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Susan Strange. “The Erosion of the State”, Current History , vol. 96, November 1997 . Main argument. Two “anti-globalization” schools: “Globaloney” school: denies the very existence of globalization.

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Susan Strange

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Susan strange l.jpg

Susan Strange

“The Erosion of the State”, Current History, vol. 96, November 1997

Main argument l.jpg

Main argument

Two “anti-globalization” schools:

  • “Globaloney” school: denies the very existence of globalization.

  • “Resistance” school: acknowledges globalization, but argues for slowing or stopping an immoral and damaging process

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The “globaloney” school

Primarily associated with discipline of international relations, which grew and matured around the theme, “Why do states make war?”. Have not adapted to post-statist international system. They are wrong; globalization is real because of;

  • changes in “material life” (Braudel), the production structure

  • changes in the financial structure (credit is now created and used in global markets)

  • changes in perceptions, beliefs, ides, and tastes

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The “Resistance” school

This school acknowledges globalization as reality, but urges resistance to it; there are really three core problems they see as being embodied in the globalization phenomenon;

  • There is no longer any state control over financial markets, no “lender of last resort”

  • Globalization encourages corporations to ignore environmental concerns, while diminishing the power of the state to impose environmental controls.

  • Globalization reduces political accountability; there is a “democratic deficit”.

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So, why globalization?

Two factors account for globalization;

  • technological change

  • accelerated mobility of capital

    Both of these factors go back at least 200 years…

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What caused these factors to accelerate in the 20th century?

“Globalization” refers to the relatively recent acceleration in the pace of these two phenomena. Two additional factors explain this:

  • economic: the pace of change meant that eventually a threshold was crossed where firms could no longer survive on the basis of profits in the home market.

  • Political; “the new diplomacy”

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The New Diplomacy

The “new diplomacy” (a term coined by Strange and Stopford) refers to the importance of state-firm or firm-firm relations in the modern world; put another way, part of the erosion of the state is its inability to make uncontested and binding (sovereign) decisions.

  • governments now have to negotiate directly with firms, as national economies cannot survive without international trade.

  • Corporate takeovers are major factors in determining wages, employment, and trade.

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The Erosion of the State

Thus the power of the state has been eroded in three key areas, according to Strange;

  • Defense: it is no longer so necessary to worry about defense, as trading “interconnectedness” has made war less rational and thus less likely (three exceptions are wars over oil or gas, water, and “irredentism”).

  • Financial: states no longer have the power to control their own currencies.

  • Welfare: states can no longer provide welfare, as the costs (taxation) discourage multinational corporations from investing in the economy.

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