (2003). See also Steger (2003). 3. For this literature,
see Cox (1986, 1987, 1996, 1999), El-Ojeili and Hayden (2006), Gill (1993, 1995), Gramsci
(1971), Gray (1998), Held (1991, 1995a, 1995b), Held and McGrew (1993, 2002a, 2002b),
Held et al. (1999), Herrman (2010), Jameson and Miyoshi (1998), Kellner (2002),
Mittelman (1996a, 1996b, 2000), Paulet (2011), Sassen (1996), Schinkel (2009), Scholte
(1997, 2000, 2008), and Sjolander (1996). Th is section is based on Scholte (2000). See also
Cohn (2005), Held and McGrew (2002a), and Steger (2002, 2003). 4. For this literature,
see Banerjee and Goldfi eld (2007), Bieler et al. (2006), Foster and McChesney (2004),
Frank (1990, 1998), Lenin (1939), Magdoff (1992), Odekon (2006), Radice (1999),
Sakellaropoulos (2007), Singer (1999), Smith, T. (2006), Th omas (1997), Tsoukalas (1999),
and Wallerstein (1974, 1979, 1984, 1999). Th is section is based on Wallerstein (1984). See
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