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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
Susan Strange

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

main argument
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
the globaloney school
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
the resistance school
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”.
so why globalization
So, why globalization?

Two factors account for globalization;

  • technological change
  • accelerated mobility of capital

Both of these factors go back at least 200 years…

what caused these factors to accelerate in the 20 th century
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”
the new diplomacy
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.
the erosion of the state
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.